Vari-L Company, Inc. Continues Strong Growth With Record Third Quarter and Nine-Month
Results
PR Newswire, Thursday, October 22, 1998 at 08:25
Net Income Through Nine Months Increases 64%, Nears $2 Million Mark;
Customer Orders Climb 58% in Third Quarter, Position Company for Extended
Growth
DENVER, Oct. 22 /PRNewswire/ -- Vari-L Company, Inc. (NASDAQ:VARL), a
leading provider of advanced components for the wireless telecommunications
industry, today announced that surging domestic commercial sales generated
record results for the third quarter and nine-month period ended September 30,
1998.
Third quarter net income increased 32% to $750,000, or 14 cents per basic
and diluted share, compared with net income of $567,000, or 11 cents per basic
and diluted share, in the third quarter of 1997. Net sales increased to
$4,805,000 in the quarter from $4,531,000 in the comparable quarter last year.
Through the first nine months of 1998, net income advanced 64% to
$1,981,000, or 37 cents per basic share and 36 cents per diluted share,
compared with net income of $1,211,000, or 29 cents per basic share and 26
cents per diluted share, through the first nine months of 1997. Net sales for
the nine-month period increased 11% to $13,181,000 versus net sales of
$11,836,000 in the comparable period a year ago.
Dave Sherman, president and CEO, said, "Our strong growth reflects both
growing demand for Vari-L's diverse product lines in domestic commercial
markets and improved profitability resulting from our increasing use of
automated production methods and equipment. While unsettled economic
conditions in the Pacific Rim may dampen short-term sales growth in those
markets, we are confident the upsurge in domestic and European sales activity,
coupled with increasingly enhanced profitability, will continue to provide the
Company with strong earnings growth."
Firm customer orders through the first nine months of 1998 increased 16%
to $10.7 million versus $9.2 million for the same period in 1997, boosting the
Company's backlog as it entered the fourth quarter to $14.2 million from $11.8
million one year ago. Commercial orders climbed 29% from year-ago levels to
$8.7 million, while military/aerospace markets accounted for $2 million.
Domestic orders for the period were up 35% to $8.4 million and international
orders totaled $2.3 million.
In the third quarter, firm customer orders rose 58% to $4.6 million from
$2.9 million in the third quarter of 1997. Commercial orders, totaling $4.1
million, were up 109% from the third quarter of 1997, while military/aerospace
orders were approximately $500,000. Domestic orders increased 95% from last
year to $3.7 million and international orders were $900,000.
"Customer orders were outstanding due to several important contracts won
in the third quarter, including a sole-source provider agreement for two
Lucent Technologies wireless infrastructure projects underway in Europe," said
Sherman. "Our success underscores Vari-L's exceptional reputation in the
wireless communications industry, and we are working aggressively to leverage
this position to penetrate the vast market for handheld communications
devices."
Sherman noted that the Company's strong earnings growth reflects gross
margins which improved to 55.3% in the third quarter from 52.5% one year ago
as the result of concerted efforts to refine and automate Vari-L's
Denver-based production facilities. "We have already implemented two
state-of-the-art, automated pick-and-place assembly lines as part of our
production process and are currently installing a third, giving Vari-L the
ability to generate the high-volume production demanded by the subscriber
marketplace. We believe we can improve profitability even further as we ramp
up subscriber production and utilize more fully the capacity of the new
equipment."
Through its headquarters in Denver, Vari-L designs, manufactures and
markets a wide range of radio and microwave frequency signal source and
processing components used in the wireless telecommunications industry for
both commercial and military applications. Vari-L serves a diverse customer
base comprised of some of the world's leading technology companies, including
Ericsson, Hughes, IBM, Lockheed Martin, Lucent Technologies, Magnavox,
Mitsubishi, Motorola, NEC, Nokia, Northern Telecom, QUALCOMM, Raytheon,
Samsung, and Texas Instruments.
Some of the statements contained in this news release are forward-looking
statements. The accuracy of these statements cannot be guaranteed as they are
subject to a variety of risks, including but not limited to the success of the
products into which the Company's products are integrated, governmental action
relating to wireless communications licensing and regulation, internal
projections as to the demand for certain types of technological innovation,
competitive products and pricing, the success of new product development
efforts, the timely release for production and the delivery of products under
existing contracts, future economic conditions generally, as well as other
factors.
INCOME STATEMENT DATA
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Net Sales $4,805,000 $4,531,000 $13,181,000 $11,836,000
Net Income $750,000 $567,000 $1,981,000 $1,211,000
Basic Earnings
Per Share $.14 $.11 $.37 $.29
Diluted Earnings
Per Share $.14 $.11 $.36 $.26
Basic Weighted Average
Shares Outstanding 5,460,000 5,064,000 5,378,000 4,164,000
Diluted Weighted Average
Shares Outstanding 5,529,000 5,348,000 5,563,000 4,718,000
BALANCE SHEET DATA
June 30, December 31,
1998 1997
Working Capital $17,708,000 $15,867,000
Total Assets $47,754,000 $39,556,000
Non-current Liabilities $12,127,000 $8,621,000
Shareholders' Equity $31,696,000 $27,835,000
SOURCE Vari-L Company, Inc.
-0- 10/22/98
/CONTACT: Dave Sherman, President, or Jon Clark, Chief Financial Officer,
both of Vari-L Company, Inc., 303-371-1560; Jay Pfeiffer, or Matt Dickerson,
matt@pfeifferpr.com, both of Pfeiffer Public Relations, Inc., 303-393-7044/
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