No posts in some time.
Looking through the most recent 10-Qs, the company has been tagged with significant legal and accounting expenses. The legal costs should continue for the forseeable future, and presumably protect the skins of the culprits.
I do find it amazing that any of the top management from 1999 are still around. Such management must either be totally clueless or not walking the straight and narrow. So why would anyone tolerate their continued involvement in the company? And those that are clearly in the latter category, why is the company tolling the legal expenses to protect them? And if they were clueless -- who wants them either? Can you believe that the company had to drop retained earnings be $30-$35 million - this is an unbelievably huge amount. Although I presume that the clueless [if there were any present] must have had a clue to be dumping their shares in the marketplace.
One should think twice before investing in a company that has a local-yocal as their outside accountants.
Is it not amazing that the company, as of Dec. 31, 2000, has a retained earnings deficit of $21 million - meaning that for the cumulative life of the company not a dime had been made -- in fact, about $3 per share has been lost.
While the current Q indicates that a decent gross margin is being made [we got to assume that KPMG kicks the *** out of these numbers], G&A costs are up over $1 million over last year and account for almost 20% of sales. The Q states "The increase was primarily attributable to higher
amounts paid to independent contractors for interim management and accounting services, stay bonuses paid to employees, higher insurance premiums, as well as
an increase in stock compensation expense."
With litigation costs and high G&A wiping out the potential for any meaningful bottom line amount, what is the potential of Vari-L ? Since their customers sales are slowing, a turn-around does not seem in the cards.
What could be a possible result of the litigation as it affects the ongoing company? Issuing additional shares to those who lost $$ in this debacle? What can this breakeven company with less than $50 million in sales be sold for in today's environment? |
