0000895755-01-500063.txt : 20011009 0000895755-01-500063.hdr.sgml : 20011009 ACCESSION NUMBER: 0000895755-01-500063 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010927 ITEM INFORMATION: Other events ITEM INFORMATION: FILED AS OF DATE: 20010928 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARI L CO INC CENTRAL INDEX KEY: 0000917173 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 060678347 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23866 FILM NUMBER: 1747284 BUSINESS ADDRESS: STREET 1: 4895 PEORIA STREET CITY: DENVER STATE: CO ZIP: 80239 BUSINESS PHONE: 3033711560 MAIL ADDRESS: STREET 1: 11101 EAST 51ST AVENUE CITY: DENVER STATE: CO ZIP: 80239 8-K 1 v8k927.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): September 27, 2001 VARI-L COMPANY, INC. (Exact Name of Registrant as Specified in its Charter) COLORADO 0-23866 06-0678347 (State of Incorporation) (Commission File (IRS Employer ID Number) Number) 4895 Peoria Street Denver, Colorado 80239 (Address of Principal Executive Offices) (303) 371-1560 (Registrant's Telephone Number, including Area Code) ITEM 5. OTHER EVENTS Vari-L Company, Inc.(the "Registrant") issued a press release on September 27, 2001 releasing financial information which is attached as Exhibit 99.1 to this report and incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) None (b) None (c) Exhibits 99.1 Press Release dated September 27, 2001 99.2 Transcript for September 27, 2001 Conference Call ITEM 9. REGULATION FD DISCLOSURE In accordance with General Instruction B.2. of Form 8-K, the transcript of the September 27, 2001 Conference Call including a summary of questions and answers from the call ,is attached as Exhibit 99.2 to this report and incorporated herein by reference. The transcript shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth in such filing. The conference call, which was open to the public, was also broadcast live over the Internet through PRNewswire's web site at www.videonewswire.com. Date: September 27, 2001 VARI-L COMPANY, INC. By:/s/Charles R. Bland Charles R. Bland President and Chief Executive Officer EX-99.1 3 v8kpr927.txt EXHIBIT 99.1 FOR IMMEDIATE RELEASE: NEWS September 27, 2001 OTC-VARL VARI-L COMPANY ANNOUNCES FISCAL 2001 FINANCIAL RESULTS DENVER, Colorado - Vari-L Company, Inc. (OTC-VARL), a leading provider of advanced components for the wireless telecommunications industry, today announced results for its fiscal year ended June 30, 2001. The Company also announced it would conduct a conference call at 2:30 p.m. Mountain Time, Thursday, Sept. 27, to discuss its results. The call-in number is 1-800-219-6110. The conference I.D. number is 399214. The call will also be broadcast over the Internet through PR Newswire's web site at http://www.videonewswire.com/event.asp?id=1207. To listen to the live call, please go to the web site 15 minutes early to register and download any necessary audio software. A replay will be made available shortly after the call at www.prnewswire.com. RESULTS OF OPERATIONS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 COMPARED WITH THE 12 MONTHS ENDED JUNE 30, 2000 Net sales for the year ended June 30, 2001 increased 35.3% to $41.4 million compared with $30.6 million for the 12 months ended June 30, 2000. This improvement primarily reflects increased demand for commercial signal source products. Net sales from commercial signal source products was $34.9 million for the year ended June 30, 2001, a 39.0% increase from the $25.1 million for the 12 months ended June 30, 2000. The year ended June 30, 2001 included a significant end-of-life production run generating net sales of $809,000 and fees earned from contract modifications of approximately $295,000. The twelve months ended June 30, 2000 did not have the benefit of these items. Net sales from all other products were $6.5 million for the year ended June 30, 2001, an 18.2% increase from the $5.5 million for the 12 months ended June 30, 2000. Gross profit for the year ended June 30, 2001 increased 49.6% to $19.6 million, or 47.3% of sales, compared with $13.1 million, or 42.8% of sales, for the 12 months ended June 30, 2000. Included in cost of goods sold for the year ended June 30, 2001 are charges of $1.4 million for obsolete and excess inventory, compared with $516,000 for the 12 months ended June 30, 2000. The higher gross profit margin in the 2001 period was due to improved production yields and the absorption of manufacturing overhead over a larger volume of sales, the benefit from the end- of-life production run and contract modification, partially offset by inventory shrinkage and scrap and the above noted provision. Included in operating expenses are charges for non-cash stock compensation. The charges for stock compensation principally relate to amortization of deferred stock compensation attributable to stock options granted at less than the market price of the common stock on the date of the grant. Of the $487,000 total amount of stock compensation recorded for the year ended June 30, 2001, $409,000 relates to options granted in December 1999. In December 2000 these options were reformed to $34.50 per share, the market price of the common stock on the date of the original grant. As a result, the remaining unamortized stock compensation cost associated with these option grants was reversed in December 2000. The net loss for the year ended June 30, 2001 was $1.4 million, or $0.20 per share, compared with a net loss of $1.6 million, or $0.25 per share, for the twelve months ended June 30, 2000. Excluding the impact of stock compensation (which is a non-cash charge to earnings) and expenses relating to accounting restatements and related shareholder litigation (which management believes are not indicative of continuing operating expenses), net income for the year ended June 30, 2001 would have been $1.5 million, or $0.21 per share, compared with a loss of $558,000, or $0.09 per share, for the twelve months ended June 30, 2000. IMPACT OF ECONOMIC SLOWDOWN As discussed in the press release of April 19, 2001, Vari-L continues to experience softness in the demand for its products due to the general state of the wireless telecommunications industry. In the fourth quarter, net sales were $9.0 million compared with $10.0 million in the third quarter. Additionally, Vari-L expects net sales for the first quarter of fiscal 2002 to be down as much as 40% compared with the fourth quarter of fiscal 2001. This reduced demand and the broad availability of excess components in the industry as a whole required Vari-L to re- evaluate the adequacy of reserves for excess and obsolete inventory in the fourth quarter. For the quarter ended June 30, 2001, Vari-L charged approximately $700,000 for excess and obsolete inventory to cost of sales. Additionally, since the majority of manufacturing overhead is fixed in nature, Vari-L's gross profit was adversely affected in the quarter by the reduced level of net sales. LIQUIDITY AND CAPITAL RESOURCES As of June 30, 2001, working capital was $7.1 million including cash and cash equivalents of $2.0 million. In fiscal 2001, Vari- L focused on reducing inventory levels and increasing inventory turns. Using the cash generated from inventory reductions, management focused on bringing accounts payable to vendors into compliance with their credit terms. Throughout the fiscal year ended June 30, 2001, the Company made significant reductions in its credit facilities. Through June 28, 2001, concurrent with the execution of three forbearance agreements, Vari-L had reduced the notes payable to Bank One from $11.5 million to $6.7 million. On June 28, 2001, the Company entered into a credit agreement with Wells Fargo Business Credit, Inc. (the "Credit Facility"). Concurrent with the closing of the Credit Facility, Vari-L paid its former lender, Bank One, in full and borrowed a total of $3.0 million from Wells Fargo Business Credit, Inc. As of June 30, 2001, the Company had outstanding balances of $1.5 million on its term loan and $1.5 million on its revolving loan. The Credit Facility provides for a $6.0 million secured revolving line of credit, a secured term loan of up to $2.5 million, and a $1.5 million secured capital expenditures loan. On September 17, 2001, this facility was amended to establish revised financial covenants for the fiscal years ending June 30, 2002 and June 30, 2001. "We are very pleased with the year over year growth we were able to achieve this year, particularly with the general downturn in the wireless sector and the overall economy that occurred in the latter part of the year," said Charles Bland, president and CEO. "The improvement in margins reflects the efforts of our leadership team in improving our operational efficiencies and lowering our breakeven rate. "We began to see some softening during our fiscal fourth quarter and that softness in orders continued into the first quarter of this year," Bland continued. "The exact timing of a recovery is difficult to predict, but we currently believe that we will experience the bottom before the end of our second quarter. Needless to say, we will likely see a much tougher competitive market over the next year, so we are aggressively stepping up our new product development efforts to broaden our market opportunity and focusing our manufacturing team on reducing our overall cost structure. "I believe that Vari-L turned in a solid performance for the fiscal year," added Bland. "Absent our non-cash charges relating to stock compensation and the nonrecurring expenses associated with accounting restatements and litigation, we would have been profitable for the fiscal year. I believe that this underscores the capabilities of our leadership team and the potential we have to increase shareholder value in the future." Bland said the Company and counsel for the class action plaintiffs have had some discussions regarding the resolution of the class action lawsuit but he could not publicly disclose details of those discussions without jeopardizing the Company's position. According to Bland, "The company stands ready to settle this litigation in a timely manner that is fair to both our current and former shareholders." Vari-L previously announced a settlement agreement with the Securities and Exchange Commission, which settlement is subject to final approval by a federal district court, under which the Company will not be required to pay civil penalties or money damages to the SEC. FORWARD-LOOKING STATEMENTS Some of the statements we make in this news release are "forward- looking statements" as that term is used in the Private Securities Litigation Reform Act of 1995. In most cases, when we use words like "believe," "expect," "estimate," "anticipate," "project," or "plan" to describe something which has not yet occurred, we are making a forward-looking statement. Forward- looking statements we make are based on a number of assumptions by us about the future, usually based on current conditions or on the broader expectations of others. These assumptions may or may not prove to be correct and, as a result, our own forward-looking statements may also be inaccurate. On the other hand, based on what we know today and what we expect in the future, we believe that the forward-looking statements we make in this news release are reasonable. We cannot list here all of the risks and uncertainties that could cause our actual future financial and operating results to differ materially from our historical experience and our present expectations or projections but we can identify many of them. For example, our future results could be affected by the overall market for various types of wireless communications products, the success of the specific products into which our products are integrated, governmental action relating to wireless communications, licensing and regulation, the accuracy of our internal projections as to the demand for certain types of technological innovation, competitors' products and pricing, the success of new product development efforts, the timely release for production and the delivery of products under existing contracts and the ultimate outcome of pending and threatened litigation and regulatory action. It is also important to remember that forward-looking statements speak only as of the date when they are made and we do not promise that we will publicly update or revise those statements whenever conditions change or future events occur. Accordingly, we do not recommend that any person seeking to evaluate our company should place undue reliance on any forward-looking statement in this news release. CONTACTS: Vari-L Company, Inc. Pfeiffer High Public Relations, Inc. Chuck Bland, President & CEO Jay Pfeiffer Rick Dutkiewicz, CFO 303/393-7044 303/371-1560 jay@pfeifferhigh.com www.vari-l.com STATEMENT OF OPERATIONS DATA (In thousands of dollars, except share and per share data)
Fiscal Year Twelve Months Three Months Ended Ended Ended June 30, 2001 June 30, 2000 June 30, 2001 ------------- ------------- ------------- (unaudited) (unaudited) Net Sales $ 41,377 $ 30,597 $ 8,988 Cost of goods sold 21,747 17,540 5,465 ------------ ------------ ----------- Gross profit 19,630 13,057 3,523 ------------ ------------ ----------- Operating Expenses: Selling 4,445 3,636 980 General and administrative 9,222 4,436 2,716 Research and development 4,286 5,646 868 Expenses relating to accounting restatements and the related shareholder litigation 2,387 469 54 ------------ ----------- ------------ Total operating expenses 20,340 14,187 4,618 ------------ ----------- ------------ Operating loss (710) (1,130) (1,095) Other income (expenses): Interest income 416 460 62 Interest expense (1,062) (873) (159) Other, net (43) (35) (39) ------------ ----------- ------------ Total other income (expenses) (689) (448) (136) ------------ ----------- ------------ Net loss $ (1,399) $ (1,578) $ (1,231) ============ ============ =========== Loss per share $ (0.20) $ (0.25) $ (0.17) ============ ============ =========== Weighted average shares outstanding 7,083,866 6,232,964 7,185,987 ============ ============ ===========
BALANCE SHEETS (In thousands of dollars) June 30, June 30, 2001 2000 ------- ------- ASSETS Current assets: Cash and cash equivalents $ 2,013 $ 11,030 Trade accounts receivable, less allowance for doubtful accounts of $279 and $175, respectively 5,942 5,881 Inventories 3,640 7,435 Prepaid expenses and other current assets 645 190 ---------- ---------- Total current assets 12,240 24,536 ---------- ---------- Property and equipment: Machinery and equipment 11,616 9,845 Furniture and fixtures 822 721 Leasehold improvements 1,500 1,539 ---------- ---------- 13,938 12,105 Less accumulated depreciation and amortization 6,362 4,767 ---------- ---------- Net property and equipment 7,576 7,338 Intangible and other assets, net of accumulated amortization 638 697 ---------- ---------- Total assets $ 20,454 $ 32,571 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank overdraft $ - $ 321 Trade accounts payable 1,669 4,182 Accrued compensation 1,286 1,500 Other accrued expenses 428 225 Notes payable and current installments of long-term obligations 1,764 11,566 ---------- ---------- Total current liabilities 5,147 17,794 Long-term obligations 1,321 92 Other liabilities 157 - ---------- ---------- Total liabilities 6,625 17,886 ---------- ---------- Stockholders' equity: Common stock, $.01 par value, 50,000,000 shares authorized; 7,107,161 and 7,070,423 shares issued and outstanding, respectively 71 71 Additional paid-in capital 36,829 40,525 Unamortized stock compensation cost (79) (4,318) Accumulated deficit (22,992) (21,593) ---------- ---------- Total stockholders' equity 13,829 14,685 ---------- ---------- Commitments and contingencies Total liabilities and stockholders' equity $ 20,454 $ 32,571 ========== ==========
EX-99.2 4 v8kts927.txt EXHIBIT 99.2 TranscriptDraft No. 1 Fiscal 2001 Year-end release 1) The operator from ACT Teleconferencing will welcome callers to the call, provide verbal instructions and a format for the call, and introduce Chuck and Rick. 2) Rick reads forward looking statements disclaimer. CHUCK BLAND Good afternoon and welcome to our conference call to discuss results for our fiscal year ended June 30, 2001. I'm Chuck Bland, CEO of Vari-L. I want to apologize in advance for the length of time between the end of our fiscal year and this conference call. In late August, we learned of the potential of reaching a settlement with the Securities and Exchange Commission. On September 17, 2001, we announced our settlement with the SEC, which is subject to final court approval. We recognized that the shelf-life of Form 10-K is one year. In light of that, we made the conscious decision to delay filing the 10-K until we could include this critical event in the filing.. I'll be going into some of the important changes that are taking place at Vari-L in a few minutes, but first I'll turn it over to Rick Dutkiewicz, who will address financial results for the fourth quarter and year-end. Rick. RICK DUTKIEWICZ Thank you, Chuck. o As you are by now aware, Vari-L achieved strong sales growth in fiscal 2001 despite a downturn in the wireless industry that began in the first calendar quarter of 2001. Our 35% growth rate pushed net sales to $41 million versus about $31 million in the prior year. As expected, commercial signal source products for wireless infrastructure dominated our sales mix. o Our gross margins increased more than 2 points to 49.6 percent, due primarily to improved production yields, increased capacity utilization and benefits from an end-of-life production run. o For the year, we reported a net loss of $1.4 million dollars, or 20 cents per share, which was actually a small improvement over the prior year's unaudited results. It's important to note, however, that without a couple of non-cash and/or nonrecurring charges associated with stock compensation and the accounting restatements and associated legal actions, we would have been profitable to the tune of $1.5 million dollars, or 21 cents per share. The message here is that once we are able to put all these distracting issues behind us, we have demonstrated an ability to grow this company on a profitable basis. o Back in April we provided guidance regarding a softening in demand for our products due to a slow- down in the wireless industry across the board. We began an immediate program to bring our spending more in line with demand, including a headcount reduction of approximately 30 employees between April and the end of our fiscal year. What followed was roughly a 10% decline in net sales in the fourth quarter as compared with the third quarter. This reduced demand negatively impacted gross margins in the period since our manufacturing overhead is pretty much fixed. In addition, the broad availability in the market of excess components resulted in our having to charge approximately $700,000 for excess and obsolete inventory. As a result of these factors, our net loss in Q4 jumped to about $1.2 million dollars as compared with a loss of less than $200 thousand dollars for the preceding nine-month period. o For the record, we expect revenue in the current quarter, which is Q1 of fiscal 2002, to decline as much as 40 percent from the fourth quarter as the wireless industry continues to look for its legs. Right now our large strategic customers are playing it pretty close to the vest in terms of when they might begin to ramp up order flow. Nevertheless, we are beginning to see some positive signs that our declining revenue trend may be near a bottom and that our second fiscal quarter that gets underway next week might begin to provide the modest beginning of the inevitable turnaround we're all waiting for. o Switching gears to our balance sheet, just prior to fiscal year end we replaced our old credit arrangement with Bank One with a new, more attractive facility with Wells Fargo. The new $10 million dollar facility includes a $6 million dollar revolver, a $2.5 million dollar term loan and a $1.5 million dollar capX loan. We are pleased to say that Wells Fargo took the unusual step of publicly expressing confidence in our prospects and we are delighted to be working with them. At June 30 we had drawn down $1.5 million dollars each on our revolver and term loans, and we had working capital of $7.1 million and cash and equivalents of $2 million. o Before I turn the call back over the Chuck, I'd like to highlight a few important changes that we have made or are planning in the finance and accounting department since I joined the Company in January. o First and foremost, we have rebuilt our staff from the ground up. That includes the addition of three new finance professionals, who have proven track records in either industry or public accounting. These professionals are dedicated to one overriding objective - to provide timely, accurate and reliable financial information. o Over the past nine months we revamped and enhanced many of our internal systems and procedures to ensure quick and accurate period closings. We are developing new cost accounting reporting and measurement tools to provide all of our operating divisions with better information on utilization, yields, material flow and the status of their own process improvement initiatives. And we are focusing carefully on improving our cost structure on a company-wide basis. o With that I'll turn the call back over to Chuck. As always, I'll be here to answer questions during the Q&A period following Chuck's remarks. CHUCK BLAND Thanks, Rick. o Over the past several months I've had an opportunity to speak in person and on the phone with many investors, brokers and analysts. Those conversations have given me a pretty good insight into what is important to people with respect to Vari-L's present and future plans, so today I'm going to try to address those issues by focusing on three particular themes. o First, Vari-L has assembled a management team that is very experienced and is intensely focused on building value for all of our stakeholders. In addition to Rick, his new staff and myself, we have strengthened the leadership of all of our operating divisions, in some cases promoting from within and in other cases recruiting strong management from the outside. We are emphasizing accountability and performance throughout the organization. And in a related move, we have redesigned every one of our incentive programs to more closely align the interests of our employees with those of our shareholders. o Second, we are fostering a culture of growth in everything we do. With deep technical resources and a strong reputation as a technical solutions house, we believe we have tremendous growth opportunities in both the commercial wireless and military/aerospace industries. Already a major provider of VCO's to leading wireless operators and defense contractors, we intend to expand our product offerings to capture a bigger piece of the pie with existing and new customers. We are actively recruiting up to 15 new engineers to help drive this process - ten will be devoted to supporting our current product offerings and five will add to the staff of our newly established research and development group. This group will focus exclusively on longer-range opportunities, leaving our engineering group free to manage the day-to-day challenges presented by our customers. o Our third primary theme involves a commitment to maintaining high standards of integrity in everything that we do. This commitment is demanded of each and every one of Vari-l's 210 employees, and we want our shareholders, vendors, customers and other stakeholders to understand that it will be strictly enforced. Our board has provided leadership in this are by having the Audit Committee fully adopt the recommendations as put forth by the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees - . Internally, my management team developed and implemented a new code of conduct program that applies to all employees throughout the organization. The code specifically states the ethical standards we expect all employees to adhere to, and we require a written confirmation that they have read and fully understand the rules. We have been aided in this effort by another recent addition to the Vari-L team, Gil Van Lunsen, who joined the board in May following a distinguished 32- year career with KPMG LLP. In addition to a strong background in SEC auditing and reporting, Gil brings a wealth of experience in corporate governance and ethics compliance. o Before we open the call to questions, I'd like to address a few issues that I'm certain are on your mind. About a week ago we announced a settlement with the SEC that does not require the Company to pay any civil penalties or money damages. For those of you who may not know, the settlement relates to Vari-L's prior financial reporting and accounting practices and procedures that caused the Company to restate earlier financial statements. Obviously, we believe the terms of the settlement were fair and are pleased to have this issue behind us once and for all. o That brings me to the second and final non-operating hurdle facing us - the pending shareholder litigation. Unfortunately, I am not at liberty to provide any substantive update on this process other than say we continue to be in contact with plaintiff's counsel, and we stand ready to settle this litigation on terms that are fair to both our former and current shareholders. At this time, no timetable has been set for a potential settlement. o Regarding the relisting of our stock on NASDAQ, we do not believe that this will be possible until we are in compliance with SEC regulations regarding audited financial results. We expect to be in compliance with the SEC, and therefore able to reapply, approximately two years from now. Operator, you may now open the call to questions. [Mr. Bland and Mr. Dutkiewicz then answered several questions from participants in the call, including but not limited to the following: In response to a question concerning why the Company was expecting an upturn in sales in the near term, Mr. Bland stated that, based on the shorter lead times being given by customers on recent orders, and the Company's belief that the recent downturn was the result of customers' need to use up excess inventory, the Company believes that much of this excess inventory has now been burned off. In response to a question concerning the Company's military and aerospace business, Mr. Bland confirmed that the Company had not abandoned this line of business, did not intend to do so in the future, and that it continued to represent a significant amount of the Company's business. With respect to any new orders arising out of the September 11, 2001 tragedies in New York and Washington, D.C., Mr. Bland stated that no new orders had yet been received but acknowledged the receipt of a number of recent customer inquiries concerning military/aerospace products. Mr. Bland also responded to a question concerning the possibility of listing the Company's stock somewhere else other than Nasdaq as follows: THE DELISTING OF THE COMPANY'S STOCK FROM NASDAQ WAS THE DIRECT RESULT OF THE COMPANY'S INABILITY TO OBTAIN AN AUDITOR'S OPINION ON ITS PRIOR YEARS' FINANCIAL STATEMENTS. NASDAQ RULES REQUIRE THREE YEARS AUDITED FINANCIAL STATEMENTS FOR NEW OR CONTINUED LISTING. SEC RULES ALSO REQUIRE THREE YEARS AUDITED FINANCIAL STATEMENTS AND MOST STOCK EXCHANGES REQUIRE THAT LISTED COMPANIES COMPLY WITH ALL SEC RULES. NEVERTHELESS, WITH THE FILING OF AUDITED FINANCIAL STATEMENTS FOR THE 12 MONTHS ENDED JUNE 30, 2001, AND THE RECENT SETTLEMENT AGREEMENT WITH THE SEC, THE COMPANY IS ACTIVELY PURSUING, ON A CONFIDENTIAL BASIS, A NUMBER OF OPPORTUNITIES FOR LISTING ITS STOCK FOR TRADING. Mr. Dutkiewicz also responded to a question concerning the Company's plans for an annual meeting of shareholders as follows: IN LIGHT OF THE CHANGE IN THE COMPANY'S FISCAL YEAR, THE COMPANY WOULD ORDINARILY HOLD ITS ANNUAL MEETING IN MID-DECEMBER. (WE USED TO HOLD OUR MEETINGS IN JUNE WHEN WE HAD A CALENDAR YEAR END.) WHILE CHRISTMAS TIME IS NOT THE BEST TIME FOR AN ANNUAL MEETING, THE BOARD OF DIRECTORS HAS NOT RULED OUT THE POSSIBILITY OF HOLDING THE MEETING EITHER IN DECEMBER OR EARLY NEXT YEAR. THE BOARD MAY PREFER, HOWEVER, TO DELAY THE MEETING UNTIL AFTER WE HAVE IDENTIFIED AT LEAST ONE MORE QUALIFIED NEW CANDIDATE FOR THE BOARD OF DIRECTORS AND, HOPEFULLY, AFTER WE HAVE MADE SIGNIFICANT PROGRESS ON THE CLASS ACTION LITIGATION. After there were no further questions, Mr. Bland closed the call as follows:] o On a final, personal note, I'm sure than many individuals on this call, particularly members of the financial community, have ties and relationships with persons who were lost or otherwise affected by the events in lower Manhattan a few weeks ago. Some of you may even be located in Manhattan. To all of you, on behalf of all of us at Vari-L, we express our sincere condolences.