TWST: Would you begin with a brief outline of what Cobra Electronics is today?

Mr. Bazet: I guess the best way to start is to give you a quick history and overview of Cobra. We are a 40-year-old global consumer electronics company publicly traded on NASDAQ under the COBR symbol. We are number one or a strong number two in market share in every market in which we participate, which is an achievement for a company of our size. Today, we are applying our automotive and communication heritage by entering new markets like GPS, 12-Volt and Marine. Cobra products are available at more than 38,000 storefronts, including Wal-Mart, Best Buy, Circuit City and Target, just to name a few. We are currently in four distinct product categories. The two-way radio category, otherwise known as GMRS and FRS, that we entered in 1998 behind established players like Motorola, Sony and Uniden, and through our innovation we have extended our range of models, and now we are neck and neck in market share with the leader. Our second category would be radar detection, and we have the dominant market share, selling more than the next four manufacturers combined. We emphasize innovation, design and performance. The company was founded on citizen's band radio and we own that marketplace as well for the professional and recreational drivers, and it continues to be a strong performer for us. Then finally, what's attracting a lot of attention to us today is global positioning systems. We entered this market in late 2003 and we expect it to drive the future growth of the company. Our first mobile navigation units are winning a lot of awards. So those are the categories in which we participate in terms of products and we feel the future is bright with these products in particular.

TWST: As you transition, has there been a major shift in focus and strategy, the type of customers you are looking at, etc.? Or has it been sort of supplemental to what you have already done at that core Cobra business?

Mr. Bazet: I think we have been able to do both. I think we have been able to take our core competencies, including innovation and distribution with all the major electronics and national retailers. Then, we have gone out and acquired what we need to be successful in the market in terms of the various types of proprietary technology. We have spent the last two years actually acquiring the resources to compete in the GPS market. At the same time we have devoted significant resources to talking with consumers and understanding what they want. We have successfully done that in the existing categories in which we compete and we have duplicated that process for GPS. I think that's what's going to be the hallmark of our success in the category. At the Consumer Electronics Show recently, our SKYNAV in-vehicle portable navigation system was named best in class in mobile electronics, and Time magazine named it as one of the top 10 products at CES. So we are having some strong early indicators that we are in the right direction here.

TWST: How much of the strength of these products is based on the strength of intellectual property? How much is the marketing acumen, the knowledge of your consumer and the technology itself?

Mr. Bazet: The Business 101 answer is that it's all important, of course, but basically as we move away from products like two-way radio into the GPS category, then it is much more critical that we have the proper engineering resources in proprietary technology to compete in that marketplace. Marketing certainly still plays a role because of the customer base and the new category challenges. But we are finding it is much more software-oriented as opposed to hardware-oriented in terms of where we have competed in the past.

TWST: What's your outlook for these markets? It certainly hasn't been an easy consumer experience over the past two or three years, but the silver lining seems to be on the horizon at this point.

Mr. Bazet: Yes, and there are some things about the market itself that are very attractive to us. First of all, the GPS market has high barriers to entry. You are not going to see it duplicated by just everyone because of what we talked about previously in terms of technology. In addition to that, the market is so large and is growing so fast that we feel like we will be able to get our fair share just in the growth that's occurring in the marketplace. Third, you have a few dominant players in this market that have kind of led the way. So this market is at its infancy and there have been some pioneers in it that dominate the market today, but they have also begun to pave the road for us. This is Cobra's competitive advantage, we enter into these markets and we innovate, build better products and take market share. And that's what we intend to do in GPS. So we are very optimistic about the market and as I said it's in its infancy. Less than 1% of households actually own GPS at this point in time. We are moving into something a little different and that is portable navigation. We are going to be able to sell products as we have done in the past to the secondary market, where consumers don't want to spend the money upfront to have a factory- installed GPS system in their car. And there are a lot of cars that don't have those at this point in time. It will be very exciting for us. We are aggressively entering these markets and leveraging our traditional strengths to take advantage of the growth.

TWST: What's the competitive landscape at this point? What does that create as far as pricing pressures or other pressures as you look at these products and your customers?

Mr. Bazet: From what we can see right now, this market, unlike some of the very, very high volume, lower priced types of products, is not quite as price sensitive. Certainly, we have to be competitive and have the engineering know-how, the capabilities and the manufacturing to do so. But we believe it's going to be a less price-sensitive market for a few reasons. First of all, the competitive landscape is made up of only one or two significant players. Second, what we see in this particular arena is low penetration in the product category because it is in its infancy. Right now manufacturers are selling technology, not price in this particular category. So we are excited about being able to compete on that type of level. The competitive landscape has two dominant players right now; Garmin is the most dominant, followed by Magellan. Those are what we view as the two significant players in the aftermarket GPS.

TWST: What is the agenda at this point? What would make the next 12 to 24 months a success?

Mr. Bazet: A variety of things. First of all, we are going to gain leadership positions and become a top player in the new markets as we have done in the past. So we are going to take the awards that we have had, and deliver our products on a timely basis. From the feedback we are getting from the retailers today, they are very excited about having another choice in the competitive landscape as an alternative for their consumers. So to answer the question more directly, good placement of the product and its acceptance is success. The way we measure success is consumer sell-through, and not who picks our product up. That's why we spend so much time in focus group studies ' with the consumers, trying to find out what makes the product more intuitive and user-friendly in their eyes. What is it that consumers are looking for? They have told us and we have listened, and we have put it into our products, so we are optimistic that the sell-through is going to be good. But the placement, and the timely delivery will be our litmus test this year.

TWST: How strong financially is Cobra at this point? Balance sheet, profit and loss statement, what areas there are you focused on for improvement?

Mr. Bazet: Certainly, we have remained focused on maintaining strong financials through these challenging economic times. We have remained focused on managing our working capital very closely. Cobra, I am proud to say, finished up the year again as a debt-free company. Not many public companies can say that. We have a very nice line of credit, and we have a strong balance sheet. We manage our liquidity, inventory and receivables very closely. The quality of our receivables is improving tremendously and we are very focused on preserving our fixed assets. From a balance sheet perspective, Cobra is a very strong company, which makes it a strong competitor in the market.

TWST: Introduce us to your top-level management team at this point, the bench strengths and skill sets onboard. How do those individuals relate to the future's strategy that you have put in place, and what areas are you looking to augment?

Mr. Bazet: Naturally, we are moving into a lot of different areas. We believe in a lot of things here. First of all, it's a company in transition. I have gone to a variety of different companies and managed them as CEO in turnaround environments. One of the things I set out to do a little over five years ago when I came here was to change the management team to make sure I had the assets, resources and management talent to make the company move forward in the direction I want to take it. My opinion was we needed to be a strong number one or number two in every category we participate in because of our small size; the lack of critical mass won't get us there, but the right people and products will. Most importantly I have brought to the company a develop-or-die attitude. I have a model here that we develop or die, not just develop but also innovate. So I went about building a new management team and brought in a new head of engineering, new head of marketing and sales, a new CFO, and a new head of operations. Most of the management team has changed over the last two or three years so the culture here has evolved, and we are a much more aggressive company. The management team that you see today is the management team that I am confident is going to help me take the company to the next level. The areas that we are getting into which leverage our core competencies are the marine area because of our excellent communication heritage and its compatibility with GPS. We expanded three years ago into Europe and that's doing well for us. It's beginning to really grow and take off. Leveraging other businesses we have had in the past has enabled us to get into the 12- volt automotive business again. So the products I have mentioned earlier not only open up new product areas for us, but new channels of distribution and new customers for us. We are very optimistic about that, and 2004 is going to be a pivotal year for us, because we are delivering products that allow us to enter into these categories. Although we won't have a full year of sales in those categories, we will establish ourselves as a contender in GPS, marine and 12-volt. The future is very bright for us.

TWST: I don't know if we have specifically discussed what role mergers and acquisitions play as you perhaps look to expand product distribution and your customer base. What role has it played? What role might it continue to play?

Mr. Bazet: It hasn't played a large role in the past. Most of our growth that we have experienced is internally generated although the economy recently has limited that growth. But it has always been on our mind and from a strategic standpoint, we are looking at these new channels of distribution that we are getting into, and there is a lot of opportunity for acquisitions. We are going to be on an aggressive acquisition program. We have a nice strong balance sheet, but first we want to get these products delivered and begin establishing the Cobra brand. Simultaneously, we are going to begin looking for opportunities to better establish ourselves in these new distribution channels, which could come from a variety of different areas. There are a lot of companies in the marine and in 12-volt markets that have products that need the distribution strength, the management strength and the financial strength that Cobra offers. So there are all sorts of joint venture possibilities and/or acquisitions. Let's not forget Europe as well. We formed Cobra Electronics Europe Limited and we are looking at the acquisition opportunities that could extend into the European marketplace as well.

TWST: What historically has been the shareholder base with Cobra? Is that base now changing or evolving?

Mr. Bazet: Our move into new markets and growing reputation is causing us to see some activity. We have a fair representation of a variety of types of shareholders. We have everything from the institutional guys down to small investors that buy our stock. Of course one of the problems we have had recently is that we have been undervalued for a number a years and our book value exceeded the market value. Recently, since entering into global positioning systems and winning these awards plus a variety of different factors, has exposed Cobra to the marketplace and we are starting to see increased interest in the company. Since CES in January, we have seen some true value recognized in our stock price and we were, on one particular day, the leading gainer on NASDAQ. So in terms of our stock now, I am comfortable the market is beginning to finally realize the value that we have in our company.

TWST: Do you enjoy specific analyst coverage? Are there any analysts who are broadly looking at these markets?

Mr. Bazet: Not to date we haven't. We haven't had much analyst coverage. We are in a process of evolving as a company, which hasn't been that attractive to analysts. But now as we see ourselves getting into the marine market and particularly the GPS market, we are seeing a lot of the analysts that cover the competitive landscape begin to gravitate toward us. One indication of this was at the Consumer Electronics Show, we had quite a few meetings with both buy- and sellside analysts that before hadn't taken great interest in our products. I think a lot of it has to do with what's been happening with our stock recently and the huge gain in the NASDAQ. I think it was January 7 that we were the top gainer on NASDAQ and shot up almost 50% at one point. A combination of factors has attracted analyst attention ' the new markets we are entering, the new products and updated versions of our existing products combined with strong demand from our international distributors ' has led to much more attention than we have had in the past. Our phone is ringing, so we are excited.

TWST: What are the priorities in that message or the investor relations program itself at this point? Is it an offshoot of the public relations and marketing and sales or are there specific goals and priorities?

Mr. Bazet: We have very specific goals and priorities. We have proved that we can compete against the biggest companies in part because of product innovation, which enables us to more rapidly adjust to changing markets. We also have a history of entering marketplaces after they are established by others, and most of the time beating larger companies and taking significant market share. We have identified how quickly and aggressively we pursue high-growth markets, particularly with GPS. We have an extensive distribution network with over 38,000 storefronts and we have strong financials. So you combine these things together, it shows the market that they ought to take a look at Cobra. That hasn't necessarily been enough in the past, but now we are entering into potentially lucrative markets that are just in their infancy and are more technologically oriented. Now people are starting to say, 'Who is this company in a corner of Chicago winning all of these awards and coming out with these consumer focused products? Maybe we should take a look at them.' So the combination of the new hot products that we are introducing, new channels that we are getting into and then the traditional strengths Cobra is built on should come together for us handsomely in the years to come.

TWST: What are the three or four summary statements that would compel investors to include Cobra in their current investment portfolios and their longer-term investment strategies?

Mr. Bazet: I think it goes back to the basics and that is the market share positions that we enjoy in the categories in which we participate. We have a proven track record of entering these categories and gaining the number one and number two position. Our history of innovations, the extensive distribution networks, certainly all of those things are the groundwork for us. But if I were looking at it from an investor standpoint, the big question is, what's next for Cobra? The future is very bright, we are entering new markets which expose us to new sales channels, broaden our horizons and give us the ability to grow the company. We continue to build on our leadership position in the current markets and expect to see gains there. Most important, we will always continue to innovate or die. Succeeding in the two-way radio market against Motorola, entering the GPS market with award-winning products are indicators that we are on the right track and that with the solid base we have built in these other categories, Cobra is going to be able to really come of age in the next year.

TWST: What have I overlooked? Any thoughts or issues to include we haven't touched?

Mr. Bazet: You asked what we are looking for and that is continued success. And again, that's continuing to gain leadership positions leveraging our award winning products in these categories while at the same time protecting our older products and our market share there. So I think we have pretty much identified why we and so many others believe Cobra's future is very bright.

TWST: Thank you. (DWA)

JAMES R. BAZET President & CEO Cobra Electronics Corporation 6500 West Cortland Street Chicago, IL 60707 (773) 889-8870 www.cobra.com

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