TWTR CIBC 2003

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Business EthicsFiscal Responsibility

Moral Correctness

Living With Integrity

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HistoryHistory

1996 1997 1998

Acquired BrynMawr Stereo,

13 stores $28million, Mid-Atlantic

Acquired HiFiBuys, 10 s tores

$95 m illion,Southeast

Built 2 newstores, 1relocation


Annual Revenue $81 million Annual Revenue $132 million Annual Revenue $232 million

Completed IPO,raised $46

million

Built 5 newstores, 2relocations

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HistoryHistory

1999 2000 2001

Acquired HomeEntertainment,7 s tores, $25

million, Texas

Acquired DOWStereo/Video, 9stores, $38

million, San Diego

Built 5 newstores, 3relocations


Annual Revenue $283 million Annual Revenue $404 million Annual Revenue $540 million


Acquired UnitedAudio, 7 stores,$49 million,

Chicago, IL

Acquired DouglasTV, 4 stores, $27million, Chicago,

IL

Acquired BigScreen City, 4stores $16 million,

San Diego, CA

Acquired AudioVideo Systems, 3stores $15 million,

Charlotte, NC

Acquired SoundAdvice, 32 stores$200 million,

Florida

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Five Year Revenue GrowthFive Year Revenue Growth

5-Yr

2003 2002 2001 2000 1999 1998 CAGR

BBY 6.9% 27.9% 22.7% 24.1% 20.7% 7.5% 21.4%

CC -24.1% -0.7% 3.2% 16.9% 22.4% 16.7% 3.2%

ULTE 21.4% 19.8% 25.8% 17.0% 10.3% 17.2% 17.7%

GGUY -8.5% -6.2% 2.8% -7.1% -1.4% 4.3% -5.1%

TWTR -1.8% 47.4% 35.1% 43.1% 22.1% 75.1% 35.6%

(estimate)

Fiscal Year

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Income from Operations GrowthIncome from Operations Growth

2003 2002 2001 2000 1999 1998 1997

BBY 10.2% 55.1% 12.1% 53.6% 111.4% 315.0% -66.7%

CC -98.5% 27.9% -49.3% 49.7% 61.7% -8.6% -20.0%

ULTE -47.4% -18.1% 53.7% 110.6% 154.3% -17.2% -45.9%

GGUY 114.5% -1384.7% 90.4% 65.5% -176.5% 31.2% -219.1%

TWTR -100%+ 11.3% 7.9% 69.0% 26.3% 487.2% 5.1%

(estimate)

TWTR 2002 number is before write-off of goodwill

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Historical Fiscal Year CompsHistorical Fiscal Year Comps

1998 +13.5%

1999 + 5.0%

2000 +12.5%

2001 + .6%

2002 - 3.2%

2003 - 8.0% to -12.0% estimate

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No Computers

Differentiated Business ModelDifferentiated Business Model

Tweeter Ultimate Circuit City Best Buy

Gross Margin 36% 31% 22% 20%

Product Mix AudioVideo

AudioVideo

ComputersSoftware

OfficeEquipment

AudioVideo

ComputersSoftware

OfficeEquipment

Compact Discs

AudioVideo

ComputersSoftware

OfficeEquipment

Compact DiscsAppliances

StorePrototype

10,000 SF 34,000 SF 34,000 SF 45,000 SF

Total Stores 177 58 626 711

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Differentiated BoxDifferentiated Box

10,000 square feet

Store Contribution goal of 12%

Profitable at $3.5 Million Volume

Store Contribution as high as 16% inlarger stores

New Store investment of $1.1 millioncreates $12 million in sales during the

first three years

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16

8

41

14

15 4

6 2

143

9

5

33

4

4

4

216

32

177 Stores

17

21 States

Store Count 9/30/03Store Count 9/30/03

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Eliminate price from sales

conversation 2x per week local market

shops

Backed by AutomaticPrice Protection

Since 1993 Revolutionary price

guarantee

Unique to industry

EDCP & Automatic Price ProtectionEDCP & Automatic Price Protection

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Sales Team EducationSales Team Education

23%

23%

54%

Professional Selling Skills

Company Culture

Product Info

Salesperson

Knowledge+

Customer

Education=

Higher average ticket

Higher Margin

Sales of new technology

Low turnover

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Current Points of Focus

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Current FocusCurrent Focus

Cut expenses to run in current business

conditions; hunker down

Eliminate store openings; cut Capexbudget; conserve Cash

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Cash Conversion Cycle

Focus on ROE

Focus on Profitability

People


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One Company One Way

Custom Strategy

Flat Panel


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In Home InstallationIn Home Installation

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In Home InstallationIn Home Installation

A differentiation strategy

A service strategy for people who love music,movies and sports home entertainment -

and want it all at the touch of a button. A margin strategy

An average ticket strategy

A convergence strategy

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The Tweeter Customer

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Our CustomerOur Customer

The more affluent customer = our customer

The early adopter = our customer The technology curious = our customer

A younger car stereo, music loving,technology competent = our customer

Our sales force simplifies the technologyOur sales force simplifies the technologyand explains the benefits of ownership toand explains the benefits of ownership to

these customersthese customers

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Sales Team EducationSales Team Education

23%

23%

4%

Professional Selling Skills

Company Culture

Product Info

Salesperson

Knowledge+

Customer

Education=

Higher average ticket

Higher Margin

Sales of new technology

Low turnover

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Profit DifferentiationProfit Differentiation

Do not chase share, except in new

technologies Gross Margin Focused

Audio focused (in spite of TV growth)

Loud Speaker dominance

New Technologies yield higher GMs early in cycle

Consultative sales approach

High Average Ticket Higher price points

In home installation to be a driver

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228.9279.5

399.9

540.1

796.1 781.6

$0

$100

$200

$300

$400

$500

$600

$700

$800

1998 1999 2000 2001 2002 2003

Mill

ions

CAGR = 28%

Total Revenues

Fiscal Year EndedSeptember 30,

(estim

ate)

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M

illions

Gross Margin

35.2% 35.4% 35.9%36.6%

35.6% 36.0% 35.3%

10%

15%

20%

25%

30%

35%

40%

45%

1997 1998 1999 2000 2001 2002 2003 to

date


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12.115.4

25.727.8

30.1

$0

$5

$10

$15

$20

$25

$30

$35

1998 1999 2000 2001 2002 2003 est

Millions

Operating IncomeOperating Income


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M

illions

Operating Margin

5.1%5.5%

6.4%

5.1%

3.7%

0%

1%

2%

3%

4%

5%

6%

7%

1998 1999 2000 2001 2002 2003 est


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The June quarter finished down 10% comp,

excluding Florida and Arizona, comp saleswere down 11% in April, down 9% in May,and down 4% in June

For the September quarter we are up

against a negative 1.4% We expect a neutral sales environment for

the September quarter.

Current Conditions Sales

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Margins remain relatively stable

Up against weaker comps next 4quarters

Digital is the buzz and were a leader

New products lined up to complement/augment HDTV

Flat Panel Plasma/LCD holy cow!

Some Good News

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02

4

6

8

10

12

14

16

% of Sales

Ju

n01

Flat Panel TV is ExplodingFlat Panel TV is Exploding

Last 9 Quarters

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New Flat Panel Display WallNew Flat Panel Display Wall

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So what does all this mean?

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Documents

TWTR CIBC 2003