Exhibit 99.1
For Information Contact:
Investor Relations
Varian, Inc.
650.424.5471
ir@varianinc.com
VARIAN, INC. REPORTS FOURTH QUARTER 2009 RESULTS
PALO ALTO, Calif. — Varian, Inc. (NasdaqGS: VARI) today reported fourth quarter fiscal year 2009 revenues of $196.5 million, a decrease of 30.4% from the fourth quarter of fiscal year 2008. Orders exceeded revenues by approximately $9 million in the fourth quarter of fiscal year 2009.
Non-GAAP (adjusted) diluted earnings per share for the fourth quarter of 2009 were $0.40, a decrease of 48.7% from the $0.78 in the fourth quarter of 2008. On a GAAP basis, diluted earnings per share in the fourth quarter of 2009 were $0.07 (including $0.28 of costs relating to the pending acquisition of the company by Agilent Technologies, Inc. (“Agilent”)), compared to $0.69 in the fourth quarter of 2008.
Adjusted operating profit margin was 8.4% in the fourth quarter of 2009, compared to 13.0% in the prior-year quarter. On a GAAP basis, operating profit margin was 2.6% in the fourth quarter of 2009, compared to 11.6% in the same quarter a year ago.
Revenues in the fourth quarter of fiscal year 2009 were essentially flat on a sequential basis, but were lower than the prior-year quarter, primarily due to the global economic downturn as well as specific items impacting the comparability of the fourth quarter of fiscal year 2009 with the fourth quarter of fiscal year 2008. Revenues in the fourth quarter of fiscal year 2008 benefitted from (1) an extra week and (2) exceptionally strong shipments related to overcoming manufacturing transition and execution issues experienced in the third quarter of fiscal year 2008. In addition, revenues in the fourth quarter of fiscal year 2009 were negatively impacted by customers’ uncertainty and other disruptions related to the announcement and pendency of the acquisition by Agilent. Compared to record adjusted operating profit margins in the prior-year quarter, adjusted operating margins in the fourth quarter of fiscal year 2009 were negatively impacted by the lower sales volumes, product mix and disruptions relating to the pending acquisition.
Free cash flow, which is defined as operating cash flow less net fixed asset purchases, was $29.7 million in the fourth quarter of 2009 and a record $94.3 million for the full fiscal year. The excellent free cash flow generated by the company in fiscal year 2009 demonstrates the fundamental strength and flexibility of the business through the challenging economic environment during that period.
Fiscal year 2009 sales totaled $806.7 million, a decrease of 20.3% compared to the $1.013 billion reported in fiscal year 2008. Adjusted net earnings in fiscal year 2009 decreased 26.2% to $58.0 million, compared to $78.7 million in the prior fiscal year. Adjusted diluted earnings per share were $2.01 in fiscal year 2009, representing a decrease of 23.3% compared to
the $2.62 in fiscal year 2008. On a GAAP basis, net earnings were $38.6 million, or $1.34 diluted earnings per share, in fiscal year 2009, compared to $65.1 million, or $2.17 diluted earnings per share, in fiscal year 2008.
For a complete reconciliation of non-GAAP (adjusted) financial information used in this press release to the most directly comparable GAAP financial information, please refer to the attached Reconciliations of GAAP to Adjusted Results, Actual.
Results by Segment
Scientific Instruments revenues for the fourth quarter of 2009 were $164.7 million, a decrease of 30.3% from the fourth quarter of the prior year. Adjusted operating profit margin was 8.1% in the fourth quarter of 2009, compared to 12.7% in the fourth quarter of the prior year. On a GAAP basis, operating profit margin was 5.5% in the fourth quarter of 2009, compared to 11.1% in the same quarter a year ago.
For the full fiscal year 2009, Scientific Instruments revenues decreased 19.5% to $675.3 million, compared to $838.7 million in fiscal year 2008. Adjusted operating profit margin was 10.7% in fiscal year 2009, compared to 11.6% in fiscal year 2008. On a GAAP basis, operating profit margin was 8.0% in fiscal year 2009, compared to 9.6% in the prior fiscal year.
Vacuum Technologies revenues were $31.7 million in the fourth quarter of 2009, a decrease of 31.0% from the fourth quarter of 2008. Adjusted operating profit margin was 20.5% in the fourth quarter of 2009, compared to 22.0% in the fourth quarter of the prior year. On a GAAP basis, operating profit margin was 20.3% in the fourth quarter of 2009, compared to 22.0% in the prior-year quarter.
For the full fiscal year 2009, Vacuum Technologies revenues totaled $131.4 million, a decrease of 24.4% compared to the $173.8 million reported in fiscal year 2008. Adjusted operating profit margin was 20.1% in fiscal year 2009, compared to 19.8% in the prior fiscal year. On a GAAP basis, operating profit margin was 19.5% in fiscal year 2009, compared to 19.8% in fiscal year 2008.
Acquisition by Agilent
As previously announced, on July 26, 2009 the company entered into an Agreement and Plan of Merger with Agilent (the “Merger Agreement”), pursuant to which the company will, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, be acquired by Agilent for $52.00 per share in cash. At a special meeting held on October 5, 2009, the company’s stockholders approved the Merger Agreement. The transaction remains subject to regulatory approvals and other closing conditions.
No Conference Call
Due to the pending acquisition by Agilent, the company will not be holding an investor conference call to review its fourth quarter and full fiscal year 2009 results.
Non-GAAP (Adjusted) Financial Measures
This press release includes non-GAAP (adjusted) financial measures for cost of sales, selling, general and administrative expenses, research and development expenses, purchased in-process research and development expenses, operating earnings, operating profit margins, impairment of private company equity investments, income tax expense, net earnings, diluted earnings per share and free cash flow. With the exception of free cash flow, these non-GAAP financial measures exclude acquisition-related intangible and inventory write-up amortization and purchased in-process research and development expenses, costs related to the pending acquisition by Agilent, restructuring and other related costs, and impairment of private company equity investments. Reconciliations of each of these non-GAAP financial measures to the most directly comparable GAAP financial measures are detailed in the Reconciliations of GAAP to Adjusted 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 and our cash flows.
We believe that excluding acquisition-related intangible and inventory write-up amortization and purchased in-process research and development expenses 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 and inventory write-up amortization and purchased in-process research and development expenses as important, useful information.
We similarly believe that excluding costs related to the pending acquisition by Agilent, restructuring and other related costs (principally related to facility closures and employee terminations to reduce costs and improve operational efficiency) and impairment of private company equity investments 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 and impairment of private company equity investments 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 and inventory write-up amortization and purchased in-process research and development expenses, costs related to the pending acquisition by Agilent, restructuring and other related costs, and impairment of private company equity investments, our non-GAAP financial measures provide investors with transparency into what is used by management to measure and forecast our 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.
We believe that the presentation of free cash flow provides investors with useful information on what is used by management to measure cash management performance, 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 and our cash flows, 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.
About Varian, Inc.
Varian, Inc. is a leading worldwide supplier of scientific instruments and vacuum technologies for life science, environmental, energy, and applied research and other applications. The company provides complete solutions, including instruments, vacuum products, laboratory consumable supplies, software, training and support through its global distribution and support systems. Varian, Inc.’s common stock is traded on the NASDAQ Global Select Market under the symbol “VARI”. Further information is available on the company’s Web site at http://www.varianinc.com.
VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
Fourth Quarter FY 2009 and Fourth Quarter FY 2008
Fiscal Quarter Ended | ||||||||
October 2, 2009 | October 3, 2008 | |||||||
Sales | $ | 196,459 | $ | 282,470 | ||||
Cost of sales | 113,263 | (1) | 156,377 | (7) | ||||
Gross profit | 83,196 | 126,093 | ||||||
Operating expenses | ||||||||
Selling, general and administrative | 64,644 | (2) | 75,098 | (8) | ||||
Research and development | 13,448 | (3) | 17,921 | (9) | ||||
Purchased in-process research and development | — | 215 | (10) | |||||
Total operating expenses | 78,092 | 93,234 | ||||||
Operating earnings | 5,104 | (4) | 32,859 | (11) | ||||
Interest income | 375 | 1,042 | ||||||
Interest expense | (395 | ) | (382 | ) | ||||
Earnings before income taxes | 5,084 | 33,519 | ||||||
Income tax expense | 3,144 | (5) | 13,142 | (12) | ||||
Net earnings | $ | 1,940 | (6) | $ | 20,377 | (13) | ||
Net earnings per diluted share | $ | 0.07 | (6) | $ | 0.69 | (13) | ||
Diluted shares outstanding | 29,138 | 29,367 | ||||||
NON-GAAP (ADJUSTED) FINANCIAL MEASURES (see also attached reconciliations of GAAP to Adjusted results for each of these measures):
(1) | $111,263 on an adjusted basis excluding $1,550 in acquisition-related intangible amortization, $72 in acquisition-related inventory write-up amortization and $378 in restructuring and other related costs. |
(2) | $55,063 on an adjusted basis excluding $9,155 in costs related to the pending acquisition by Agilent, $194 in acquisition-related intangible amortization and $232 in restructuring and other related costs. |
(3) | $13,694 on an adjusted basis excluding a credit of $246 in restructuring and other related costs. |
(4) | $16,439 on an adjusted basis excluding the adjustments described in items (1) – (3) above. |
(5) | $4,891 on an adjusted basis excluding the tax impact of the adjustments described in items (1) – (3) above. |
(6) | $11,528 and $0.40 per diluted share, respectively, on an adjusted basis excluding the adjustments (net of related tax effects) described in items (1) – (3) above. |
(7) | $154,076 on an adjusted basis excluding $1,663 in acquisition-related intangible amortization, $172 in acquisition-related inventory write-up amortization and $466 in restructuring and other related costs. |
(8) | $74,239 on an adjusted basis excluding $586 in acquisition-related intangible amortization and $273 in restructuring and other related costs. |
(9) | $17,420 on an adjusted basis excluding $501 in restructuring and other related costs. |
(10) | $0 on an adjusted basis excluding $215 related to an acquisition-related in-process research and development charge. |
(11) | $36,735 on an adjusted basis excluding the adjustments described in items (7) – (10) above. |
(12) | $14,417 on an adjusted basis excluding the tax impact of the adjustments described in items (7) – (9) above. |
(13) | $22,978 and $0.78 per diluted share, respectively, on an adjusted basis excluding the adjustments (net of related tax effects) described in items (7) – (10) above. |
VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
Full Year FY 2009 and Full Year FY 2008
Fiscal Year Ended | ||||||||
October 2, 2009 | October 3, 2008 | |||||||
Sales | $ | 806,744 | $ | 1,012,515 | ||||
Cost of sales | 452,054 | (1) | 560,061 | (7) | ||||
Gross profit | 354,690 | 452,454 | ||||||
Operating expenses | ||||||||
Selling, general and administrative | 239,282 | (2) | 277,478 | (8) | ||||
Research and development | 56,425 | (3) | 71,810 | (9) | ||||
Purchased in-process research and development | — | 1,703 | (10) | |||||
Total operating expenses | 295,707 | 350,991 | ||||||
Operating earnings | 58,983 | (4) | 101,463 | (11) | ||||
Impairment of private company equity investment | — | (3,018 | )(12) | |||||
Interest income | 1,650 | 5,930 | ||||||
Interest expense | (1,486 | ) | (1,656 | ) | ||||
Earnings before income taxes | 59,147 | 102,719 | ||||||
Income tax expense | 20,527 | (5) | 37,605 | (13) | ||||
Net earnings | $ | 38,620 | (6) | $ | 65,114 | (14) | ||
Net earnings per diluted share | $ | 1.34 | (6) | $ | 2.17 | (14) | ||
Diluted shares outstanding | 28,936 | 30,072 | ||||||
NON-GAAP (ADJUSTED) FINANCIAL MEASURES (see also attached reconciliations of GAAP to Adjusted results for each of these measures):
(1) | $441,730 on an adjusted basis excluding $6,117 in acquisition-related intangible amortization, $131 in acquisition-related inventory write-up amortization and $4,076 in restructuring and other related costs. |
(2) | $224,255 on an adjusted basis excluding $9,155 in costs related to the pending acquisition by Agilent, $1,118 in acquisition-related intangible amortization and $4,754 in restructuring and other related costs. |
(3) | $55,583 on an adjusted basis excluding $842 in restructuring and other related costs. |
(4) | $85,176 on an adjusted basis excluding the adjustments described in items (1) – (3) above. |
(5) | $27,294 on an adjusted basis excluding the tax impact of the adjustments described in items (1) – (3) above. |
(6) | $58,046 and $2.01 per share, respectively, on an adjusted basis excluding the adjustments (net of related tax effects) described in items (1) – (3) above. |
(7) | $550,465 on an adjusted basis excluding $6,547 in acquisition-related intangible amortization, $1,408 in acquisition-related inventory write-up amortization and $1,641 in restructuring and other related costs. |
(8) | $273,072 on an adjusted basis excluding $1,825 in acquisition-related intangible amortization and $2,581 in restructuring and other related costs. |
(9) | $70,556 on an adjusted basis excluding $1,254 in restructuring and other related costs. |
(10) | $0 on an adjusted basis excluding $1,703 related to an acquisition-related in-process research and development charge. |
(11) | $118,422 on an adjusted basis excluding the adjustments described in items (7) – (10) above. |
(12) | $0 on an adjusted basis excluding $3,018 related to the impairment of a private company equity investment. |
(13) | $44,007 on an adjusted basis excluding the tax impact of the adjustments described in items (7) – (9) and (12) above. |
(14) | $78,689 and $2.62 per share, respectively, on an adjusted basis excluding the adjustments (net of related tax effects) described in items (7) – (10) and (12) above. |
VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except par value amounts)
October 2, 2009 | October 3, 2008 | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 209,348 | $ | 103,895 | ||
Accounts receivable, net | 159,958 | 199,420 | ||||
Inventories | 136,704 | 161,039 | ||||
Deferred taxes | 38,349 | 32,287 | ||||
Prepaid expenses and other current assets | 15,488 | 15,663 | ||||
Total current assets | 559,847 | 512,304 | ||||
Property, plant and equipment, net | 114,363 | 110,343 | ||||
Goodwill | 216,223 | 218,208 | ||||
Intangible assets, net | 28,334 | 36,972 | ||||
Other assets | 25,420 | 24,089 | ||||
Total assets | $ | 944,187 | $ | 901,916 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities | ||||||
Current portion of long-term debt | $ | 6,250 | $ | — | ||
Accounts payable | 63,368 | 70,923 | ||||
Deferred profit | 8,935 | 10,957 | ||||
Accrued liabilities | 171,103 | 167,173 | ||||
Total current liabilities | 249,656 | 249,053 | ||||
Long-term debt | 12,500 | 18,750 | ||||
Deferred taxes | 2,505 | 4,341 | ||||
Other liabilities | 41,255 | 43,431 | ||||
Total liabilities | 305,916 | 315,575 | ||||
Stockholders’ equity | ||||||
Preferred stock—par value $0.01, authorized—1,000 shares; issued—none | — | — | ||||
Common stock—par value $0.01, authorized—99,000 shares; issued and outstanding—28,971 shares at October 2, 2009 and 28,917 shares at October 3, 2008 | 368,324 | 356,192 | ||||
Retained earnings | 220,068 | 184,678 | ||||
Accumulated other comprehensive income | 49,879 | 45,471 | ||||
Total stockholders’ equity | 638,271 | 586,341 | ||||
Total liabilities and stockholders’ equity | $ | 944,187 | $ | 901,916 | ||
VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||||||
October 2, 2009 | October 3, 2008 | October 2, 2009 | October 3, 2008 | |||||||||||||
Cash flows from operating activities | ||||||||||||||||
Net earnings | $ | 1,940 | $ | 20,377 | $ | 38,620 | $ | 65,114 | ||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 6,470 | 8,128 | 26,783 | 29,346 | ||||||||||||
Gain on disposition of property, plant and equipment | (90 | ) | (22 | ) | (230 | ) | (474 | ) | ||||||||
Impairment of private company equity investment | — | — | — | 3,018 | ||||||||||||
Purchased in-process research and development | — | 215 | — | 1,703 | ||||||||||||
Share-based compensation expense | 1,672 | 2,466 | 7,705 | 9,673 | ||||||||||||
Excess tax benefit from share-based plans | (705 | ) | (894 | ) | (705 | ) | (894 | ) | ||||||||
Deferred taxes | (11,157 | ) | (1,251 | ) | (12,211 | ) | (1,791 | ) | ||||||||
Unrealized loss (gain) on currency remeasurement | 929 | (7,959 | ) | 525 | (5,286 | ) | ||||||||||
Changes in assets and liabilities, excluding effects of acquisitions: | ||||||||||||||||
Accounts receivable, net | 1,093 | (22,940 | ) | 42,387 | (12,205 | ) | ||||||||||
Inventories | 12,812 | 11,618 | 24,663 | (19,428 | ) | |||||||||||
Prepaid expenses and other current assets | 386 | 2,811 | 403 | 3,300 | ||||||||||||
Other assets | 1,531 | (736 | ) | 168 | (1,462 | ) | ||||||||||
Accounts payable | 9,260 | (2,293 | ) | (8,663 | ) | (1,072 | ) | |||||||||
Deferred profit | (1,289 | ) | 440 | (2,103 | ) | (3,526 | ) | |||||||||
Accrued liabilities | 11,196 | 10,853 | (3,061 | ) | 14,053 | |||||||||||
Other liabilities | (490 | ) | (1,416 | ) | (1,394 | ) | (1,048 | ) | ||||||||
Net cash provided by operating activities | 33,558 | 19,397 | 112,887 | 79,021 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||
Proceeds from sale of property, plant and equipment | 344 | 470 | 6,454 | 1,735 | ||||||||||||
Purchase of property, plant and equipment | (4,245 | ) | (7,286 | ) | (25,073 | ) | (23,960 | ) | ||||||||
Acquisitions, net of cash acquired | (20 | ) | (2,269 | ) | (2,449 | ) | (55,167 | ) | ||||||||
Private company equity investments | — | — | — | (18 | ) | |||||||||||
Net cash used in investing activities | (3,921 | ) | (9,085 | ) | (21,068 | ) | (77,410 | ) | ||||||||
Cash flows from financing activities | ||||||||||||||||
Repayments of debt | — | — | — | (6,250 | ) | |||||||||||
Repurchase of common stock | (24 | ) | (24,968 | ) | (7,647 | ) | (106,859 | ) | ||||||||
Issuance of common stock | 4,856 | 2,467 | 8,139 | 18,228 | ||||||||||||
Excess tax benefit from share-based plans | 705 | (2,258 | ) | 705 | 894 | |||||||||||
Transfers to Varian Medical Systems, Inc. | (204 | ) | — | (645 | ) | (600 | ) | |||||||||
Net cash provided by (used in) financing activities | 5,333 | (24,759 | ) | 552 | (94,587 | ) | ||||||||||
Effects of exchange rate changes on cash and cash equivalents | 8,001 | (9,872 | ) | 13,082 | 475 | |||||||||||
Net increase (decrease) in cash and cash equivalents | 42,971 | (24,319 | ) | 105,453 | (92,501 | ) | ||||||||||
Cash and cash equivalents at beginning of period | 166,377 | 128,214 | 103,895 | 196,396 | ||||||||||||
Cash and cash equivalents at end of period | $ | 209,348 | $ | 103,895 | $ | 209,348 | $ | 103,895 | ||||||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO ADJUSTED RESULTS - ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In thousands)
Fourth Quarter FY 2009 and Fourth Quarter FY 2008
and
Full Year FY 2009 and Full Year FY 2008
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||||||
October 2, 2009 | October 3, 2008 | October 2, 2009 | October 3, 2008 | |||||||||||||
TOTAL COMPANY | ||||||||||||||||
Cost of Sales | ||||||||||||||||
U.S. GAAP as reported | $ | 113,263 | $ | 156,377 | $ | 452,054 | $ | 560,061 | ||||||||
Adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | (1,550 | ) | (1,663 | ) | (6,117 | ) | (6,547 | ) | ||||||||
Acquisition-related inventory write-up amortization | (72 | ) | (172 | ) | (131 | ) | (1,408 | ) | ||||||||
Restructuring and other related costs | (378 | ) | (466 | ) | (4,076 | ) | (1,641 | ) | ||||||||
As adjusted | $ | 111,263 | $ | 154,076 | $ | 441,730 | $ | 550,465 | ||||||||
Selling, General and Administrative | ||||||||||||||||
U.S. GAAP as reported | $ | 64,644 | $ | 75,098 | $ | 239,282 | $ | 277,478 | ||||||||
Adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | (194 | ) | (586 | ) | (1,118 | ) | (1,825 | ) | ||||||||
Costs related to pending acquisition by Agilent | (9,155 | ) | — | (9,155 | ) | — | ||||||||||
Restructuring and other related costs | (232 | ) | (273 | ) | (4,754 | ) | (2,581 | ) | ||||||||
As adjusted | $ | 55,063 | $ | 74,239 | $ | 224,255 | $ | 273,072 | ||||||||
Research and Development | ||||||||||||||||
U.S. GAAP as reported | $ | 13,448 | $ | 17,921 | $ | 56,425 | $ | 71,810 | ||||||||
Adjustments: | ||||||||||||||||
Restructuring and other related costs | 246 | (501 | ) | (842 | ) | (1,254 | ) | |||||||||
As adjusted | $ | 13,694 | $ | 17,420 | $ | 55,583 | $ | 70,556 | ||||||||
Purchased In-Process Research and Development | ||||||||||||||||
U.S. GAAP as reported | $ | — | $ | 215 | $ | — | $ | 1,703 | ||||||||
Adjustments: | ||||||||||||||||
Acquisition-related in-process research and development charge | — | (215 | ) | — | (1,703 | ) | ||||||||||
As adjusted | $ | — | $ | — | $ | — | $ | — | ||||||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO ADJUSTED RESULTS - ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In thousands, except margin data)
Fourth Quarter FY 2009 and Fourth Quarter FY 2008
and
Full Year FY 2009 and Full Year FY 2008
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||||||
October 2, 2009 | October 3, 2008 | October 2, 2009 | October 3, 2008 | |||||||||||||
TOTAL COMPANY (Continued) | ||||||||||||||||
Operating Earnings | ||||||||||||||||
U.S. GAAP as reported | $ | 5,104 | $ | 32,859 | $ | 58,983 | $ | 101,463 | ||||||||
Adjustments: | ||||||||||||||||
Acquisition-related in-process research and development charges | — | 215 | — | 1,703 | ||||||||||||
Acquisition-related intangible amortization | 1,744 | 2,249 | 7,235 | 8,372 | ||||||||||||
Acquisition-related inventory write-up amortization | 72 | 172 | 131 | 1,408 | ||||||||||||
Costs related to pending acquisition by Agilent | 9,155 | — | 9,155 | — | ||||||||||||
Restructuring and other related costs | 364 | 1,240 | 9,672 | 5,476 | ||||||||||||
As adjusted | $ | 16,439 | $ | 36,735 | $ | 85,176 | $ | 118,422 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 2.6 | % | 11.6 | % | 7.3 | % | 10.0 | % | ||||||||
Adjustments: | ||||||||||||||||
Acquisition-related in-process research and development charges | — | 0.1 | — | 0.2 | ||||||||||||
Acquisition-related intangible amortization | 0.9 | 0.8 | 1.0 | 0.9 | ||||||||||||
Acquisition-related inventory write-up amortization | 0.0 | 0.1 | 0.0 | 0.1 | ||||||||||||
Costs related to pending acquisition by Agilent | 4.7 | — | 1.1 | — | ||||||||||||
Restructuring and other related costs | 0.2 | 0.4 | 1.2 | 0.5 | ||||||||||||
As adjusted | 8.4 | % | 13.0 | % | 10.6 | % | 11.7 | % | ||||||||
Impairment of Private Company Equity Investment | ||||||||||||||||
U.S. GAAP as reported | $ | — | $ | — | $ | — | $ | 3,018 | ||||||||
Adjustments: | ||||||||||||||||
Impairment of private company equity investment | — | — | — | (3,018 | ) | |||||||||||
As adjusted | $ | — | $ | — | $ | — | $ | — | ||||||||
Income Tax Expense | ||||||||||||||||
U.S. GAAP as reported | $ | 3,144 | $ | 13,142 | $ | 20,527 | $ | 37,605 | ||||||||
Adjustments: | ||||||||||||||||
Tax impact of adjustments: | ||||||||||||||||
Acquisition-related intangible amortization | 527 | 723 | 2,310 | 2,755 | ||||||||||||
Acquisition-related inventory write-up amortization | 20 | 75 | 37 | 485 | ||||||||||||
Costs related to pending acquisition by Agilent | 1,045 | — | 1,045 | — | ||||||||||||
Impairment of private company equity investment | — | — | — | 1,147 | ||||||||||||
Restructuring and other related costs | 155 | 477 | 3,375 | 2,015 | ||||||||||||
As adjusted | $ | 4,891 | $ | 14,417 | $ | 27,294 | $ | 44,007 | ||||||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO ADJUSTED RESULTS - ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In thousands, except per share data)
Fourth Quarter FY 2009 and Fourth Quarter FY 2008
and
Full Year FY 2009 and Full Year FY 2008
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||||||
October 2, 2009 | October 3, 2008 | October 2, 2009 | October 3, 2008 | |||||||||||||
TOTAL COMPANY (Continued) | ||||||||||||||||
Net Earnings | ||||||||||||||||
U.S. GAAP as reported | $ | 1,940 | $ | 20,377 | $ | 38,620 | $ | 65,114 | ||||||||
Adjustments: | ||||||||||||||||
Acquisition-related in-process research and development charges | — | 215 | — | 1,703 | ||||||||||||
Acquisition-related intangible amortization | 1,217 | 1,526 | 4,925 | 5,617 | ||||||||||||
Acquisition-related inventory write-up amortization | 52 | 97 | 94 | 923 | ||||||||||||
Costs related to pending acquisition by Agilent | 8,110 | — | 8,110 | — | ||||||||||||
Impairment of private company equity investment | — | — | — | 1,871 | ||||||||||||
Restructuring and other related costs | 209 | 763 | 6,297 | 3,461 | ||||||||||||
As adjusted | $ | 11,528 | $ | 22,978 | $ | 58,046 | $ | 78,689 | ||||||||
Diluted Earnings Per Share | ||||||||||||||||
U.S. GAAP as reported | $ | 0.07 | $ | 0.69 | $ | 1.34 | $ | 2.17 | ||||||||
Adjustments: | ||||||||||||||||
Acquisition-related in-process research and development charges | — | 0.01 | — | 0.06 | ||||||||||||
Acquisition-related intangible amortization | 0.04 | 0.05 | 0.17 | 0.18 | ||||||||||||
Acquisition-related inventory write-up amortization | 0.00 | 0.00 | 0.00 | 0.03 | ||||||||||||
Costs related to pending acquisition by Agilent | 0.28 | — | 0.28 | — | ||||||||||||
Impairment of private company equity investment | — | — | — | 0.06 | ||||||||||||
Restructuring and other related costs | 0.01 | 0.03 | 0.22 | 0.12 | ||||||||||||
As adjusted | $ | 0.40 | $ | 0.78 | $ | 2.01 | $ | 2.62 | ||||||||
Free Cash Flow | ||||||||||||||||
U.S. GAAP as reported - Net cash provided by operating activities | $ | 33,558 | $ | 19,396 | $ | 112,887 | $ | 79,021 | ||||||||
Adjustments: | ||||||||||||||||
Proceeds from sale of property, plant and equipment | 344 | 470 | 6,454 | 1,735 | ||||||||||||
Purchase of property, plant and equipment | (4,245 | ) | (7,286 | ) | (25,073 | ) | (23,960 | ) | ||||||||
As adjusted - Free Cash Flow | $ | 29,657 | $ | 12,580 | $ | 94,268 | $ | 56,796 | ||||||||
VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO ADJUSTED RESULTS - ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In thousands, except margin data)
Fourth Quarter FY 2009 and Fourth Quarter FY 2008
and
Full Year FY 2009 and Full Year FY 2008
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||||||
October 2, 2009 | October 3, 2008 | October 2, 2009 | October 3, 2008 | |||||||||||||
SCIENTIFIC INSTRUMENTS SEGMENT | ||||||||||||||||
Operating Earnings | ||||||||||||||||
U.S. GAAP as reported | $ | 9,041 | $ | 26,191 | $ | 53,890 | $ | 80,700 | ||||||||
Adjustments: | ||||||||||||||||
Acquisition-related in-process research and development charges | — | 215 | — | 1,703 | ||||||||||||
Acquisition-related intangible amortization | 1,744 | 2,249 | 7,235 | 8,372 | ||||||||||||
Acquisition-related inventory write-up amortization | 72 | 172 | 131 | 1,408 | ||||||||||||
Costs related to pending acquisition by Agilent | 2,157 | — | 2,157 | — | ||||||||||||
Restructuring and other related costs | 304 | 1,240 | 8,871 | 5,476 | ||||||||||||
As adjusted | $ | 13,318 | $ | 30,067 | $ | 72,284 | $ | 97,659 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 5.5 | % | 11.1 | % | 8.0 | % | 9.6 | % | ||||||||
Adjustments: | ||||||||||||||||
Acquisition-related in-process research and development charges | — | 0.1 | — | 0.2 | ||||||||||||
Acquisition-related intangible amortization | 1.1 | 0.9 | 1.1 | 0.9 | ||||||||||||
Acquisition-related inventory write-up amortization | 0.0 | 0.1 | 0.0 | 0.2 | ||||||||||||
Costs related to pending acquisition by Agilent | 1.3 | — | 0.3 | — | ||||||||||||
Restructuring and other related costs | 0.2 | 0.5 | 1.3 | 0.7 | ||||||||||||
As adjusted | 8.1 | % | 12.7 | % | 10.7 | % | 11.6 | % | ||||||||
VACUUM TECHNOLOGIES SEGMENT | ||||||||||||||||
Operating Earnings | ||||||||||||||||
U.S. GAAP as reported | $ | 6,432 | $ | 10,123 | $ | 25,665 | $ | 34,384 | ||||||||
Adjustments: | ||||||||||||||||
Restructuring and other related costs | 60 | — | 802 | — | ||||||||||||
As adjusted | $ | 6,492 | $ | 10,123 | $ | 26,467 | $ | 34,384 | ||||||||
Operating Margins | ||||||||||||||||
U.S. GAAP as reported | 20.3 | % | 22.0 | % | 19.5 | % | 19.8 | % | ||||||||
Adjustments: | ||||||||||||||||
Restructuring and other related costs | 0.2 | — | 0.6 | — | ||||||||||||
As adjusted | 20.5 | % | 22.0 | % | 20.1 | % | 19.8 | % | ||||||||
GENERAL (UNALLOCATED) CORPORATE | ||||||||||||||||
Operating Earnings | ||||||||||||||||
U.S. GAAP as reported | $ | (10,369 | ) | $ | (3,455 | ) | $ | (20,572 | ) | $ | (13,621 | ) | ||||
Adjustments: | ||||||||||||||||
Costs related to pending acquisition by Agilent | 6,998 | — | 6,998 | — | ||||||||||||
As adjusted | $ | (3,371 | ) | $ | (3,455 | ) | $ | (13,574 | ) | $ | (13,621 | ) | ||||