News Release

A Message from Palomar Products' President, Val Policky

January, 2000 - A new century looms on the horizon, bringing with it many new challenges and opportunities for fulfilling the needs of our valued customers. On the threshold of this century I would like to share with you what we are doing to make Palomar Products (PPI) and even stronger company.

PPI has made significant changes since the relocation of the facility from Carlsbad to Rancho Santa Margarita, but we've hardly come close to achieving our potential. The relocation is significant for PPI since it improved our focus on all phases of our business. This year PPI will launch an aggressive program to maintain its leadership in the areas of innovation, creativity and responsiveness to the needs of our customers. Our development staff will continue to work closely with our customers to understand their needs and opportunities and will offer design solutions that will not only meet but exceed their expectations. In today's highly competitive marketplace, exceeding our customer's expectations at every turn is our only guarantee of success.

In virtually every business, efficiency of operation is what determines profitability, and our Company is committed to continuous improvement. As an example, over the past two years, we have reduced our delivery time from 18 months to nine months. Over the same time period, we have been able to reduce the prices offered to our customers. An increased level of employee empowerment in our Company at all levels has contributed greatly to this improved efficiency.

Today companies need to change in order to succeed. PPI is a proactive company that seizes opportunities and takes prudent risks to survive. Our continuing success has come about through our ability to change, and this skill has never been more important than it is today. Our manufacturing area has been reengineered to provide better flow for all of our products. Our procurement processes have been improved. In 1999 our Company received its ISO-9000 certification status. This year, as a follow-up to this certification, PPI has made a commitment to develop the skills of our team by providing training for all manufacturing employees.

At the dawn of this new century, PPI is poised to emerge with a new look and the promise of an even brighter future. A future that will provide greater opportunity and more rewards for our employees, while providing increasing value to our customers.

Contact:
Palomar Products
Bob Lawson
Marketing Director
Voice (949) 766-5434
FAX (949) 766-5353
email: rlawson@palpro.com