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): May 17, 2000
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
On May 17, 2000, Vari-L Company, Inc.(the "Registrant") issued
the press release 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 May 17, 2000
Date: May 17, 2000 VARI-L COMPANY, INC.
By:/s/Jon L. Clark
Jon L. Clark
Chief Financial Officer
FOR IMMEDIATE RELEASE: NEWS
May 17, 2000 Nasdaq National Market-VARL
VARI-L COMPANY ANNOUNCES RESTATEMENT OF
1997 REVENUES AND EARNINGS
First Quarter 2000 EPS Revised Up To 15 Cents From 14 Cents
to Reflect Correction of Fully Diluted Share Count
DENVER, May 17, 2000 -- Vari-L Company, Inc. (Nasdaq: VARL - news), a
leading provider of advanced components for the wireless
telecommunications industry, today announced that it will be amending its
1997 financial statements to correct a $1,332,000 overstatement of its
revenues for that year and a corresponding $159,800 overstatement of
earnings. The Company will also correct its subsequent financial
statements to reflect the residual effect of the 1997 correction. The
Company will adjust its balance sheets for periods ending March 31, 1998
and thereafter to correct the resulting overstatement of approximately
$159,800 in retained earnings and the relative composition of its assets
and liabilities.
The Company has today filed a Form 12b-25 with the Securities and
Exchange Commission to obtain an extension of time to file its Form 10-Q
until May 22, 2000 to ensure that the above-referenced corrections are
properly reflected in its first quarter financial statements. The Company
intends to amend its prior reports on Form 10-KSB and Form 10-QSB to
include corrected financial statements.
After the correction, 1997 revenues will be $16,053,364, versus
$17,385,364 originally reported, and 1997 earnings will be $1,875,049,
versus $2,034,849 originally reported. Basic earnings per share for the
year will be $0.41, versus $0.45 originally reported and fully diluted
earnings per share will be $0.40, versus $0.43 originally reported.
Because the overstatement occurred in the fourth quarter of 1997,
revenues for that quarter will be $4,217,813, versus $5,549,813 originally
reported. Fourth quarter 1997 earnings will be $664,431 after the
revision, as opposed to the $824,231 originally reported. Primary
earnings per share for the quarter as corrected will be $0.13, and fully
diluted earnings per share will be $0.12, as opposed to $0.16 and $0.15,
respectively, as originally reported.
The Audit Committee of the Company's Board of Directors is conducting
an investigation of this matter and, in connection therewith, has engaged
the Company's independent accounting firm, Haugen, Springer & Co., P.C.,
to evaluate certain of the Company's accounting policies and practices as
reflected in its recent financial statements. The Audit Committee has
requested that, upon completion of that evaluation, the Company's
independent accountant issue new reports, if required, regarding the
Company's financial statements for the years ending 1997, 1998 and 1999.
In connection therewith, the independent accounting firm is evaluating the
Company's internal accounting procedures, including but not limited to the
Company's policies and practices concerning the capitalization of labor
expense and other costs and the appropriate documentation thereof. The
Company believes that such evaluation may result in further adjustments of
the Company's financial statements. The amount of such adjustments, if
any, cannot presently be determined by the Company.
The Company has provided information to the staff of the Securities
and Exchange Commission regarding these matters in response to inquiries
from the staff.
Separately, the Company announced a correction of its earnings per
share and fully diluted share count for the quarter ended March 31, 2000.
Due to an error in calculating the weighted average number of fully
diluted shares, the Company incorrectly reported a diluted share count of
7,939,000 for the first quarter, which was 362,000 shares higher that the
correct figure of 7,577,000. The first quarter 2000 number compares to a
fourth quarter 1999 diluted share count of 6,724,000.
The correction of the fully diluted share count increased first
quarter 2000 earnings per share by $0.01 for a total of $0.15 cents per
share for the quarter, versus the previously reported $0.14 per share.
Revised summary income statement data for the quarter is presented below.
The recalculation of EPS does not result in any change in previously
announced revenues or earnings for the first quarter. The Company
previously announced net sales of $7.9 million, up 48% over the year-ago
first quarter, and net income of $1.1 million, up 47% over the comparable
period last year.
Fully diluted shares outstanding is calculated in a manner designed
to take into account the dilutive effect of outstanding warrants and
options. The calculation seeks to recognize the number of shares which
would be issued upon the exercise of all outstanding stock options,
including both vested and unvested options in many cases, after
subtracting the number of shares which the Company could, in theory,
repurchase in the market at current fair market value with the proceeds of
the aggregate exercise price received on account of the "exercised"
options. The tax savings which the Company receives on account of the
exercise of nonqualified stock options is considered a part of the
proceeds received by the Company from the "exercise" for purposes of this
calculation. In this case, the Company miscalculated the number of fully
diluted shares because it failed to account for the substantial tax
savings that would be afforded the Company in the event of the exercise of
most of its outstanding options.
Shareholders seeking further information on the Company's outstanding
stock options, including recent option grants, are encouraged to read the
Company's SEC filings, including but not limited to its May 1, 2000 proxy
statement and its Form 10K for the year ended December 31, 1999.
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.
FIRST QUARTER 2000 INCOME STATEMENT DATA
First Quarter Ended
March 31,
2000 1999
Net Sales $ 7,866,000 $5,313,000
Net Income $ 1,106,000 $ 754,000
Basic Earnings
Per Share $ .16 $ .14
Diluted Earnings
Per Share $ .15 $ .14
Basic Weighted Average
Shares Outstanding 7,014,000 5,488,000
Diluted Weighted Average
Shares Outstanding 7,577,000 5,580,000
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.
###
CONTACTS:
Vari-L Company, Inc. Pfeiffer Public Relations, Inc.
Dave Sherman, President Jay Pfeiffer
or Jon Clark, Chief Financial Officer 303/393-7044
303/371-1560 [email protected]
[email protected]
