LOUD Technologies Reports Third Quarter Results

November 8, 2006 – Woodinville, Wash. - LOUD Technologies Inc. (LOUD) (NASDAQ:LTEC) today announced results of operations for the three and nine month periods ended September 30, 2006, highlighted by net income of $1.4 million, or $0.29 per diluted common share, for the third quarter, compared with $0.08 per diluted common share for the third quarter of 2005.

Third Quarter Results
Revenue for the third quarter of 2006 decreased $0.6 million to $53.4 million from $54.0 million for the third quarter of 2005.

Gross profit was $18.2 million, or 34.1% of net sales, in the third quarter of 2006 compared to $18.2 million, or 33.7% of net sales, in the comparable period in 2005.

SG&A expenses decreased to $11.6 million for the third quarter of 2006 compared to $12.7 million in the third quarter of 2005, a reduction of 8%. This decrease was primarily attributable to consolidating the St. Louis Music operations, to the ongoing cost benefits of our direct sales program, and to cost-cutting programs implemented in June 2006.

Operating income for the third quarter of 2006 was $3.6 million, which included restructuring costs of $0.2 million for severance payments related to reductions in workforce in the consolidation of the St. Louis Music and service operations. This represents a 30% increase in operating income when compared to the $2.8 million result for the third quarter of 2005.

Nine Month Results

Revenue for the nine months ended September 30, 2006 increased by $17.4 million to $165.6 million compared to $148.2 million for the nine months ended September 30, 2005. The 2006 period includes a full nine months of sales from the historical St. Louis Music brands as opposed to the comparable period in 2005 which includes sales from the historical St. Louis Music brands only from the acquisition date of March 5 through September 30.

Operating income for the nine months ended September 30, 2006 was $7.2 million, which included restructuring costs of $0.8 million for severance payments related to reductions in workforce in the consolidation of the St. Louis Music and service operations. This represents an increase of $2.5 million, or 52%, over our operating income of $4.7 million for the comparable period in 2005.

Net income for the nine months ended September 30, 2006 was $1.2 million, or $0.24 per diluted share. This represents a decrease of $0.8 million, or 42%, when compared to net income of $2.0 million, or $0.42 per diluted share, in the comparable period in 2005. However, nine-month net income for 2005 included only a partial year of performance from the St. Louis Music acquisition and included a gain from the discontinued operations of the Company’s former Italian subsidiary of $2.8 million, or $0.60 per diluted share.