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EXHIBIT 99.1
Contact: Jack Leone
Sitrick And Company
(310) 788-2850
For Immediate Release
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Variflex Says Some of Its Safety Helmets Do Not Meet All Standards
No Injuries Known; Firm Working With CPSC on Expected Recall
MOORPARK, Calif. - October 6, 2000 - Variflex, Inc. (Nasdaq:VFLX) today
announced that it has discovered that certain of its X-Games Helmets,
manufactured by a third party, do not comply with all applicable Consumer
Product Safety Commission standards. Variflex said it has not received any
notice of any injury resulting from the use of these helmets.
Variflex has contacted the Consumer Product Safety Commission and is in the
process of working out the details of a recall, which will be made promptly
after Consumer Product Safety Commission approval. Variflex believes that
approximately 150,000 of the subject helmets have been sold by retailers since
October 1999 at an average cost of approximately $20 per helmet. Variflex said
it has asked retailers to cease sales and remove the subject helmets from their
shelves. The financial impact of the recall, which is expected to be material,
will be reflected in Variflex's fourth quarter results for the year ended July
31, 2000. At this time Variflex is unable to estimate the cost of the recall or
the actual impact on its fourth quarter results.
Variflex is a leading wholesaler and distributor in the United States of in-line
skates, skateboards, scooters, recreational safety helmets, athletic protective
equipment (such as wrist guards, elbow pads and knee pads used by skaters and
skateboarders) to the mass market. The Company also sells Quick Shade (R), a
convenient and innovative portable instant canopy, snowboards and related
accessories, and the Airzone (TM) "springless" trampoline. The Company designs
and develops these products which are then manufactured to detailed
specifications by independent contractors. Variflex distributes its products
throughout the United States and in foreign countries.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Statements in this press release regarding the business of Variflex, Inc.
which are not historical facts are "forward-looking statements" that involve
risks and uncertainties. These forward-looking statements include statements
about the expected impact of the recall. In that regard, Variflex is currently
unable to estimate the cost to it of the helmet recall although it believes that
the cost will be material, assuming that purchasers of the helmets avail
themselves of the recall and that existing inventories held by retailers are
returned to Variflex for replacement. Actual results may differ materially due
to factors, including, but not limited to: uncertainty regarding the consumer
response to the recall, uncertainty regarding the reactions of the retailers to
the recall, and the effect generally on the demand for Variflex's products. For
a discussion of other risks and uncertainties, and other factors, which could
cause actual results to differ materially from those contained in the forward-
looking statements, see information contained in the company's Form 10-K for the
most recently ended fiscal year and Form 10-Q for the most recently ended fiscal
quarter on file with the Securities and Exchange Commission.
