FOR IMMEDIATE RELEASE: NEWS
July 7, 2000 Nasdaq National Market-VARL
VARI-L COMPANY ANNOUNCES
RESIGNATION OF INDEPENDENT ACCOUNTING FIRM
AND RETENTION OF KPMG LLP
KPMG to Review Prior Financial Statements and
Assist Audit Committee with Internal Investigation
DENVER, July 7, 2000 -- Vari-L Company, Inc. (Nasdaq: VARL - news), a
leading provider of advanced components for the wireless
telecommunications industry, today announced that, by letter dated July 5,
2000, Haugen, Springer & Co., P.C., has resigned as the Company's auditors
and independent accountants.
According to Haugen Springer, its resignation was prompted by the
decision of the Audit Committee of the Board of Directors to retain KPMG
LLP to assist the Committee in the Committee's internal investigation of
the Company's prior financial statements in place of Haugen Springer. In
its July 5 letter, Haugen Springer referenced its concern that, in light
of certain statements attributed to Company management and a lack of
cooperation from the Company's former Controller, it was uncertain whether
it could rely on management's representations. Haugen Springer declared
that, because it had not yet completed its investigation of, among other
things, the recognition of certain of the Company's revenues, the
capitalization of certain expenses, and the Company's depreciation and
amortization policies for the years ended December 31, 1997, 1998 and
1999, and because the completion of that investigation is likely to be
prolonged, the Company's financial statements for those years, and Haugen
Springer's reports thereon, are not to be relied upon. Finally, Haugen
Springer indicated that it has become aware of information indicating that
one or more illegal acts, within the meaning of Section 10A of the
Securities Exchange Act, has or may have occurred.
The Audit Committee stated that it made the determination to direct
legal counsel to retain KPMG LLP to assist counsel and the Committee
because it came to believe that, under the circumstances, Haugen Springer
could not effectively evaluate the Company's prior financial statements
which it had audited.
The Audit Committee announced that it has not yet engaged a new
independent accounting firm to audit the Company's financial statements
for the year ending December 31, 2000.
The Company confirmed that, as previously announced, it intends to
announce its financial results for the quarter ended June 30, 2000 when it
files its report on Form 10-Q in mid-August. The Audit Committee stated
that it plans to complete the investigation and announce the adjustments
to the Company's prior financial statements at that time. The Audit
Committee further indicated that it considers it very likely that
adjustments will be made in at least some of the areas cited by Haugen
Springer in its resignation letter but that it could not estimate the
amount of total adjustments or their effect on the Company's financial
statements going forward until the Committee completes its investigation.
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, Ericsson, Glenayre Technologies (Wireless Access), Harris,
Hughes, IBM, LGIC, Lockheed Martin, Lucent Technologies, Mitsubishi,
Motorola, NEC, NeoPoint, Netro, Newbridge Networks, Nokia, Northrop
Grumman, Raytheon, Samsung, Siemens and SpectraPoint.
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, future economic conditions generally,
as well as other factors.
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CONTACTS:
Vari-L Company, Inc. Pfeiffer Public Relations, Inc.
Dave Sherman, President Jay Pfeiffer
303/371-1560 303/393-7044
[email protected] [email protected]
