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.