Exhibit 99.2
FOR IMMEDIATE RELEASE: NEWS
September 12, 2000 Nasdaq National Market - VARLE*
VARI-L ANNOUNCES ESTIMATE OF WRITE-DOWN
KPMG Accepts Assignment to Audit Financials Statements
DENVER, Colorado -- Vari-L Company, Inc. (Nasdaq National Market -
VARLE*), a leading provider of advanced components for the wireless
telecommunications industry, today announced that it will restate its
previously issued financial statements, reducing stockholder's equity by
$30 to $35 million. This estimate has been prepared by management and
includes write-downs of assets and changes in liabilities identified in a
preliminary report by KPMG LLP. The Audit Committee of the Board of
Directors engaged KPMG LLP in June to investigate the Company's financial
reporting practices.
The restatement will consist primarily of adjustments to property and
equipment, inventory, and other assets. As a result of these adjustments,
the Company intends to restate its financial results for 1998, 1999 and
the first quarter of 2000. Adjustments to periods before 1998 will be
reported as a charge to retained earnings as of December 31, 1997.
The Company intends to adjust the carrying value of property & equipment
to reflect significantly reduced capitalized labor costs, shorter economic
asset lives, reduced residual values, and to eliminate certain items that
do not qualify for capitalization. The Company also intends to adjust
inventory to increase the reserve for obsolescence of certain items and to
bring carrying values in line with recalculated standard costs. In
addition, the Company intends to adjust other assets to eliminate the
capitalization of internal labor and certain other deferred costs related
to patents and ISO 9001 registration. The adjustment will also reflect a
reduction in the estimated useful lives of certain patents. The
adjustments will also reflect additional accrued expenses, a reduction in
prepaid expenses, as well as the elimination of deferred income tax
liabilities. Of the total write-down, management's preliminary estimate
is that approximately 80% of the adjustment relates to property and
equipment , 14% to inventory, and 6% to other assets and liabilities.
In a related matter, the Company also announced that KPMG has been engaged
to perform an audit of the Company's financial statements. The Company
and KPMG expect the audit to be completed during the fourth quarter. KPMG
is evaluating the scope of the audit for 1998 and 1999.
"We are working diligently with KPMG to strengthen the Company's internal
controls and accounting practices. Obviously, these non-cash adjustments
don't directly affect our current operations," said Pete Pappas, Vari-L
Chief Executive Officer. "The Company remains focused on innovation,
manufacturing and design excellence. As we announced last week,
manufacturing operations have continued without interruption, and the
Company continues to produce and ship products around the world."
As previously announced, the Company intends to request a review of
Nasdaq's decision to delist the Company. Trading of the Company's stock
was halted in July after the Company's former independent accounting firm
resigned. "We are making progress in resolving the Company's accounting
issues and will keep our shareholders fully informed as new developments
occur," Pappas said.
Through its headquarters in Denver, Vari-L designs, manufactures and
markets wireless communications components that generate or process radio
frequency (RF) and microwave frequency signals. Vari-L's patented
products are used in commercial infrastructure equipment (including
cellular/paging/PCS base stations and repeaters, fixed terminal point to
point/multi-point data radios including LMDS/MMDS), consumer subscriber
products (advanced cellular/PCS/satellite handsets, web-enabled smart
phones, 2-way pagers, wireless PDAs, home networking), and
military/aerospace platforms (satellite communications/telemetry, missile
guidance, electronic warfare, electronic countermeasures, battlefield
communications). Vari-L serves a diverse customer base of the world's
leading technology companies, including Adaptive Broadband, Agilent
Technologies, Digital Microwave, Ericsson, Glenayre Technologies (Wireless
Access), Harris, Hughes, Lockheed Martin, Lucent Technologies, Microwave
Data Systems, Mitsubishi, Motorola, NEC, NeoPoint, Netro, Newbridge
Networks, Nokia, Northrop Grumman, Novatel Wireless, Raytheon, Samsung,
and Siemens.
Some of the statements contained in this news release are forward-looking
statements. The accuracy of these statements cannot be guaranteed as they
are subject to a variety of risks, including but not limited to the
success of the products into which the Company's products are integrated,
governmental action relating to wireless communications licensing and
regulation, the accuracy of the Company's internal projections as to the
demand for certain types of technological innovation, competitive products
and pricing, the success of new product development efforts, the timely
release for production and the delivery of products under existing
contracts, the outcome of pending and threatened litigation and regulatory
actions, the success of the Company's efforts to engage a new independent
accounting firm and that firm's efforts to re-audit prior years, future
economic conditions generally, as well as other factors.
*The Company's common stock was delisted on September 7, 2000.
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CONTACTS:
Vari-L Company, Inc. Johnston Wells
Pete Pappas, CEO Marj Charlier
303/371-1560 303/623-3366
Pfeiffer Public Relations, Inc.
Jay Pfeiffer
303/393-7044
