Richard Thalheimer Quotations

We are maintaining intense efforts on good merchandising, marketing and the gauging of customers' tastes and demands. We are focused on introducing many new products that we believe will be attractive to our customers.

We won't be knocked off from being the best-selling product in the category, ... At the same time, we're not sitting still or looking at the rearview mirror while running out business. Our air purifier is still in front of the pack and will stay there a long time.

selling more purifiers this year than last year.

With the success of our online sales we expect to report another record year of sales and earnings.

We remain committed to our successful strategy of growth through multiple sales channels, driven by high-margin private label and Sharper Image Design proprietary products,

While we are encouraged by the sales results during this difficult economic climate, they were below our expectations, ... ... However, we remain strongly committed to our long-term strategy and believe this will continue to produce excellent financial results over time.

We will be aggressively expanding our Internet presence in 1999, ... Our new auction site comes online Feb. 22 (and) we will be substantially expanding our partnership advertising this year, which will drive more traffic to our sites.

We will auction one-of-a-kind items, some of our newest Sharper Image Design products, as well as established best sellers.

Total company sales for the month of March continued to be down from the prior year. During the month, we experienced improving returns on infomercial spending, and although it is too early to tell if this is a trend, we have incrementally increased spending in this channel. We have over the past several months implemented significant measures to reduce expenses as outlined in detail in our press release dated March 27, 2006. Additionally, we are focused on introducing many new products which we believe will be attractive to our customers.

Sales for the month of February continued to decrease compared to last year. In response to our recent trends, we have cut expenses, accelerated new product testing and development, and further reduced our advertising spend, particularly in our direct marketing channels. In the near term, we expect our reduced advertising to contribute to continued lower year-over-year sales results. Our focus continues to be the introduction of new and innovative products, the optimization of advertising expenditures, and to lower expenses and inventory levels.

People expect a certain reaction from a business and when you pleasantly exceed those expectations, you've somehow passed an important psychological threshold.

People expect a certain reaction from a business, and when you pleasantly exceed those expectations, you've somehow passed an important psychological threshold.