Tweeter Home Entertainment Group Reports Sales For Its Third Fiscal Quarter Ending June 30, 2001.

Business/Technology Editors

CANTON, Mass.--(BUSINESS WIRE)--July 5, 2001

-- Total Revenue up 17.8% for this quarter compared to last year

-- Comparable store sales declined 0.6% excluding Douglas TV, Big

Screen City and Audio Video Systems

-- Digital product sales continue to escalate

-- 5 new stores opened since last quarter

-- The Company closed on a new, three-year, $75 million senior credit facility

Tweeter Home Entertainment Group, Inc. (Nasdaq: TWTR) announced sales results for the quarter ending June 30, 2001. Total revenue increased 17.8% to $110.1 million from $93.5 million in the same period last year. Comparable store sales were down 0.6% excluding the Douglas TV, Big Screen City and Audio Video Systems chains. The acquisition of Douglas TV was completed on October 2, 2000, the acquisition of Big Screen City was completed on May 1, 2001, and the acquisition of Audio Video Systems was completed on June 1, 2001. All three acquisitions were accounted for as purchases. For the quarter ended June 30, 2001, the Douglas TV stores had a total comparable store sales decrease of 21.5%, the Big Screen City stores, opened two months, had a comparable store sales increase of 13.6%, and the Audio Video Systems stores, opened one month, had a comparable store sales decrease of 18.9%.

Jeffrey Stone, President and CEO said, "Although we slightly missed our goal of flat comps for the quarter, I am proud of our store management team for their efforts. They were totally energized in the pursuit of this goal knowing that it was going to be a tough challenge going up against very tough comps for the same quarter last year of 20.5%. It feels a bit odd to be pleased about almost flat comps, but given the reports coming out of some other companies and the change in the economic mood of the country - we are indeed happy with our performance. We are also pleased that all chains included in the comp base had positive comparable sales in June, including San Diego and Chicago, where we were struggling in the first half of the year."

"Digital products continue to be a driver of sales for Tweeter as total television penetration of digital sets reached 73.9 percent of the combined TV category. Digital sales of all products were 43.2% of sales for the quarter, our highest digital penetration in a quarter."

"Our installation business continues to grow nicely as we now have 121 dedicated installation professionals in the company and expect to double this amount over the next 12 months. Our installation strategy continues to be a strategy that is being groomed for the convergent future. It also provides the company with another arena in which to achieve high gross margins."

Stone went on to say, "The acquisition pipeline is still very active and we are having several conversations with other specialty retailers about the possibilities of a merger."

Joe McGuire, Chief Financial Officer, said, "Sales of digital and new technology products continued to drive our revenue in the third quarter. Projection television sales are up 16.2% year over year for the quarter, with digital sets representing 89.3% of the category. Tube television was up 29.0% year over year for the quarter, and digital sets represented 51.5% of that category. Plasma television sets were the fastest growing category, up 72.3% year over year for the quarter. We believe that emerging television display technologies including plasma and DLP will be the fastest growing category over the next several years."

McGuire went on to say, "Regarding our planned merger with Sound Advice, we received word from the SEC that we would not be reviewed, which has allowed us to accelerate our timetable for closing. The Boards of Directors of both companies declared Tuesday, June 26, 2001 as the record date for shareholders entitled to vote on the transaction, and proxy statements were mailed to shareholders on Thursday, June 28, 2001. Both Tweeter and Sound Advice made the Hart Scott Rodino Act filings on Friday, June 29, 2001. We anticipate closing this transaction on or about August 1, 2001."

"We started the year with 90 stores and have added eleven stores through acquisition - four each with Douglas TV and Big Screen City, and three more with Audio Video Systems. The Sound Advice merger will add 33 additional stores. With our anticipated organic growth of 17 new stores for the fiscal year, we expect to end Fiscal 2001 with 151 stores in 20 states, which represents approximately 68% storefront growth. Projected store data for fiscal 2001:

                                                         Fiscal 2001

Stores open at beginning of period                           90
New stores                                                   17
Closed stores                                                 0
Stores acquired                                              44
Stores open at end of period                                151

The Company opened five new stores since the last quarter, including its first store in New York State. Four stores operating under the Tweeter name opened in Albany, New York, Bel Air, Maryland, Woodlands, Texas and Braintree, Massachusetts. One store opened under the HiFi Buys name in Fayetteville, Georgia.

McGuire continued, "We recently closed on a new three-year senior credit facility. This new credit facility has a maximum availability of $75 million and a maturity date of July 1, 2004, and is secured by our inventory and certain other assets."

Tweeter Home Entertainment Group, Inc. has scheduled its third quarter earnings conference call, for the quarter ended June 30, 2001. The call will take place on Thursday, July 19, 2001 at 10:30am EDT. The earnings press release will be available for viewing or download at our investor relations' website, www.twtr.com after 9:00am on Thursday, July 19, 2001. A live webcast of the call will also be available. To access the webcast, logon at www.streetevents.com or from the Company's investor relations website at www.twtr.com. There will be a brief presentation by Tweeter Home Entertainment Group management followed by a Q&A session with institutional owners.

The conference call will be available for playback until Monday, July 23, 2001 at 5:00pm by calling [phone].

Tweeter Home Entertainment Group, Inc. (Nasdaq: TWTR) was founded in 1972 by current Chairman Sandy Bloomberg. Based in Canton, Massachusetts, the company is a specialty retailer of mid- to high-end audio and video consumer electronics products. The company's fiscal 2000 revenues were $405 million. Tweeter was named "Consumer Electronics Retailer of the Year" four out of the past five years by Audio-Video International, "1999 Retail Leader" by TWICE, and awarded Dealerscope's 1999 Dealer's Pride award. The company employs approximately 2,500 associates. It operates 109 stores under the Tweeter and HiFi Buys names in the New England, Mid-Atlantic, Texas, San Diego, Chicago and Southeastern markets respectively.

Further information on the Tweeter Home Entertainment Group can be found on the company's website at www.twtr.com. Customers can also shop online at www.tweeter.outpost.com. A joint venture with Cyberian Outpost, it is a vendor authorized site devoted to bringing you the best quality mid- to high-end audio and video equipment.

Certain statements contained in this press release, including, without limitation, statements containing the words "expects," "anticipates," "believes," and words of similar import, constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements are subject to various risks and uncertainties, including those related to other possible mergers, growth of our home installation professionals, expected new store openings and store count, growth rate of plasma and DLP, expected closing date on the Sound Advice merger, dependence on key personnel, the need for additional financing, competition and seasonal fluctuations and those risks referred to in Tweeter's Registration Statement filed on Form S-3 (SEC file number 333-94433) on January 11, 2000 and in the Company's Annual Report on Form 10-K filed on December 10, 2000 (copies of which may be accessed through the SEC's web site at http:\\www.sec.gov), that could cause actual future results and events to differ materially from those currently anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements.