New Company Highlight         December 2005

Color Kinetics Inc. (CLRK) markets and licenses intelligent solid-state lighting systems worldwide. The company's business is broken into two segments: lighting systems and OEM. The lighting systems segment includes the IntelliWhite^™ Series, the iColor^® and bColor Series, the UnoColor Series, various controllers, power supplies, and peripherals. These products have been used in worldwide high-profile applications within the architectural, theatrical, retail, residential, landscape, signage, entertainment, fine arts, hospitality, TV studio, and commercial arenas. The company's OEM segment offers a range of its solid-state lighting systems to manufacturers which are incorporated into their own brands. Color Kinetics can be found on the Web at www.colorkinetics.com.

Source: Color Kinetics, Brion D. Tanous at Merriman Curhan Ford & Co

Rocket Capital Checklist for Color Kinetics Inc.

Rapid revenue and earnings growth

Accelerating revenue growth of 27.1%, 26.5%, 40.1% and 39.1% year over year in most recent 4 quarters.
Earnings growth of 50% and 25% year over year in most recent 2 quarters with annual earnings growth of 70% and 93% year over year the last two years.

Obvious leader in its category

Color Kinetics is a dominant player in the solid-state lighting market with 48 current patents on its products and 150 pending approval.

Competitive edge within its sector

The company has few competitors and those competitors fail to offer the number of product choices.

Keep it small – greater upside potential

$310 million market cap and 18 million shares outstanding.

Economic effects of supply/demand

29% institutional ownership.

Technical analysis to decide timing

Broke out of a cup with handle pattern featuring 3 times better then average daily volume on a close above $16.

As of the time of this post, clients of Rocket Capital Management own approximately 24,160 shares.

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