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

To: Robert Sheldon who wrote (1535)	12/5/1999 3:14:00 AM
From: akmike	Respond to of 2702

Robert-As you know, I agree that those three listed items will drive tremendous growth for VARL, and it is possible that they will need additional capital. In my model the payback for the additional equipment is very short and conventional bank financing should be available on good terms. The new 4-srory mfg. facility on the land next to HQ can be financed off balance sheet except for the equipment. AR will grow rapidly, but I don't see inventory ramping proportionately to sales as they will certainly get many more turns under the new manufacturing model. In summary, with the strong cash flow from organic growth VARL should be able to finance a lot of expansion internally except for the incremental bank financing which they should have no trouble servicing. My read of the management is that they will purchase future equipment with orders in hand and not on a speculative basis. I also agree that if the growth is so rapid that additional equity will be needed that a secondary at much higher prices will be heavily subscribed unless capital markets go completely awry. Best regards, Mike