Executive Summary

Net loss for the first quarter of 2009 totaled $1.6 million, or $.25 loss per share, compared to net earnings of $81,000, or $.01 per share, for the first quarter of 2008. Key factors contributing to the lower net earnings were:

• Net sales declined $9.8 million, or 33.9%, principally because of the adverse economic climate in the United States and Europe.

• Gross margins decreased by 4.4 points to 26.5 points due to lower volume, unfavorable sales mix and the impact of fixed overhead charges against a lower sales base.

• Selling, general and administrative expenses decreased $1.3 million, or 15.1%, due to management's effort to reduce spending and lower variable selling costs.

• Other expenses decreased by $88,000 mainly due to lower interest expense.

The combined impact of the foregoing factors was a $2.5 million decrease in income before taxes.

The effective tax rate for the first quarter of 2009 was 32.7% compared to 22.8% for the first quarter of 2008. The higher effective tax rate for the first quarter of 2009 was because of management's decision to repatriate the future earnings of its Irish subsidiary as of January 1, 2009.

Outlook

The prospects for the global economy, particularly in Europe, remain uncertain. Although the first quarter results were below expectations, the Company continues to forecast profitability in 2009 as new products are introduced and as the Company takes advantage of new and enhanced marketing channels. As noted previously, the Company has taken steps to weather the downturn and continue to identify opportunities to reduce expenses in light of reduced consumer spending. In light of the uncertain economic climate, the Board of Directors has elected not to pay a dividend in 2009.

EBITDA

The following table shows the reconciliation of net earnings (loss) to the
Adjusted EBITDA:



                                                     Three Months
                                                   Ended March 31,
                                                    (in thousands)
                                                   2009        2008
                Net (loss) earnings              $ (1,616 )   $    81
                Depreciation/amortization             978       1,694
                Interest expense                      150         303
                Income tax (benefit) provision       (786 )        26
                Minority interest                       1           7

                EBITDA                             (1,273 )     2,111
                Stock option expense                   59          65
                CSV loss                              279         349
                Other non-cash items                   53        (160 )

                Adjusted EBITDA                  $   (882 )   $ 2,365

EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA, represents EBITDA plus the applicable adjustments required to agree with the EBITDA measurement for compliance with the financial covenants of the Company's lenders. The Company believes EBITDA is a useful performance indicator and is frequently used by management, securities analysts and investors to judge operating performance between time periods and among other companies. The Company uses Adjusted EBITDA to assess operating performance and ensure compliance with financial covenants.

EBITDA and Adjusted EBITDA are Non-GAAP performance indicators that should be used in conjunction with GAAP performance measurements such as net sales, operating profit and net income to evaluate the Company's operating performance. EBITDA and Adjusted EBITDA are not alternatives to net income or cash flow from operations determined in accordance with GAAP. Furthermore, EBITDA and Adjusted EBITDA may not be comparable to the calculation of similarly titled measures reported by other companies.

First Quarter 2009 Compared to First Quarter 2008

The following table contains sales and pre-tax (loss) profit after eliminating
intercompany accounts by business segment for the first quarter ending March 31,
2009 and 2008:



                                                     First Quarter
                                                                                2009 vs. 2008
                             2009                       2008                 Increase (Decrease)
                                                    (in thousands)
                                                              Pre-tax
                                  Pre-tax                     (Loss)                       Pre-tax
 Business Segment    Net Sales      Loss        Net Sales     Profit        Net Sales        Loss
 Cobra              $    17,248   $ (2,200 )   $    24,576   $    (666 )   $   (7,328)     $ (1,534 )
 PPL                      1,837       (201 )         4,282         780          (2,445 )       (981 )

 Total Company      $    19,085   $ (2,401 )   $    28,858   $     114     $    (9,773 )   $ (2,515 )

Cobra Business Segment

Cobra net sales decreased $7.3 million, or 29.8%, in the first quarter of 2009 to $17.2 million, as compared to prior year. Excluding the mobile navigation sales, sales for the first quarter of 2009 were down $6.2 million, or 26.5%. Most of this sales decline was due to lower sales of two-way radios and Citizens Band radios in the United States and a broad decline across several product lines in Europe, as the severe global economic downturn resulted in significant declines in retail store traffic and consumer spending for discretionary items. In particular, sales of Citizens Band radios were down by more than 40%, as declining freight movements resulted in reductions in traffic at travel centers and truck stops. Additionally in 2009, Cobra experienced a vendor delay that caused more than $800,000 of Citizens Band radio sales to shift to the second quarter. Lastly, net sales for 2008 included $1.1 million for mobile navigation products that have been discontinued in 2009 due to the Company's change in its North American mobile navigation strategy as reflected in the following table:

                         Mobile Navigation/         Other
                            GPS Products          Products          Total
                             Net Sales            Net Sales       Net Sales
             2009       $                 -      $    17,248     $    17,248
             2008                      1,123          23,453          24,576

             Decrease   $             (1,123 )   $    (6,205 )   $    (7,328 )

Gross profit decreased $2.7 million in the first quarter of 2009 from the first quarter of 2008 to $4.3 million and the gross margin decreased to 24.7% in the first quarter of 2009 from 28.4% in the first quarter of 2008. Excluding the mobile navigation sales, the 2009 gross margin of 24.7% declined from the 2008 gross margin of 27.2% mainly due to sales mix, as well as the effect of overhead expense on a reduced sales base, which resulted in a reduction in the gross margin by 0.9%. In 2008, as reflected below, Mobile Navigation/GPS sales added 1.2% to Cobra's gross margin in the first quarter of 2008.

                             Mobile Navigation/           Other           Total
                             GPS Products Gross         Products          Gross
                                (Loss) Profit         Gross Profit        Profit
                                                     (in thousands)
         2009 gross profit   $                -      $         4,261     $  4,261
         2008 gross profit                   607               6,377        6,984

         Decrease            $              (607 )   $        (2,116 )   $ (2,723 )

         2009 gross margin             NA                   24.7%          24.7%
         2008 gross margin            54.1%                 27.2%          28.4%

Selling, general and administrative expenses declined $894,000, or 12.8%, to $6.1 million in the first quarter of 2009 from $7.0 million in the first quarter of 2008. Decreased variable selling costs because of lower sales, accounted for $371,000 of the decline. Fixed marketing and administrative expenses were down $523,000 due to cost savings measures implemented by management, including an approximate 10% reduction in the Cobra segment headcount. As a result of the headcount reduction, the first quarter of 2009 included $147,000 of severance expenses.

Interest expense decreased $153,000 in the first quarter of 2009 compared to the prior year's quarter due to the lower level of debt and a more favorable interest rate. Other expense decreased $142,000 due to $70,000 of lower CSV expense and $52,000 of royalty income on cell phone headsets sold under the Cobra name by a third party.

As a result of the above, there was a pre-tax loss of $2.2 million in the first quarter of 2009 compared to a pre-tax loss of $666,000 in the first quarter of 2008.

Performance Products Limited ("PPL") Business Segment

PPL's net sales decreased by $2.5 million, or 57.1%, to $1.8 million in the first quarter of 2009 from $4.3 million in the first quarter of 2008. This decrease was due to the severe recession, particularly in the United Kingdom as well as elsewhere in Europe, delays in new products because of development timing issues and a stronger dollar versus the pound sterling.

Gross profit decreased $1.1 million to $801,000 in the first quarter of 2009 from $1.9 million in the first quarter of 2008. Gross margin decreased to 43.6% in 2009 from 45.1% in 2008 primarily due to the impact of amortizing intangible assets (purchase price allocation) over lower sales volume.

Selling, general and administrative expenses were $357,000 or 26.7% lower than the first quarter of 2008 and mainly reflected the impact of a stronger dollar. As a percentage of net sales, selling, general and administrative expenses increased to 53.3% in 2009 from 31.2% in 2008 due to the lower level of sales in 2009 as compared to 2008.

As a result of the above, loss before income taxes totaled $201,000 for the first quarter of 2009 compared to $780,000 pre-tax income for the first quarter of 2008.

On February 15, 2008, the Company entered into a Loan and Security Agreement (the "LSA") with The Private Bank and Trust Company, as lender and agent, and RBS Citizens, N.A. for a $5.7 million term loan facility and a $40 million revolving credit facility. Both facilities mature on October 19, 2011 and replaced the previous credit agreement.

At March 31, 2009, the Company had interest bearing debt outstanding of $16.8 million, consisting of the $4.1 million term loan and $12.7 million in the revolver. As of March 31, 2009, availability was approximately $7.8 million under the revolving credit line based on the borrowing base formula.

For the three months ended March 31, 2009, net cash flows from operating activities were $1.2 million. Significant net cash inflows from operations included the add-back of non-cash depreciation and amortization of $978,000 million, a reduction in accounts receivable of $3.8 million and an increase in accounts payable of $1.0 million. The decrease in accounts receivable resulted from collections on sales from the fourth quarter of 2008. The increase in accounts payable was due to higher inventory levels and additions to prepaid and other current assets. Partially offsetting these inflows was the net loss of $1.6 million, an increase in inventory of $620,000, an increase in net deferred income tax asset of $1.0 million and a decrease in accrued liabilities of $1.3 million. The deferred tax asset increase was due to the current year tax benefit while the decrease in accrued liabilities was because of lower accruals for variable program selling expenses (reflecting both lower first quarter sales and timing of payments) and payment of year-end payroll bonuses.

Working capital requirements are seasonal, with demand for working capital being higher later in the year as customers begin purchasing for the holiday selling season. The Company believes that cash generated from operations and from borrowings under its credit agreement will be sufficient in 2009 to fund its working capital needs.

Net cash used in investing activities amounted to $371,000 in the first three months of 2009. $140,000 was due to an increase in intangible assets and $231,000 was used for capital expenditures, primarily computer equipment, tooling and building improvements.

Net cash used in the first three months of 2009 for financing activities totaled $874,000 due to reduction of long-term debt. For 2009, the cash used for financing activities will most likely be limited to debt reduction. The Company decided not to pay a dividend in 2009.

The Company believes that for the foreseeable future, it will be able to continue to fund its operations and seasonal working capital requirements with cash generated from operations and borrowings under the Company's current or similar future credit agreement. The Company's credit agreement contains certain financial covenants with which the Company was in compliance as of March 31, 2009. A failure to comply with these covenants in future periods could result in any outstanding indebtedness under the credit facility becoming immediately due and payable and in our inability to borrow additional funds under the credit facility.

Critical accounting policies and estimates generally consist of those that reflect significant judgments and uncertainties and could potentially result in materially different results under different assumptions. For a description of the Company's critical accounting polices and estimates refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2008. The application of certain of these policies requires significant judgments or a historical based estimation process that can affect the results of operations and financial position of the Company as well as the related footnote disclosures. The Company bases its estimates on historical experience and other assumptions that it believes are reasonable. If actual amounts ultimately differ from previous estimates, the revisions are included in the Company's results of operations for the period in which the actual amounts become known.

This report contains forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995 found at Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Additional written or oral forward-looking statements may be made by the Company from time to time in filings with the SEC, press releases, or otherwise. Statements contained in this report that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act. Forward-looking statements may include, but are not limited to, projections of revenue, income or loss and capital expenditures, statements regarding future operations, anticipated financing needs, compliance with financial covenants in loan agreements, liquidity, plans for acquisitions or sales of assets or businesses, plans relating to products or services, assessments of materiality, expansion into international markets, growth trends in the consumer electronics business, technological and market developments in the consumer electronics business, the availability of new consumer electronics products and predictions of future events, as well as assumptions relating to these statements. In addition, when used in this report, the words "anticipates," "believes," "should," "estimates," "expects," "intends," "plans" and variations thereof and similar expressions are intended to identify forward-looking statements.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified based on current expectations. Consequently, future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements contained in this report or in other Company filings, press releases, or otherwise. Factors that could contribute to or cause such differences include, but are not limited to, unanticipated developments in any one or more of the following areas:

• global economic and market conditions, including continuation of or changes in the current economic environment;

• ability of the Company to introduce new products to meet consumer needs, including timely introductions as new consumer technologies are introduced, and customer and consumer acceptance of these new product introductions;

• pressure for the Company to reduce prices for older products as newer technologies are introduced;

• significant competition in the consumer electronics business, including introduction of new products and changes in pricing;

• factors related to foreign manufacturing, sourcing and sales (including foreign government regulation, trade and importation, and health and safety concerns, and effects of fluctuation in exchange rates);

• ability of the Company to maintain adequate financing, to bear the interest cost of such financing and to remain in compliance with financing covenants;

• impairment of intangible assets due to market conditions and/or the Company's operating results;

• changes in law;

• ability to successfully integrate acquisitions;

• and other risk factors, which may be detailed from time to time in the Company's SEC filings.

Readers are cautioned not to place undue reliance on any forward-looking statements contained in this report, which speak only as of the date set forth on the signature page hereto. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.