Exhibit 99.1
For Information Contact:
Laurie H. Alire
Varian, Inc.
650.424.5225
laurie.alire@varianinc.com
VARIAN, INC. REPORTS HIGHER SALES AND PROFITS
FOR THE SECOND QUARTER OF FISCAL YEAR 2004
PALO ALTO, Calif. — Varian, Inc. (Nasdaq: VARI) today reported higher sales of $232.7 million for the second quarter of fiscal year 2004, representing an increase of 13.7% over second quarter 2003 sales of $204.6 million. The increase was driven by the general economic improvement and by strong demand for the Company’s newer products. All three of the Company’s segments, particularly the Vacuum Technologies segment, contributed to the revenue growth.
Pro forma net earnings were $15.4 million for the second quarter of fiscal year 2004, or $0.43 pro forma diluted earnings per share, compared to $14.3 million, or $0.41 pro forma diluted earnings per share, in the second quarter of fiscal year 2003. On a GAAP basis, net earnings in the second quarter of fiscal year 2004 were $14.7 million, or $0.41 diluted earnings per share, compared to $13.9 million, or $0.40 diluted earnings per share, in the second quarter of fiscal year 2003. (For a complete reconciliation of pro forma financial information used in this press release to the most directly comparable GAAP financial information, please refer to the attached Reconciliations of GAAP to Pro Forma Results – Actual, Unaudited Consolidated Condensed Statements of Earnings and Unaudited Results of Operations; and Reconciliation of GAAP to Pro Forma Results – Projected, Results of Operations.)
“We are pleased with the revenue growth achieved during the quarter,” said Garry W. Rogerson, president and CEO. “The growth was driven by increased spending from both our life science and industrial customers. This is evidence that our balanced approach in R&D for different application segments is paying off. Our commitment to information-rich detection has also been affirmed by the continuing expansion of these products into life science and industrial applications.”
Results by Segment
Scientific Instruments revenues for the second quarter of fiscal year 2004 were $149.9 million, representing a 10.6% increase over revenues of $135.5 million in the second quarter of the prior year. Demand was strong in Europe and continued to improve in North America.
Scientific Instruments operating profit margin for the second quarter of fiscal year 2004 was 10.2% on a pro forma basis and 9.5% on a GAAP basis. As the Company had anticipated, pro forma operating margins were lower versus the year-ago quarter, but improved slightly sequentially. Operating margins continued to be adversely affected by a mix shift towards high-
field nuclear magnetic resonance (NMR) systems and leading edge cold probes for NMR and away from lower field NMR systems. The negative impact of this mix shift on operating margins was partially offset by stronger sales of higher margin mass spectrometry products and application-based consumables.
Vacuum Technologies revenues of $38.4 million rose 36.5% in the second quarter of fiscal year 2004 compared to revenues of $28.2 million in the second quarter of fiscal year 2003. Vacuum Technologies operating profit margin in the second quarter of fiscal year 2004 was 17.6% on both a pro forma and GAAP basis. During the quarter, Vacuum Technologies revenue growth was fueled by significantly higher demand in both life science and industrial applications. In life sciences, the segment experienced a substantial uptick in demand for turbomolecular pumps for use in OEM mass spectrometers. Industrial growth was driven by semiconductor applications, but demand for pumps for broad industrial uses also increased during the quarter. Operating margins improved primarily as a result of sales volume leverage.
Electronics Manufacturing revenues were $44.4 million in the second quarter of fiscal year 2004, up 8.4% from revenues of $40.9 million in the second quarter of fiscal year 2003. The revenue growth primarily resulted from increased demand from industrial customers and included about $3 million of revenues from new customers obtained through the acquisition of the assets of Comtel Electronics, Inc. in the third quarter of fiscal year 2003. The pro forma and GAAP operating profit margin for Electronics Manufacturing was 9.7% in the second quarter of fiscal year 2004. The sequential decrease in operating margins resulted primarily from higher start-up costs relating to new business from existing customers.
Outlook
“We continued to see improved demand from both industrial and life science customers,” said Rogerson. “The Electronics Manufacturing business is receiving orders for new products from their industrial customers, and as a result, the segment should contribute to higher revenues in the second half of this year. Scientific Instruments and Vacuum Technologies, having released a multitude of new products for both industrial and life science applications, are also positioned to grow.
“However, we are providing a broad range of guidance to reflect uncertainties associated with how much momentum the economy maintains and the two large 900MHz NMR system orders that we currently expect to be recognized in the second half of the year. These orders have risks associated with them in terms of magnet availability and installation time that could impact when revenue is recognized.
“Our guidance for the third quarter of fiscal year 2004 is $0.37 to $0.40 pro forma diluted earnings per share, or $0.35 to $0.38 GAAP diluted earnings per share, and $1.64 to $1.74 pro forma diluted earnings per share, or $1.52 to $1.62 GAAP diluted earnings per share, for fiscal year 2004.
“For the third fiscal quarter and the full fiscal year, we expect high-single digit revenue growth, with pro forma operating profit margins of roughly 9.5% to 10.0% for the quarter and 10.0% to 10.5% for the full fiscal year. GAAP operating profit margins should be approximately 0.5% and 0.7% lower than the comparable pro forma results for the third fiscal quarter and the full fiscal year, respectively.
“We are optimistic about our prospects,” said Rogerson. “Our strategy is working. Revenue growth and margin expansion over the next few years should be driven by continued
internal investment in new product development along with acquisitions in our focus areas of information-rich detection, life science, application-based consumables, and vacuum products.
“To further expand our operating margins, we are pursuing operational efficiency programs targeted at structural changes such as the previously announced consolidation of Southern California factories.”
Varian, Inc. will be holding a conference call with securities analysts and investors later today, April 28, 2004, at 2:00 p.m. Pacific time. Interested investors are invited to listen to the call by going to www.varianinc.com and clicking on the Investors tab at the top of the screen.
Non-GAAP (Pro Forma) Financial Measures
This press release includes non-GAAP (what we refer to as “pro forma”) financial measures for operating profit, operating margins, net earnings and diluted earnings per share. In each case, these non-GAAP financial measures exclude acquisition-related intangible amortization and restructuring costs, as is detailed in the Reconciliations of GAAP to Pro Forma Results attached to this press release.
We believe that presentation of these non-GAAP financial measures provides useful information to investors regarding our results of operations. When viewed together with related GAAP financial measures and a reconciliation to those GAAP measures, these non-GAAP financial measures provide investors with supplemental information, an alternative presentation and an additional tool for evaluating our operating results and trends in a manner that reflects what we consider to be ongoing business operations, especially when comparing those results on a more consistent basis to results for previous periods and forecasting results for future periods.
For these reasons, we believe that excluding acquisition-related intangible amortization provides useful supplemental information to investors. In addition, investors have indicated to us that they analyze the benefits of acquisitions based on the cash return on the investment made, and thus consider financial measures excluding acquisition-related intangible amortization as important, useful information.
We similarly believe, for the reasons stated above, that excluding restructuring costs (principally related to facility closures and employee terminations) provides useful supplemental information to investors. In addition, we do not consider restructuring costs as a normal expense related to ongoing operations, but rather as costs occurring only periodically and not directly linked to our ordinary business activities in the quarter in which those costs occur. We therefore believe that it is useful to provide investors with GAAP financial measures that include restructuring charges together with non-GAAP financial measures that exclude restructuring costs.
We also believe that, in excluding acquisition-related intangible amortization and restructuring costs, our non-GAAP financial measures provide investors with transparency into information used by management for budgeting and planning purposes, for comparing on a more consistent basis our results of operations for the current period to that of prior periods, for comparing our results of operations on a more consistent basis against those of other companies, in making financial and operating decisions (such as potential acquisitions) and in establishing certain incentive-based management compensation.
Although we believe, for the foregoing reasons, that our presentation of non-GAAP financial measures provides useful information to investors regarding our results of operations, our non-GAAP financial measures should be viewed together with our GAAP financial measures and should only be considered supplemental to, and not as a substitute for or superior to, the GAAP measures. We encourage investors to review our GAAP financial measures and the reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures.
Caution Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, including those relating to: anticipated revenue growth, operating profit margins, and diluted earnings per share for the third quarter of fiscal year 2004 and the full fiscal year. These
forward-looking statements are based on management’s current expectations, are not guarantees of future performance, and involve certain risks and uncertainties that could cause the company’s actual results to differ materially from management’s current expectations and the forward-looking statements made in this press release. Those risks and uncertainties include, but are not limited to, the following: whether we will succeed in new product development, commercialization, performance, and acceptance, particularly in life science applications; whether we can achieve continued growth in sales in life science applications; risks arising from the timing of shipments, installations, and the recognition of revenues on leading-edge NMR systems; whether we can increase margins on newer leading-edge NMR products; whether we will see continued demand for vacuum products and for electronics manufacturing services; competitive products and pricing; economic conditions in the company’s product and geographic markets; whether we will see continued and timely delivery of key raw materials and components by suppliers; foreign currency fluctuations that could adversely impact revenue growth and earnings; whether we will see sustained market investment in capital equipment; whether we will see reduced demand from customers that operate in cyclical industries; whether government funding for research might decline; the actual cost of anticipated restructuring activities and their impact on future costs; and other risks detailed from time to time in the company’s filings with the Securities and Exchange Commission. We disclaim any intent or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise.
About Varian, Inc.
Varian, Inc. is a major supplier of scientific instruments, vacuum technologies, and specialized contract electronics manufacturing services. These businesses serve a broad range of life science and industrial customers worldwide. The company manufactures in 14 locations in North America, Europe, and the Pacific Rim and employs some 4,300 people. Varian, Inc. had fiscal year 2003 sales of $848 million. Additional information about Varian, Inc. is available at www.varianinc.com.
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO PRO FORMA RESULTS—ACTUAL
UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
Second Quarter FY 2004 and Second Quarter FY 2003
Fiscal Quarter Ended April 2, 2004 | Fiscal Quarter Ended March 28, 2003 | |||||||||||||||
GAAP | Pro Forma | GAAP | Pro Forma | |||||||||||||
Sales | $ | 232,745 | $ | 232,745 | $ | 204,614 | $ | 204,614 | ||||||||
Cost of sales | 144,308 | 144,308 | 126,330 | 126,330 | ||||||||||||
Gross profit | 88,437 | 88,437 | 78,284 | 78,284 | ||||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing | 40,646 | 40,646 | 34,489 | 34,489 | ||||||||||||
Research and development | 12,649 | 12,649 | 11,088 | 11,088 | ||||||||||||
General and administrative | 12,742 | 11,636 | (1) | 11,434 | 10,779 | (2) | ||||||||||
Total operating expenses | 66,037 | 64,931 | 57,011 | 56,356 | ||||||||||||
Operating earnings | 22,400 | 23,506 | 21,273 | 21,928 | ||||||||||||
Interest income (expense) | ||||||||||||||||
Interest income | 803 | 803 | 383 | 383 | ||||||||||||
Interest expense | (598 | ) | (598 | ) | (576 | ) | (576 | ) | ||||||||
Total interest income (expense), net | 205 | 205 | (193 | ) | (193 | ) | ||||||||||
Earnings before income taxes | 22,605 | 23,711 | 21,080 | 21,735 | ||||||||||||
Income tax expense | 7,911 | 8,299 | 7,180 | 7,403 | ||||||||||||
Net earnings | $ | 14,694 | $ | 15,412 | $ | 13,900 | $ | 14,332 | ||||||||
Net earnings per diluted share | $ | 0.41 | $ | 0.43 | $ | 0.40 | $ | 0.41 | ||||||||
Diluted shares outstanding | 35,870 | 35,870 | 34,888 | 34,888 | ||||||||||||
SUMMARY OF RECONCILING ITEMS:
(1) | Excludes $709 in acquisition-related intangible amortization and $397 in restructuring costs. |
(2) | Excludes $655 in acquisition-related intangible amortization. |
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO PRO FORMA RESULTS—ACTUAL
UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
First Six Months FY 2004 and First Six Months FY 2003
Six Months Ended April 2, 2004 | Six Months Ended March 28, 2003 | |||||||||||||||
GAAP | Pro Forma | GAAP | Pro Forma | |||||||||||||
Sales | $ | 445,238 | $ | 445,238 | $ | 400,357 | $ | 400,357 | ||||||||
Cost of sales | 277,025 | 277,025 | 245,683 | 245,683 | ||||||||||||
Gross profit | 168,213 | 168,213 | 154,674 | 154,674 | ||||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing | 77,802 | 77,802 | 68,175 | 68,175 | ||||||||||||
Research and development | 23,804 | 23,804 | 21,962 | 21,962 | ||||||||||||
General and administrative | 23,247 | 21,278 | (1) | 23,014 | 19,831 | (2) | ||||||||||
Total operating expenses | 124,853 | 122,884 | 113,151 | 109,968 | ||||||||||||
Operating earnings | 43,360 | 45,329 | 41,523 | 44,706 | ||||||||||||
Interest income (expense) | ||||||||||||||||
Interest income | 1,368 | 1,368 | 644 | 644 | ||||||||||||
Interest expense | (1,216 | ) | (1,216 | ) | (1,264 | ) | (1,264 | ) | ||||||||
Total interest income (expense), net | 152 | 152 | (620 | ) | (620 | ) | ||||||||||
Earnings before income taxes | 43,512 | 45,481 | 40,903 | 44,086 | ||||||||||||
Income tax expense | 15,229 | 15,919 | 14,316 | 15,449 | ||||||||||||
Net earnings | $ | 28,283 | $ | 29,562 | $ | 26,587 | $ | 28,637 | ||||||||
Net earnings per diluted share | $ | 0.79 | $ | 0.83 | $ | 0.76 | $ | 0.82 | ||||||||
Diluted shares outstanding | 35,785 | 35,785 | 34,966 | 34,966 | ||||||||||||
SUMMARY OF RECONCILING ITEMS:
(1) | Excludes $1,411 in acquisition-related intangible amortization and $558 in restructuring costs. |
(2) | Excludes $1,151 in acquisition-related intangible amortization and $2,032 in restructuring costs. |
VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands, except par value amounts)
April 2, 2004 | October 3, 2003 | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 163,662 | $ | 135,791 | ||
Accounts receivable, net | 170,201 | 165,049 | ||||
Inventories | 141,192 | 125,649 | ||||
Deferred taxes | 26,709 | 26,464 | ||||
Other current assets | 17,231 | 17,788 | ||||
Total current assets | 518,995 | 470,741 | ||||
Property, plant, and equipment, net | 121,404 | 120,088 | ||||
Goodwill | 127,173 | 126,411 | ||||
Intangible assets, net | 15,758 | 16,762 | ||||
Other assets | 4,149 | 3,050 | ||||
Total assets | $ | 787,479 | $ | 737,052 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities | ||||||
Notes payable | $ | 1,915 | $ | — | ||
Current portion of long-term debt | 6,724 | 2,811 | ||||
Accounts payable | 69,792 | 61,209 | ||||
Deferred profit | 11,947 | 14,385 | ||||
Accrued liabilities | 148,955 | 141,938 | ||||
Total current liabilities | 239,333 | 220,343 | ||||
Long-term debt | 31,250 | 36,273 | ||||
Deferred taxes | 12,454 | 12,454 | ||||
Other liabilities | 10,682 | 10,413 | ||||
Total liabilities | 293,719 | 279,483 | ||||
Stockholders’ equity | ||||||
Preferred stock—par value $.01, authorized—1,000 shares; issued—none | — | — | ||||
Common stock—par value $.01, authorized—99,000 shares; issued and outstanding—34,542 shares at April 2, 2004 and 34,181 shares at October 3, 2003 | 247,386 | 252,630 | ||||
Retained earnings | 221,849 | 193,566 | ||||
Accumulated other comprehensive income | 24,525 | 11,373 | ||||
Total stockholders’ equity | 493,760 | 457,569 | ||||
Total liabilities and stockholders’ equity | $ | 787,479 | $ | 737,052 | ||
VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(In thousands)
Fiscal Quarter Ended | Six Months Ended | |||||||||||||||
April 2, 2004 | March 28, 2003 | April 2, 2004 | March 28, 2003 | |||||||||||||
Cash flows from operating activities | ||||||||||||||||
Net earnings | $ | 14,694 | $ | 13,900 | $ | 28,283 | $ | 26,587 | ||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 6,598 | 5,890 | 12,904 | 11,330 | ||||||||||||
Loss (gain) on disposition of property, plant, and equipment | 3 | 10 | 40 | (16 | ) | |||||||||||
Tax benefit from stock option exercises | — | 515 | 3,716 | 515 | ||||||||||||
Changes in assets and liabilities, excluding effects of acquisitions: | ||||||||||||||||
Accounts receivable, net | (6,476 | ) | (14,465 | ) | 237 | 2,629 | ||||||||||
Inventories | (4,469 | ) | 776 | (12,842 | ) | (4,442 | ) | |||||||||
Other current assets | (2,039 | ) | 1,216 | 2,608 | 2,001 | |||||||||||
Other assets | (174 | ) | 95 | (103 | ) | 113 | ||||||||||
Accounts payable | 9,354 | 5,906 | 7,242 | 5,510 | ||||||||||||
Deferred profit | (615 | ) | (98 | ) | (2,462 | ) | 906 | |||||||||
Accrued liabilities | 11,713 | 20,031 | 4,831 | 16,772 | ||||||||||||
Other liabilities | (257 | ) | (59 | ) | (392 | ) | 443 | |||||||||
Net cash provided by operating activities | 28,332 | 33,717 | 44,062 | 62,348 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||
Proceeds from sale of property, plant, and equipment | 567 | 150 | 623 | 324 | ||||||||||||
Purchase of property, plant, and equipment | (6,278 | ) | (5,788 | ) | (10,637 | ) | (9,985 | ) | ||||||||
Purchase of businesses, net of cash acquired | (750 | ) | (22,196 | ) | (750 | ) | (22,728 | ) | ||||||||
Private company equity investments | (1,318 | ) | — | (1,318 | ) | — | ||||||||||
Net cash used in investing activities | (7,779 | ) | (27,834 | ) | (12,082 | ) | (32,389 | ) | ||||||||
Cash flows from financing activities | ||||||||||||||||
Repayment of debt | — | (582 | ) | (1,565 | ) | (1,832 | ) | |||||||||
Issuance of debt | — | 2,494 | 1,831 | 2,813 | ||||||||||||
Repurchase of common stock | (21,417 | ) | — | (23,895 | ) | (8,074 | ) | |||||||||
Issuance of common stock | 5,938 | 1,591 | 14,935 | 2,971 | ||||||||||||
Transfers to Varian Medical Systems, Inc. | (357 | ) | (196 | ) | (683 | ) | (466 | ) | ||||||||
Net cash (used in) provided by financing activities | (15,836 | ) | 3,307 | (9,377 | ) | (4,588 | ) | |||||||||
Effects of exchange rate changes on cash and cash equivalents | 737 | 1,287 | 5,268 | 1,754 | ||||||||||||
Net increase in cash and cash equivalents | 5,454 | 10,477 | 27,871 | 27,125 | ||||||||||||
Cash and cash equivalents at beginning of period | 158,208 | 81,793 | 135,791 | 65,145 | ||||||||||||
Cash and cash equivalents at end of period | $ | 163,662 | $ | 92,270 | $ | 163,662 | $ | 92,270 | ||||||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO PRO FORMA RESULTS—ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In millions, except margin and per share data)
Second Quarter FY 2004 and Second Quarter FY 2003
and
First Six Months FY 2004 and First Six Months FY 2003
Fiscal Quarter Ended | Six Months Ended | |||||||||||||||
April 2, 2004 | March 28, 2003 | April 2, 2004 | March 28, 2003 | |||||||||||||
TOTAL COMPANY | ||||||||||||||||
Operating Profit | ||||||||||||||||
U.S. GAAP as reported | $ | 22.4 | $ | 21.3 | $ | 43.4 | $ | 41.5 | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 0.7 | 0.6 | 1.4 | 1.2 | ||||||||||||
Restructuring costs | 0.4 | — | 0.5 | 2.0 | ||||||||||||
Pro forma as presented | $ | 23.5 | $ | 21.9 | $ | 45.3 | $ | 44.7 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 9.6 | % | 10.4 | % | 9.7 | % | 10.4 | % | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 0.3 | 0.3 | 0.3 | 0.3 | ||||||||||||
Restructuring costs | 0.2 | — | 0.2 | 0.5 | ||||||||||||
Pro forma as presented | 10.1 | % | 10.7 | % | 10.2 | % | 11.2 | % | ||||||||
Net Earnings | ||||||||||||||||
U.S. GAAP as reported | $ | 14.7 | $ | 13.9 | $ | 28.3 | $ | 26.6 | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 0.4 | 0.4 | 0.9 | 0.7 | ||||||||||||
Restructuring costs | 0.3 | — | 0.4 | 1.3 | ||||||||||||
Pro forma as presented | $ | 15.4 | $ | 14.3 | $ | 29.6 | $ | 28.6 | ||||||||
Diluted Earnings Per Share | ||||||||||||||||
U.S. GAAP as reported | $ | 0.41 | $ | 0.40 | $ | 0.79 | $ | 0.76 | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 0.01 | 0.01 | 0.03 | 0.02 | ||||||||||||
Restructuring costs | 0.01 | — | 0.01 | 0.04 | ||||||||||||
Pro forma as presented | $ | 0.43 | $ | 0.41 | $ | 0.83 | $ | 0.82 | ||||||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO PRO FORMA RESULTS—ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In millions, except margin data)
Second Quarter FY 2004 and Second Quarter FY 2003
and
First Six Months FY 2004 and First Six Months FY 2003
Fiscal Quarter Ended | Six Months Ended | |||||||||||||||
April 2, 2004 | March 28, 2003 | April 2, 2004 | March 28, 2003 | |||||||||||||
SCIENTIFIC INSTRUMENTS SEGMENT | ||||||||||||||||
Operating Profit | ||||||||||||||||
U.S. GAAP as reported | $ | 14.2 | $ | 14.5 | $ | 26.9 | $ | 27.6 | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 0.7 | 0.6 | 1.4 | 1.1 | ||||||||||||
Restructuring costs | 0.4 | — | 0.5 | 1.6 | ||||||||||||
Pro forma as presented | $ | 15.3 | $ | 15.1 | $ | 28.8 | $ | 30.3 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 9.5 | % | 10.7 | % | 9.5 | % | 10.6 | % | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 0.4 | 0.5 | 0.5 | 0.5 | ||||||||||||
Restructuring costs | 0.3 | — | 0.2 | 0.6 | ||||||||||||
Pro forma as presented | 10.2 | % | 11.2 | % | 10.2 | % | 11.7 | % | ||||||||
VACUUM TECHNOLOGIES SEGMENT | ||||||||||||||||
Operating Profit | ||||||||||||||||
U.S. GAAP as reported | $ | 6.8 | $ | 3.4 | $ | 11.6 | $ | 7.8 | ||||||||
Pro forma adjustment: | ||||||||||||||||
Acquisition-related intangible amortization | — | — | — | 0.1 | ||||||||||||
Pro forma as presented | $ | 6.8 | $ | 3.4 | $ | 11.6 | $ | 7.9 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 17.6 | % | 11.9 | % | 16.6 | % | 13.6 | % | ||||||||
Pro forma adjustment: | ||||||||||||||||
Acquisition-related intangible amortization | — | 0.1 | 0.1 | — | ||||||||||||
Pro forma as presented | 17.6 | % | 12.0 | % | 16.7 | % | 13.6 | % | ||||||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO PRO FORMA RESULTS—ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In millions, except margin data)
Second Quarter FY 2004 and Second Quarter FY 2003
and
First Six Months FY 2004 and First Six Months FY 2003
Fiscal Quarter Ended | Six Months Ended | |||||||||||||||
April 2, 2004 | March 28, 2003 | April 2, 2004 | March 28, 2003 | |||||||||||||
ELECTRONICS MANUFACTURING SEGMENT | ||||||||||||||||
Operating Profit | ||||||||||||||||
U.S. GAAP as reported | $ | 4.3 | $ | 5.0 | $ | 9.4 | $ | 9.7 | ||||||||
Pro forma adjustments: | ||||||||||||||||
None | — | — | — | — | ||||||||||||
Pro forma as presented | $ | 4.3 | $ | 5.0 | $ | 9.4 | $ | 9.7 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 9.7 | % | 12.2 | % | 10.3 | % | 11.7 | % | ||||||||
Pro forma adjustments: | ||||||||||||||||
None | — | — | — | — | ||||||||||||
Pro forma as presented | 9.7 | % | 12.2 | % | 10.3 | % | 11.7 | % | ||||||||
GENERAL CORPORATE | ||||||||||||||||
Operating Profit | ||||||||||||||||
U.S. GAAP as reported | $ | (2.9 | ) | $ | (1.6 | ) | $ | (4.5 | ) | $ | (3.6 | ) | ||||
Pro forma adjustment: | ||||||||||||||||
Restructuring costs | — | — | — | 0.4 | ||||||||||||
Pro forma as presented | $ | (2.9 | ) | $ | (1.6 | ) | $ | (4.5 | ) | $ | (3.2 | ) | ||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO PRO FORMA RESULTS—PROJECTED
RESULTS OF OPERATIONS
Third Quarter FY 2004 and Full Year FY 2004
Range of Projected Results | ||||
Fiscal Quarter Ending July 2, 2004 | Fiscal Year Ending October 1, 2004 | |||
TOTAL COMPANY | ||||
Projected Diluted Earnings per Share | ||||
Projected U.S. GAAP | $0.35 – $0.38 | $1.52 – $1.62 | ||
Pro forma adjustments: | ||||
Projected acquisition-related intangible amortization | $0.01 | $0.05 | ||
Projected restructuring costs | $0.01 | $0.07 | ||
Projected pro forma | $0.37 – $0.40 | $1.64 – $1.74 | ||
Projected Operating Margins | ||||
Projected U.S. GAAP | 9.0% – 9.5% | 9.3% – 9.8% | ||
Pro forma adjustments: | ||||
Projected acquisition-related intangible amortization | 0.3% | 0.3% | ||
Projected restructuring costs | 0.2% | 0.4% | ||
Projected pro forma | 9.5% – 10.0% | 10.0% – 10.5% |