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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10 - Q

|  |  |                                                                                  
|- |  | ---------------------------------------------------------------------------------
|x |  | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2003

or

|  |  |                                                                                   
|- |  | ----------------------------------------------------------------------------------
|o |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from
_______ to ______


Commission file number 0-28180

SPECTRALINK CORPORATION

(Exact name of registrant as specified in charter)


|                                                               |  |                       
|-------------------------------------------------------------- |  | ----------------------
|Delaware                                                       |  | 84-1141188            
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer         
|                                                               |  | Identification Number)
|                                                               |  |                       
|5755 Central Avenue, Boulder, Colorado                         |  | 80301-2848            
|(Address of principal executive office)                        |  | (Zip code)            

303-440-5330

(Registrants telephone number)


(Former name, former address and former fiscal year, if changed from last report)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes x No o

Applicable only to corporate issuers:

As of October 31, 2003, there were 18,790,155 shares outstanding of SpectraLink
Corporations Common Stock - par value $0.01.





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TABLE OF CONTENTS



|                                           |                                                                                              |                                                      |  |  |  |  |  | 
|------------------------------------------ | -------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I   FINANCIAL INFORMATION           
|                                           | ITEM 1 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                          
|                                           |                                                                                              | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                                           |                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF INCOME         
|                                           |                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                           |                                                                                              | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                                           | ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                           | ITEM 3. Quantitative and Qualitative Disclosures about Market Risk                          
|                                           | ITEM 4. Controls and Procedures                                                             
|Part II Other Information                 
|                                           | Item 1 Legal Proceedings                                                                    
|                                           | Item 6 Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                
|EXHIBIT INDEX                             
|EX-31.1 Certification by John H. Elms     
|EX-31.2 Certification by Nancy K. Hamilton
|EX-32.1 Certification by John H. Elms     
|EX-32.2 Certification by Nancy K. Hamilton



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##### Table of Contents



SPECTRALINK CORPORATION AND SUBSIDIARY
INDEX

|               |  |                                                                                       |  |                                                                                                                                |    |      |    | 
|-------------- |  | ------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------ | -- | ---- | -- | 
|               |  |                                                                                       |  |                                                                                                                                |    | Page
|Part I         |  | Financial Information                                                                 |  |                                                                                                                                |    |     
|Item 1         |  | Condensed Consolidated Financial Statements                                           |  |                                                                                                                                |    |     
|               |  |                                                                                       |  | Condensed Consolidated Balance Sheets at
September 30, 2003 and December 31, 2002 (Unaudited)                                  |    |      | 3  | 
|               |  |                                                                                       |  | Condensed Consolidated Statements of Income for the
Three Months and Nine Months Ended September 30, 2003 and 2002 (Unaudited) |    |      | 4  | 
|               |  |                                                                                       |  | Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 2003 and 2002 (Unaudited)              |    |      | 5  | 
|               |  |                                                                                       |  | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                               |    |      | 6  | 
|Item 2         |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations |  |                                                                                                                                | 10 |     
|Item 3         |  | Quantitative and Qualitative Disclosures About Market Risk                            |  |                                                                                                                                | 15 |     
|Item 4         |  | Controls and Procedures                                                               |  |                                                                                                                                | 22 |     
|Part II        |  | Other Information                                                                     |  |                                                                                                                                |    |     
|Item 1         |  | Legal Proceedings                                                                     |  |                                                                                                                                | 23 |     
|Item 6         |  | Exhibits and Reports on Form 8-K                                                      |  |                                                                                                                                |    |     
|               |  |                                                                                       |  | (a) Exhibits                                                                                                                   |    |      | 24 | 
|               |  |                                                                                       |  | (b) Form 8-K                                                                                                                   |    |      | 24 | 
|Signatures     |  |                                                                                       |  |                                                                                                                                | 25 |     
|Certifications |  |                                                                                       |  |                                                                                                                                | 27 |     

2



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PART I - FINANCIAL INFORMATION




ITEM 1

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




SPECTRALINK CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |        |  | 
|------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------ | ------- | ------------- |  | ------------ | ------- | ------ |  | 
|                                     |                                                                                                                                                                |                                            |        |         | September 30, |  | December 31,
|                                     |                                                                                                                                                                |                                            |        |         |               |  |             
|                                     |                                                                                                                                                                |                                            |        |         | 2003          |  | 2002        
|                                     |                                                                                                                                                                |                                            |        |         |               |  |             
|ASSETS                               |                                                                                                                                                                |                                            |        |         |               |  |              |        
|CURRENT ASSETS:                      |                                                                                                                                                                |                                            |        |         |               |  |              |        
|                                     | Cash and cash equivalents                                                                                                                                      |                                            | $      | 50,002  |               |  | $            | 44,211  |       
|                                     | Trade accounts receivable, net of allowance of $341 and $311, respectively                                                                                     |                                            |        | 13,234  |               |  |              | 11,143  |       
|                                     | Income taxes receivable                                                                                                                                        |                                            |        | 1,192   |               |  |              | 105     |       
|                                     | Inventory, net of allowance of $627 and $651, respectively                                                                                                     |                                            |        | 7,473   |               |  |              | 7,449   |       
|                                     | Other                                                                                                                                                          |                                            |        | 1,941   |               |  |              | 1,773   |       
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       
|                                     |                                                                                                                                                                | Total current assets                       |        |         | 73,842        |  |              |         | 64,681 | 
|PROPERTY AND EQUIPMENT, at cost:     |                                                                                                                                                                |                                            |        |         |               |  |              |        
|                                     | Furniture and fixtures                                                                                                                                         |                                            |        | 2,288   |               |  |              | 1,632   |       
|                                     | Equipment                                                                                                                                                      |                                            |        | 8,862   |               |  |              | 7,240   |       
|                                     | Leasehold improvements                                                                                                                                         |                                            |        | 977     |               |  |              | 865     |       
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       
|                                     |                                                                                                                                                                |                                            | 12,127 |         |               |  | 9,737        |        
|                                     | Less  accumulated depreciation                                                                                                                                |                                            |        | (8,086  | )             |  |              | (7,224  | )     
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       
|                                     |                                                                                                                                                                | Net property and equipment                 |        |         | 4,041         |  |              |         | 2,513  | 
|OTHER                                |                                                                                                                                                                |                                            | 502    |         |               |  | 397          |        
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       
|                                     |                                                                                                                                                                | TOTAL ASSETS                               |        | $       | 78,385        |  |              | $       | 67,591 | 
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                                                                |                                            |        |         |               |  |              |        
|CURRENT LIABILITIES:                 |                                                                                                                                                                |                                            |        |         |               |  |              |        
|                                     | Accounts payable                                                                                                                                               |                                            | $      | 1,487   |               |  | $            | 1,023   |       
|                                     | Accrued payroll, commissions and employee benefits                                                                                                             |                                            |        | 2,617   |               |  |              | 2,069   |       
|                                     | Accrued sales, use and property taxes                                                                                                                          |                                            |        | 640     |               |  |              | 512     |       
|                                     | Accrued warranty expenses                                                                                                                                      |                                            |        | 411     |               |  |              | 274     |       
|                                     | Other accrued expenses and liabilities                                                                                                                         |                                            |        | 2,265   |               |  |              | 1,564   |       
|                                     | Deferred revenue                                                                                                                                               |                                            |        | 6,258   |               |  |              | 5,281   |       
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       
|                                     |                                                                                                                                                                | Total current liabilities                  |        |         | 13,678        |  |              |         | 10,723 | 
|LONG-TERM LIABILITIES                |                                                                                                                                                                |                                            | 266    |         |               |  | 178          |        
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       
|                                     |                                                                                                                                                                | TOTAL LIABILITIES                          |        |         | 13,944        |  |              |         | 10,901 | 
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       
|STOCKHOLDERS EQUITY:                |                                                                                                                                                                |                                            |        |         |               |  |              |        
|                                     | Preferred stock, 5,000 shares authorized, none issued and outstanding                                                                                          |                                            |        |        |               |  |              |        |       
|                                     | Common stock, $0.01 par value, 50,000 shares authorized, 22,697 and 22,130 shares
issued, respectively, and 18,768 and 18,648 shares outstanding, respectively |                                            |        | 226     |               |  |              | 221     |       
|                                     | Additional paid-in capital                                                                                                                                     |                                            |        | 69,564  |               |  |              | 63,763  |       
|                                     | Retained earnings                                                                                                                                              |                                            |        | 24,045  |               |  |              | 18,412  |       
|                                     | Treasury stock, 3,929 shares and 3,482 shares, respectively, at cost                                                                                           |                                            |        | (29,394 | )             |  |              | (25,706 | )     
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       
|                                     |                                                                                                                                                                | TOTAL STOCKHOLDERS EQUITY                 |        |         | 64,441        |  |              |         | 56,690 | 
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       
|                                     |                                                                                                                                                                | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |        | $       | 78,385        |  |              | $       | 67,591 | 
|                                     |                                                                                                                                                                |                                            |        |         |               |  |              |         |       

The accompanying notes to condensed financial statements are an integral part of these condensed consolidated
statements.

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SPECTRALINK CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)

|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |        |        |        | 
|------------------------------------------- | --------------------------- | --------------------------------- | ------------ | ------ | ------------------ | ------ | ----------------- | ------ | ------ | ----- | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | 
|                                            |                             |                                   |              |        | Three Months Ended |        | Nine Months Ended
|                                            |                             |                                   |              |        | September 30,      |        | September 30,    
|                                            |                             |                                   |              |        |                    |        |                  
|                                            |                             |                                   |              |        | 2003               |        | 2002              |        | 2003   |       | 2002  
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |       
|SALES:                                      |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|                                            | Product Sales, net          |                                   | $            | 14,500 |                    |        | $                 | 11,958 |        |       | $      | 40,672 |        |        | $      | 35,349 |       
|                                            | Service Sales               |                                   |              | 3,843  |                    |        |                   | 3,359  |        |       |        | 10,875 |        |        |        | 9,066  |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|                                            |                             | Net Sales                         |              |        | 18,343             |        |                   |        | 15,317 |       |        |        | 51,547 |        |        |        | 44,415 |       
|COST OF SALES:                              |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|                                            | Cost of Product Sales       |                                   |              | 4,164  |                    |        |                   | 3,491  |        |       |        | 11,644 |        |        |        | 10,836 |       
|                                            | Cost of Service Sales       |                                   |              | 1,883  |                    |        |                   | 1,875  |        |       |        | 5,193  |        |        |        | 4,780  |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|                                            |                             | Total Cost of Sales               |              |        | 6,047              |        |                   |        | 5,366  |       |        |        | 16,837 |        |        |        | 15,616 |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|                                            |                             |                                   | Gross Profit |        |                    | 12,296 |                   |        |        | 9,951 |        |        |        | 34,710 |        |        |        | 28,799 | 
|OPERATING EXPENSES:                         |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|                                            | Research and Development    |                                   |              | 1,908  |                    |        |                   | 1,622  |        |       |        | 5,912  |        |        |        | 4,764  |       
|                                            | Marketing and Selling       |                                   |              | 5,775  |                    |        |                   | 5,098  |        |       |        | 16,879 |        |        |        | 15,586 |       
|                                            | General and Administrative  |                                   |              | 1,009  |                    |        |                   | 917    |        |       |        | 3,066  |        |        |        | 2,874  |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|                                            |                             | Total Operating Expenses          |              |        | 8,692              |        |                   |        | 7,637  |       |        |        | 25,857 |        |        |        | 23,224 |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|INCOME FROM OPERATIONS                      |                             |                                   | 3,604        |        |                    |        | 2,314             |        |        |       | 8,853  |        |        |        | 5,575  |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|INVESTMENT INCOME AND OTHER:                |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|                                            | Interest Income             |                                   |              | 96     |                    |        |                   | 167    |        |       |        | 334    |        |        |        | 484    |       
|                                            | Other Income (Expense), net |                                   |              | (29    | )                  |        |                   | (24    | )      |       |        | (102   | )      |        |        | (46    | )     
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|                                            |                             | Total Investment Income and Other |              |        | 67                 |        |                   |        | 143    |       |        |        | 232    |        |        |        | 438    |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|INCOME BEFORE INCOME TAXES                  |                             |                                   | 3,671        |        |                    |        | 2,457             |        |        |       | 9,085  |        |        |        | 6,013  |       
|INCOME TAX EXPENSE                          |                             |                                   | 1,395        |        |                    |        | 934               |        |        |       | 3,452  |        |        |        | 2,285  |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|NET INCOME                                  |                             | $                                 | 2,276        |        |                    | $      | 1,523             |        |        | $     | 5,633  |        |        | $      | 3,728  |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|BASIC EARNINGS PER SHARE (Note 4)           |                             | $                                 | 0.12         |        |                    | $      | 0.08              |        |        | $     | 0.30   |        |        | $      | 0.20   |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|BASIC WEIGHTED AVERAGE SHARES OUTSTANDING   |                             |                                   | 18,530       |        |                    |        | 18,910            |        |        |       | 18,490 |        |        |        | 19,050 |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|DILUTED EARNINGS PER SHARE (Note 4)         |                             | $                                 | 0.12         |        |                    | $      | 0.08              |        |        | $     | 0.30   |        |        | $      | 0.19   |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       
|DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING |                             |                                   | 19,500       |        |                    |        | 19,110            |        |        |       | 19,020 |        |        |        | 19,340 |       
|                                            |                             |                                   |              |        |                    |        |                   |        |        |       |        |        |        |        |        |       

The accompanying notes to condensed financial statements are an integral part of these condensed consolidated
statements.

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SPECTRALINK CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |        |        |  
|----------------------------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------------------------------------- | ------ | ----------------- | ------ | ---- | ------ | ------ | ------ | -
|                                                                        |                                                                                   |                                                                            |        | Nine Months Ended
|                                                                        |                                                                                   |                                                                            |        | September 30,    
|                                                                        |                                                                                   |                                                                            |        |                  
|                                                                        |                                                                                   |                                                                            |        | 2003              |        | 2002
|                                                                        |                                                                                   |                                                                            |        |                   |        |     
|CASH FLOWS FROM OPERATING ACTIVITIES:                                   |                                                                                   |                                                                            |        |                   |        |      |        |       
|                                                                        | Net income                                                                        |                                                                            | $      | 5,633             |        |      | $      | 3,728  |       
|                                                                        | Adjustments to reconcile net income to net cash provided by
operating activities: |                                                                            |        |                   |        |      |        |        |       
|                                                                        |                                                                                   | Depreciation and amortization                                              |        |                   | 862    |      |        |        | 826    |  
|                                                                        |                                                                                   | Income tax benefit from the exercise of stock options                      |        |                   | 1,374  |      |        |        | 184    |  
|                                                                        |                                                                                   | Provision for bad debts                                                    |        |                   | 34     |      |        |        | 209    |  
|                                                                        |                                                                                   | Provision for excess and obsolete inventory                                |        |                   | 474    |      |        |        | 163    |  
|                                                                        |                                                                                   | Amortization of premium on investments in marketable securities            |        |                   |       |      |        |        | 4      |  
|                                                                        | Changes in assets and liabilities -                                               |                                                                            |        |                   |        |      |        |        |       
|                                                                        |                                                                                   | (Increase) decrease in trade accounts receivable                           |        |                   | (2,125 | )    |        |        | 1,952  |  
|                                                                        |                                                                                   | Increase in inventory                                                      |        |                   | (498   | )    |        |        | (208   | )
|                                                                        |                                                                                   | (Increase) decrease in other assets and income taxes receivable            |        |                   | (1,360 | )    |        |        | 1,755  |  
|                                                                        |                                                                                   | Increase in accounts payable                                               |        |                   | 464    |      |        |        | 11     |  
|                                                                        |                                                                                   | Increase in accrued liabilities, income taxes payable and
deferred revenue |        |                   | 2,462  |      |        |        | 1,363  |  
|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |       
|                                                                        |                                                                                   | Net cash provided by operating activities                                  |        |                   | 7,320  |      |        |        | 9,987  |  
|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |       
|CASH FLOWS FROM INVESTING ACTIVITIES:                                   |                                                                                   |                                                                            |        |                   |        |      |        |       
|                                                                        | Purchases of property and equipment                                               |                                                                            |        | (2,262            | )      |      |        | (673   | )     
|                                                                        | Maturity of investments in marketable securities                                  |                                                                            |        |                  |        |      |        | 1,000  |       
|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |       
|                                                                        |                                                                                   | Net cash (used in) provided by investing activities                        |        |                   | (2,262 | )    |        |        | 327    |  
|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |       
|CASH FLOWS FROM
 FINANCING ACTIVITIES:                                  |                                                                                   |                                                                            |        |                   |        |      |        |       
|                                                                        | Principal payments under long-term obligation                                     |                                                                            |        | (11               | )      |      |        |       |       
|                                                                        | Proceeds from exercises of common stock options                                   |                                                                            |        | 4,135             |        |      |        | 920    |       
|                                                                        | Proceeds from issuances of common stock                                           |                                                                            |        | 297               |        |      |        | 311    |       
|                                                                        | Purchases of treasury stock                                                       |                                                                            |        | (3,688            | )      |      |        | (6,619 | )     
|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |       
|                                                                        |                                                                                   | Net cash provided by (used in) financing activities                        |        |                   | 733    |      |        |        | (5,388 | )
|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |       
|INCREASE IN CASH AND CASH EQUIVALENTS                                   |                                                                                   |                                                                            | 5,791  |                   |        |      | 4,926  |       
|CASH AND CASH EQUIVALENTS, beginning of period                          |                                                                                   |                                                                            | 44,211 |                   |        |      | 37,242 |       
|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |       
|CASH AND CASH EQUIVALENTS, end of period                                |                                                                                   | $                                                                          | 50,002 |                   |        | $    | 42,168 |       
|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |        |       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                       |                                                                                   |                                                                            |        |                   |        |      |        |       
|                                                                        | Cash paid for income taxes                                                        |                                                                            | $      | 3,171             |        |      | $      | 113    |       
|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |        |       
|SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING
ACTIVITIES: |                                                                                   |                                                                            |        |                   |        |      |        |       
|                                                                        | Assets acquired under long-term obligation                                        |                                                                            | $      | 128               |        |      | $      |       |       
|                                                                        |                                                                                   |                                                                            |        |                   |        |      |        |        |       

The accompanying notes to condensed financial statements are an integral part of these condensed consolidated
statements.

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SPECTRALINK CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003
(Unaudited)

1. Basis of Presentation

The accompanying condensed consolidated financial statements as of
September 30, 2003 and December 31, 2002, and for the three and nine months
ended September 30, 2003 and 2002, have been prepared from the books and
records of SpectraLink Corporation and SpectraLink International Corporation
(together SpectraLink or the Company) and are unaudited. In managements
opinion, these financial statements include all adjustments, consisting only of
normal recurring adjustments, necessary to fairly present SpectraLinks
financial position, results of operations and cash flows for the periods
presented. The results of operations for the periods ended September 30, 2003,
are not necessarily indicative of the results to be expected for any subsequent
quarter or for the entire fiscal year ending December 31, 2003.

The financial statements should be read in conjunction with the audited
financial statements and notes thereto as of and for the year ended December
31, 2002, which are included in SpectraLinks Annual Report on Form 10-K. The
accounting policies utilized in the preparation of the financial statements
herein presented are the same as set forth in SpectraLinks annual financial
statements.

2. Stock-Based Compensation Plans

The Company accounts for its stock-based compensation plans under
Accounting Principles Board Opinion (APB) No. 25 (APB No. 25), Accounting for
Stock Issued to Employees. Statement of Financial Accounting Standards No.
123 (SFAS 123), Accounting for Stock-Based Compensation defines a fair value
based method of accounting for stock options and similar equity instruments.
As allowed by SFAS 123, the Company has continued to apply APB No. 25 to
account for its employee stock based compensation plans and has adopted the
disclosure requirements of SFAS 123 and Statement of Financial Accounting
Standards No. 148, Accounting for Stock-Based Compensation  Transition and
Disclosure, an amendment of SFAS 123. Had the Company determined compensation
expense for its stock-based compensation plans based on fair value at the date
of grant under SFAS 123, the Companys consolidated net income, and basic and
diluted earnings per share, would have been the pro forma amounts as follows:

|                                                                                                               |                       |                                                  |       |                           |      |                           |       |      |      |      |       |      |        |   |       |      |        |  
|-------------------------------------------------------------------------------------------------------------- | --------------------- | ------------------------------------------------ | ----- | ------------------------- | ---- | ------------------------- | ----- | ---- | ---- | ---- | ----- | ---- | ------ | - | ----- | ---- | ------ | -
|                                                                                                               |                       |                                                  |       | Three months ended        |      | Nine months ended        
|                                                                                                               |                       |                                                  |       | September 30,             |      | September 30,            
|                                                                                                               |                       |                                                  |       |                           |      |                          
|                                                                                                               |                       |                                                  |       | 2003                      |      | 2002                      |       | 2003 |      | 2002
|                                                                                                               |                       |                                                  |       |                           |      |                           |       |      |      |     
|                                                                                                               |                       |                                                  |       | (in thousands, except per |      | (in thousands, except per
|                                                                                                               |                       |                                                  |       | share amounts)            |      | share amounts)           
|Net Income, as reported                                                                                        |                       | $                                                | 2,276 |                           |      | $                         | 1,523 |      |      | $    | 5,633 |      |        | $ | 3,728 |     
|Deduct stock based employee compensation
expense under the fair value based method,
net of related tax effect: |                       |                                                  |       |                           |      |                           |       |      |      |      |       |      |        |   |       |     
|                                                                                                               |                       | Compensation expense for stock options           |       |                           | (579 | )                         |       |      | (741 | )    |       |      | (1,748 | ) |       |      | (2,291 | )
|                                                                                                               |                       | Compensation expense for the stock
purchase plan |       |                           | (41  | )                         |       |      | (43  | )    |       |      | (122   | ) |       |      | (139   | )
|Net Income, pro forma                                                                                          |                       | $                                                | 1,656 |                           |      | $                         | 739   |      |      | $    | 3,763 |      |        | $ | 1,298 |     
|Earnings Per Share:                                                                                            |                       |                                                  |       |                           |      |                           |       |      |      |      |       |      |        |   |       |     
|                                                                                                               | Basic  as reported   |                                                  | $     | 0.12                      |      |                           | $     | 0.08 |      |      | $     | 0.30 |        |   | $     | 0.20 |       
|                                                                                                               | Basic  pro forma     |                                                  | $     | 0.09                      |      |                           | $     | 0.04 |      |      | $     | 0.20 |        |   | $     | 0.07 |       
|                                                                                                               | Diluted  as reported |                                                  | $     | 0.12                      |      |                           | $     | 0.08 |      |      | $     | 0.30 |        |   | $     | 0.19 |       
|                                                                                                               | Diluted  pro forma   |                                                  | $     | 0.09                      |      |                           | $     | 0.04 |      |      | $     | 0.20 |        |   | $     | 0.07 |       

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3. Inventory

Inventory includes the cost of raw materials, direct labor and
manufacturing overhead, and is stated at the lower of cost (first-in,
first-out) or market. Inventory as of September 30, 2003 and December 31,
2002, consisted of the following:

|                 |  |                |       |              |  |   |       | 
|---------------- |  | -------------- | ----- | ------------ |  | - | ----- | 
|                 |  | September 30,  |       | December 31,
|                 |  |                |       |             
|                 |  | 2003           |       | 2002        
|                 |  |                |       |             
|                 |  | (In thousands)
|Raw materials    |  | $              | 2,890 |              |  | $ | 2,630 | 
|Work in progress |  |                | 7     |              |  |   |      | 
|Finished goods   |  |                | 4,576 |              |  |   | 4,819 | 
|                 |  |                |       |              |  |   |       | 
|                 |  | $              | 7,473 |              |  | $ | 7,449 | 
|                 |  |                |       |              |  |   |       | 

4. Earnings Per Share

Basic earnings per share is computed by dividing net income by the
weighted average number of shares of common stock outstanding for the period.
Diluted earnings per share is determined by dividing the net income by the sum
of the weighted average number of common shares outstanding, and if not
anti-dilutive, the effect of outstanding stock options and/or other common
stock equivalents determined utilizing the treasury stock method. Potentially
dilutive common stock options excluded from the calculation of dilutive income
per share because they were anti-dilutive, totaled 67,265 and 1,869,546 for the
three months ended September 30, 2003 and 2002, respectively, and 277,542 and
1,358,866 for the nine months ended September 30, 2003 and 2002, respectively.
A reconciliation of the numerators and denominators used in computing earnings
per share is as follows:

|                               |                           |   |        |   |        |  |           |     |        |   |                                          |   |           |   |       |   |      |  |        |     |  |   |      |   | 
|------------------------------ | ------------------------- | - | ------ | - | ------ |  | --------- | --- | ------ | - | ---------------------------------------- | - | --------- | - | ----- | - | ---- |  | ------ | --- |  | - | ---- | - | 
|                               |                           |   |        |   |        |  |           |     |        |   | Three Months Ended September 30,         |   |           |   |       |   |      |  |       
|                               |                           |   |        |   |        |  |           |     |        |   | (In thousands, except per share amounts) |   |           |   |       |   |      |  |       
|                               |                           |   |        |   |        |  | 2003      |     |        |   |                                          |   |           |   |       |   | 2002 |  |        |     | 
|                               |                           |   |        |   |        |  |           |     |        |   |                                          |   |           |   |       |   |      |  |        |     | 
|                               |                           |   | Income |   | Shares |  | Per Share |     | Income |   | Shares                                   |   | Per Share
|                               |                           |   |        |   |        |  |           |     |        |   |                                          |   |          
|Basic EPS                     |                           | $ | 2,276  |   |        |  | 18,530    |     |        | $ | 0.12                                     |   |           | $ | 1,523 |   |      |  | 18,910 |     |  | $ | 0.08 |  
|Effect of dilutive securities: |                           |   |        |   |        |  |           |     |        |   |                                          |   |           |   |       |   |      |  |        |     |  |   |      |  
|                               | Stock purchase plan       |   |        |  |        |  |           | 13  |        |   |                                          |  |           |   |       |  |      |  |        | 17  |  |   |      |  | 
|                               | Stock options outstanding |   |        |  |        |  |           | 957 |        |   |                                          |  |           |   |       |  |      |  |        | 183 |  |   |      |  | 
|                               |                           |   |        |   |        |  |           |     |        |   |                                          |   |           |   |       |   |      |  |        |     |  |   |      |  
|Diluted EPS                   |                           | $ | 2,276  |   |        |  | 19,500    |     |        | $ | 0.12                                     |   |           | $ | 1,523 |   |      |  | 19,110 |     |  | $ | 0.08 |  
|                               |                           |   |        |   |        |  |           |     |        |   |                                          |   |           |   |       |   |      |  |        |     |  |   |      |  

|                               |                           |   |        |   |        |  |           |     |        |   |                                          |   |           |   |       |   |      |  |        |     |  |   |      |       |  
|------------------------------ | ------------------------- | - | ------ | - | ------ |  | --------- | --- | ------ | - | ---------------------------------------- | - | --------- | - | ----- | - | ---- |  | ------ | --- |  | - | ---- | ----- | -
|                               |                           |   |        |   |        |  |           |     |        |   | Nine Months Ended September 30,          |   |           |   |       |   |      |  |       
|                               |                           |   |        |   |        |  |           |     |        |   | (In thousands, except per share amounts) |   |           |   |       |   |      |  |       
|                               |                           |   |        |   |        |  | 2003      |     |        |   |                                          |   |           |   |       |   | 2002 |  |        |     | 
|                               |                           |   |        |   |        |  |           |     |        |   |                                          |   |           |   |       |   |      |  |        |     | 
|                               |                           |   | Income |   | Shares |  | Per Share |     | Income |   | Shares                                   |   | Per Share
|                               |                           |   |        |   |        |  |           |     |        |   |                                          |   |          
|Basic EPS                     |                           | $ | 5,633  |   |        |  | 18,490    |     |        | $ | 0.30                                     |   |           | $ | 3,728 |   |      |  | 19,050 |     |  | $ | 0.20 |      
|Effect of dilutive securities: |                           |   |        |   |        |  |           |     |        |   |                                          |   |           |   |       |   |      |  |        |     |  |   |      |      
|                               | Stock purchase plan       |   |        |  |        |  |           | 16  |        |   |                                          |  |           |   |       |  |      |  |        | 18  |  |   |      |      |  
|                               | Stock options outstanding |   |        |  |        |  |           | 514 |        |   |                                          |  |           |   |       |  |      |  |        | 272 |  |   |      | (0.01 | )
|                               |                           |   |        |   |        |  |           |     |        |   |                                          |   |           |   |       |   |      |  |        |     |  |   |      |      
|Diluted EPS                   |                           | $ | 5,633  |   |        |  | 19,020    |     |        | $ | 0.30                                     |   |           | $ | 3,728 |   |      |  | 19,340 |     |  | $ | 0.19 |      
|                               |                           |   |        |   |        |  |           |     |        |   |                                          |   |           |   |       |   |      |  |        |     |  |   |      |      

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5. Product Warranties

The Company provides warranties against defects in materials and
workmanship for products for periods ranging from 90 days to 15 months, but in
limited cases up to 18 months. At the time the product is shipped, the Company
establishes a provision for estimated expenses of providing service under these
warranties based on historical warranty experience. A summary of activity for
accrued product warranty and service is as follows:

|                                                    |                                                 |   |                    |      |                   |   |      |      |      |   |     |      |   |   |     |      |  
|--------------------------------------------------- | ----------------------------------------------- | - | ------------------ | ---- | ----------------- | - | ---- | ---- | ---- | - | --- | ---- | - | - | --- | ---- | -
|                                                    |                                                 |   | Three months ended |      | Nine months ended
|                                                    |                                                 |   | September 30,      |      | September 30,    
|                                                    |                                                 |   |                    |      |                  
|                                                    |                                                 |   | 2003               |      | 2002              |   | 2003 |      | 2002
|                                                    |                                                 |   |                    |      |                   |   |      |      |     
|                                                    |                                                 |   | (In thousands)     |      | (In thousands)   
|Beginning Balance Accrued Product Warranty Expenses |                                                 | $ | 404                |      |                   | $ | 289  |      |      | $ | 274 |      |   | $ | 278 |     
|                                                    | Additions to the accrual for product warranties |   |                    | 143  |                   |   |      | 120  |      |   |     | 526  |   |   |     | 562  |  
|                                                    | Payments made in cash or in kind                |   |                    | (136 | )                 |   |      | (109 | )    |   |     | (389 | ) |   |     | (540 | )
|                                                    |                                                 |   |                    |      |                   |   |      |      |      |   |     |      |   |   |     |     
|Ending Balance Accrued Product Warranty Expenses    |                                                 | $ | 411                |      |                   | $ | 300  |      |      | $ | 411 |      |   | $ | 300 |     
|                                                    |                                                 |   |                    |      |                   |   |      |      |      |   |     |      |   |   |     |     

6. Advertising Costs

The Company expenses all advertising costs as they are incurred.
Advertising expense for the three months ended September 30, 2003 and 2002,
were approximately $187,000 and $118,000, respectively, and $505,000 and
$309,000 for the nine months ended September 30, 2003 and 2002, respectively.

7. Stockholders Equity

In the third quarter of 2003, SpectraLink did not repurchase any shares of
outstanding common stock. During the third quarter of 2002, 310,300 shares
were repurchased at a cost of $2,122,000. For the nine months ended September
30, 2003, SpectraLink repurchased 447,100 shares of outstanding common stock
(now classified as treasury stock) at a cost of $3,688,000, and during the nine
months ended September 30, 2002, 771,300 shares were repurchased at a cost of
$6,619,000.

8. Legal Proceedings

On January 14, 2002, SpectraLink issued a press release announcing
preliminary financial results for the fourth quarter of 2001 and revising
downward its projections for year 2002. Shortly after the press release, the
Companys stock price declined and the Company and certain of its officers and
directors were named as defendants in four lawsuits filed between February 7,
2002 and March 6, 2002, three of which were filed in the United States District
Court for the District of Colorado and one of which was filed in the Colorado
District Court for the City and County of Denver. In each of the lawsuits,
plaintiffs, who purport to be purchasers or holders of SpectraLink common
stock, seek to assert claims either on behalf of a class of persons who
purchased securities in SpectraLink between July 19, 2001 and January 11, 2002,
or in the case of two of the lawsuits (one filed in the United States District
Court and one in the Colorado District Court), derivatively on behalf of
SpectraLink. Two of the lawsuits filed in the United States District contained
essentially identical claims alleging that SpectraLink and certain of its
officers and directors violated Sections 10(b) and 20(a) and Rule 10b-5 under
the Securities Exchange Act of 1934, as a result of alleged public
misstatements and omissions, accompanied by insider stock sales made in the
months prior to the decline in the price of SpectraLinks stock after the
January 14, 2002 press release. In the cases brought as derivative actions,
the plaintiffs allege that the officers and directors of SpectraLink violated
fiduciary duties owed to SpectraLink and its stockholders under state laws by
allowing and/or facilitating the issuance of these same alleged public
misstatements and omissions, misappropriating nonpublic information for their
own benefit, making insider stock sales, wasting corporate assets, abusing
their positions of control, and mismanaging the corporation. The plaintiffs in
these derivative cases allege that SpectraLink has and will continue to suffer
injury as a result of these alleged violations of duty for which the officers
and directors should be liable.

The cases are designated as follows: Wilmer Kerns, Individually And On
Behalf of All Others Similarly Situated, Plaintiff, vs. SpectraLink
Corporation, Bruce Holland and Nancy K. Hamilton, Defendants (United States
District Court Civil Action Number 02-D-0263); Danilo Martin Molieri,
Individually and On Behalf of All Others Similarly Situated, Plaintiff, v.
SpectraLink Corporation, Bruce Holland and Nancy K. Hamilton, Defendants
(United States District Court Civil Action Number 02-D-0315); Evie Elennis,
derivatively on behalf of SpectraLink Corporation, Plaintiff(s), v. Bruce M.
Holland, Anthony V. Carollo, Jr., Gary L. Bliss, Michael P. Cronin, Nancy K.
Hamilton and

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John H. Elms, Defendant(s), and SpectraLink Corporation, Nominal Defendant
(United States District Court Civil Action Number 02-D-0345); and Roger
Humphreys, Derivatively on Behalf of Nominal Defendant SpectraLink Corporation,
Plaintiff, v. Carl D. Carman, Anthony V. Carollo, Jr., Bruce M. Holland, Burton
J. McMurtry, Gary L. Bliss, Michael P. Cronin, John H. Elms, and Nancy K.
Hamilton, Defendants (Colorado District Court Case. No. 02CV1687).

The Kerns and Molieri purported class actions were consolidated, and the
plaintiffs filed a Consolidated Amended Complaint. In January of 2003, the
Court denied a motion to dismiss that amended pleading, and discovery has
recently commenced. The Court has now certified a class of all purchasers of
publicly traded common stock of SpectraLink from April 19, 2001 through January
11, 2002, inclusive.

The two derivative actions were stayed pending resolution of the motion to
dismiss in the consolidated class action, and plaintiffs counsel in the
Elennis derivative action filed an unopposed motion for relief from the stay
and filed an amended complaint and then a corrected amended complaint. Prior
to the entry of the stays in each of the derivative cases, the defendants had
filed motions to dismiss. Defendants moved to dismiss the amended and
corrected Elennis complaint, which motion is currently pending.

SpectraLink believes that the lawsuits are without merit and it intends to
vigorously defend itself and its officers and directors. SpectraLink does not
believe that its interests and that of the named officers and directors are
adverse to each other as of this time. However, no assurance can be given that
SpectraLink will be successful in defending the claims being asserted in these
suits, or that the interests of the various parties will remain aligned. If
SpectraLink is not successful in its defense of these suits, it could be
required to make significant payments to its stockholders and their lawyers,
which could have a material adverse effect on SpectraLinks business, financial
condition and results of operations. In addition, the litigation could result
in substantial costs, divert managements attention and resources, or
ultimately result in the interests of SpectraLink becoming adverse to those of
certain of its officers and directors. In either case, SpectraLinks business
could be adversely affected, even if the plaintiffs are not successful in their
claims against SpectraLink and/or its officers and directors.

The Company has incurred a loss related to the directors and officers
insurance deductible of which the majority of the expense was reflected in
2002. Based on current facts and circumstances, the Company is unable to
estimate future losses, if any, it may incur after considering the amounts that
will be covered by insurance.

SpectraLink is not presently a party to any other material pending legal
proceedings of which it is aware.

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ITEM 2

MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SPECTRALINK CORPORATION AND SUBSIDIARY

This Form 10-Q contains forward-looking statements within the context of
Section 21E of the Securities Exchange Act of 1934, as amended. Each and every
forward-looking statement involves a number of risks and uncertainties which
are described in this report. The actual results that SpectraLink achieves may
differ materially from those described in any forward-looking statement due to
such risks and uncertainties. SpectraLink has identified by*bold face*various sentences within this Form 10-Q which are believed to contain
forward-looking statements. Additionally, words such as believes,
anticipates, expects, intends, could, might, and similar expressions
are intended to identify forward-looking statements, but are not the exclusive
means of identifying such statements. SpectraLink undertakes no obligation to
revise any forward-looking statements in order to reflect events or
circumstances that may arise after the date of this report.

Business Description

SpectraLink commenced operations in April 1990 to design, manufacture and
sell workplace wireless telephone systems which complement existing telephone
systems by providing mobile communications in a building or campus environment.
SpectraLink Wireless Telephone Systems increase the efficiency of employees by
enabling them to remain in telephone contact while moving throughout the
workplace. SpectraLinks primary sales efforts are currently focused on home
improvement, grocery stores and other retail store chains, hospitals, nursing
homes, distribution centers, manufacturing and service facilities, corporate
offices and government and education facilities. SpectraLink sells its systems
in the United States, Canada, Europe and Asia/Pacific through its direct sales
force, telecommunications equipment distributors, and certain specialty
dealers. Effective December 23, 1999, SpectraLink incorporated SpectraLink
International Corporation in Delaware, as a wholly owned subsidiary of
SpectraLink.

Since inception, SpectraLink has expended considerable effort and
resources developing its wireless telephone systems, building its direct and
indirect channels of distribution, and managing the effects of rapid growth.
This rapid growth has required SpectraLink to significantly increase the scale
of its operations, including the hiring of additional personnel in all
functional areas, and has resulted in significantly higher operating expenses.
SpectraLink anticipates that its operating expenses will continue to increase.
Expansion of SpectraLinks operations may cause a significant strain on
SpectraLinks management, financial and other resources. The inability of
SpectraLink to manage additional growth, should it occur, could have a material
adverse effect on SpectraLinks business, financial condition and results of
operations.

Critical Accounting Policies and Estimates

SpectraLink has identified the most critical accounting principles upon
which its financial status depends in response to the SECs Release No.
33-8040, Cautionary Advice Regarding Disclosure About Critical Accounting
Policies. SpectraLink determined the critical accounting principles by
considering accounting policies that involve the most complex or subjective
decisions or assessments. Below is a summary of SpectraLinks most critical
accounting policies. This discussion and analysis should be read in
conjunction with SpectraLinks consolidated financial statements and related
notes included in SpectraLinks Annual Report on Form 10-K for the fiscal year
ended December 31, 2002, which was filed with the U.S. Securities and Exchange
Commission on March 28, 2003 (2002 Form 10-K).

SpectraLinks discussion and analysis of its financial condition and
results of operations are based upon SpectraLinks consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires SpectraLink to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. SpectraLink evaluates its
estimates, on an on-going basis, including those related to revenue
recognition, receivables, product warranty obligations, inventories and income
taxes. SpectraLink bases estimates on historical experience and on various
other assumptions that it believes to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.

10



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##### Table of Contents



SpectraLink believes the following critical accounting policies affect its
more significant judgments and estimates used in the preparation of its
consolidated financial statements:



| |  |  | Revenue Recognition.Most of SpectraLinks sales are generated from
contractual arrangements, which require SpectraLinks revenue
recognition policy to follow very specific and detailed guidelines in
measuring revenue and determining the periods that the related revenue
should be recorded, however, certain judgments affect the application
of SpectraLinks revenue policy, particularly in the area of
collectibility. The assessment of collectibility is particularly
critical in determining whether revenues should be recognized in the
current market environment. As part of the revenue recognition policy,
SpectraLink determines whether collectibility on its customers is
reasonably assured based on various factors, including whether there
has been deterioration in the credit quality of its customers that
could result in SpectraLink being unable to collect. SpectraLink will
defer revenue and related costs if SpectraLink is uncertain as to
whether collectibility is reasonably assured. Revenue results are
difficult to predict, and any shortfall in revenue or delay in
recognizing revenue could cause SpectraLinks operating results to vary
significantly from quarter to quarter and could result in operating
losses.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Allowance for Doubtful Accounts.SpectraLink is required to
estimate the collectibility of its trade accounts receivable. A
considerable amount of judgment is required in assessing the
realization of these receivables, including current creditworthiness of
each customer and related aging of past due balances. SpectraLink
maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required
payments. At September 30, 2003 and December 31, 2002, the allowance
for uncollectible accounts was $341,000 and $311,000, respectively.
Additional allowances may be required if the financial condition of
SpectraLinks customers were to deteriorate, resulting in an impairment
of their ability to make payments. If actual losses are significantly
greater than the reserves that SpectraLink has established,
SpectraLinks expenses will increase and its reported income will
decrease.                                                                                                                                                                                                                                                                                                 
|
| |  |  | Accrued Product Warranty Expenses.SpectraLink provides for the
estimated cost of product warranties at the time revenue is recognized.
SpectraLink engages in extensive product quality programs and
processes, including actively monitoring and evaluating the quality of
its component suppliers. At September 30, 2003 and December 31, 2002,
the accrual for warranty expenses was $411,000 and $274,000,
respectively. Product failure rates, material usage and service
delivery costs incurred in correcting a product failure affect
SpectraLinks warranty obligation. Revisions to the estimated warranty
liability would be required should actual product failure rates,
material usage or service delivery costs differ from SpectraLinks
estimates. If actual returns are significantly greater than the
reserves that SpectraLink has established, the actual results will
decrease SpectraLinks future reported earnings.                                                                                                                                                                                                                                                                                                                        
|
| |  |  | Reserve for Inventory.SpectraLink writes down its inventory for
estimated obsolescence or unmarketable inventory equal to the
difference between the cost of inventory and the estimated market value
based upon assumptions about future demand and market conditions. At
September 30, 2003 and December 31, 2002, the reserve for inventory was
$627,000 and $651,000, respectively. Additional inventory write-downs
may be required if actual market conditions are less favorable than
those projected by management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  |  | Income Taxes Valuation Allowances.SpectraLink may record a
valuation allowance to reduce its deferred tax assets to an amount that
is estimated to be more likely than not that such amounts will not be
realized. As of September 30, 2003 and December 31, 2002, there was no
valuation allowance for deferred tax assets as it was more likely than
not that such amounts would be realized. SpectraLink considers future
taxable income and ongoing prudent and feasible tax planning strategies
in assessing the need for a valuation allowance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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Results of Operations

The following table sets forth unaudited results of operations for the
three-month and nine-month periods ended September 30, 2003 and 2002, as a
percentage of net sales in each of these periods. This data has been derived
from the unaudited consolidated financial statements.

|                                 |                            |  |                    |       |                   |  |      |       |      |  |      |       |   |  |      |       |  
|-------------------------------- | -------------------------- |  | ------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | ---- | ----- | -
|                                 |                            |  | Three Months Ended |       | Nine Months Ended
|                                 |                            |  | September 30,      |       | September 30,    
|                                 |                            |  |                    |       |                  
|                                 |                            |  | 2003               |       | 2002              |  | 2003 |       | 2002
|                                 |                            |  |                    |       |                   |  |      |       |     
|Product Sales, net               |                            |  | 79.0               | %     |                   |  | 78.0 | %     |      |  | 78.9 | %     |   |  | 79.6 | %    
|Service Sales                    |                            |  | 21.0               | %     |                   |  | 22.0 | %     |      |  | 21.1 | %     |   |  | 20.4 | %    
|                                 | Net Sales                  |  |                    | 100.0 | %                 |  |      | 100.0 | %    |  |      | 100.0 | % |  |      | 100.0 | %
|Cost of Product Sales            |                            |  | 22.7               | %     |                   |  | 22.8 | %     |      |  | 22.6 | %     |   |  | 24.4 | %    
|Cost of Service Sales            |                            |  | 10.3               | %     |                   |  | 12.2 | %     |      |  | 10.1 | %     |   |  | 10.8 | %    
|                                 | Total Cost of Sales        |  |                    | 33.0  | %                 |  |      | 35.0  | %    |  |      | 32.7  | % |  |      | 35.2  | %
|Gross Profit                     |                            |  | 67.0               | %     |                   |  | 65.0 | %     |      |  | 67.3 | %     |   |  | 64.8 | %    
|Operating Expenses:              |                            |  |                    |       |                   |  |      |       |      |  |      |       |   |  |      |      
|                                 | Research and Development   |  |                    | 10.4  | %                 |  |      | 10.6  | %    |  |      | 11.5  | % |  |      | 10.7  | %
|                                 | Marketing and Selling      |  |                    | 31.5  | %                 |  |      | 33.3  | %    |  |      | 32.7  | % |  |      | 35.1  | %
|                                 | General and Administrative |  |                    | 5.5   | %                 |  |      | 6.1   | %    |  |      | 5.9   | % |  |      | 6.5   | %
|Total Operating Expenses         |                            |  | 47.4               | %     |                   |  | 50.0 | %     |      |  | 50.1 | %     |   |  | 52.3 | %    
|Income from Operations           |                            |  | 19.6               | %     |                   |  | 15.0 | %     |      |  | 17.2 | %     |   |  | 12.5 | %    
|Investment Income and Other, net |                            |  | 0.4                | %     |                   |  | 1.0  | %     |      |  | 0.4  | %     |   |  | 1.0  | %    
|Income Before Income Taxes       |                            |  | 20.0               | %     |                   |  | 16.0 | %     |      |  | 17.6 | %     |   |  | 13.5 | %    
|Income Tax Expense               |                            |  | 7.6                | %     |                   |  | 6.1  | %     |      |  | 6.7  | %     |   |  | 5.1  | %    
|Net Income                       |                            |  | 12.4               | %     |                   |  | 9.9  | %     |      |  | 10.9 | %     |   |  | 8.4  | %    

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SPECTRALINK CORPORATION AND SUBSIDIARY
Three and Nine Months Ended September 30, 2003 and 2002

Product Sales, net.SpectraLink derives its product revenue principally from
the sale of wireless, on-premises telephone systems. Product sales for the
three months ended September 30, 2003, increased by 21.3% to $14,500,000 from
$11,958,000 for the same period last year. Product sales for the nine months
ended September 30, 2003, increased by 15.1% to $40,672,000 from $35,349,000
for the same period last year. The increase in product sales was mainly due
to SpectraLinks increased product sales through distributors and dealers, and
increased penetration in the commercial markets.

Service Sales. SpectraLink derives its service revenue principally from the
installation and service of wireless, on-premises telephone systems. Service
sales for the three months ended September 30, 2003, increased by 14.4% to
$3,843,000 from $3,359,000 for the same period last year. Service sales for
the nine months ended September 30, 2003, increased by 20.0% to $10,875,000
from $9,066,000 for the same period last year. The increase in service sales
was mainly due to increased revenue from maintenance contracts relating to
products previously sold to a larger install base of customers, which continue
to use our products. Service sales also increased due to additional time and
material service repairs.

The customer mix shows a relatively equal decrease in the percentage of direct
sales compared to the increase in the percentage of indirect sales for the
three months and nine months ended September 30, 2003 and 2002 for many reasons
one of which is because SpectraLink has continued to enter into agreements with
additional distributors. The following table details the sales to different
customer types as a percentage of total net sales:

|                |  |                                |       |                   |  |      |       |      |  |  |       |   |  |  |       |  
|--------------- |  | ------------------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                |  | Customer Mix Table            
|                |  | (As a Percentage of Net Sales)
|                |  |                               
|                |  | Three Months Ended             |       | Nine Months Ended
|                |  | September 30,                  |       | September 30,    
|                |  |                                |       |                  
|                |  | 2003                           |       | 2002              |  | 2003 |       | 2002
|                |  |                                |       |                   |  |      |       |     
|Customer Type:  |  |                                |       |                   |  |      |       |      |  |  |       |   |  |  |       |  
|Indirect Sales  |  |                                | 55.6  | %                 |  |      | 45.9  | %    |  |  | 54.6  | % |  |  | 46.3  | %
|Direct Sales    |  |                                | 23.4  | %                 |  |      | 32.1  | %    |  |  | 24.3  | % |  |  | 33.3  | %
|Service Sales   |  |                                | 21.0  | %                 |  |      | 22.0  | %    |  |  | 21.1  | % |  |  | 20.4  | %
|                |  |                                |       |                   |  |      |       |      |  |  |       |   |  |  |       |  
|Total Net Sales |  |                                | 100.0 | %                 |  |      | 100.0 | %    |  |  | 100.0 | % |  |  | 100.0 | %
|                |  |                                |       |                   |  |      |       |      |  |  |       |   |  |  |       |  

The Company had sales to major customers which individually comprised more than
10% of total net sales for either the three or nine months ended September 30,
2003. The following table summarizes sales to major customers:

|               |  |                                |      |                   |  |      |      |      |  |  |     |   |  |  |     |  
|-------------- |  | ------------------------------ | ---- | ----------------- |  | ---- | ---- | ---- |  |  | --- | - |  |  | --- | -
|               |  | Sales to Major Customers      
|               |  | (As a Percentage of Net Sales)
|               |  |                               
|               |  | Three Months Ended             |      | Nine Months Ended
|               |  | September 30,                  |      | September 30,    
|               |  |                                |      |                  
|               |  | 2003                           |      | 2002              |  | 2003 |      | 2002
|               |  |                                |      |                   |  |      |      |     
|Customer Name: |  |                                |      |                   |  |      |      |      |  |  |     |   |  |  |     |  
|Customer A:    |  |                                | 10.0 | %                 |  |      | 11.4 | %    |  |  | 9.3 | % |  |  | 9.2 | %

Gross Profit.SpectraLinks cost of sales consists primarily of direct
material, direct labor, service expenses, and manufacturing overhead. Gross
profit increased by 23.6% to $12,296,000 for the three months ended September
30, 2003, from $9,951,000 for the same period last year. Gross profit
increased by 20.5% to $34,710,000 for the nine months ended September 30, 2003,
from $28,799,000 for the same period last year. For the three months and nine

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months ended September 30, 2003, gross profit margin (gross profit as a
percentage of net sales) increased to 67.0% from 65.0% and to 67.3% from 64.8%,
respectively. The increase in gross profit margin as a percentage of net sales
was mainly due to an increase in product sales compared to a proportionate
decrease in service sales and lower material costs.

Research and Development.Research and development expenses consist primarily
of employee costs, professional services and supplies necessary to develop,
enhance and reduce the cost of SpectraLinks systems. Research and development
expenses increased by 17.6% to $1,908,000 for the three months ended September
30, 2003, from $1,622,000 for the same period last year, representing 10.4% and
10.6%, respectively, of net sales. Research and development expenses increased
by 24.1% to $5,912,000 for the nine months ended September 30, 2003, from
$4,764,000 for the same period last year, representing 11.5% and 10.7%,
respectively, of net sales. SPECTRALINK EXPECTS THAT RESEARCH AND DEVELOPMENT
EXPENSES WILL BE APPROXIMATELY 10% TO 12% OF NET SALES FOR FISCAL 2003.In
both periods, SpectraLink incurred research and development expenses for new
product development, improvements to existing products, and manufacturing
process improvements. The increase in research and development expenses in
dollars spent and as a percentage of net sales was due to an increase in
headcount, which resulted from hiring additional personnel, increases in merit
and the rising cost of employee benefits, as well as increased consulting fees,
product design fees, tooling costs and miscellaneous parts and supplies
associated with new products and enhancements to existing products.

Marketing and Selling.Marketing and selling expenses consist primarily of
salaries and other expenses for personnel, commissions, travel, advertising,
trade shows, sales meetings and market research. Sales and marketing expenses
increased by 13.3% to $5,775,000 for the three months ended September 30, 2003,
from $5,098,000 for the same period last year, representing 31.5% and 33.3%,
respectively, of net sales. Sales and marketing expenses increased by 8.3% to
$16,879,000 for the nine months ended September 30, 2003, from $15,586,000 for
the same period last year, representing 32.7% and 35.1%, respectively, of net
sales. The increase in dollars spent for the three months ended September 30,
2003 was primarily due to an increase in salaries, as well as increases in
marketing and promotion costs (including costs associated with launching
SpectraLinks new products), commissions, travel costs and sales meetings. The
increase in dollars spent for the nine months ended September 30, 2003 was
primarily due to an increase in salaries and employee benefits to hire and
retain personnel, marketing and promotion costs, and professional fees. These
increases were partially offset by decreases in travel and sales meetings. The
decrease in percent of sales for the three months and nine months ending
September 30, 2003 was due to economies of scale resulting from increased
sales.

General and Administrative. General and administrative expenses consist
primarily of salaries and other expenses for management, finance, accounting,
contract administration, order processing, investor relations, and human
resources, as well as legal and other professional services. General and
administrative expenses increased by 10.0% to $1,009,000 for the three months
ended September 30, 2003, from $917,000 for the same period last year,
representing 5.5% and 6.1%, respectively, of net sales. General and
administrative expenses increased by 6.7% to $3,066,000 for the nine months
ended September 30, 2003, from $2,874,000 for the same period last year,
representing 5.9% and 6.5%, respectively, of net sales. The increase in
dollars spent was primarily due to increasing SpectraLinks infrastructure to
support future growth, which resulted in increased salaries and employee
benefits to hire and retain personnel, as well as professional fees, insurance
and amounts spent on other corporate matters related to Sarbanes-Oxley
legislation. The increase was partially offset by a decrease in legal fees
related to legal proceedings as SpectraLink met its insurance deductible and a
decrease in bad debt expense. The decrease as a percentage of sales was due to
economies of scale resulting from increased sales.

Investment Income and Other (Net).Investment income is the result of
SpectraLinks investments in money market, investment-grade debt securities,
government securities, and corporate bonds. Investment income and other
decreased by 53.1% to $67,000 for the three months ended September 30, 2003,
from $143,000 for the same period last year, representing 0.4% and 1.0%,
respectively, of net sales. Investment income and other decreased by 47.0% to
$232,000 for the nine months ended September 30, 2003, from $438,000 for the
same period last year, representing 0.4% and 1.0%, respectively, of net sales.
The decrease in investment income and other was primarily due to a decrease in
interest rates in 2003.

Income Tax.SpectraLinks income tax expense was $1,395,000 for the three
months ended September 30, 2003, compared to $934,000 for the same period last
year, and $3,452,000 for the nine months ended September 30, 2003 compared to
$2,285,000 for the same period last year. The increase was primarily related
to increased sales and income from the operations of SpectraLink.

Future Operating Expenses. SpectraLink bases operating expenses in part on its
expectations of future sales, and generally determines expense levels in
advance of sales. SPECTRALINK CURRENTLY PLANS TO CONTINUE

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TO EXPAND AND INCREASE ITS OPERATING EXPENSES IN AN EFFORT TO GENERATE AND
SUPPORT ADDITIONAL FUTURE REVENUE.If sales do not occur in any quarter as
expected, SpectraLinks results of operations for that quarter will be
adversely affected. Net income may be disproportionately affected by a
reduction because only a small portion of SpectraLinks operating expenses
varies directly with its revenue.

Liquidity and Capital Resources

Since its inception, SpectraLink has funded its operations with cash
provided by operations, supplemented by equity financing and leases on capital
equipment. As of September 30, 2003, SpectraLink had $50,002,000 of cash and
cash equivalents.

For the nine months ended September 30, 2003, SpectraLink generated cash
from operations of $7,320,000, consisting principally of net income of
$5,633,000, and increases in income tax benefit from exercises of stock
options, increases in accounts payable, accrued liabilities, and deferred
revenue and was offset by increases in trade accounts receivable, inventory,
other assets and income tax receivable. Investing activities used cash of
$2,262,000 for purchases of property and equipment. SpectraLink generated
$733,000 of cash in financing activities during the nine months ended September
30, 2003, which was a direct result of proceeds of $4,432,000 received from
stock option exercises and issuances of common stock. This cash inflow was
offset by the cash used to purchase 447,100 shares of its outstanding common
stock (now classified as treasury stock) at a cost of $3,688,000.

As of September 30, 2003, SpectraLink had no debt outstanding, and there
were no off-balance sheet arrangements, unconsolidated subsidiaries,
commitments or guarantees, except as disclosed in the notes to the consolidated
financial statements. Stockholders equity at September 30, 2003, was
$64,441,000, which represented 82.2% of total assets.

As of September 30, 2003, SpectraLink had working capital of $60,164,000
compared to $53,958,000 at December 31, 2002. The increase in working capital
occurred primarily due to an increase in cash and cash equivalents, along with
trade accounts receivable, income taxes receivable and is offset by increases
in accrued payroll, commissions and employee benefits, other accrued expenses
and deferred revenue. As of September 30, 2003, SpectraLinks current ratio
(ratio of current assets to current liabilities) was 5.40:1, compared with a
current ratio of 6.03:1 as of December 31, 2002.

SPECTRALINK BELIEVES THAT ITS CURRENT CASH, CASH EQUIVALENTS AND
INVESTMENTS IN MARKETABLE SECURITIES, AND CASH GENERATED FROM OPERATIONS WILL
BE SUFFICIENT, BASED ON SPECTRALINKS PRESENTLY ANTICIPATED NEEDS TO FUND
NECESSARY CAPITAL EXPENDITURES, TO PROVIDE ADEQUATE WORKING CAPITAL, AND TO
FINANCE SPECTRALINKS EXPANSION FOR THE FORESEEABLE FUTURE (NEXT 12 MONTHS).
THERE CAN BE NO ASSURANCE THAT ANY ADDITIONAL FINANCING WILL BE AVAILABLE TO
SPECTRALINK ON ACCEPTABLE TERMS, OR AT ALL, WHEN REQUIRED BY SPECTRALINK. IF
EQUITY SECURITIES ARE ISSUED TO RAISE ADDITIONAL FUNDS, FURTHER DILUTION TO THE
EXISTING STOCKHOLDERS WILL RESULT.

Recently Issued Accounting Pronouncements

SpectraLink was required to adopt EITF Issue No. 00-21, Accounting for
Revenue Arrangements with Multiple Deliverables for the quarter ending
September 30, 2003. This issue addresses when and, if so, how an arrangement
involving multiple deliverables should be divided into separate units of
accounting and how the arrangement consideration should be measured and
allocated to the separate units of accounting in the arrangement. The adoption
of this EITF did not have an effect on the consolidated results of operations
or financial position of SpectraLink.




ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.

Market risk represents the risk of loss that may impact the financial
position, results of operations or cash flows of SpectraLink due to adverse
changes in financial and commodity market prices and rates. SpectraLink is
exposed to market risk in the areas of changes in United States interest rates.
These exposures are directly related to its normal operating and funding
activities. As of September 30, 2003, SpectraLink has not used derivative
instruments or engaged in hedging activities, and is not currently impacted by
fluctuations in foreign currency exchange rates.

Interest Rate Risk

As part of SpectraLinks cash management strategy, at September 30, 2003,
SpectraLink had cash and cash equivalents of $50,002,000 mainly in the form of
bank demand deposits and money market accounts. SpectraLink has completed a
market risk sensitivity analysis of these cash and cash equivalents based on an
assumed 1% point increase

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in interest rates. If market interest rates had
increased or decreased 1% point during the nine months ended September 30,
2003, SpectraLinks interest income would have increased or decreased by
approximately $353,000. This is only an estimate. Any actual loss due to an
increase or decrease in interest rates could differ from this estimate.

FORWARD-LOOKING STATEMENT FACTORS

Certain statements in this Form 10-Q, as well as statements made by
SpectraLink in periodic press releases, oral statements made by SpectraLinks
officials to analysts and stockholders in the course of presentations about
SpectraLink, and conference calls following earnings releases, constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the Reform Act). Words such as believes,
anticipates, expects, intends, could, might, and similar expressions are
intended to identify forward-looking statements, but are not the exclusive
means of identifying such statements. These projections and forward-looking
statements are based on assumptions, which are believed reasonable but are, by
their nature, inherently uncertain. In all cases, results could differ
materially from those projected. Accordingly, caution should be taken not to
place undue reliance on any such forward-looking statements since such
statements speak only as of the date of the making of such statements. Some of
the important factors that could cause actual results to differ from any of
these projections or other forward-looking statements are detailed below and in
other reports filed by SpectraLink under the Securities Exchange Act of 1934.
SpectraLink undertakes no obligation to revise any forward-looking statements
in order to reflect events or circumstances that may arise after the date of
this report.

The factors discussed below are cautionary statements that identify important
factors that could cause actual results to differ materially from those
anticipated by the forward-looking statements contained in this report.

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | If SpectraLink is unable to fulfill quarter end customer orders,
then SpectraLink could lose revenue and customers. The volume of
customer orders for SpectraLinks products typically increases
significantly at the end of each quarter. SpectraLink faces
significant challenges in meeting this demand. It is difficult to
ensure that SpectraLink has the resources available to meet any such
increase in order volume since it is very difficult to predict what
the level of demand will be. SpectraLink may not have the personnel
and/or systems necessary to fulfill the large order volume or the
ability to upgrade and develop its systems and infrastructure to meet
an increased order volume. If SpectraLink is unable to meet demand
from its customer for its products in a cost effective manner, then
SpectraLink might lose revenue and customers or incur increased
operating costs, either of which would harm SpectraLinks business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | Many of the orders for SpectraLinks products are realized at the
end of the quarter, which makes it difficult to estimate or adjust
SpectraLinks operating activities quickly in response to an
unexpected increase or decrease in customer demand. Due to the timing
of orders from customers, SpectraLink has often recognized a
substantial portion of its revenue in the last month of a quarter. As
a result, minor fluctuations in the timing of orders and the shipment
of products may, in the future, cause operating results to vary
significantly from quarter to quarter. The demand for SpectraLinks
products depends upon many factors and is difficult to forecast.
Significant unanticipated fluctuations in demand could cause problems
in SpectraLinks operations. The lead-time required to assemble
SpectraLinks systems is often longer than the lead-time SpectraLinks
customers provide to SpectraLink for delivery of their product
requirements. Therefore, SpectraLink often must place orders in
advance of expected purchase orders from SpectraLinks customers. As
a result, SpectraLink has only a limited ability to react to
fluctuations in demand for its products, which could cause it to have
either too much or too little inventory of a particular product.
Further, the business relationship which SpectraLink has with Offshore
Group to use a Mexico facility to assemble SpectraLinks products may
not be able to provide product in a
timely manner. Additionally, once SpectraLink receives an order, it
requires sufficient time to complete the configuration of its product to
the phone systems of the customer.
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  |  | SpectraLinks inability to satisfy customer demand in a timely manner
would lead to lost sales and impede SpectraLinks ability to increase
its revenue. Conversely, a large portion of SpectraLinks expenses,
including rent and salaries, is fixed and difficult to reduce.
SpectraLinks expenses are based in part on expectations for its
revenue. If SpectraLinks revenue does not meet its expectations, the
adverse effect of the revenue shortfall upon SpectraLinks operating
results may be acute in light of the fixed nature of its expenses. It
is possible that due to fluctuations in revenue, SpectraLinks operating
results could be below the expectations of securities analysts and
investors. For instance, SpectraLinks stock price declined
substantially after its preliminary announcement of its fourth quarter
2001 financial results reported in January 2002. In such an event, or
in the event that adverse market conditions prevail or are perceived to                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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|                                                                                                                                         
|-----------------------------------------------------------------------------------------------------------------------------------------
|prevail either generally or with respect to SpectraLinks business, the
price of SpectraLinks common stock would likely decline further.

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The ability of SpectraLink and its current and new distributors
and resellers to develop and execute effective marketing and sales
strategies.SpectraLink offers its products directly and indirectly
through a variety of third-party business partners, including
distributors and resellers. Changes in the financial or business
condition of these distributors and resellers, in addition to the
ability to develop and execute effective marketing and sales
strategies, could subject SpectraLink to lost sales and affect its
ability to bring its products to market. For instance, SpectraLink
experienced a decrease in sales by distributors during the second
quarter of 2002 when those distributors downsized their businesses in
reaction to the economic slowdown and, as a result, had fewer sales
representatives marketing SpectraLink products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | The continuing economic slowdown in some sectors of our target
customer market, adversely impacts their information technology
spending and SpectraLinks business. SpectraLinks business has been
adversely impacted by the continuing general economic slowdown in some
sectors of our target customer market within the United States and
worldwide, because the slowdown has resulted in a decline in their
information technology spending. Consumers of information technology
in some of these sectors continue to defer, and in some cases cancel,
their purchase decisions. SpectraLinks operating results have been
adversely affected as a result. SpectraLink expects the economic
slowdown to continue to adversely impact its business and operating
results for at least the next few quarters and perhaps significantly
longer. The adverse impacts from the slowdown include longer sales
cycles, lower average selling prices, fewer large orders from a single
customer and reduced revenues.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Because many of SpectraLinks current and planned products are or
will be highly complex, they may contain defects or errors that are
detectable only after deployment in complex networks and which, if
detected, could have a negative effect on SpectraLinks business,
operating results or financial condition.Many of SpectraLinks
complex products can only be fully tested when deployed in commercial
networks. As a result, end-users may discover defects or errors or
experience breakdowns in their networks after the products have been
deployed. If any of these products contains defects, or has
reliability, quality or compatibility problems, SpectraLinks
reputation might be damaged significantly and customers might be
reluctant to buy SpectraLink products. These defects could interrupt
or delay sales. SpectraLink may have to invest significant capital
and other resources to correct these problems. If SpectraLink fails to
provide solutions to the problems, it will also incur product recall,
repair, warranty or replacement costs. These problems might also
result in claims against SpectraLink by its customer or others. In
addition, the occurrence of any defects or errors in these products,
could result in: failure to achieve market acceptance and loss of
market share; cancellation of orders; difficulty in collecting
accounts receivable; increased service and warranty costs in excess of
SpectraLinks estimates; diversion of resources, and; increased
insurance costs and other losses to SpectraLinks business or to
end-users.
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | SpectraLinks reliance on a limited number of significant
customers.A portion of SpectraLinks revenue has been derived from a
limited number of customers. Sales to one customer represented
approximately 10% of SpectraLinks revenue during the three months
ended September 30, 2003. SpectraLink also has experienced
quarter-to-quarter variability in sales to each of its major customers
and expects this pattern to continue in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | SpectraLinks reliance on sole or limited sources of supply for
many components and equipment used in its manufacturing process.
SpectraLink relies on sole or limited sources of supply for many
components and equipment used in its manufacturing process. The delay,
inability, or refusal of any of these suppliers to ship these components
or equipment could interrupt SpectraLinks manufacturing process and
ability to manufacture products in a timely manner to meet customer
demand. The limited number of sources for many of these components may
also prevent SpectraLink from decreasing its reliance on certain
suppliers and finding other sources at competitive prices. Unforeseen
price increases by any of the sole or limited source suppliers could
negatively impact product margins and the financial performance of
SpectraLink.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | The risk of business interruption arising from SpectraLinks
dependence on its manufacturing facility located in Boulder, Colorado,
and the business relationship SpectraLink has with Offshore Group to
use a facility in Empalme, Sonora, Mexico which provides assembly
services. SpectraLink is highly dependent on its Boulder, Colorado
manufacturing facility, which is home to the majority of SpectraLinks
manufacturing operations. SpectraLink is also highly dependent upon
its business relationship with Offshore Group to provide management
services and a facility located in Empalme, Sonora, Mexico which                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|assembles SpectraLinks products. Any event that may disrupt or
indefinitely discontinue either of the facilities capacity to
manufacture, assemble and repair SpectraLinks products could greatly
impair SpectraLinks ability to generate revenues, fulfill orders and
attain financial goals. For instance, SpectraLink may experience
delays in the receipt of assembled product from the facility in Mexico
should the border between the U.S. and Mexico close.

|  |  |                                                                                                                                                                                                                                                                                                             
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SpectraLinks ability to respond to rapid technological changes
within the on-premises wireless telephone industry.The wireless
communications industry is characterized by rapid technological
change, short product life cycles, and evolving industry standards. To
remain competitive, SpectraLink must:

| |  |   |  |                                                                                                                                                             
| |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  |  | develop or gain access to new technologies in order to
increase product performance and functionality, reduce product
size, and maintain cost-effectiveness;
| |  |   |  |                                                                                                                                                             
| |  |  |  | develop new products for existing and emerging wireless
communications markets, and introduce such products in a timely
manner;                             
| |  |   |  |                                                                                                                                                             
| |  |  |  | implement emerging wireless standards quickly enough to
satisfy market demands and without significant product redesign;                                    
| |  |   |  |                                                                                                                                                             
| |  |  |  | develop or obtain access to advanced wireless
networking capabilities as they become available; and                                                         
| |  |   |  |                                                                                                                                                             
| |  |  |  | design, develop and introduce competitive new products
on a timely basis.                                                                                   

|                                                                                                                                                                                                            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Due to the competitive nature of SpectraLinks business, any failure
by SpectraLink to meet these challenges could materially and adversely
affect SpectraLinks business, reputation, and operating results

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SpectraLinks ability to attract and retain personnel, including
key technical and management personnel.Much of the future success of
SpectraLink depends on the continued service and availability of
skilled personnel, including technical, marketing and staff positions.
Experienced personnel in the information technology industry are in
high demand and competition for their talents is intense. There can
be no assurance that SpectraLink will be able to successfully retain
and attract the key personnel it needs. Many of SpectraLinks key
personnel receive a total compensation package that includes stock
options and other equity awards. New regulations, volatility in the
stock market and other factors could diminish the value of
SpectraLinks equity awards, putting SpectraLink at a competitive
disadvantage or forcing SpectraLink to use more cash compensation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | SpectraLink might not be able to execute on its business plan if
it loses key management or technical personnel, on whose knowledge,
leadership and technical expertise it relies, or if new members of
SpectraLinks management team fail to work effectively together.
SpectraLinks success depends heavily upon the contributions of its
key management and technical personnel, whose knowledge, leadership
and technical expertise would be difficult to replace. Many of these
individuals have been with SpectraLink for several years and have
developed specialized knowledge and skills relating to its technology
and business. Others have been promoted within, or have newly joined,
senior management roles only recently. For example, in September 2003,
John Elms, SpectraLinks Vice President of Operations, was promoted to
President and Chief Executive Officer, while Bruce Holland, the former
President and Chief Executive Officer, has continued with SpectraLink
as Chairman of the Board. Additionally, in October 2003, SpectraLink
hired John Kelley as Vice President of Operations. SpectraLinks
success depends in part upon the ability of new executives to work effectively together and with the rest of SpectraLinks
employees to continue to develop its technology and manage the operation
and growth of SpectraLinks business. All of SpectraLinks executive
officers and key personnel are employees at will. SpectraLink has no
employment contracts and does not maintain key person insurance on any
of its personnel. SpectraLink might not be able to execute on its
business plan if it were to lose the services of any of its key
personnel. If any of these individuals were to leave SpectraLink
unexpectedly, SpectraLink could face substantial difficulty in hiring
qualified successors and could experience a loss in productivity while
any such successor develops the necessary training and experience.
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | SpectraLinks reliance on its 802.11b technology partners to
continue to provide the wireless local area network for SpectraLinks
NetLink product, and to provide access points which support
SpectraLink Voice Priority. In the absences of a wireless voice
prioritization standard, SpectraLink relies on 802.11b technology
partners, such as Proxim, Symbol Technologies, and Cisco Systems to
continue to provide wireless local area network support for
SpectraLinks NetLink product and to provide access points that
support SpectraLink Voice Priority. If any of SpectraLinks
technology partners fails to provide voice prioritization support for
SpectraLinks products, the market opportunity for NetLink products
would be reduced and SpectraLinks future results of operations would
be materially harmed until SpectraLink finds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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|                                                                              
|------------------------------------------------------------------------------
|new 802.11b technology
partners or voice prioritization standards are adopted.

|  |  |                                                                                                                                                                                                                                                                                                                                                                                 
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Potential fluctuations in SpectraLinks future revenues, gross
margins and operating results. SpectraLink has experienced, and may
in the future continue to experience, significant quarterly
fluctuations in revenue, gross margins and operating results due to
numerous factors, some of which are outside SpectraLinks control.
Among other things, these factors include:

|  |  |                                                                                                                                                                              
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | changes in customer, geographic or product mix,
including mix of configurations within each product group;                                                                   
|  |  |                                                                                                                                                                              
| |  | fluctuating market demand for, and declines in the
average selling prices of, SpectraLinks products;                                                                        
|  |  |                                                                                                                                                                              
| |  | the timing of and delay of significant orders from customers;                                                                                                                
|  |  |                                                                                                                                                                              
| |  | seasonality in demand within SpectraLinks various sectors;                                                                                                                  
|  |  |                                                                                                                                                                              
| |  | increases in material or labor costs;                                                                                                                                        
|  |  |                                                                                                                                                                              
| |  | excess inventory;                                                                                                                                                            
|  |  |                                                                                                                                                                              
| |  | obsolescence charges;                                                                                                                                                        
|  |  |                                                                                                                                                                              
| |  | changes in shipment volume;                                                                                                                                                  
|  |  |                                                                                                                                                                              
| |  | loss of cost savings due to changes in component
pricing or charges incurred due to inventory holding periods if
parts ordering does not correctly anticipate product demand;
|  |  |                                                                                                                                                                              
| |  | increases in price competition;                                                                                                                                              
|  |  |                                                                                                                                                                              
| |  | changes in distribution channels;                                                                                                                                            
|  |  |                                                                                                                                                                              
| |  | increases in warranty costs; and                                                                                                                                             
|  |  |                                                                                                                                                                              
| |  | introducing of new products and costs of entering new markets.                                                                                                               

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|For example, historically SpectraLink has not operated with a
significant order backlog and a substantial portion of SpectraLinks
revenue in any quarter has been derived from orders booked and shipped
in that quarter. Accordingly, SpectraLinks revenue expectations are
based almost entirely on its internal estimates of future demand and not
on firm customer orders. Planned expense levels are relatively fixed in
the short-term and are based in large part on these estimates, and if
orders and revenue do not meet expectations, SpectraLinks revenues,
gross margins and operating results could be materially adversely
affected.

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SpectraLinks revenue and earnings are highly seasonal.
Seasonality and other factors cause significant quarterly fluctuations
in SpectraLinks revenue and net income. SpectraLinks business is
highly seasonal. This causes significant quarterly fluctuations in
SpectraLinks financial results. Revenue and operating results are
usually strongest during the second and fourth fiscal quarters.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | Recently enacted and proposed changes in securities laws and
regulations are likely to increase SpectraLinks costs.The
Sarbanes-Oxley Act of 2002 that became law in July 2002, as well as
new rules subsequently implemented by the SEC, requires changes in
some of SpectraLinks corporate governance, public disclosure and
compliance practices. The Act also requires the SEC to promulgate
additional new rules on a variety of subjects. In addition to final
rules and rule proposals already made by the SEC, the
Nasdaq National Market has proposed revisions to its requirements for
companies, such as SpectraLink, that are Nasdaq-listed. SpectraLink
expects these developments to increase SpectraLinks legal and financial
compliance costs, and to make some activities like SEC reporting
obligations, more difficult. In addition, SpectraLink expects these
developments to make it more difficult and more expensive for
SpectraLink to obtain director and officer liability insurance, and
SpectraLink may be required to accept reduced coverage or incur
substantially higher costs to obtain coverage. These developments could
make it more difficult for SpectraLink to attract and retain qualified
members of SpectraLinks board of directors, particularly to serve on
SpectraLinks audit committee, and qualified executive officers.
SpectraLink is presently evaluating and monitoring regulatory
developments and cannot estimate the timing or magnitude of additional
costs SpectraLink may incur as a result.
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | A lower than anticipated rate of acceptance of domestic and
international markets using the 802.11b standard. SpectraLinks
NetLink Wireless Telephones are compatible with the IEEE 802.11b
standard for use on 802.11b compliant wireless LANs. Consequently,
demand for NetLink Wireless Telephones depends upon the acceptance of
markets utilizing 802.11b compliant networks. This depends in part
upon the initial adoption of the 802.11b standard in international
markets, as well as enhancements to that standard in the U.S. and
foreign markets where the standard has already been adopted.
Additionally, the acceptance of 802.11b compliant networks may move
more slowly, if at all, if competing wireless networks are established
and utilized. Additionally, the deployment of wireless voice and data
systems has been inhibited by concerns about the potential of
unauthorized access to data and communications transmitted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|over or
accessible through a wireless system. Potential customers may choose
not to purchase SpectraLink products until wireless systems are
developed which provide for greater security. Further, SpectraLinks
products may not be compatible with secure wireless systems that may
be developed in the future. If markets utilizing 802.11b compliant
networks do not grow as SpectraLink anticipates, SpectraLinks growth
would be impeded and it would not be able to factor the related
revenues into its growth in the future.

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The market for on-premises wireless telephone systems may fail to
grow or to grow as quickly as SpectraLink anticipates. SpectraLink
derives its revenue principally from the sale of wireless, on-premises
telephone systems and related installation and other services relating
to those systems. Therefore, SpectraLinks future operating results
depend on the demand for those types of services. If this market does
not grow or grow quickly, SpectraLinks future results of operations
would be significantly harmed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | The ability of SpectraLink to develop and introduce new products
and transition existing products. SpectraLinks development efforts
may not lead to the successful introduction of new or improved
products. SpectraLink may encounter delays in deploying new or
improved products. For instance, SpectraLinks new products may not
properly function with its customers existing telephone systems or
SpectraLinks new products may contain defects or bugs. These
incompatibilities, defects or bugs may not be detected until
SpectraLinks customers begin to install the products or thereafter.
SpectraLink may need to modify the design of its new or improved
products if they have incompatibilities, defects or bugs, which could
result in significant expenditures by SpectraLink as it seeks to
remedy the problems, delays in the purchase of the products or
cancelled orders. SpectraLink may also encounter delays in the
manufacturing and production of the new products. Additionally, the
new products may not be commercially successful. Demand for existing
products may decrease upon the announcement of new or improved
products. Further, since products under development are often
announced before introduction, these announcements may cause customers
to delay purchases of any products, even if newly introduced, until
the new or improved versions of those products are available. If
customer orders decrease or are delayed during the product transition,
SpectraLink may experience a decline in revenue and have excess
inventory on hand which could decrease gross profit margins.
SpectraLinks gross margins might decrease if customers, who may
otherwise choose to purchase existing products, instead choose to
purchase lower priced models of new products. Delays or deficiencies
in the development, manufacturing, and delivery of, or demand for, new
or improved products could have a negative effect on SpectraLinks
business, operating results or financial condition.
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | SpectraLinks ability to manage potential expansion of operations
in the U.S. and internationally.SpectraLink intends to expand its
existing domestic and international operations and to enter new
markets. This expansion will require significant management attention
and financial resources. SpectraLink currently has limited experience
in marketing and distributing its products internationally
and in developing versions of products that comply with local standards.
SpectraLink may also not be able to maintain or increase international
market demand for its products. International operations are subject to
other inherent risks, including foreign government regulation of
technology or unexpected changes in regulatory and customs requirements,
difficulty and delays in accounts receivable collection, difficulties
and costs of staffing and managing foreign operations, reduced
protection for intellectual property rights, foreign currency exchange
rate fluctuations, and taxation consequences.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | If SpectraLink experiences warranty failure that indicates either
manufacturing or design deficiencies, SpectraLink may be required to
recall units in the field and/or stop producing and shipping such
products until the deficiency is identified and corrected.In the
event of such warranty failures, SpectraLinks business could be
adversely affected resulting in reduced revenue, increased costs and
decreased customer satisfaction. End-users have discovered errors in
SpectraLinks products in the past and may discover errors in
SpectraLinks products in the future. In addition, if SpectraLinks
costs of remediating problems experienced by SpectraLinks customers
exceed SpectraLinks warranty reserves, these costs may adversely
affect SpectraLinks operating results. Consequently, SpectraLinks
warranty failure could have a material adverse impact on SpectraLinks
operations and financial results.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | SpectraLink faces increasing competition in the on-premises
wireless telephone system market. The on-premises wireless telephone
system industry is competitive and influenced by the introduction of
new products and new entrants into the industry. The competitive
factors affecting the market for SpectraLinks systems include product
functionality and features, frequency band of operation, ease-of-use,
quality of support, product quality and performance, price,
distribution channels, and the effectiveness of marketing and sales
efforts. Most of SpectraLinks competitors have significantly greater
financial, technical, research and development, and marketing
resources than SpectraLink. As a result, SpectraLinks competitors may
respond more quickly to new or emerging technologies and changes in
customer requirements, or may                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|devote greater resources to the
development, promotion, sale and support of their products than
SpectraLink. In addition, some purchasers may prefer to buy their
wireless telephone systems from a single source provider of telephone
systems, such as Alcatel or Cisco Systems, all of which manufacture
and sell enterprise telephone systems. Other purchasers may prefer to
buy their 802.11 wireless telephone systems from a single source
provider of wireless local area networks, or LANs, such as Cisco
Systems or Symbol Technologies, all of which provide 802.11 wireless
infrastructure and wireless telephones. Because SpectraLink focuses on
wireless on-premises telephone communications, it cannot serve as the
sole source for a complete telephone or data communications system.
There is no assurance that SpectraLink will be able to compete
successfully in the future. Further, if a potential customer is
already using a competing product or system, that potential customer
may not be willing or able to make the investment necessary to replace
such a system with a SpectraLink Wireless Telephone System. In
addition, there may be potential customers who choose another
technology because of cost or their belief that their needs do not
require the full functionality provided by a SpectraLink Wireless
Telephone System.

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The certification and approval process for SpectraLinks NetLink
product for use in countries that support the 802.11b standard.
Foreign countries which support the 802.11b standard could provide
future markets for the NetLink products. However, countries
certification and approval processes for 802.11b compatible products,
such as those of SpectraLink, are typically time consuming and costly.
If SpectraLink has difficulty obtaining certification and approval by
foreign countries for its NetLink product, then SpectraLink may not be
able to gain access to the markets in these countries in a timely
fashion, if at all, which would limit international growth of
SpectraLinks business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Changes in rules and regulations of the FCC and other wireless
regulatory agencies.The wireless communications industry, regulated
by the Federal Communications Commission (FCC) in the United States
and similar government agencies in other countries, is subject to
changing political, economic, and regulatory influences. Regulatory
changes, including changes in the allocation of available frequency
spectrum, could significantly impact SpectraLinks operations in the
United States and internationally.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | SpectraLinks ability to protect its intellectual property
rights.SpectraLinks future success depends, in part, upon its
proprietary technology. SpectraLink relies on a combination of
patent, copyright, trade secret and trademark laws, confidentiality
procedures, and nondisclosure and other contractual provisions to
protect its proprietary rights. These legal protections provide only
limited protection and may be time
consuming and expensive to obtain and enforce. There can be no assurance
that SpectraLinks pending patent applications will be allowed or that
the issued or pending patents will not be challenged or circumvented by
competitors or provide meaningful protection against competition. If
challenged, SpectraLinks patents might not be upheld or their claims
could be narrowed. If SpectraLink fails to protect its proprietary
rights adequately, SpectraLinks competitors might gain access to
SpectraLinks technology. As a result, SpectraLinks competitors might
offer similar products and SpectraLink might not be able to compete
successfully in its market. Moreover, despite SpectraLinks efforts to
protect its proprietary rights, unauthorized parties may copy aspects of
SpectraLinks products and obtain and use information that SpectraLink
regards as proprietary. Also, SpectraLinks competitors may
independently develop similar, but not infringing, technology, duplicate
SpectraLinks products, or design around SpectraLinks patents or its
other intellectual property. In addition, other parties may breach
confidentiality agreements or other protective contracts with
SpectraLink, and SpectraLink may not be able to enforce its rights in
the event of these breaches. Furthermore, SpectraLink expects that it
will increase its international operations in the future, and the laws
of many foreign countries do not protect SpectraLinks intellectual
property rights to the same extent as the laws of the United States.
SpectraLink may be required to spend significant resources to monitor
and protect its intellectual property rights. Any litigation
surrounding SpectraLinks rights could force SpectraLink to divert
important financial and other resources from its business operations.
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | The assertion of intellectual property infringement claims
against SpectraLink.SpectraLinks industry is characterized by the
existence of a large number of patents and frequent claims and related
litigation regarding patent and other intellectual property rights.
SpectraLink cannot be certain that its products do not and will not
infringe upon issued patents, patents to be issued in the future, or
other intellectual property rights of others. SpectraLink may in the
future be notified that it is infringing upon certain patent and/or
other intellectual property rights of others. Although there are no
such pending lawsuits against SpectraLink or unresolved notices that
SpectraLink is infringing upon intellectual property rights of others,
there can be no assurance that infringement claims will not occur in
the future. From time to time, third parties may assert exclusive
patent, copyright, trademark and other intellectual property rights to
technologies and related methods that are important to SpectraLink.
Litigation may be necessary in the future to defend against                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|claims of
infringement or invalidity, to determine the validity and scope of the
proprietary rights of others, to enforce SpectraLinks intellectual
property rights, or to protect SpectraLinks trade secrets.
SpectraLink may also be subject to claims from customers for
indemnification. Any resulting litigation, regardless of its
resolution, could result in substantial costs and diversion of
resources. If it were determined that SpectraLinks products infringe
upon the intellectual property rights of others, SpectraLink would
need to obtain licenses from these parties or reengineer its products
in order to avoid infringement. SpectraLink might not be able to
obtain the necessary licenses on acceptable terms or at all, or to
reengineer its products successfully. Moreover, if SpectraLink is
sued for infringement and loses the suit, it could be required to pay
substantial damages or be enjoined from licensing or using the
infringing products or technology. Any of the foregoing could cause
SpectraLink to incur significant costs and prevent it from selling its
products.

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The historic volatility of SpectraLinks stock price, which may
make it more difficult to resell shares at prices attractive to
sellers.The market price of SpectraLinks common stock has been
volatile and is likely to remain subject to wide fluctuations in the
future. For example, during the 12-month period ended September 30,
2003, the closing price of SpectraLinks common stock has ranged from
a high of $24.70 per share to a low of $4.45 per share. Many factors
could cause the market price of SpectraLinks common stock to
fluctuate, including:

| |  |   |  |                                                                                                                      
| |  | - |  | ---------------------------------------------------------------------------------------------------------------------
| |  |  |  | variations in SpectraLinks actual or anticipated
quarterly or annual results;                                       
| |  |   |  |                                                                                                                      
| |  |  |  | market conditions in SpectraLinks industry, the
industries of SpectraLinks customers and the economy as a whole;   
| |  |   |  |                                                                                                                      
| |  |  |  | announcements of technological innovations by
SpectraLink or by its competitors;                                     
| |  |   |  |                                                                                                                      
| |  |  |  | introduction of new products or product enhancements or
new pricing policies by SpectraLink or by its competitors;   
| |  |   |  |                                                                                                                      
| |  |  |  | acquisitions or strategic alliances by SpectraLink or by its competitors;                                            
| |  |   |  |                                                                                                                      
| |  |  |  | recruitment or departure of key personnel;                                                                           
| |  |   |  |                                                                                                                      
| |  |  |  | the gain or loss of significant orders;                                                                              
| |  |   |  |                                                                                                                      
| |  |  |  | changes in the market valuations of other telecommunications companies;                                              
| |  |   |  |                                                                                                                      
| |  |  |  | the amount of liquid financial resources available to SpectraLink;                                                   
| |  |   |  |                                                                                                                      
| |  |  |  | the gain or loss of significant customers; and                                                                       
| |  |   |  |                                                                                                                      
| |  |  |  | changes in the estimates of SpectraLinks operating
performance or changes in recommendations by securities analysts.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|In addition, the stock market in general, and the market for
technology-related stocks in particular, could decline, which could
cause the market price of SpectraLinks common stock to fall for reasons
not necessarily related to SpectraLinks business, results of operations
or financial condition. The market price of SpectraLinks stock also
might decline in reaction to events that affect other companies in
SpectraLinks industry even if these events do not directly affect
SpectraLink. Accordingly, you may not be able to resell your shares of
common stock at or above the price you paid. Securities class action
litigation is often brought against a company following a period of
volatility in the market price of its securities, and SpectraLink has
recently been sued in several purported securities class action
lawsuits. Further, certain of SpectraLinks management and directors
have also been sued in purported shareholder derivative actions.
Although SpectraLink believes that the lawsuits lack merit, due to
inherent uncertainties in litigation, SpectraLink cannot accurately
predict the outcome of this litigation. An adverse determination could
have a significant effect upon SpectraLinks business and materially
affect the price of its stock. Moreover, regardless of the ultimate
result, it is likely that the lawsuits will require SpectraLink to incur
expenses and divert managements attention and resources from other
matters, which could also adversely affect SpectraLinks business and
the price of its stock.




ITEM 4. Controls and Procedures.

The Securities and Exchange Commission defines the term disclosure
controls and procedures to mean a companys controls and other procedures that
are designed to ensure that information required to be disclosed in the reports
that it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commissions rules and forms. SpectraLinks Chief
Executive Officer and Chief Financial Officer have concluded, based on the
evaluation of the effectiveness of SpectraLinks disclosure controls and
procedures by SpectraLinks management, with the participation of its Chief
Executive Officer and Chief Financial Officer, as of the end of the period
covered by this report, that SpectraLinks disclosure controls and procedures
were effective for this purpose.

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During the third quarter of fiscal 2003, there have been no changes in
SpectraLinks internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, SpectraLinks internal
control over financial reporting.




Part II Other Information




Item 1 Legal Proceedings

On January 14, 2002, SpectraLink issued a press release announcing
preliminary financial results for the fourth quarter of 2001 and revising
downward its estimates for year 2002 results of operations. Shortly after the
press release, the Companys stock price declined and the Company and certain
of its officers and directors were named as defendants in four lawsuits filed
between February 7, 2002 and March 6, 2002, three of which were filed in the
United States District Court for the District of Colorado and one of which was
filed in the Colorado District Court for the City and County of Denver. In
each of the lawsuits, plaintiffs, who purport to be purchasers or holders of
SpectraLink common stock, seek to assert claims either on behalf of a class of
persons who purchased securities in SpectraLink between July 19, 2001 and
January 11, 2002, or in the case of two of the lawsuits (one filed in the
United States District Court and one in the Colorado District Court),
derivatively on behalf of SpectraLink. Two of the lawsuits filed in the United
States District contained essentially identical claims alleging that
SpectraLink and certain of its officers and directors violated Sections 10(b)
and 20(a) and Rule 10b-5 under the Securities Exchange Act of 1934, as a result
of alleged public misstatements and omissions, accompanied by insider stock
sales made in the months prior to the decline in the price of SpectraLinks
stock after the January 14, 2002 press release. In the cases brought as
derivative actions, the plaintiffs allege that the officers and directors of
SpectraLink violated fiduciary duties owed to SpectraLink and its stockholders
under state laws by allowing and/or facilitating the issuance of these same
alleged public misstatements and omissions, misappropriating nonpublic
information for their own benefit, making insider stock sales, wasting
corporate assets, abusing their positions of control, and mismanaging the
corporation. The plaintiffs in these derivative cases allege that SpectraLink
has and will continue to suffer injury as a result of these alleged violations
of duty for which the officers and directors should be liable.

The cases are designated as follows: Wilmer Kerns, Individually And On
Behalf of All Others Similarly Situated, Plaintiff, vs. SpectraLink
Corporation, Bruce Holland and Nancy K. Hamilton, Defendants (United States
District Court Civil Action Number 02-D-0263); Danilo Martin Molieri,
Individually and On Behalf of All Others Similarly Situated, Plaintiff, v.
SpectraLink Corporation, Bruce Holland and Nancy K. Hamilton, Defendants
(United States District Court Civil Action Number 02-D-0315); Evie Elennis,
derivatively on behalf of SpectraLink Corporation, Plaintiff(s), v. Bruce M.
Holland, Anthony V. Carollo, Jr., Gary L. Bliss, Michael P. Cronin, Nancy K.
Hamilton and John H. Elms, Defendant(s), and SpectraLink Corporation, Nominal
Defendant (United States District Court Civil Action Number 02-D-0345); and
Roger Humphreys, Derivatively on Behalf of Nominal Defendant SpectraLink
Corporation, Plaintiff, v. Carl D. Carman, Anthony V. Carollo, Jr., Bruce M.
Holland, Burton J. McMurtry, Gary L. Bliss, Michael P. Cronin, John H. Elms,
and Nancy K. Hamilton, Defendants (Colorado District Court Case. No. 02CV1687).

The Kerns and Molieri purported class actions were consolidated, and the
plaintiffs filed a Consolidated Amended Complaint. In January of 2003, the
Court denied a motion to dismiss that amended pleading, and discovery has
recently commenced. The Court has now certified a class of all purchasers of
publicly traded common stock of SpectraLink from April 19, 2001 through January
11, 2002, inclusive.

The two derivative actions were stayed pending resolution of the motion to
dismiss in the consolidated class action, and plaintiffs counsel in the
Elennis derivative action filed an unopposed motion for relief from the stay
and filed an amended complaint and then a corrected amended complaint. Prior
to the entry of the stays in each of the derivative cases, the defendants had
filed motions to dismiss. Defendants have moved to dismiss the amended and
corrected Elennis complaint, which motion is currently pending.

SpectraLink believes that the lawsuits are without merit and it intends to
vigorously defend itself and its officers and directors. SpectraLink does not
believe that its interests and that of the named officers and directors are
adverse to each other as of this time. However, no assurance can be given that
SpectraLink will be successful in defending the claims being asserted in these
suits, or that the interests of the various parties will remain aligned. If
SpectraLink is not successful in its defense of these suits, it could be
required to make significant payments to its stockholders and their lawyers,
which could have a material adverse effect on SpectraLinks business, financial
condition and results of operations. In addition, the litigation could result
in substantial costs, divert managements attention and resources, or
ultimately result in the interests of SpectraLink becoming adverse to those of
certain of its officers and directors. In

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either case, SpectraLinks business
could be adversely affected, even if the plaintiffs are not successful in their
claims against SpectraLink and/or its officers and directors.

The Company has incurred a loss related to the directors and officers
insurance deductible of which the majority of the expense was reflected in
2002. Based on current facts and circumstances, the Company is unable to
estimate future losses, if any, it may incur after considering the amounts that
will be covered by insurance.

SpectraLink is not presently a party to any other material pending legal
proceedings of which it is aware.




Item 6 Exhibits and Reports on Form 8-K

|    |  |                                           
|--- |  | ------------------------------------------
|(a) |  | Exhibits                                  
|    |  | The following exhibits are filed herewith:

|               |  |                                                                                                                                             
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Exhibit Title                                                                                                                               
|               |  |                                                                                                                                             
|31.1          |  | Certification by John H. Elms pursuant to 15 U.S.C. Section 7241, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.     
|               |  |                                                                                                                                             
|31.2          |  | Certification by Nancy K. Hamilton pursuant to 15 U.S.C. Section 7241, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|               |  |                                                                                                                                             
|32.1 *        |  | Certification by John H. Elms pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.     
|               |  |                                                                                                                                             
|32.2 *        |  | Certification by Nancy K. Hamilton pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

 Filed herewith.

*     As contemplated by SEC Release No. 33-8212, these exhibits are furnished
with this quarterly report on Form 10-Q and are not deemed filed with the
Securities and Exchange Commission and are not incorporated by reference in
any filing of SpectraLink Corporation under the Securities Act of 1933 or
the Securities Exchange
Act of 1934, whether made before or after the date hereof and irrespective
of any general incorporation language in any filings.

|                                                                                                                                                                                                                
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits filed with SpectraLinks 2002 Form 10-K constitute
those exhibits currently required to be on file. The reader
should refer to the 2002 Form 10-K under Part III, Item 15, for
a list of those exhibits



| | (b) |  | Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | SpectraLink filed two Current Reports on Form 8-K during the
quarter ending September 30, 2003. The first Form 8-K, dated
July 23, 2003, reported information under Item 9 Regulation FD
Disclosure, that was intended to be furnished under Item 12.
Results of Operations and Financial Condition in accordance
with SEC Release No. 33-8216. This filing included SpectraLinks
earnings press release for the six months ended June 30, 2003,
and the script used by SpectraLink executives on the conference
call explaining the quarterly results. The information furnished
under that Form 8-K was intended to be furnished and not deemed
filed with the Securities and Exchange Commission, and is not
incorporated by reference in any filing of SpectraLink under the
Securities Act of 1933 or the Securities Exchange Act of 1934,
including this quarterly report, whether made before or after
the date of that Form 8-K and irrespective of any general
incorporation language in any filings.
|
| |     |  | The second Form 8-K, dated August 21, 2003, reported information
under Item 5 Other Events concerning the announcement that:
John H. Elms, Vice President of Operations of SpectraLink for
the past four years, assumed the position of President and Chief
Executive Officer on September 1, 2003 and Mr. Elms also joined
the Board of Directors; and Bruce Holland, President and CEO, up
to September 1, 2003, and a founder of SpectraLink, would
continue with SpectraLink as Chairman of the Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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SPECTRALINK CORPORATION
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: November 13, 2003

|                                                                                             
|---------------------------------------------------------------------------------------------
|By: /s/ NANCY K. HAMILTON                                                                    
|                                                                                             
|Nancy K. Hamilton,
Principal Financial and Accounting
Officer and on behalf of the Registrant

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EXHIBIT INDEX

|               |  |                                                                                                                                             
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Exhibit Title                                                                                                                               
|               |  |                                                                                                                                             
|31.1          |  | Certification by John H. Elms pursuant to 15 U.S.C. Section 7241, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.     
|               |  |                                                                                                                                             
|31.2          |  | Certification by Nancy K. Hamilton pursuant to 15 U.S.C. Section 7241, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|               |  |                                                                                                                                             
|32.1 *        |  | Certification by John H. Elms pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.     
|               |  |                                                                                                                                             
|32.2 *        |  | Certification by Nancy K. Hamilton pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

 Filed herewith.

*     As contemplated by SEC Release No. 33-8212, these exhibits are furnished
with this quarterly report on Form 10-Q and are not deemed filed with the
Securities and Exchange Commission and are not incorporated by reference in any
filing of SpectraLink Corporation under the Securities Act of 1933 or the
Securities Exchange Act of 1934, whether made before or after the date hereof
and irrespective of any general incorporation language in any filings.

26