In last year's message I stated "Your Team is committed and determined to make 2005 a Breakthrough Year".

I am happy to report that, 2005 with its 40% increase in revenues and its 20% pretax income becomes the 'watershed event' that we, your team, have been working toward over the past 5 years! ... and ... This is Just the Beginning!

It is said the hardest steel is forged from the heart of the hottest furnace. Your team has fought through adversity over the last 5 years to develop and deliver 29 new products, eight of which are APCO Digital P-25 compliant.

This performance epitomizes the re-birth of Your Company.

A company whose mission is to deliver the right solution to more customers at the best value in the marketplace while delivering the highest margins among our competition, which result in an escalating value to you our Stockholders!

A company whose total focus is listening to our growing lists of customers and delivering product that is defect free centered on the 'core requirements' of what these customers need;

• Ease of use
• Best power consumption resulting in longer battery life
• World class audio quality

A company who attacks the market aggressively, delivering the lowest prices and best value to our Public Safety and Military end users, and through its unique Hybrid Manufacturing Strategy delivers the highest Gross Margin performance in the industry.

Other Major Highlights of the year include;

• Extending the number of consecutive profitable quarters to 11.
• $14 million dollars in customer bookings during the third quarter.
• 47% increase in Digital revenues and 61% increase in Digital Bookings.
• 8% increase in gross margins from 44% in 2004 to 52% in 2005.
• Very strong Balance sheet with a growing cash position and no debt.
• Completion of two Digital mobile products.
• Major contract award from the U.S. Postal Service.
• New business generated with the U.S. Army and the National Guard.
• A new listing on the American Stock Exchange.
• Stock price appreciation from $2.35 at the start of the year to $7.31 by year-end.

......... But this is Just the Beginning!.........

2005 is now history and although we are pleased with the results of the last 5 years we are not complacent; we are not declaring success.

We have raised the 'performance bar' in all of the disciplines of the company.

We are working on 30 new products to be introduced over the next two to three years... always listening to the customer to ensure they are the right products.

These products will continue to expand our addressable market and enable us to capture more of the market.

We, your team at RELM, are excited about beating our goals and exceeding your expectations.

I thank you, our loyal Shareholders, for your continued support... and this is Just the Beginning!

Sincerely,

David P. Storey
President / C.E.O.
RELM Wireless Corp.