Varian, Inc. Reports Fourth Quarter 2009 Results
- Press Release
- Source: Varian, Inc.
- On 6:00 pm EST, Wednesday November 4, 2009
PALO ALTO, Calif., Nov. 4 /PRNewswire-FirstCall/ -- Varian, Inc. (NasdaqGS: VARI - News) 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.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| VARI | 51.28 | +0.09 |
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, October 3,
2009 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, October 3,
2009 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, October 3,
2009 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, October 3, October 2, October 3,
2009 2008 2009 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, October 3, October 2, October 3,
2009 2008 2009 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 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, October 3, October 2, October 3,
2009 2008 2009 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, October 3, October 2, October 3,
2009 2008 2009 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 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, October 3, October 2, October 3,
2009 2008 2009 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)
======= ======= ======== ========
For Information Contact:
Investor Relations
Varian, Inc.
650.424.5471
ir@varianinc.com
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