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

To: pat mudge who wrote (1272)	10/22/1999 2:31:00 PM
From: Allegoria	Read Replies (1) \| Respond to of 2702

Pat, I tried it once but received a failure notice. I'll give it another go... Thanks, Eric

To: pat mudge who wrote (1272)	10/22/1999 7:46:00 PM
From: akmike	Read Replies (2) \| Respond to of 2702

Pat-I was worried that I may have been confused about capacity and checked with the company. Jon Clark was kind enough to provide the following response which I have excerpted verbatim: ---------------------------------------------------------------------- You asked me to expand on the manufacturing capacity issue that was raised in the conference call yesterday. We have three automated manufacturing lines;two small lines in our Commercial Products (base station or infrastructure business) and the new high-volume line in our Subscriber business. As you might be aware, it is difficult to assess capacity if one is running multiple versions of products through a line since the various versions of products have multiple complexities and we have the ability to operate with multiple shifts-therefore various capacities. We have somewhat settled on the following (although subject to significant changes in the future as our excellent team of process engineers develop enhancements through experimentation with the lines and/or identify bottlenecks and execute solutions, or our excellent engineers develop iterations of current products enabling more efficient assembly) The commercial products lines together have about 2MM to 2.5MM capacity with 2 shifts and we are approaching 75-80% capacity as currently used and configured. The new automated Subscriber line is engineered/designed to produce approximately 8MM to 10MM units with two shifts running VCO's designed for handset applications. We are barely at 10% capacity utilization at this time under this configuration. I am not worried about capacity constraints on the company. You know, due to your recent visit to the company, that we have available two more developed building pads on the real estate the current headquarters sits on. Each building may be 4 floors high with the same footprint as the current headquarters. We could put 3-4 assembly lines on each floor (although one probably wouldn't, due to support needs) with similar capacity as noted above. As Mr. Sherman stated in the conference call we have learned a lot on creating the line and the next one(s) will not take as long to install and tune up as the first one. I hope this helps alleviate some of the misunderstanding that seems to exist with this issue. Please understand that these approximate numbers will change depending on the makeup of production runs, future enhancements to the line by our process engineers... Jon L. Clark V. P. Finance Chief Financial Officer --------------------------------------------------------------------- I hope this helps, Best regards, Mike