Sirius Radios Are Noncompliant Sirius in deep dog doo doo

Directed Shares Fall After FCC Notice
Wednesday July 5, 1:54 pm ET
Shares of Directed Electronics Plunge After FCC Says 2 of Its Sirius Radios
Are Noncompliant

NEW YORK (AP) -- Shares of Directed Electronics Inc. plunged Wednesday after
the maker of car security and audio equipment said it received notice that
two Sirius Satellite Radio Inc. radios it markets were found to be
noncompliant with Federal Communications Commission rules.
Shares of Directed dived 79 cents, or 6.2 percent, to $11.94 in afternoon
trading on the Nasdaq at nearly double their average daily volume. Earlier
in the day, the stock dipped to $11.62, below its previous 52-week low of

The Vista, Calif.-based company said in a Securities and Exchange Commission
report filed Wednesday that the FCC determined that the company's Sirius ST2
and Sirius S50-C radios are not in compliance with applicable rules for
operating-frequency range and applicable emissions. Directed Electronics
said the problems are not health or safety issues.

The FCC requested information from Direct Electronics regarding the
certification, manufacturing, importation, and other matters related to the
two radios. The company said it plans to fully cooperate with the FCC and
said it is also conducting an internal review.

The company also said it is working with Sirius and related manufacturers to
"make any and all necessary modifications to ensure that we distribute only
FCC-compliant products, to obtain new equipment authorizations where
appropriate, and to minimize any interruption in supply of these wireless
Sirius radios to retailers and consumers."

"Although we believe that it is too early in the process to determine with
any degree of certainty the significance, if any, of these matters to our
business, results of operations, or financial position, we fully expect to
resolve these issues in a timely manner and expect that our 2006 results
will continue to be in line with prior guidance," the company said in the

Shares of Sirius fell 9 cents, or 2 percent, to $4.52 on the Nasdaq. The
stock has traded in a 52-week range of $3.60 to $7.98.


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