Exhibit 99.1
For Information Contact:
Laurie H. Alire
Varian, Inc.
650.424.5225
laurie.alire@varianinc.com
VARIAN, INC. REPORTS RECORD DILUTED EPS
FOR THIRD QUARTER FY04
Pro Forma Diluted EPS Up 29%, GAAP Diluted EPS Up 39%
PALO ALTO, Calif. — Varian, Inc. (Nasdaq: VARI) today reported sales of $236.7 million for the third quarter of fiscal year 2004, a record for any third quarter and an increase of 13.4% over third quarter 2003 sales of $208.7 million. The increase was driven by all three of the Company’s segments, with good growth from products for both life science and industrial applications.
“We are pleased with the results, particularly in a third quarter, which is traditionally a challenging quarter for us,” said Garry W. Rogerson, President and CEO. “Our balanced approach of developing products for both industrial and life science applications is paying off. Our factories executed more efficiently than forecast, newly released products were delivered faster than expected, and certain NMR sales including a 900MHz system and imaging systems were recognized earlier than expected – all of which contributed to a strong quarter.”
Records were also set in both pro forma and GAAP diluted earnings per share with increases of 29% and 39%, respectively, over the year-ago quarter. Pro forma net earnings were $16.1 million, or $0.45 pro forma diluted earnings per share, for the third quarter of fiscal year 2004, compared to $12.3 million, or $0.35 pro forma diluted earnings per share, in the third quarter of fiscal year 2003. On a GAAP basis, net earnings in the third quarter of fiscal year 2004 were $15.4 million, or $0.43 diluted earnings per share, compared to $10.7 million, or $0.31 diluted earnings per share, in the third 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 Condensed Consolidated Statements of Earnings and Unaudited Results of Operations; and Reconciliation of GAAP to Pro Forma Results – Projected, Results of Operations.)
The GAAP results for the third quarter of fiscal year 2004 include the following items:
— Curtailment of a defined benefit pension plan in Australia resulting in a gain of approximately $1.3 million (which could be offset by related plan settlement charges in the fourth quarter of fiscal year 2004), and
— Restructuring and other related costs of approximately $1.6 million incurred primarily in connection with the previously announced consolidation of consumables factories in Southern California.
The following items which occurred in the prior year’s third quarter impact the comparison with this year’s quarter:
—Restructuring costs of approximately $1.1 million,
—Transition costs of $0.5 million related to an acquisition, and
—Delayed revenues of $1.0 million to $1.5 million as a result of union-mandated work stoppages in Australia.
Results by Segment
Scientific Instruments revenues for the third quarter of fiscal year 2004 were $149.2 million, representing a 10.3% increase over revenues of $135.3 million in the third quarter of the prior year. Many of the Company’s information rich detection products, such as mass spectrometers, contributed to the growth. Growth was particularly strong in Europe.
Scientific Instruments operating profit margin for the third quarter of fiscal year 2004 was 10.5% on a pro forma basis and 8.9% on a GAAP basis. Compared to the third quarter of fiscal year 2003, the segment’s pro forma operating margins improved primarily as a result of changes in product mix and lower costs associated with newer leading edge products.
Vacuum Technologies revenues of $34.8 million rose 21.7% in the third quarter of fiscal year 2004 compared to revenues of $28.5 million in the third quarter of fiscal year 2003. Sales for both life science and industrial uses had good growth, but were particularly strong into a broad range of industrial applications. Vacuum Technologies operating profit margin in the third quarter of fiscal year 2004 was 15.4% on a pro forma basis and 15.3% on a GAAP basis. Pro forma operating margins compared to the prior year’s quarter improved primarily as a result of sales volume leverage.
Electronics Manufacturing revenues were $52.7 million in the third quarter of fiscal year 2004, up 17.5% from revenues of $44.9 million in the third quarter of fiscal year 2003. The revenue growth resulted primarily from increased demand from medical equipment and industrial customers. The pro forma and GAAP operating profit margin for Electronics Manufacturing was 12.2% in the third quarter of fiscal year 2004.
Outlook
The Company is increasing the low-end of its guidance for fiscal year 2004 from $1.64 to $1.69 pro forma diluted earnings per share, leaving the high-end of the fiscal year guidance unchanged at $1.74 pro forma diluted earnings per share. This puts the Company in the upper end of its prior guidance for the full fiscal year. GAAP diluted earnings per share for the full fiscal year are expected to be $1.55 to $1.64.
For the full fiscal year, the Company expects high-single digit revenue growth, with pro forma operating profit margins of approximately 10.1% to 10.3%. GAAP operating profit margins should be approximately 0.6% to 0.8% lower than the comparable pro forma results for the full fiscal year.
“We are encouraged to see greater interest generated by our new products, whether into life science or industrial applications,” said Rogerson, “which included, for example, our new metabonomics products for pharmaceutical research or our new range of atomic absorption products for environmental analyses.
“The drivers of growth in our industry are new products and services, and we are in an excellent position, having had a record number of product introductions in fiscal year 2004.
“To reach our aggressive three-year internal goals we must continue to develop products at a rapid rate, acquire new technologies and products, and reduce our cost structure. We are making progress on all fronts.”
Varian, Inc. will be holding a conference call with securities analysts and investors later today, July 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 link at the right side of the screen.
Non-GAAP (Pro Forma) Financial Measures
This press release includes non-GAAP (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, restructuring and other related costs, acquisition transition costs, and defined benefit pension plan curtailment gains, 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.
We believe that excluding acquisition-related intangible amortization provides supplemental information and an alternative presentation useful to investors’ understanding of the company’s core operating results and trends. 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 that excluding restructuring and other related costs (principally related to facility closures and employee terminations to improve operational efficiency), acquisition transition costs, and defined benefit pension plan curtailment gains provides supplemental information and an alternative presentation useful to investors’ understanding of the company’s core operating results and trends, especially when comparing those results on a consistent basis to results for previous periods and anticipated results for future periods. Investors have indicated that they consider financial measures of our results of operations excluding restructuring and other related costs, acquisition transition costs, and defined benefit pension plan curtailment gains as important supplemental information useful to their understanding of our historical results and estimating of our future results.
We also believe that, in excluding acquisition-related intangible amortization, restructuring and other related costs, acquisition transition costs, and defined benefit pension plan curtailment gains, our non-GAAP financial measures provide investors with transparency into what is used by management to measure and forecast results of operations, to compare on a consistent basis our results of operations for the current period to that of prior periods, to compare our results of operations on a more consistent basis against that of other companies, in making financial and operating decisions and to establish certain management compensation.
Although we believe, for the foregoing reasons, that our presentation of non-GAAP financial measures provides useful supplemental information to investors regarding our results of operations, our non-GAAP financial measures should only be considered in addition to, and not as a substitute for or superior to, our financial measures prepared in accordance with GAAP.
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 fourth 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; the impact of shifting product mix on margins in the Scientific Instruments segment; 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; the impact of delays on government funding for research; 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 CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
Third Quarter FY 2004 and Third Quarter FY 2003
Fiscal Quarter Ended July 2, 2004 | Fiscal Quarter Ended June 27, 2003 | |||||||||||||||
GAAP | Pro Forma | GAAP | Pro Forma | |||||||||||||
Sales | $ | 236,680 | $ | 236,680 | $ | 208,734 | $ | 208,734 | ||||||||
Cost of sales | 147,381 | 147,381 | 130,773 | 130,304 | (2) | |||||||||||
Gross profit | 89,299 | 89,299 | 77,961 | 78,430 | ||||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing | 39,591 | 39,591 | 36,153 | 36,153 | ||||||||||||
Research and development | 12,522 | 12,522 | 12,066 | 12,066 | ||||||||||||
General and administrative | 13,692 | 12,629 | (1) | 13,037 | 11,138 | (3) | ||||||||||
Total operating expenses | 65,805 | 64,742 | 61,256 | 59,357 | ||||||||||||
Operating earnings | 23,494 | 24,557 | 16,705 | 19,073 | ||||||||||||
Interest income (expense) | ||||||||||||||||
Interest income | 747 | 747 | 413 | 413 | ||||||||||||
Interest expense | (601 | ) | (601 | ) | (624 | ) | (624 | ) | ||||||||
Total interest income (expense), net | 146 | 146 | (211 | ) | (211 | ) | ||||||||||
Earnings before income taxes | 23,640 | 24,703 | 16,494 | 18,862 | ||||||||||||
Income tax expense | 8,274 | 8,646 | 5,773 | 6,602 | ||||||||||||
Net earnings | $ | 15,366 | $ | 16,057 | $ | 10,721 | $ | 12,260 | ||||||||
Net earnings per diluted share | $ | 0.43 | $ | 0.45 | $ | 0.31 | $ | 0.35 | ||||||||
Diluted shares outstanding | 35,794 | 35,794 | 35,048 | 35,048 | ||||||||||||
SUMMARY OF RECONCILING ITEMS:
(1) | Excludes $704 in acquisition-related intangible amortization, $1,643 in restructuring and other related costs, and a pension curtailment gain of ($1,284). |
(2) | Excludes $469 in acquisition transition costs. |
(3) | Excludes $759 in acquisition-related intangible amortization, $1,103 in restructuring costs and $37 in acquisition transition costs. |
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO PRO FORMA RESULTS — ACTUAL
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
First Nine Months FY 2004 and First Nine Months FY 2003
Nine Months Ended July 2, 2004 | Nine Months Ended June 27, 2003 | |||||||||||||||
GAAP | Pro Forma | GAAP | Pro Forma | |||||||||||||
Sales | $ | 681,918 | $ | 681,918 | $ | 609,091 | $ | 609,091 | ||||||||
Cost of sales | 424,406 | 424,406 | 376,456 | 375,987 | (2) | |||||||||||
Gross profit | 257,512 | 257,512 | 232,635 | 233,104 | ||||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing | 117,393 | 117,393 | 104,328 | 104,328 | ||||||||||||
Research and development | 36,326 | 36,326 | 34,028 | 34,028 | ||||||||||||
General and administrative | 36,939 | 33,907 | (1) | 36,051 | 30,969 | (3) | ||||||||||
Total operating expenses | 190,658 | 187,626 | 174,407 | 169,325 | ||||||||||||
Operating earnings | 66,854 | 69,886 | 58,228 | 63,779 | ||||||||||||
Interest income (expense) | ||||||||||||||||
Interest income | 2,115 | 2,115 | 1,057 | 1,057 | ||||||||||||
Interest expense | (1,817 | ) | (1,817 | ) | (1,888 | ) | (1,888 | ) | ||||||||
Total interest income (expense), net | 298 | 298 | (831 | ) | (831 | ) | ||||||||||
Earnings before income taxes | 67,152 | 70,184 | 57,397 | 62,948 | ||||||||||||
Income tax expense | 23,503 | 24,565 | 20,089 | 22,051 | ||||||||||||
Net earnings | $ | 43,649 | $ | 45,619 | $ | 37,308 | $ | 40,897 | ||||||||
Net earnings per diluted share | $ | 1.22 | $ | 1.27 | $ | 1.07 | $ | 1.17 | ||||||||
Diluted shares outstanding | 35,798 | 35,798 | 35,000 | 35,000 | ||||||||||||
SUMMARY OF RECONCILING ITEMS:
(1) | Excludes $2,115 in acquisition-related intangible amortization, $2,201 in restructuring and other related costs, and a pension curtailment gain of ($1,284). |
(2) | Excludes $469 in acquisition transition costs. |
(3) | Excludes $1,910 in acquisition-related intangible amortization, $3,135 in restructuring costs and $37 in acquisition transition costs. |
VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except par value amounts)
July 2, 2004 | October 3, 2003 | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 175,895 | $ | 135,791 | ||
Accounts receivable, net | 171,381 | 165,049 | ||||
Inventories | 142,976 | 125,649 | ||||
Deferred taxes | 28,565 | 26,464 | ||||
Other current assets | 21,352 | 17,788 | ||||
Total current assets | 540,169 | 470,741 | ||||
Property, plant, and equipment, net | 120,840 | 120,088 | ||||
Goodwill | 127,487 | 126,411 | ||||
Intangible assets, net | 15,043 | 16,762 | ||||
Other assets | 4,020 | 3,050 | ||||
Total assets | $ | 807,559 | $ | 737,052 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities | ||||||
Notes payable | $ | 1,823 | $ | — | ||
Current portion of long-term debt | 6,553 | 2,811 | ||||
Accounts payable | 72,728 | 61,209 | ||||
Deferred profit | 10,750 | 14,385 | ||||
Accrued liabilities | 155,094 | 141,938 | ||||
Total current liabilities | 246,948 | 220,343 | ||||
Long-term debt | 30,000 | 36,273 | ||||
Deferred taxes | 13,355 | 12,454 | ||||
Other liabilities | 10,444 | 10,413 | ||||
Total liabilities | 300,747 | 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—34,846 shares at July 2, 2004 and 34,181 shares at October 3, 2003 | 252,572 | 252,630 | ||||
Retained earnings | 237,215 | 193,566 | ||||
Accumulated other comprehensive income | 17,025 | 11,373 | ||||
Total stockholders’ equity | 506,812 | 457,569 | ||||
Total liabilities and stockholders’ equity | $ | 807,559 | $ | 737,052 | ||
VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
Fiscal Quarter Ended | Nine Months Ended | |||||||||||||||
July 2, 2004 | June 27, 2003 | July 2, 2004 | June 27, 2003 | |||||||||||||
Cash flows from operating activities | ||||||||||||||||
Net earnings | $ | 15,366 | $ | 10,721 | $ | 43,649 | $ | 37,308 | ||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 6,041 | 6,102 | 18,945 | 17,432 | ||||||||||||
(Gain) loss on disposition of property, plant, and equipment | (18 | ) | (108 | ) | 22 | (124 | ) | |||||||||
Tax benefit from stock option exercises | — | 837 | 3,716 | 1,352 | ||||||||||||
Deferred taxes | (1,152 | ) | 2,865 | (1,152 | ) | 2,865 | ||||||||||
Changes in assets and liabilities, excluding effects of acquisitions: | ||||||||||||||||
Accounts receivable, net | (3,344 | ) | 11,457 | (3,107 | ) | 14,086 | ||||||||||
Inventories | (3,459 | ) | (3,413 | ) | (16,301 | ) | (7,855 | ) | ||||||||
Other current assets | (5,311 | ) | 584 | (2,703 | ) | 2,585 | ||||||||||
Other assets | 63 | 141 | (40 | ) | 254 | |||||||||||
Accounts payable | 3,988 | (192 | ) | 11,230 | 5,318 | |||||||||||
Deferred profit | (1,175 | ) | (5,319 | ) | (3,637 | ) | (4,413 | ) | ||||||||
Accrued liabilities | 7,562 | (1,945 | ) | 12,393 | 14,827 | |||||||||||
Other liabilities | (101 | ) | 133 | (493 | ) | 576 | ||||||||||
Net cash provided by operating activities | 18,460 | 21,863 | 62,522 | 84,211 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||
Proceeds from sale of property, plant, and equipment | 596 | 149 | 1,219 | 473 | ||||||||||||
Purchase of property, plant, and equipment | (6,669 | ) | (5,576 | ) | (17,306 | ) | (15,561 | ) | ||||||||
Purchase of businesses, net of cash acquired | (320 | ) | (858 | ) | (1,070 | ) | (23,586 | ) | ||||||||
Private company equity investments | — | — | (1,318 | ) | — | |||||||||||
Net cash used in investing activities | (6,393 | ) | (6,285 | ) | (18,475 | ) | (38,674 | ) | ||||||||
Cash flows from financing activities | ||||||||||||||||
Repayment of debt | (1,250 | ) | (1,250 | ) | (2,815 | ) | (3,082 | ) | ||||||||
Issuance of debt | 206 | 385 | 2,037 | 3,198 | ||||||||||||
Repurchase of common stock | — | (2,294 | ) | (23,895 | ) | (10,368 | ) | |||||||||
Issuance of common stock | 5,186 | 2,629 | 20,121 | 5,600 | ||||||||||||
Transfers to Varian Medical Systems, Inc. | (211 | ) | (273 | ) | (894 | ) | (739 | ) | ||||||||
Net cash provided by (used in) financing activities | 3,931 | (803 | ) | (5,446 | ) | (5,391 | ) | |||||||||
Effects of exchange rate changes on cash and cash equivalents | (3,765 | ) | 4,093 | 1,503 | 5,847 | |||||||||||
Net increase in cash and cash equivalents | 12,233 | 18,868 | 40,104 | 45,993 | ||||||||||||
Cash and cash equivalents at beginning of period | 163,662 | 92,270 | 135,791 | 65,145 | ||||||||||||
Cash and cash equivalents at end of period | $ | 175,895 | $ | 111,138 | $ | 175,895 | $ | 111,138 | ||||||||
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)
Third Quarter FY 2004 and Third Quarter FY 2003
and
First Nine Months FY 2004 and First Nine Months FY 2003
Fiscal Quarter Ended | Nine Months Ended | |||||||||||||||
July 2, 2004 | June 27, 2003 | July 2, 2004 | June 27, 2003 | |||||||||||||
TOTALCOMPANY | ||||||||||||||||
Operating Profit | ||||||||||||||||
U.S. GAAP as reported | $ | 23.5 | $ | 16.7 | $ | 66.9 | $ | 58.2 | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition transition costs | — | 0.5 | — | 0.5 | ||||||||||||
Acquisition-related intangible amortization | 0.7 | 0.8 | 2.1 | 1.9 | ||||||||||||
Restructuring and other related costs | 1.7 | 1.1 | 2.2 | 3.2 | ||||||||||||
Pension curtailment gain | (1.3 | ) | — | (1.3 | ) | — | ||||||||||
Pro forma as presented | $ | 24.6 | $ | 19.1 | $ | 69.9 | $ | 63.8 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 9.9 | % | 8.0 | % | 9.8 | % | 9.6 | % | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition transition costs | — | 0.3 | — | 0.1 | ||||||||||||
Acquisition-related intangible amortization | 0.3 | 0.3 | 0.3 | 0.3 | ||||||||||||
Restructuring and other related costs | 0.7 | 0.5 | 0.3 | 0.5 | ||||||||||||
Pension curtailment gain | (0.5 | ) | — | (0.2 | ) | — | ||||||||||
Pro forma as presented | 10.4 | % | 9.1 | % | 10.2 | % | 10.5 | % | ||||||||
Net Earnings | ||||||||||||||||
U.S. GAAP as reported | $ | 15.4 | $ | 10.7 | $ | 43.6 | $ | 37.3 | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition transition costs | — | 0.3 | — | 0.3 | ||||||||||||
Acquisition-related intangible amortization | 0.4 | 0.5 | 1.4 | 1.2 | ||||||||||||
Restructuring and other related costs | 1.1 | 0.8 | 1.4 | 2.1 | ||||||||||||
Pension curtailment gain | (0.8 | ) | — | (0.8 | ) | — | ||||||||||
Pro forma as presented | $ | 16.1 | $ | 12.3 | $ | 45.6 | $ | 40.9 | ||||||||
Diluted Earnings Per Share | ||||||||||||||||
U.S. GAAP as reported | $ | 0.43 | $ | 0.31 | $ | 1.22 | $ | 1.07 | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition transition costs | — | 0.01 | — | 0.01 | ||||||||||||
Acquisition-related intangible amortization | 0.01 | 0.01 | 0.03 | 0.04 | ||||||||||||
Restructuring and other related costs | 0.03 | 0.02 | 0.04 | 0.05 | ||||||||||||
Pension curtailment gain | (0.02 | ) | — | (0.02 | ) | — | ||||||||||
Pro forma as presented | $ | 0.45 | $ | 0.35 | $ | 1.27 | $ | 1.17 | ||||||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO PRO FORMA RESULTS — ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In millions, except margin data)
Third Quarter FY 2004 and Third Quarter FY 2003
and
First Nine Months FY 2004 and First Nine Months FY 2003
Fiscal Quarter Ended | Nine Months Ended | |||||||||||||||
July 2, 2004 | June 27, 2003 | July 2, 2004 | June 27, 2003 | |||||||||||||
SCIENTIFIC INSTRUMENTS SEGMENT | ||||||||||||||||
Operating Profit | ||||||||||||||||
U.S. GAAP as reported | $ | 13.4 | $ | 11.5 | $ | 40.3 | $ | 39.1 | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 0.7 | 0.7 | 2.0 | 1.8 | ||||||||||||
Restructuring and other related costs | 1.6 | 0.6 | 2.2 | 2.2 | ||||||||||||
Pro forma as presented | $ | 15.7 | $ | 12.8 | $ | 44.5 | $ | 43.1 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 8.9 | % | 8.5 | % | 9.3 | % | 9.9 | % | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 0.5 | 0.6 | 0.5 | 0.5 | ||||||||||||
Restructuring and other related costs | 1.1 | 0.4 | 0.5 | 0.5 | ||||||||||||
Pro forma as presented | 10.5 | % | 9.5 | % | 10.3 | % | 10.9 | % | ||||||||
VACUUM TECHNOLOGIES SEGMENT | ||||||||||||||||
Operating Profit | ||||||||||||||||
U.S. GAAP as reported | $ | 5.3 | $ | 2.8 | $ | 16.9 | $ | 10.6 | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 0.1 | — | 0.1 | 0.1 | ||||||||||||
Restructuring and other related costs | — | 0.5 | — | 0.5 | ||||||||||||
Pro forma as presented | $ | 5.4 | $ | 3.3 | $ | 17.0 | $ | 11.2 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 15.3 | % | 9.8 | % | 16.2 | % | 12.3 | % | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 0.1 | 0.1 | — | 0.1 | ||||||||||||
Restructuring and other related costs | — | 1.8 | — | 0.6 | ||||||||||||
Pro forma as presented | 15.4 | % | 11.7 | % | 16.2 | % | 13.0 | % | ||||||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO PRO FORMA RESULTS — ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In millions, except margin data)
Third Quarter FY 2004 and Third Quarter FY 2003
and
First Nine Months FY 2004 and First Nine Months FY 2003
Fiscal Quarter Ended | Nine Months Ended | |||||||||||||||
July 2, 2004 | June 27, 2003 | July 2, 2004 | June 27, 2003 | |||||||||||||
ELECTRONICS MANUFACTURING SEGMENT | ||||||||||||||||
Operating Profit | ||||||||||||||||
U.S. GAAP as reported | $ | 6.4 | $ | 5.5 | $ | 15.8 | $ | 15.2 | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition transition costs | — | 0.5 | — | 0.5 | ||||||||||||
Pro forma as presented | $ | 6.4 | $ | 6.0 | $ | 15.8 | $ | 15.7 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 12.2 | % | 12.1 | % | 11.0 | % | 11.9 | % | ||||||||
Pro forma adjustments: | ||||||||||||||||
Acquisition transition costs | — | 1.2 | — | 0.4 | ||||||||||||
Pro forma as presented | 12.2 | % | 13.3 | % | 11.0 | % | 12.3 | % | ||||||||
GENERAL CORPORATE | ||||||||||||||||
Operating Profit | ||||||||||||||||
U.S. GAAP as reported | $ | (1.6 | ) | $ | (3.1 | ) | $ | (6.1 | ) | $ | (6.7 | ) | ||||
Pro forma adjustments: | ||||||||||||||||
Restructuring and other related costs | — | — | — | 0.5 | ||||||||||||
Pension curtailment gain | (1.3 | ) | — | (1.3 | ) | — | ||||||||||
Pro forma as presented | $ | (2.9 | ) | $ | (3.1 | ) | $ | (7.4 | ) | $ | (6.2 | ) | ||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO PRO FORMA RESULTS — PROJECTED
RESULTS OF OPERATIONS
Full Year FY 2004
Range of Projected Results Fiscal Year Ending October 1, 2004 | ||
TOTAL COMPANY | ||
Projected Diluted Earnings per Share | ||
Projected U.S. GAAP | $1.55 – $1.64 | |
Pro forma adjustments: | ||
Projected acquisition-related intangible amortization | $0.05 | |
Projected restructuring and other related costs | $0.07 | |
Projected pension settlement and curtailment (gains) losses, net | $(0.02) - $0.02 | |
Projected pro forma | $1.69 – $1.74 | |
Projected Operating Margins | ||
Projected U.S. GAAP | 9.3% – 9.7% | |
Pro forma adjustments: | ||
Projected acquisition-related intangible amortization | 0.3% | |
Projected restructuring and other related costs | 0.4% | |
Projected pension settlement and curtailment (gains) losses, net | (0.1)% - 0.1% | |
Projected pro forma | 10.1% – 10.3% |