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Directed Electronics Announces Agreement to Acquire Polk Audio

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Acquisition Will Significantly Expand Directed’s Position in Home Audio Entertainment

VISTA, Calif., Aug 21, 2006 — Directed Electronics, Inc. (Nasdaq: DEIX), today announced that it has entered into a definitive agreement to acquire Polk Audio, a leading provider of high performance home and mobile audio equipment. Consideration for the acquisition will be approximately $136 million in cash. Current Polk management will be joining the Directed team after the acquisition which is scheduled to close during the third quarter of 2006. Directed expects the acquisition to be accretive to its pro forma net earnings in 2006 and beyond.

“The acquisition of Polk, with its leading consumer brand, complements our current Definitive Technology product line. Having these two powerful brands under the Directed umbrella will give us the #1 position in the U.S. home speaker market according to industry data,” commented Jim Minarik, President and CEO of Directed. “We look forward to working with the Polk team to expand our home audio business,” he continued.

Founded in 1972, Polk has grown into a leading speaker brand in home entertainment. The company sells its products in all key channels of home electronics distribution including a diverse set of customers such as Circuit City, Tweeter, Fry’s Electronics, Crutchfield, and AVAD Distributors. Polk’s focus on brand management and product development has resulted in an impressive track record of growth in both home and mobile audio. Polk co-founders Matthew Polk and George Klopfer will remain actively engaged after the transaction by using their 35 years of industry experience to advise on the direction of Directed’s home audio strategy. Including Polk Audio’s approximately $86 million in net sales for the twelve months ended June 30, 2006, Directed’s net sales would have been approximately $435 million for the same period.

“The addition of Polk Audio is significant in that it continues our strategy of building a growing and profitable security and entertainment platform,” commented Kevin Duffy, Senior Vice President of Strategy, Corporate Development and Investor Relations. “We are also excited by Polk’s broad product offering including the company’s growing position in the expanding custom installation speaker market,” he continued.

“We have worked hard to build Polk into a profitable leader in home and mobile audio,” stated Jim Herd, President of Polk Audio. “We believe the Polk brand is positioned for continued growth through our existing customer base, as well as through the introduction of innovative entertainment products for both the home and vehicle environments. We look forward to partnering with Directed to build our business together.”

Goldman, Sachs & Co. and Trivest Partners acted as financial advisors and Greenberg Traurig, LLP acted as legal advisor to Directed Electronics. Barrington Associates acted as the exclusive financial advisor and DLA Piper US LLP acted as legal advisor to Polk Audio.

The acquisition will be financed by an addition to Directed’s senior credit facility. CIBC World Markets and J.P. Morgan Securities are providing committed financing for the acquisition and related expenses.

About Directed Electronics, Inc.

Directed Electronics is the largest designer and marketer of consumer branded vehicle security and convenience systems in the United States based on sales and a major supplier of home audio, mobile audio and video, and satellite radio products. As the sales leader in the vehicle security and convenience category, Directed offers a broad range of products, including security, remote start, hybrid systems, GPS tracking and navigation, and accessories, which are sold under its Viper, Clifford, Python, and other brand names. In the home audio market, Directed designs and markets award-winning Definitive Technology and a/d/s/ premium loudspeakers. Directed’s mobile audio products include speakers, subwoofers, and amplifiers sold under its Orion, Precision Power, Directed Audio, a/d/s/, and Xtreme brand names. Directed also markets a variety of mobile video systems under the Directed Video, Directed Mobile Media and Automate brand names. Directed also markets and sells certain SIRIUS-branded satellite radio products, with exclusive distribution rights for such products to Directed’s existing U.S. retailer customer base.

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