1. Z AGG (NASDAQ: ZAGG) April 3, 2014 1 Jason Chan Michael DeRenzo Rodrigo Serna

2. A GENDA Introduction Company Overview Macroeconomic Outlook Relevant Stock Market Prospects Financial Analysis Valuation Recommendation 2

3. C OMPANY O VERVIEW 3 Founded in 2005 and headquartered in Salt Lake City, Utah Designs, produces, and distributes mobile and media accessories, namely InvisibleShield Blackrock currently holds 10.75% Mainly produce protective screen coverings under InvisibleShield brand name Moving into mobile device peripherals such as headphones, power products, and gaming products – Fastest growing market segments are tablet and smartphone – Look to serve global accessories market which is expected to increase from $44bn during 2013 to $60bn in 2016 Source: Form 10-K 2013 F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION

4. C OMPANY O VERVIEW – M ANAGEMENT ’ S O UTLOOK 4 Source: Form 10-K 2013 F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION Product offerings – New offerings in gaming, mobile, and audio accessories – Continued growth in existing mobile device accessories including keyboards, screen protectors, and cases International sales – Distribution center in Ireland to compete in European market and increase brand recognition – Focus on distribution through targeted, global distribution partners Increase volume from internet sales

5. 5 Source: http://www.theguardian.com/money/2012/mar/12/family-income-dip-again Disposable income Projected sales growth rates in key market segments such as tablets and smart phones Cost of labor in China Cost of raw materials Shift from in-store sales to online sales Potential Product shift through innovation M ACROECONOMIC O UTLOOK – K EY E XTERNAL D RIVERS F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION

6. I NDUSTRY O VERVIEW – C ONSUMER E LECTRONICS 6 F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION Sources: http://clients1.ibisworld.com/reports/us/industry/currentperformance.aspx?entid=1024 http://www.statista.com/statistics/200248/forecast-of-tablet-pc-sales-in-the-united-states-from-2010-to-2015/ Current Performance Consistent demand Keys to Success Innovation (Differentiation) Control cost structure (Low cost leadership) Distribution networks Industry Trends Little to no long term debt Heavy R&D expenditures Preferences shifting to multi-purpose devices

7. 7 I NDUSTRY A NALYSIS – C ONSUMER E LECTRONICS RevenueRevenue Growth Source: http://clients1.ibisworld.com/reports/us/industry/industryoutlook.aspx?entid=1024 Expected revenue: $77.3 Billion in 2015, upswing projected starting 2015. Annualized growth rate of 1.88% from 2012 to 2018. F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION

8. I NDUSTRY L IFE C YCLE Maturity Competition fierce Reduction in cost is imperative Increase in Market Share Continuous innovation to extend maturity phase 8 Introduction Growth Maturity Decline Time Total Industry Revenue F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION Source: IBIS World

9. P ORTER ’ S F IVE F ORCES 9 Power of Suppliers: StrongSubstitutes: High Heavily reliant on a limited number of suppliers Improved screen technology rendering screen protectors obsolete Weak protection on the intellectual property underlying high revenue products Continual product shifts and innovation Lower buyer switching cost Barriers to Entry: LowPower of Buyers: High Not Capital Intensive Manufacturing easily outsourced to third parties Little product differentiation Limited brand loyalty Numerous other competitors to choose from (substitutes) Competition: High Many companies offer similar products Weak patent protection F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION

10. U NDERSTANDING M ARKET P OWER 10 StrengthsWeaknesses - Paid down much of their debt - Product quality meeting expectations - Sustaining their competitive advantage and profitability - Limited number of suppliers - Continued increase in DSI and DSO OpportunitiesThreats - New acquisitions - New markets, adjacent industries - Increase in Disposable Income - Continued innovation in consumer electronics industry -Rising cost of raw materials -Indirect distribution networks -Greater competition -Limited protection on intellectual property F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION

11. R ECENT S TOCK P ERFORMANCE 11 20 & 200 Day Moving Average Stock Chart ZAGG’s stock price has been well below the 200 day moving average since the end of Dec, 2012. Currently, there could be a potential upswing in the near future. F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION Source: Yahoo Finance

12. F INANCIAL A NALYSIS - R ATIOS 12 F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION ZAGG, Financial Analysis Liquidity Ratios 20092010201120122013 Current Ratio 3.48 2.02 3.21 3.14 3.52 Quick Ratio 2.74 1.25 2.33 2.18 2.17 Cash Ratio 0.99 0.10 0.78 0.48 0.45 Profitability Ratios 20092010201120122013 Operating Profit Margin14.88%22.08%15.71%12.67%4.99% Net Margin8.81%13.04%9.82%5.49%2.18% ROA17.89%17.29%8.69%7.04%2.73% ROE (Book Value)24.35%32.92%17.13%11.69%3.84% Solvency Ratios 20092010201120122013 Debt/Assets 0.01 0.00 0.34 0.22 0.10 Debt/Equity 0.02 0.00 0.67 0.37 0.14 Interest Coverage 24.67 69.30 9.31 5.30 19.04 Activity Ratios 20092010201120122013 A/R Turnover 7.04 3.32 2.41 3.58 5.23 Days Sales of Inventory 82.72 169.10 111.23 101.44 122.94 Days Sales Outstanding 51.86 109.99 151.30 101.90 69.81 Fixed Asset Turnover 43.21 50.87 43.04 54.39 43.84 Total Asset Turnover 2.03 1.33 0.89 1.28 1.25

13. F INANCIAL A NALYSIS – D UPONT 13 F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION DuPont Analysis 20092010201120122013 Tax Burden61.33%59.89%65.12%60.70%56.45% Interest Burden96.56%98.60%95.97%71.36%77.52% Operating Profit Margin14.88%22.08%15.71%12.67%4.99% Asset Turnover2.031.330.891.281.25 Leverage 1.36 1.90 1.97 1.66 1.41 ROE24.35%32.92%17.13%11.69%3.84%

14. V ALUATION – WACC 14 F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION Zagg’s current debt consists of a revolving credit facility, which was used to pay down long-term notes payable Zagg is paying an effective interest rate of 1.11% on the revolving line of credit Business Risk Premium attributed to limited cost of debt, competitive playing field Zagg competes in

15. V ALUATION – DCF 15 F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION Discounted Cash Flows - ZAGG Historical figures Forecast Figures 2009A2010A2011A2012A2013A 2014P2015P2016P2017P2018P EBIT5,71016,81328,13733,49110,946 15,79417,84719,63121,59523,754 Less: Income Taxes(2,132)(6,650)(9,418)(9,393)(3,695)(5,314)(6,005)(6,605)(7,266)(7,992) Plus: D&A2433485,92611,55912,15713,16114,87216,36017,99619,795 Less: CapEx(574)(820)(1,590)(2,764)(2,588)(2,994)(3,169)(3,272)(3,599)(3,959) Less: Change in Working Capital:1,006(40,921)25,907(10,553)46,434(416)16,0287,6648,4309,273 Unlevered FCF 21,0637,51724,99427,49330,243 Terminal Value =241,833 Terminal Value Assumption Terminal Growth2.5% Terminal Value241,276 Discount Rate 15.3% Present Value of Cash Flows 18,2655,65316,29815,54714,830 PV of Terminal Value =118,584 EV =188,697 Share Price Sensitivity Terminal Growth Rate WACC 2.0%2.3%2.5%2.8%3.0% 13.3%$6.75$6.87$7.00$7.13$7.27 14.3%$6.10$6.20$6.30$6.41$6.52 15.3%$5.55$5.63$5.72$5.81$5.90 16.3%$5.08$5.15$5.22$5.29$5.37 17.3%$4.67$4.73$4.78$4.85$4.91 Calculation of Implied Share Price Implied Enterprise Value $ 189,176 Less Debt $ 17,543 Plus Cash $ - Implied Market Cap $ 171,633 Implied Share Price $ 5.73

16. V ALUATION – C OMPARABLES C OMPANY A NALYSIS 16 F INANCIAL A NALYSIS C OMPANY O VERVIEW S TOCK M ARKET P ROSPECTS M ACRO O UTLOOK V ALUATION

17. R ECOMMENDATION Things to Look For Improved management of inventory levels Increased brand recognition and product offerings Stabilized gross and operating margins Expansion to adjacent markets 17 W ATCH L IST