SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

----------------

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2001

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 000-25393

----------------

VARIAN, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware 77-0501995
(State or Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification Number)

3120 Hansen Way, Palo Alto, California 94304-1030
(Address of Principal Executive Offices) (Zip Code)

(650) 213-8000
(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes[X] No[_]

The number of shares of the Registrant's common stock outstanding as of
July 27, 2001 was 33,190,772.

TABLE OF CONTENTS

Part I. Financial Information.......................................... 3

Item 1. Financial Statements........................................... 3

Consolidated Statements of Earnings............................ 3

Consolidated Balance Sheets.................................... 4

Consolidated Statements of Cash Flows.......................... 5

Notes to the Consolidated Financial Statements................. 6

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.......................................... 12

Item 3. Quantitative and Qualitative Disclosure about Market Risk...... 19

Part II. Other Information.............................................. 21

Item 6. Exhibits and Reports on Form 8-K............................... 21

RISK FACTORS RELATING TO FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and uncertainties that
could cause actual results of Varian, Inc. (the "Company") to differ
materially from management's current expectations. Those risks and
uncertainties include, without limitation: new product development and
commercialization; growth in life science, health care and industrial sales
continuing to be sufficient to offset the decline in demand from semiconductor
and telecommunications customers; demand and acceptance for the Company's
products; competitive products and pricing; economic conditions in the
Company's product and geographic markets; foreign currency fluctuations if
they adversely impact revenue growth and earnings; market investment in
capital equipment, particularly equipment requiring vacuum products; the
impact of SAB 101, "Revenue Recognition," on the timing of the Company's
recognition of revenue and results reported for prior and future periods; and
other risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission.

PART I.
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Varian, Inc. and Subsidiary Companies
Consolidated Statements of Earnings
(In thousands, except per share amounts)
(Unaudited)

Quarter Ended Nine Months Ended
----------------- -----------------
Jun. 29, Jun. 30, Jun. 29, Jun. 30,
2001 2000 2001 2000
-------- -------- -------- --------

Sales...................................... $191,499 $181,996 $576,943 $519,258
Cost of sales.............................. 118,985 114,690 358,077 322,321
-------- -------- -------- --------

Gross profit............................... 72,514 67,306 218,866 196,937
-------- -------- -------- --------

Operating expenses
Sales and marketing...................... 32,491 31,302 96,946 92,408
Research and development................. 9,345 8,265 26,445 23,796
General and administrative............... 9,592 8,303 31,692 29,319
-------- -------- -------- --------

Total operating expenses................. 51,428 47,870 155,083 145,523
-------- -------- -------- --------

Operating earnings......................... 21,086 19,436 63,783 51,414
Interest expense, net...................... 244 353 821 1,597
-------- -------- -------- --------

Earnings before income taxes............... 20,842 19,083 62,962 49,817
Income tax expense......................... 8,128 7,442 24,555 19,429
-------- -------- -------- --------

Net earnings............................... $ 12,714 $ 11,641 $ 38,407 $ 30,388
======== ======== ======== ========

Net earnings per share:
Basic.................................... $ 0.38 $ 0.36 $ 1.17 $ 0.97
======== ======== ======== ========
Diluted.................................. $ 0.37 $ 0.34 $ 1.11 $ 0.91
======== ======== ======== ========
Shares used in per share calculations:
Basic.................................... 33,055 32,159 32,956 31,456
======== ======== ======== ========
Diluted.................................. 34,459 34,136 34,469 33,533
======== ======== ======== ========

See accompanying Notes to the Consolidated Financial Statements.

Varian, Inc. and Subsidiary Companies
Consolidated Balance Sheets
(In thousands, except share and par value amounts)

Jun. 29, Sept. 29,
2001 2000
----------- ---------
(Unaudited)

ASSETS

Current assets
Cash and cash equivalents.............................. $ 46,998 $ 39,708
Accounts receivable, net............................... 156,857 168,513
Inventories............................................ 123,799 105,450
Deferred taxes......................................... 19,304 21,044
Other current assets................................... 12,956 10,734
-------- --------

Total current assets................................... 359,914 345,449
Property, plant, and equipment, net...................... 87,118 80,632
Other assets............................................. 94,402 86,238
-------- --------

Total assets............................................. $541,434 $512,319
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Current portion of long-term debt...................... $ 6,379 $ 6,384
Accounts payable....................................... 50,099 52,193
Accrued liabilities.................................... 136,741 133,825
-------- --------

Total current liabilities.............................. 193,219 192,402
Long-term debt........................................... 39,882 45,516
Deferred taxes........................................... -- 6,669
Other liabilities........................................ 9,898 11,626
-------- --------

Total liabilities........................................ 242,999 256,213
-------- --------
Contingencies (Note 8)

Stockholders' equity
Preferred stock--par value $.01, authorized--1,000,000
shares; issued--none.................................. -- --
Common stock--par value $.01, authorized--99,000,000
shares; issued and outstanding--33,144,899 shares at
Jun. 29, 2001 and 32,834,000 shares at Sept. 29,
2000.................................................. 231,089 222,838
Retained earnings...................................... 94,351 55,944
Other comprehensive loss............................... (27,005) (22,676)
-------- --------

Total stockholders' equity............................. 298,435 256,106
-------- --------

Total liabilities and stockholders' equity............... $541,434 $512,319
======== ========

See accompanying Notes to the Consolidated Financial Statements.

Varian, Inc. and Subsidiary Companies
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

Nine Months Ended
------------------
Jun. 29, Jun. 30,
2001 2000
-------- --------

Cash flows from operating activities
Net earnings.............................................. $ 38,407 $ 30,388
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization........................... 15,627 13,695
(Gain) loss on disposition of property, plant, and
equipment.............................................. (21) (78)
Tax benefit from stock option deductions................ 3,986 8,200
Deferred taxes.......................................... (5,015) --
Changes in assets and liabilities:
Accounts receivable, net.............................. 12,908 (7,318)
Inventories........................................... (14,544) (28,709)
Other current assets.................................. (2,797) (515)
Accounts payable...................................... (8,113) 9,335
Accrued liabilities................................... 4,793 12,027
Other liabilities..................................... (1,262) 3,412
Other assets.......................................... 886 (870)
-------- --------
Net cash provided by operating activities................. 44,855 39,567
-------- --------
Cash flows from investing activities
Proceeds from sale of property, plant, and equipment...... 589 428
Purchase of property, plant, and equipment................ (19,789) (14,430)
Purchase of businesses, net of cash acquired.............. (16,061) (7,095)
-------- --------

Net cash used in investing activities..................... (35,261) (21,097)
-------- --------
Cash flows from financing activities
Issuance of debt.......................................... 11,691 --
Repayment of debt......................................... (16,184) (5,534)
Issuance of common stock.................................. 4,265 22,084
Purchase of common stock.................................. -- (9,696)
Transfers (to) from Varian Medical Systems, Inc........... (1,392) 1,095
-------- --------
Net cash provided by financing activities................. (1,620) 7,949
-------- --------
Effects of exchange rate changes on cash.................. (684) (1,288)
-------- --------
Net increase in cash and cash equivalents................. 7,290 25,131
Cash and cash equivalents at beginning of period.......... 39,708 23,348
-------- --------
Cash and cash equivalents at end of period................ $ 46,998 $ 48,479
======== ========
Supplemental cash flow information
Income taxes paid......................................... $ 20,779 $ 5,251
Interest paid............................................. $ 2,583 $ 2,844

See accompanying Notes to the Consolidated Financial Statements.

VARIAN, INC. AND SUBSIDIARY COMPANIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1. Interim Consolidated Financial Statements

These interim consolidated financial statements of Varian, Inc. and its
subsidiary companies (collectively, the "Company") have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. The year ended September 29, 2000 balance sheet data was derived
from audited financial statements, but does not include all disclosures
required by generally accepted accounting principles. These interim
consolidated financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Company's Form 10-K
for the year ended September 29, 2000 filed with the Securities and Exchange
Commission. In the opinion of the Company's management, the interim
consolidated financial statements include all normal recurring adjustments
necessary to present fairly the information required to be set forth therein.
The results of operations for the fiscal quarter and nine months ended June
29, 2001 are not necessarily indicative of the results to be expected for a
full year or for any other periods.

During the fiscal quarter ended December 29, 2000, the Company acquired
substantially all of the assets of Imagine Manufacturing Solutions, Inc. and
R&S Technology, Inc. During the fiscal quarter ended March 30, 2001, the
Company acquired all of the outstanding capital stock of Bear Instruments,
Inc. These acquisitions, which did not have a material effect on the Company's
operations or financial position, were accounted for using the purchase method
of accounting.

Certain amounts in the prior year's financial statements have been
reclassified to conform to the current presentation of the financial
statements.

Note 2. Description of Business and Basis of Presentation

The Company is a major supplier of scientific instruments and consumable
laboratory supplies, vacuum technology products and services, and electronics
manufacturing services. These businesses primarily serve life science, health
care, semiconductor processing, communications, industrial, and academic
customers. Until April 2, 1999, the business of the Company was operated as
the Instrument Business ("IB") of Varian Associates, Inc. ("VAI"). On that
date, VAI distributed to the holders of its common stock one share of common
stock of the Company for each share of VAI (the "Distribution").

The Company's fiscal years reported are the 52-week periods ending on the
Friday nearest September 30. Fiscal year 2001 will comprise the 52-week period
ending September 28, 2001, and fiscal year 2000 was comprised of the 52-week
period ended September 29, 2000. The fiscal quarters ended June 29, 2001 and
June 30, 2000 each comprise 13 weeks, and the nine-month periods ended June
29, 2001 and June 30, 2000 each comprise 39 weeks.

Note 3. Balance Sheet Detail

Jun. 29, Sept. 29,
2001 2000
--------- ---------

(In thousands)
INVENTORIES
Raw materials and parts..................................... $ 67,473 $ 55,649
Work in process............................................. 13,162 10,912
Finished goods.............................................. 43,164 38,889
--------- --------
$ 123,799 $105,450
========= ========

VARIAN, INC. AND SUBSIDIARY COMPANIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Note 4. Forward Exchange Contracts

Effective September 30, 2000, the Company adopted Statement of Financial
Accounting Standards ("SFAS") 133, "Accounting for Derivative Instruments and
Hedging Activities," which was amended by SFAS 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities." SFAS 133 and 138
require derivatives to be measured at fair value and to be recorded as assets
or liabilities on the balance sheet. The accounting for gains or losses
resulting from changes in the fair values of those derivatives would be
dependent upon the use of the derivative and whether it qualifies for hedge
accounting. The adoption of SFAS 133 and 138 did not have a material effect on
the Company's financial statements for the fiscal quarter or the nine months
ended June 29, 2001.

The Company's forward exchange contracts generally range from one to 12
months in original maturity. Forward exchange contracts outstanding as of June
29, 2001 that hedge the balance sheet were effective June 29, 2001, and
accordingly there were no significant unrealized gains or losses associated
with such contracts and the fair value of these contracts approximates their
notional values. Forward exchange contracts that were outstanding as of June
29, 2001 are summarized as follows:

Notional Notional
Value Value
Sold Purchased
-------- ---------

(In thousands)
Australian Dollar............................................ $ -- $30,131
Euro......................................................... -- 23,350
Canadian Dollar.............................................. 2,368 --
British Pound................................................ 2,145 --
Japanese Yen................................................. 3,058 --
------ -------
Total...................................................... $7,571 $53,481
====== =======

Note 5. Net Earnings Per Share

Basic earnings per share are calculated based on net earnings and the
weighted-average number of shares outstanding during the reported period.
Diluted earnings per share include dilution from potential common stock shares
issuable pursuant to the exercise of outstanding stock options determined
using the treasury stock method.

For the fiscal quarter and nine months ended June 29, 2001, options to
purchase 682,898 and 536,911, respectively, potential common stock shares with
exercise prices greater than the weighted-average market value of such common
stock were excluded from the calculation of diluted earnings per share. For
the fiscal quarter and nine months ended June 30, 2000, options to purchase
36,182 and 17,052, respectively, potential common stock shares with exercise
prices greater than the weighted-average market value of such common stock
were excluded from the calculation of diluted earnings per share.

VARIAN, INC. AND SUBSIDIARY COMPANIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

A reconciliation follows:
(In thousands except per share amounts)

Nine Months
Quarter Ended Ended
--------------- ---------------
Jun. Jun. Jun. Jun.
29, 30, 29, 30,
2001 2000 2001 2000
------- ------- ------- -------

Basic
Net earnings................................... $12,714 $11,641 $38,407 $30,388
Weighted average shares outstanding............ 33,055 32,159 32,956 31,456
Net earnings per share......................... $ 0.38 $ 0.36 $ 1.17 $ 0.97
======= ======= ======= =======
Diluted
Net earnings................................... $12,714 $11,641 $38,407 $30,388
Weighted average shares outstanding............ 33,055 32,159 32,956 31,456
Net effect of dilutive stock options........... 1,404 1,977 1,513 2,077
------- ------- ------- -------
Total shares................................... 34,459 34,136 34,469 33,533
Net earnings per share......................... $ 0.37 $ 0.34 $ 1.11 $ 0.91
======= ======= ======= =======

Note 6. Comprehensive Income

Comprehensive income is comprised of net income and the currency translation
adjustment. Comprehensive income was $12.2 million and $10.4 million for the
fiscal quarters ended June 29, 2001 and June 30, 2000, respectively, and $34.1
million and $14.9 million for the nine months ended June 29, 2001 and June 30,
2000, respectively.

Note 7. Debt and Credit Facilities

In December 2000, the Company established a 364-day bank credit facility in
Japan in the amount of 1.2 billion yen (approximately $9.8 million). The
credit facility is for working capital purposes for its wholly-owned Japan
subsidiary. As of June 29, 2001, no amount was outstanding under this credit
facility. This credit facility contains certain covenants that limit future
borrowings of the Company and requires the maintenance by the Company of
certain levels of working capital and operating results.

Note 8. Contingencies

Environmental Matters. The Company's operations are subject to various
foreign, federal, state, and local laws regulating the discharge of materials
into the environment or otherwise relating to the protection of the
environment. These regulations increase the costs and potential liabilities of
the Company's operations. However, the Company does not currently anticipate
that its compliance with these regulations will have a material effect upon
the Company's capital expenditures, earnings, or competitive position.

Under the terms of the Distribution, the Company and Varian Semiconductor
Equipment Associates, Inc. ("VSEA") each agreed to indemnify Varian Medical
Systems, Inc. ("VMS") for one-third of certain environmental investigation and
remediation costs (after adjusting for any insurance proceeds and tax benefits
recognized or realized by VMS for such costs), as further described below.

VARIAN, INC. AND SUBSIDIARY COMPANIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
as amended, at eight sites where VAI is alleged to have shipped manufacturing
waste for recycling, treatment, or disposal. VMS is also involved in various
stages of environmental investigation, monitoring, and/or remediation under
the direction of, or in consultation with, foreign, federal, state, and/or
local agencies at certain current VMS or former VAI facilities, or is
reimbursing third parties which are undertaking such investigation,
monitoring, and/or remediation activities.

For certain of these sites and facilities, various uncertainties make it
difficult to assess the likelihood and scope of further investigation or
remediation activities or to estimate the future costs of such activities if
undertaken. As of June 29, 2001, it was nonetheless estimated that the
Company's share of the future exposure for environmental-related investigation
and remediation costs for these sites and facilities ranged in the aggregate
from $1.5 million to $5.0 million (without discounting to present value). The
time frame over which these costs are expected to be incurred varies with each
site and facility, ranging up to approximately 30 years as of June 29, 2001.
No amount in the foregoing range of estimated future costs is believed to be
more probable of being incurred than any other amount in such range, and the
Company therefore accrued $1.5 million as of June 29, 2001.

As to other sites and facilities, sufficient knowledge has been gained to be
able to better estimate the scope and costs of future environmental
activities. As of June 29, 2001, it was estimated that the Company's share of
the future exposure for environmental-related investigation and remediation
costs for these sites and facilities ranged in the aggregate from $7.8 million
to $18.1 million (without discounting to present value). The time frame over
which these costs are expected to be incurred varies with each site and
facility, ranging up to approximately 30 years as of June 29, 2001. As to each
of these sites and facilities, it was determined that a particular amount
within the range of estimated costs was a better estimate of the future
environmental liability than any other amount within the range, and that the
amount and timing of these future costs were reliably determinable. Together,
these amounts totaled $13.8 million at June 29, 2001. The Company therefore
accrued $6.1 million as of June 29, 2001, which represents the best estimate
of its share of these future costs discounted at 4%, net of inflation. This
accrual is in addition to the $1.5 million described in the preceding
paragraph.

Lawsuits for recovery of environmental investigation and remediation costs
already incurred, and to be incurred in the future, were filed by VAI against
various insurance companies and other third parties. Following settlements
with or judgments against those insurance companies, VMS is still pursuing a
lawsuit against a third party for the benefit of itself, VSEA, and the
Company. One insurance company has agreed to pay a portion of certain of VAI's
(now VMS') future environmental-related expenditures for which the Company has
an indemnity obligation, and the Company therefore has a $1.4 million
receivable in Other Assets as of June 29, 2001 for the Company's share of such
recovery. The Company has not reduced any environmental-related liability in
anticipation of recovery on claims made against third parties.

The Company's management believes that its reserves for the foregoing and
certain other environmental-related matters are adequate, but as the scope of
its obligation becomes more clearly defined, these reserves may be modified,
and related charges or credits against earnings may be made. Although any
ultimate liability arising from environmental-related matters described herein
could result in significant expenditures that, if aggregated and assumed to
occur within a single fiscal year, would be material to the Company's
financial statements, the likelihood of such occurrence is considered remote.
Based on information currently available and its best assessment of the
ultimate amount and timing of environmental-related events, the Company's
management believes that the costs of these environmental-related matters are
not reasonably likely to have a material adverse effect on the Company's
financial position or results of operations.

Legal Proceedings. Under the terms of the Distribution, the Company agreed
to defend and indemnify VSEA and VMS for costs, liabilities, and expenses with
respect to legal proceedings related to the Instruments

VARIAN, INC. AND SUBSIDIARY COMPANIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Business of VAI, and agreed to reimburse VMS for one-third of certain costs
and expenses (after adjusting for any insurance proceeds and tax benefits
recognized or realized by VMS for such costs and expenses) that are paid after
April 2, 1999 and arise from actual or potential claims or legal proceedings
relating to discontinued, former, or corporate operations of VAI. From time to
time, the Company is involved in a number of its own legal actions and could
incur an uninsured liability in one or more of them. While the ultimate
outcome of all of the foregoing legal matters is not determinable, management
believes that these matters are not reasonably likely to have a material
adverse effect on the Company's financial position or results of operations.

Note 9. Industry Segments

The Company's operations are grouped into three business segments:
Scientific Instruments, Vacuum Technologies, and Electronics Manufacturing.
Scientific Instruments is a supplier of instruments, consumable laboratory
supplies, and after sales support used in studying the chemical composition
and structure of myriad substances and for imaging. These products are tools
for scientists engaged in drug discovery, life sciences, genetic engineering,
health care, environmental analysis, quality control, and academic research.
Vacuum Technologies provides products and solutions to create, maintain,
contain, and measure an ultra-clean or high-vacuum environment for industrial
and scientific applications. Vacuum Technologies products are used in
semiconductor manufacturing equipment, life science and other analytical
instruments, industrial manufacturing, and quality control. Electronics
Manufacturing provides contract manufacturing services for technology
companies with low-volume and high-mix requirements.

Transactions between segments are accounted for at cost and are not included
in sales. Accordingly, the following information is provided for purposes of
achieving an understanding of operations, but may not be indicative of the
financial results of the reported segments were they independent
organizations. In addition, comparisons of the Company's operations to similar
operations of other companies may not be meaningful.

Industry Segments
(In millions)

Quarter Ended Quarter Ended
----------------- -----------------
Jun. 29, Jun. 30, Jun. 29, Jun. 30,
2001 2000 2001 2000
-------- -------- -------- --------
Pretax Pretax
Sales Sales Earnings Earnings

Scientific Instruments...................... $111.7 $100.4 $13.4 $10.9
Vacuum Technologies ........................ 32.9 35.4 5.7 6.2
Electronics Manufacturing................... 46.9 46.2 3.0 3.6
------ ------ ----- -----
Total industry segments..................... 191.5 182.0 22.1 20.7
General corporate........................... -- -- (1.0) (1.2)
Interest expense, net....................... -- -- (0.2) (0.4)
------ ------ ----- -----
Total....................................... $191.5 $182.0 $20.9 $19.1
====== ====== ===== =====

VARIAN, INC. AND SUBSIDIARY COMPANIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Industry Segments
(In millions)

Nine Months Ended Nine Months Ended
----------------- -----------------
Jun. 29, Jun. 30, Jun. 29, Jun. 30,
2001 2000 2001 2000
-------- -------- -------- --------
Pretax Pretax
Sales Sales Earnings Earnings

Scientific Instruments...................... $ 328.4 $ 296.7 $38.3 $33.5
Vacuum Technologies ........................ 115.4 102.1 23.4 16.5
Electronics Manufacturing................... 133.1 120.5 7.9 9.3
-------- -------- ----- -----
Total industry segments..................... 576.9 519.3 69.6 59.3
General corporate........................... -- -- (5.8) (7.9)
Interest expense, net....................... -- -- (0.8) (1.6)
-------- -------- ----- -----
Total....................................... $ 576.9 $ 519.3 $63.0 $49.8
======== ======== ===== =====

Note 10. Recent Accounting Pronouncements

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") 101, "Revenue Recognition," which provides
guidance on the recognition, presentation, and disclosure of revenue in
financial statements filed with the SEC. The Company will be required to adopt
SAB 101 in its fiscal fourth quarter ending September 28, 2001. While SAB 101
will not affect the fundamental aspects of the Company's operations as
measured by shipments and cash flows, the adoption of SAB 101 will result in a
deferral in the recognition of revenue in certain situations, primarily for
the NMR product line of the Scientific Instruments segment because customer
acceptance often occurs subsequent to shipment of NMR systems. The Company is
still assessing the impact of SAB 101 on its consolidated financial
statements, but believes adoption of SAB 101 will result in some changes to
historically reported revenues, operating results, and net income.
Accordingly, any shipments previously recorded as revenue, including revenue
reported for the first, second, and third quarters of fiscal 2001 that do not
meet the requirements of SAB 101, will be recorded as revenue in periods
subsequent to that in which they were originally recorded as required by SFAS
No. 3 "Reporting Accounting Changes in Interim Financial Statements." The
Company will report the impact of revenues recognized prior to fiscal year
2001 that did not meet SAB 101 recognition criteria as a cumulative effect of
accounting change on the first day of fiscal year 2001 (September 30, 2000) as
required by SAB 101; that cumulative effect is still being determined but will
likely be significant.

In July 2001, the Financial Accounting Standards Board ("FASB") issued FASB
Statements Nos. 141 and 142 ("FAS 141" and "FAS 142"), "Business Combinations"
and "Goodwill and Other Intangible Assets." FAS 141 eliminates pooling-of-
interests accounting prospectively. It also provides guidance on purchase
accounting related to the recognition of intangible assets and accounting for
negative goodwill. FAS 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. Under FAS 142, goodwill
will be tested annually and whenever events or circumstances occur indicating
that goodwill might be impaired. FAS 141 and FAS 142 are effective for all
business combinations completed after June 30, 2001. Upon adoption of FAS 142,
amortization of goodwill recorded for business combinations consummated prior
to July 1, 2001 will cease, and intangible assets acquired prior to July 1,
2001 that do not meet the new criteria for recognition as intangibles under
FAS 141 will be reclassified to goodwill. Companies are required to adopt
FAS 142 for fiscal years beginning after December 15, 2001, but early adoption
is permitted in certain circumstances. The Company plans to adopt FAS 142 on
the first day of fiscal year 2002 (September 29, 2001). In connection with the
adoption of FAS 142, the Company will be required to perform a transitional
goodwill impairment assessment. The Company has not yet determined the impact
that implementation of these standards will have on its results of operations
and financial position.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Until April 2, 1999, the business of Varian, Inc. (the "Company") was
operated as the Instruments Business ("IB") of Varian Associates, Inc.
("VAI"). IB included the business units that designed, manufactured, sold, and
serviced scientific instruments and vacuum technologies, and a business unit
that provided contract electronics manufacturing. VAI contributed IB to the
Company; then on April 2, 1999, VAI distributed to the holders of record of
VAI common stock on March 24, 1999 one share of common stock of the Company
for each share of VAI common stock outstanding on April 2, 1999 (the
"Distribution"). At the same time, VAI contributed its Semiconductor Equipment
business to Varian Semiconductor Equipment Associates, Inc. ("VSEA") and
distributed to the holders of record of VAI common stock on March 24, 1999 one
share of common stock of VSEA for each share of VAI common stock outstanding
on April 2, 1999. VAI retained its Health Care Systems business and changed
its name to Varian Medical Systems, Inc., ("VMS") effective as of April 3,
1999. These transactions were accomplished under the terms of an Amended and
Restated Distribution Agreement dated as of January 14, 1999 by and among the
Company, VAI, and VSEA (the "Distribution Agreement").

Results of Operations

Third Quarter of Fiscal Year 2001 Compared to Third Quarter of Fiscal Year
2000

Sales. Sales were $191.5 million in the third quarter of fiscal year 2001,
an increase of 5.2% from sales of $182.0 million in the third quarter of
fiscal year 2000. Sales by the Scientific Instruments, Vacuum Technologies,
and Electronics Manufacturing segments increased (decreased) by 11.3%, (7.3%)
and 1.6%, respectively.

Geographically, sales in North America of $122.7 million, Europe of $42.2
million and the rest of the world of $26.6 million in the third quarter of
fiscal year 2001 represented increases (decreases) of 10.1%, 4.2%, and
(11.6%), respectively, as compared to the third quarter of fiscal year 2000.
The increase in North America was due to the sales growth in Scientific
Instruments and Electronics Manufacturing partially offset by a decline in
Vacuum Technologies; Scientific Instruments grew 32.3%, Vacuum Technologies
decreased (11.0%) and Electronics Manufacturing grew 1.6%. The increase in
Europe was primarily driven by Scientific Instrument sales growth partially
offset by the decline in the European currencies compared to the third quarter
of fiscal year 2000. The decrease in the rest of the world was primarily due
to the timing of sales of large dollar NMR systems in Japan in the year ago
period.

Gross Profit. Gross profit was $72.5 million (representing 37.9% of sales)
in the third quarter of fiscal year 2001, compared to $67.3 million
(representing 37.0% of sales) in the third quarter of fiscal year 2000. The
$5.2 million increase in gross profit resulted primarily from the increase in
sales in the third quarter of fiscal year 2001 compared to the third quarter
of fiscal year 2000. The increase in gross profit as a percent of sales
primarily reflects the revenue shift to Scientific Instruments, which has
higher gross profit margins than the Company's other segments, and higher
gross profit margins in Vacuum Technologies due primarily to the favorable
effect of the weaker Euro and certain improvements in product costs.

Sales and Marketing. Sales and marketing expenses were $32.5 million
(representing 17.0% of sales) in the third quarter of fiscal year 2001,
compared to $31.3 million (representing 17.2% of sales) in the third quarter
of fiscal year 2000. The $1.2 million increase was primarily to support the
sales growth. The decrease in sales and marketing expenses as a percent of
sales resulted primarily from the Company's ability to leverage these expenses
as sales increased and from the favorable effect on these expenses of the
weaker Euro and Australian dollar.

Research and Development. Research and development expenses were $9.3
million (representing 4.9% of sales) in the third quarter of fiscal year 2001,
compared to research and development expenses of $8.3 million (representing
4.5% of sales) in the third quarter of fiscal year 2000. Research and
development expenses increased from the year ago quarter primarily because the
Company continued to increase its focus on new product development for life
science and health care applications.

General and Administrative. General and administrative expenses were $9.6
million (representing 5.0% of sales) in the third quarter of fiscal year 2001,
compared to $8.3 million (representing 4.6% of sales) in the third quarter of
fiscal year 2000. The increases resulted primarily from increased goodwill
amortization and other general and administrative costs of acquired businesses
since the third quarter of fiscal year 2000.

Net Interest Expense. Net interest expense was $0.2 million (representing
0.1% of sales) for the third quarter of fiscal year 2001, compared to $0.4
million (representing 0.2% of sales) for the third quarter of fiscal year
2000. The reduction in net interest expense resulted mainly from reduced debt
levels.

Taxes on Earnings. The effective income tax rate was 39.0% for both the
third quarter of fiscal year 2001 and the third quarter of fiscal year 2000.

Net Earnings. Net earnings were $12.7 million ($0.37 diluted net earnings
per share) in the third quarter of fiscal year 2001, compared to net earnings
of $11.6 million ($0.34 diluted net earnings per share) in the third quarter
of fiscal year 2000. The net earnings improvement resulted primarily from
higher sales and gross profit margins.

Segments. Scientific Instruments sales of $111.7 million in the third
quarter of fiscal year 2001 increased 11.3% over the third quarter of fiscal
year 2000 sales of $100.4 million. The revenue growth was primarily driven by
demand for life science products in NMR, liquid chromatography, molecular
spectroscopy, and tablet dissolution, as well as for certain chemical analysis
products, but was negatively impacted by the strong U.S. dollar. Earnings from
operations in the third quarter of fiscal year 2001 of $13.4 million (12.0% of
sales) increased from $10.9 million (10.9% of sales) in the third quarter of
fiscal year 2000. The increase in earnings and percent of sales primarily
reflects the product mix shift to higher margin products for life science
applications in addition to controlling expenses as revenues increased.

Vacuum Technologies sales of $32.9 million in the third quarter of fiscal
year 2001 decreased (7.3%) from third quarter of fiscal year 2000 sales of
$35.4 million. The revenue decrease was caused primarily by continued slow
demand for semiconductor applications, partially offset by higher revenues for
life science applications. The Company expects Vacuum Technologies' revenues
to fall sequentially in the fourth quarter of fiscal year 2001 by $2-$3
million but then to show a gradual recovery as early as the first half of
fiscal year 2002. Earnings from operations in the third quarter of fiscal year
2001 of $5.7 million (17.1% of sales) were down from the $6.2 million (17.4%
of sales) in the third quarter of fiscal year 2000. The decreased earnings
resulted from the decreased sales, offset by tight cost controls, improved
product mix, and favorable impact of the stronger U.S. dollar on the segment's
Torino, Italy factory, which sold approximately 55% of its output into the
U.S.

Electronics Manufacturing sales in the third quarter of fiscal year 2001 of
$46.9 million increased 1.6% from third quarter of fiscal year 2000 sales of
$46.2 million. Electronics Manufacturing continued to experience a slowing of
demand, which began in the first quarter of fiscal 2001, from some of its
communications customers. This slowing in demand was offset by strong demand
from new medical device customers and customers brought to the business by the
acquisition in October 2000 of the operations of Imagine Manufacturing
Solutions, Inc. Earnings from operations in the third quarter of fiscal year
2001 of $3.0 million (6.6% of sales) decreased from $3.6 million (7.7% of
sales) in the third quarter of fiscal year 2000. The decrease in earnings was
primarily the result of the costs of integrating an acquisition and start-up
costs for new customers.

First Nine Months of Fiscal Year 2001 Compared to First Nine Months of Fiscal
Year 2000

Sales. Sales were $576.9 million in the first nine months of fiscal year
2001, an increase of 11.1% from sales of $519.3 million in the first nine
months of fiscal year 2000. Sales by the Scientific Instruments, Vacuum
Technologies, and Electronics Manufacturing segments increased by 10.7%,
13.0%, and 10.5%, respectively.

Geographically, sales in North America of $355.9 million, Europe of $134.1
million and the rest of the world of $86.9 million in the first nine months of
fiscal year 2001 represented increases of 16.5%, 0.4%, and 8.3%, respectively,
as compared to the first nine months of fiscal year 2000. The significant
increase in North America was due to the sales growth in all three segments;
Scientific Instruments grew 23.4%, Vacuum Technologies grew 15.1%, and
Electronics Manufacturing grew 10.5%. The almost flat sales in Europe resulted
mainly from the sharp decline in the European currencies compared to the first
nine months of fiscal year 2000. The increase in the rest of the world was
primarily due to strong sales growth in Scientific Instruments.

Gross Profit. Gross profit was $218.9 million (representing 37.9% of sales)
in the first nine months of fiscal year 2001, compared to $196.9 million
(representing 37.9% of sales) in the first nine months of fiscal year 2000.
The $21.9 million increase in gross profit resulted primarily from the higher
sales compared to the same period last year. Currency fluctuations contributed
to lower gross margins for Scientific Instruments but contributed to higher
gross margins for Vacuum Technologies compared to the same period last year.
Electronics Manufacturing had lower gross margins primarily as a result of the
costs of integrating an acquisition and start-up costs for new customers.

Sales and Marketing. Sales and marketing expenses were $96.9 million
(representing 16.8% of sales) in the first nine months of fiscal year 2001,
compared to $92.4 million (representing 17.8% of sales) in the first nine
months of fiscal year 2000. The $4.5 million increase was primarily to support
the higher sales volume. The decrease in sales and marketing expenses as a
percent of sales resulted primarily from the Company's ability to leverage
these expenses as sales increased and from the favorable effect on these
expenses of the weaker Euro and Australian dollar.

Research and Development. Research and development expenses were $26.4
million (representing 4.6% of sales) in the first nine months of fiscal year
2001, compared to research and development expenses of $23.8 million
(representing 4.6% of sales) in the first nine months of fiscal year 2000.
Both Scientific Instruments and Vacuum Technologies increased research and
development expenses in line with their revenue growth.

General and Administrative. General and administrative expenses were $31.7
million (representing 5.5% of sales) in the first nine months of fiscal year
2001, compared to $29.3 million (representing 5.6% of sales) in the first nine
months of fiscal year 2000. The decrease as a percent of sales resulted
primarily from growth in the revenues while controlling the growth in these
costs.

Net Interest Expense. Net interest expense was $0.8 million (representing
0.1% of sales) for the first nine months of fiscal year 2001 compared to $1.6
million (representing 0.3% of sales) for the first nine months of fiscal year
2000. The reduction in net interest expense resulted mainly from income on
invested cash and reduced expenses from decreased debt levels.

Taxes on Earnings. The effective income tax rate was 39.0% for the first
nine months of fiscal year 2001 and for the first nine months of fiscal year
2000.

Net Earnings. Net earnings were $38.4 million ($1.11 diluted net earnings
per share) in the first nine months of fiscal year 2001, compared to net
earnings of $30.4 million ($0.91 diluted net earnings per share) in the first
nine months of fiscal year 2000. The net earnings improvement resulted
primarily from higher sales and from operating expenses growing at a lower
rate than sales.

Segments. Scientific Instruments sales of $328.4 million in the first nine
months of fiscal year 2001 increased 10.7% over the first nine months of
fiscal year 2000 sales of $296.7 million. The revenue growth was primarily
driven by demand for life science products in NMR, liquid chromatography,
molecular spectroscopy,

and tablet dissolution, as well as for certain chemical analysis products, but
was negatively impacted by the strong U.S. dollar. Earnings from operations in
the first nine months of fiscal year 2001 of $38.3 million (11.7% of sales)
increased from $33.5 million (11.3% of sales) in the first nine months of
fiscal year 2000. The increase in earnings resulted primarily from higher
sales, with the leverage of operating expenses offsetting the negative impact
of the strong U.S. dollar on profitability.

Vacuum Technologies sales of $115.4 million in the first nine months of
fiscal year 2001 increased 13.0% above the first nine months of fiscal year
2000 sales of $102.1 million. The revenue growth was primarily driven by broad
demand for industrial, research, and life science applications partially
offset by a slowing in demand for semiconductor applications. The Company
expects Vacuum Technologies' revenues to decrease further in the fourth
quarter of fiscal year 2001, but then to show a gradual recovery as early as
the first half of fiscal year 2002. Earnings from operations in the first nine
months of fiscal year 2001 of $23.4 million (20.2% of sales) were up from the
$16.5 million (16.1% of sales) in the first nine months of fiscal year 2000.
The improved earnings resulted from the increased sales, improved product mix,
and favorable impact of the stronger U.S. dollar on the segment's Torino,
Italy factory, which sold approximately 55% of its output into the U.S.

Electronics Manufacturing sales in the first nine months of fiscal year 2001
of $133.1 million increased 10.5% from the first nine months of fiscal year
2000 sales of $120.5 million. Electronics Manufacturing experienced a slowing
of demand from some of its communications customers, which was offset by
strong demand from new medical device customers and customers brought to the
business by the acquisition in October 2000 of the operations of Imagine
Manufacturing Solutions, Inc. Earnings from operations in the first
nine months of fiscal year 2001 of $7.9 million (6.0% of sales) decreased from
$9.3 million (7.7% of sales) in the first nine months of fiscal year 2000. The
decrease in earnings was primarily the result of the cost of integrating an
acquisition and start-up costs for new customers.

Liquidity and Capital Resources

The Company generated $44.9 million of cash from operating activities in the
first nine months of fiscal year 2001, which compares to $39.6 million in the
first nine months of fiscal year 2000. The increase in cash from operating
activities resulted primarily from improved net earnings.

The Company used $35.3 million of cash for investing activities in the first
nine months of fiscal year 2001, which compares to $21.1 million in the first
nine months of fiscal year 2000. This increase in cash used for investing
activities in the first nine months of fiscal year 2001 was primarily due to a
higher level of business acquisition activity.

The Company used $1.6 million of cash for financing activities in the first
nine months of fiscal year 2001, which compares to $7.9 million generated in
the first nine months of fiscal year 2000. This decrease resulted primarily
from a decline in proceeds from issuance of common stock under stock option
plans partially offset by a decline in purchases of common stock.

The Distribution Agreement provides that the Company is responsible for
certain litigation to which VAI was a party, and further provides that the
Company will indemnify VMS and VSEA for one-third of the costs, expenses, and
other liabilities relating to certain discontinued, former, and corporate
operations of VAI, including certain environmental liabilities (see
"Environmental Matters" below). The Distribution Agreement also provided for
the division among the Company, VSEA, and VMS of VAI's cash and debt as of
April 2, 1999. Under the Distribution Agreement, the Company was to assume 50%
of VAI's term loans and receive an amount

of cash from VAI such that it would have net debt (defined in the Distribution
Agreement as the amount outstanding under the term loans and notes payable,
less cash and cash equivalents) equal to approximately 50% of the net debt of
the Company and VMS, subject to such adjustment as was necessary to provide
VMS with a net worth (as defined in the Distribution Agreement) of between 40%
and 50% of the aggregate net worth of the Company and VMS, and subject to
further adjustment to reflect the Company's approximately 50% share of the
estimated proceeds, if any, to be received by VMS after the Distribution from
the sale of VAI's long-term leasehold interest at certain of its Palo Alto
facilities, together with certain related buildings and other corporate
assets, and the Company's obligation for approximately 50% of any estimated
transaction expenses to be paid by VMS after the Distribution (in each case
reduced for estimated taxes payable or tax benefits received from all sales
and transaction expenses). Since the amounts transferred immediately prior to
the Distribution were based on estimates, these and other adjustments were
required following the Distribution. As a result of these final adjustments,
the Company recorded an increase in stockholders' equity of $1.1 million in
the second quarter of fiscal year 2000. Management believes that no further
adjustments are necessary, and that if any are required, they will not have a
material effect on the Company's financial condition.

The Company's liquidity is affected by many other factors, some based on the
normal ongoing operations of the business and others related to the
uncertainties of the industry and global economies. The Company's current
business strategy contemplates possible acquisitions, further stock
repurchases, and/or facility expansions. Any of these activities could utilize
cash currently being generated by the Company. Although the Company's cash
requirements will fluctuate based on the timing and extent of these factors
and activities, management believes that cash generated from operations,
together with the Company's borrowing capability, will be sufficient to
satisfy commitments for capital expenditures and other cash requirements for
the next 12 months.

Environmental Matters

The Company's operations are subject to various foreign, federal, state, and
local laws regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment. These regulations
increase the costs and potential liabilities of the Company's operations.
However, the Company does not currently anticipate that its compliance with
these regulations will have a material effect upon the Company's capital
expenditures, earnings, or competitive position.

Under the terms of the Distribution, the Company and VSEA each agreed to
indemnify VMS for one-third of certain environmental investigation and
remediation costs (after adjusting for any insurance proceeds and tax benefits
recognized or realized by VMS for such costs), as further described below.

VMS has been named by the U.S. Environmental Protection Agency or third
parties as a potentially responsible party under the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, at
eight sites where VAI is alleged to have shipped manufacturing waste for
recycling, treatment, or disposal. VMS is also involved in various stages of
environmental investigation, monitoring, and/or remediation under the
direction of, or in consultation with, foreign, federal, state, and/or local
agencies at certain current VMS or former VAI facilities, or is reimbursing
third parties which are undertaking such investigation, monitoring, and/or
remediation activities.

Legal proceedings

Under the terms of the Distribution, the Company agreed to defend and
indemnify VSEA and VMS for costs, liabilities, and expenses with respect to
legal proceedings related to the Instruments Business of VAI, and agreed to
reimburse VMS for one-third of certain costs and expenses (after adjusting for
any insurance proceeds and tax benefits recognized or realized by VMS for such
costs and expenses) that are paid after April 2, 1999 and arise from actual or
potential claims or legal proceedings relating to discontinued, former, or
corporate operations of VAI. From time to time, the Company is involved in a
number of its own legal actions and could incur an uninsured liability in one
or more of them. While the ultimate outcome of all of the foregoing legal
matters is not determinable, management believes that these matters are not
reasonably likely to have a material adverse effect on the Company's financial
position or results of operations.

Euro Conversion

On January 1, 1999, 11 of the 15 member countries of the European Union
established fixed conversion rates between their existing currencies (legal
currencies) and one new common currency--the Euro. The Euro then began trading
on currency exchanges and began to be used in certain business transactions.
The transition period for the introduction of the Euro occurs through June
2002. Beginning January 1, 2002, new Euro-denominated bills and coins will be
issued. Simultaneously, legacy currencies will begin to be withdrawn from
circulation with the completion of the withdrawal scheduled for no later than
July 1, 2002. Because of the Company's significant sales and operating profits
generated in the European Union, the Company has initiated a program to
identify and address risks arising from the conversion to the Euro currency.
These risks include, but

are not limited to, converting information technology systems to handle the
new currency, evaluating the competitive impact of one common currency due to,
among other things, increased cross-border price transparency, evaluating the
Company's exposure to currency exchange risks during and following the
transition period to the Euro, and determining the impact on the Company's
processes for preparing and maintaining accounting and taxation records.

The Company believes that it is taking appropriate steps to prepare for the
Euro conversion and to mitigate its effects on the Company's business, and
that the Euro conversion is not likely to have a material adverse effect on
the Company's business or financial condition. However, the Company is still
preparing for the Euro conversion and therefore cannot assure that the Euro
conversion will not have a material adverse effect on the Company's business
or financial condition.

Recent Accounting Pronouncements

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Effective September 30, 2000, the Company adopted Statement of Financial
Accounting Standards ("SFAS") 133, "Accounting for Derivative Instruments and
Hedging Activities," which was amended by SFAS 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities." SFAS 133 and 138
require derivatives to be measured at fair value and to be recorded as assets
or liabilities on the balance sheet. The accounting for gains or losses
resulting from changes in the fair values of those derivatives would be
dependent upon the use of the derivative and whether it qualifies for hedge
accounting. The adoption of SFAS 133 and SFAS 138 did not have a material
effect on the Company's financial statements for the fiscal quarter or the
nine months ended June 29, 2001.

Foreign Currency Exchange Risk.

The Company typically hedges its currency exposures associated with certain
assets and liabilities denominated in non-functional currencies and with
anticipated foreign currency cash flows. As a result, the effect of an
immediate 10% change in exchange rates would not be material to the Company's
financial condition or results of operations. The Company's forward exchange
contracts have generally ranged from one to 12 months in original maturity,
and no forward exchange contract has had an original maturity greater than one
year. Forward exchange contracts outstanding as of June 29, 2001 that hedge
the balance sheet were effective on June 29, 2001, and accordingly there were
no significant unrealized gains or losses associated with such contracts and
the fair value of these contracts approximates their notional values.

Forward Exchange Contracts Outstanding as of June 29, 2001

Notional Notional
Value Value
Sold Purchased
-------- ---------

Interest Rate Risk

The Company has no material exposure to market risk for changes in interest
rates. The Company invests primarily in short-term U.S. Treasury securities
and money market funds, and changes in interest rates would not be material to
the Company's financial condition or results of operations. The Company
primarily enters into debt obligations to support general corporate purposes,
including working capital requirements, capital expenditures, and
acquisitions. At June 29, 2001, most of the Company's debt obligations had
fixed interest rates.

The estimated fair value of the Company's debt obligations approximates the
principal amounts reflected below on rates currently available to the Company
for debt with similar terms and remaining maturities.

Although payments under certain of the Company's operating leases for its
facilities are tied to market indices, the Company is not exposed to material
interest rate risk associated with its operating leases.

Debt Obligations

Principal Amounts and Related Weighted Average Interest Rates By Year of
Maturity

Three Months
Ending Fiscal Years
-------------- ----------------------------------------------------------
Sept. 28, 2001 2002 2003 2004 2005 2006 Thereafter Total
-------------- ------ ------ ------ ------ ------ ---------- -------
(dollars in thousands)

Long-term debt
(including current
portion)............... $180 $6,399 $3,690 $3,492 $2,500 $2,500 $27,500 $46,261
Average interest rate... 1.5% 6.9% 5.1% 5.3% 7.2% 7.2% 6.7% 6.6%

PART II.

OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits required to be filed by Item 601 of Regulation S-K:

10.22* Amended and Restated Change in Control Agreement, dated as of April
9, 2001, between Varian, Inc. and Garry W. Rogerson.

* Management contract or compensatory plan or arrangement.

(b) Reports on Form 8-K filed during the fiscal quarter ended June 29, 2001:

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

VARIAN, INC.
(Registrant)

/s/ G. Edward McClammy
By __________________________________
G. Edward McClammy
Vice President, Chief Financial
Officer and Treasurer
(Duly Authorized Officer and
Principal Financial Officer)

Dated: August 10, 2001