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Technology Stocks : Vari-L (VARL) -- Ignore unavailable to you. Want to Upgrade?

To: Lhn5 who wrote (992)	6/17/1999 8:24:00 AM
From: Yo Yo	Read Replies (1) \| Respond to of 2702

Larry, High margin products are the very precise, very reliable VCOs that go into wireless base stations. Military products are also specialized, sophisticated, lower volume, and high margin. Cellular telephone and other hand held device VCOs are high volume, less sophisticated, lower margin product. To date, virtually all of VARL's business has been in the high end products, hence the 55% gross margins. Expectations are for 20% annual growth in this area. However, VARL is "juicing up" the growth rate by leveraging their established customer base (insert names of any of the leaders in the industry here) into the hand set market. As you are probably aware, they have recently entered that market with the installation of new automated manufacturing capacity for these products. The Glenayre order from a few months back was their first big score in this area. As far as stock buy back goes, the balance sheet is fantastic, current capacity can handle near term growth in existing markets, capacity is installed for hand set VCO markets, and the company has been generating solid operating cash flow for two years. With the stock price hovering within a couple points of a four year low, it seems to me that a $1MM commitment to supporting the stock price would be a good sign. You might recall that the company had some convertible debt turned into stock back in early 1997. There is a suspician that some of these stock holders are still looking to liquidate the remnanats of their positions. So the stock buyback might be an incentive for those who want out to get out and remove all of the overhang in the stock price. Just a thought. Yo Yo