Every now and then, I run across an interesting company that investors should know about. The latest is West Melbourne, Fla.-based Relm Wireless, which has carved out a very nice business for itself as a low-price, high-margin manufacturer of two-way land mobile radios.  These two-way radios are handheld devices (although some can be mounted in vehicles) and look a lot like walkie-talkies. They are used by public-safety companies, businesses and government agencies.  Traditionally, the biggest market for Relm has been public safety. Its customers include the U.S. Department of Defense, the U.S. Department of the Interior, the U.S. Army, the U.S. Forest Service and the U.S. Parks Service, to name just a few. About 70% of revenue comes from these organizations.  Relm also has business and industrial customers such as hotels (Hyatt Hotels just signed up for Relm’s radios), construction companies, schools, airports and taxis that need less expensive, push-to-talk communication. Businesses and industrial companies generate about 30% of revenue.  One of the biggest advantages of Relm’s radios: They all work when the Internet or cellular networks operated by companies such as Sprint and Verizon go down.  Now, Relm’s business is going through a transformation for two reasons. The first is that the government has mandated the development of interoperable networks, where radios developed by different manufacturers and used by different organizations, will all be able to communicate with one another. In this area, Relm is at the forefront and is one of the earliest players to develop interoperable radios.  The second reason that Relm is doing well is that the company has been able to develop highly sophisticated radios with high specifications at a much lower cost than competitors such as Motorola . As a result, it can sell its products for a lower price, giving it an edge in sales.  Despite Relm’s advantages, the company is up against some tough competitors. Motorola, for instance, pulls in more than $5.1 billion in sales of radios and related infrastructure, while Relm only generates about $28.5 million. But Relm CEO David Storey David Storey says that doesn’t mean his company can’t grow rapidly. He sees an opportunity to increase sales so that Relm will have a 10% global market share within ten years. He plans to do this by adding new components to the company’s offering through acquisitions. If it can do that, Relm will be a company with about $1 billion in sales in ten years.  So far, the company seems to be on track. At the end of February, Relm released its fourth-quarter and fiscal-2005 earnings results. For the quarter ended Dec. 31, 2005, sales were up 61.5% to $9.0 million, compared with $5.6 million for the same quarter last year. Pretax income increased approximately 458% to $2.3 million from the same quarter in 2004.  Net income grew 25% to $8.3 million, and gross profit margins widened to 53.4% from 40.0%. And the good performance wasn’t just in the fourth quarter. For the full year of 2005, sales were up 38.1% to $28.5 million, compared with $20.7 million for 2004. Pretax income increased approximately 233% to $5.5 million, from $1.7 million for 2004. Net income was $10.3 million, up from $7.9 million in 2004. Gross profit margins increased to 51.5% from 44.0% for 2004.  I expect things to continue to pick up this year. Relm is moving aggressively to develop digital products. Over the last five years, the company released 29 different products, eight of which were digital. This year, the company will release another 30 products, most of which are digital as well.  Relm’s rapid growth comes after a very long and difficult history. The company got its start some 60 years ago in Indianapolis under the name Industrial Development Engineering Associations. It was incorporated almost 50 years ago under the name Regency Electronics, and its main business became developing citizens’ band (CB) radios. In 1992, Relm was acquired by a company called Adage, a mini-conglomerate involved in many disparate businesses such as real estate, steel, garage-door openers and paper.  But Relm’s management, which included Richard Laird, a former chief executive officer, William Kelly William Kelly , chief financial officer, and David Storey, who became CEO in July 2000, decided to focus the company on wireless communications and on land mobile radios in particular. Storey says to expect some exciting new technologies from the company this year. One of them is the ability to encrypt radios signals over the air, something that he says could boost sales of Relm’s products.  Nikhil Hutheesing is editor of Forbes Wireless Stock Watch. Click here for more analysis and recommendations by Hutheesing and to subscribe to Forbes Wireless Stock Watch.  More Adviser Soapbox/Unwired Portfolio columns  Send comments and questions to newsletters@forbes.com.  Comments are turned off for this post.
One way to grow fast is to focus on a market niche. For Relm Wireless, that means land mobile radios.