News Release

A Message from Val Policky, President of Palomar Products, Inc.

March, 1999 - Palomar Products completed its first year as an independent subsidiary. We were successful in achieving our business objectives and our employees grew professionally. It marked a year of significant change, sine we relocated to Rancho Santa Margarita from the Carlsbad facility and began doing business as a separate company. Sales of military intercommunications systems continued to exceed plan and 1999 will continue this trend. One major reason for increased sales is the exceptional performance of our military systems. We continue to set the industry standard for technical performance, system reliability and customer support. In 1998 we saw the return of several customers who had previously selected other suppliers but are now dissatisfied with the performance of those systems.

Our commercial products also established performance records. The digital voice switch installed in the Zurich, Switzerland Air Traffic Control Center one year age has provided the facility with an unprecedented 100 percent availability during that period.

This will be the year we introduce our new line of voice and data switching equipment for the telephone industry. We are very optimistic about these products since they are derivatives of the Air Traffic Control design that has proven high reliability and low cost. Our customers will be the ultimate winners when they purchase these products since the services they provide will be more cost competitive.

I am looking forward to an exciting and successful year for our employees, customers and suppliers.

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