U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________.
Commission File No. 0-23866
A. Full title of the plan and address of the plan, if different from that of the
issuer named below:
VARI-L COMPANY, INC. PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
VARI-L COMPANY, INC.
4895 Peoria Street
Denver, Colorado 80239
(303) 371-1560
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustee
has duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Vari-L Company, Inc. Profit Sharing Plan
Date: June 28, 2002 By: /s/ Richard P. Dutkiewicz
---------------------------------------
Richard P. Dutkiewicz, Trustee
2
VARI-L COMPANY, INC.
PROFIT SHARING PLAN
Financial Statements and Supplemental Schedules
December 31, 2001 and 2000
(With Independent Auditors' Report Thereon)
3
VARI-L COMPANY, INC.
PROFIT SHARING PLAN
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 5
Statements of Net Assets Available for Participant Benefits -
December 31, 2001 and 2000 6
Statements of Changes in Net Assets Available for Participant Benefits -
Years ended December 31, 2001 and 2000 7
Notes to Financial Statements 8
SUPPLEMENTAL SCHEDULE
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) -
December 31, 2001 12
4
INDEPENDENT AUDITORS' REPORT
The Plan Administrator
Vari-L Company, Inc. Profit Sharing Plan:
We have audited the accompanying statement of net assets in liquidation of the
Vari-L Company, Inc. Profit Sharing Plan (the Plan) as of December 31, 2001, and
the related statement of changes in net assets in liquidation for the year then
ended. In addition, we have audited the accompanying statement of net assets
available for participant benefits as of December 31, 2000, and the related
statement of changes in net assets available for participant benefits for the
year then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As described in note 1(h) to the financial statements, the Board of Directors of
Vari-L Company, Inc. approved a plan of liquidation of the Vari-L Company, Inc.
Profit Sharing Plan on December 31, 2001 and the Company commenced liquidation
in March 2002. As a result, the Company has changed its basis of accounting as
of December 31, 2001 from the going-concern basis to a liquidation basis.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for participant benefits of the
Plan as of December 31, 2001 and 2000, and the changes in net assets available
for participant benefits for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2001 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the 2001 basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
KPMG LLP
Denver, Colorado
June 1, 2002
5
VARI-L COMPANY, INC.
PROFIT SHARING PLAN
Statements of Net Assets Available for Participant Benefits
December 31, 2001 and 2000
2001 2000
(LIQUIDATION (GOING-CONCERN
ASSETS BASIS) BASIS)
------------ --------------
Cash $ -- 72
Investments, at fair value:
Money market fund 924 700
Vari-L Company, Inc. common stock 187,478 175,761
-------- --------
Total investments 188,402 176,461
Employer contribution receivable -- 113
-------- --------
Net assets available for participant benefits $188,402 176,646
======== ========
See accompanying notes to financial statements
6
VARI-L COMPANY, INC.
PROFIT SHARING PLAN
Statements of Changes in Net Assets Available for Participant Benefits
Years ended December 31, 2001 and 2000
2001 2000
(LIQUIDATION (GOING-CONCERN
ADDITIONS BASIS) BASIS)
------------ --------------
Employer contributions $ -- 9,470
Investment income (loss):
Net realized and unrealized appreciation (depreciation)
in fair value of investments 11,717 (3,837,449)
Interest and dividends 39 50
---------- ----------
Total additions (reductions) 11,756 (3,827,929)
---------- ----------
DEDUCTIONS
Distributions paid to participants -- 29,764
---------- ----------
Net increase (decrease) 11,756 (3,857,693)
Net assets available for participant benefits:
Beginning of year 176,646 4,034,339
---------- ----------
End of year $ 188,402 176,646
========== ==========
See accompanying notes to financial statements
7
VARI-L COMPANY, INC.
PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(1) DESCRIPTION OF THE PLAN
The following description of the Vari-L Company, Inc. Profit Sharing Plan
(the Plan) provides only general information. Participants should refer
to the Plan agreement for a more complete description of the Plan's
provisions.
(a) GENERAL
The Plan was established by Vari-L Company, Inc. (the Company)
effective January 1, 1990, for the benefit of its employees and
beneficiaries. The Plan was subsequently amended and restated
effective April 19, 1994 and has since been amended. The Plan is a
defined contribution plan. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
All employees who have completed at least 1,000 hours of service
during the first twelve months of their employment, or during any
Plan year and have reached 21 years of age, are eligible to
participate. Once employees are admitted to the Plan, they remain
in the Plan until termination of employment regardless of the
number of hours worked in succeeding years. Employees become
eligible to participate in the Plan on January 1 or July 1 after
meeting the eligibility requirements.
(b) CONTRIBUTIONS
The Company makes discretionary contributions, as determined by
its Board of Directors. Employer contributions for the years ended
December 31, 2001 and 2000 were $0 and $9,470, respectively.
Employees may make voluntary after-tax contributions to the Plan
of up to 10% of their compensation. There were no employee
contributions to the Plan for the years ended December 31, 2001
and 2000.
(c) PARTICIPANT ACCOUNTS
Company contributions and amounts forfeited by terminated
participants are allocated among active participants who are
employees on the last day of the Plan year in the same proportion
as the compensation of each respective participant during the year
to the total compensation of all participants during the year.
Compensation is limited as required by the Internal Revenue Code.
Net investment income (or loss) for the year is allocated to
participants' accounts based upon the beginning of the year
balance, less any distributions, in each individual participant's
account.
8
VARI-L COMPANY, INC.
PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(d) VESTING
Participants are immediately vested in their voluntary
contributions, adjusted by actual earnings and losses thereon, and
vest in Company contributions, adjusted by actual earnings and
losses thereon, in accordance with the following table:
YEARS OF SERVICE VESTING %
---------------- ---------
1 0%
2 0%
3 20%
4 40%
5 60%
6 80%
7 100%
Participants become 100% vested in Company contributions on the
earlier of death, permanent disability or normal retirement age.
(e) FORFEITURES
Amounts forfeited by terminated participants are allocated to the
remaining participant accounts at the end of every plan year.
Forfeitures during the years ended December 31, 2001 and 2000 were
$0 and $14,036, respectively.
(f) PAYMENT OF BENEFITS
Upon termination of service due to death, disability or
retirement, a participant may elect to receive a lump-sum
distribution, equal to the value of the participant's vested
interest in their account, or periodic installments, as selected
by the participant within defined limits, not to exceed the lesser
of ten years, or the life expectancy of the participant.
Distributions may be made in cash or stock.
(g) ADMINISTRATIVE EXPENSES
Certain administrative functions are performed by officers and
employees of the Company, without compensation from the Plan.
Administrative expenses of the Plan are paid by the Company.
(h) PLAN TERMINATION
The Company has the right under the Plan to terminate the Plan
subject to the provisions of ERISA. In the event of Plan
termination, participants become 100% vested in their accounts.
On December 31, 2001, the Company's Board of Directors resolved to
terminate the Plan. All plan participants became immediately and
fully vested in their respective account balances. In conjunction
with the complete transfer of assets out of the Plan, which
commenced on March 15, 2002, the Plan was effectively terminated
on March 15, 2002. As a result of this plan termination, the
Plan's basis of accounting as of and for the year ended December
31, 2001 and for all subsequent periods was changed from the
going-concern basis to a liquidation basis.
9
VARI-L COMPANY, INC.
PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
The financial statements of the Plan are presented on the accrual
basis of accounting.
(b) INVESTMENT VALUATION AND INCOME RECOGNITION
Investments are recorded at fair value based on quoted market
prices. Money market funds are recorded at cost which approximates
market value. Dividend income is recorded on the ex-dividend date
and interest income is recorded as earned. Purchases and sales of
securities are reflected on a trade date basis. Gain or loss on
sale of securities is based upon average cost.
The Plan presents, in the statements of changes in net assets
available for participant benefits, the net appreciation
(depreciation) in the fair value of investments which consists of
the realized gains or losses and the unrealized gains or losses on
those investments.
(c) USE OF ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires the Plan administrator to make certain estimates
and assumptions. These estimates and assumptions affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities as of the date of the statement
of net assets available for benefits and the reported amounts of
additions and deductions in net assets during the reporting
period. Actual results could differ significantly from those
estimates.
(d) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(e) RECLASSIFICATION
Certain prior year balances have been reclassified to conform to
the current year presentation.
(3) INVESTMENTS
Investments representing 5% or more of net assets available for plan
benefits as of December 31 are as follows:
FAIR VALUE
------------------------
2001 2000
-------- --------
Vari-L Company, Inc. common stock $187,478 175,761
10
VARI-L COMPANY, INC.
PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(4) CHANGES IN NET ASSETS AVAILABLE FOR PARTICIPANT BENEFITS BY INVESTMENT
ALTERNATIVE FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
VARI-L COMPANY, CASH AND MONEY
INC. COMMON STOCK MARKET FUNDS TOTAL
----------------- -------------- -----------
Net assets available for participant benefits at
December 31, 1999 $ 4,033,500 839 4,034,339
----------- ----------- -----------
Additions to net assets attributed to:
Employer contributions 9,357 113 9,470
Investment income (loss):
Net realized and unrealized depreciation
in fair value of investments (3,837,449) -- (3,837,449)
Interest and dividends -- 50 50
Distributions paid to participants (29,647) (117) (29,764)
----------- ----------- -----------
Net increase (decrease) in net
assets available for participant
benefits (3,857,739) 46 (3,857,693)
----------- ----------- -----------
Net assets available for participant benefits at
December 31, 2000 175,761 885 176,646
----------- ----------- -----------
Additions to net assets attributed to:
Investment income:
Net realized and unrealized appreciation
in fair value of investments 11,717 -- 11,717
Interest and dividends -- 39 39
----------- ----------- -----------
Net increase in net assets
available for participant
benefits 11,717 39 11,756
----------- ----------- -----------
Net assets available for participant benefits at
December 31, 2001 $ 187,478 924 188,402
=========== =========== ===========
(5) TAX STATUS
The Plan obtained its latest determination letter on October 5, 1995, in
which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the IRC.
The Plan has since been amended. The Plan administrator believes that the
Plan is currently designed and is being operated in compliance with the
applicable requirements of the IRC and thus continues to be tax exempt.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
11
VARI-L COMPANY, INC.
PROFIT SHARING PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2001
HISTORICAL NUMBER OF FAIR
Description cost shares or units value
------------------- ---------- --------------- --------
Money market fund $ 924 924 $ 924
Vari-L common stock 236,862 117,174 187,478
--------
$188,402
========
All investments are held by Wells Fargo Bank West, N.A. which is a
party-in-interest
See accompanying independent auditors' report.
12