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Varian, Inc. Announces First Quarter 2009 Preliminary Results
Posted by: gurufocus (IP Logged)
Date: January 16, 2009 08:01AM

Press Release: Varian, Inc. Announces First Quarter 2009 Preliminary Results

PALO ALTO, Calif., Jan. 16 /PRNewswire-FirstCall/ -- Varian, Inc.(NasdaqGS: VARI) today announced preliminary results for the first quarter ofits fiscal year 2009, which ended January 2, 2009.

First quarter sales should be between $205 million and $210 million. Non-GAAP (adjusted) diluted earnings per share should be between $0.50 and $0.54including share-based compensation expense of approximately $0.05. On a GAAPbasis, diluted earnings per share should be between $0.41 and $0.45. Adjustedoperating margins should be between 11.2% and 11.4% in the quarter, while GAAPoperating margins should be between 9.4% and 9.6%. Operating cash flow shouldbe between $15 million and $20 million for the quarter.

For a complete reconciliation of non-GAAP (adjusted) financial informationused in this press release to the most directly comparable GAAP financialinformation, please refer to the attached Reconciliations of GAAP to AdjustedResults, Preliminary.

Sales were below expectations in the first quarter primarily due to lowerrevenues from research products (in particular NMR and imaging systems).Despite order weakness late in the quarter, in particular for certain vacuumand analytical products, total company orders exceeded sales for the quarter.Adjusted operating margins held up well, even on lower revenues, due to thepositive impact of efficiency improvements implemented in recent years andfavorable foreign currency movements. In addition, operating cash flow wassolid during the quarter.

"With respect to our research products sales, we have said many times thatthe timing of revenues on these products is impacted by factors such aslaboratory readiness and access to customer sites, duration of installationsand availability of key components and installation personnel," said Garry W.Rogerson, President and Chief Executive Officer. "Although we entered thefirst quarter with a strong backlog for these products and saw solid ordersduring the quarter, delays due to some of these factors, compounded by theshorter working month and customer shutdowns in December, were responsible fora large portion of our decrease in revenues, and all of the decrease inearnings, in the first quarter. Fortunately, we expect to recognize most ofthese revenues during the second and third quarters."

"We believe the broader weakness in orders that we experienced duringDecember reflected a combination of factors including the deterioration ofglobal economic conditions, the timing and extent of customer shutdowns andthe shorter working month," said Rogerson. "It is currently difficult to sayhow much each of these factors contributed to the weaker order activity andwhether that weakness is indicative of any longer-term trend."

"We therefore believe, as we separately announced today, it is prudent totake steps to reduce our cost structure and position ourselves favorably torespond to demand fluctuations while continuing to invest in new productdevelopment and maintaining our high standard of customer service and support.Our product, application and geographic diversity continue to position uswell, in particular with the prospect of increased global governmentalspending on research and other applications."

Webcast Conference Call

The company plans to report its final and more detailed results for thefirst quarter of fiscal year 2009 after 1:00 p.m. Pacific Time (PT) onWednesday, February 4, 2009. A conference call to review the results willfollow at 2:00 p.m. PT that same day.

A live webcast of the conference call will be publicly available (inlisten-only mode) and may be heard via the Internet by going and clicking on the "Live Webcast" link at the top of theright side of the page. In addition to the live webcast, replays will beavailable to the public on Varian, Inc.'s website for at least 90 days.

Non-GAAP (Adjusted) Financial Measures

This press release includes non-GAAP (which we refer to as "adjusted")financial measures for diluted earnings per share and operating profitmargins. These non-GAAP financial measures exclude acquisition-relatedintangible amortization and restructuring and other related costs.Reconciliations of each of these non-GAAP financial measures to the mostdirectly comparable GAAP financial measures are detailed in theReconciliations of GAAP to Adjusted Results attached to this press release.We believe that presentation of these non-GAAP financial measures providesuseful information to investors regarding our results of operations.

We believe that excluding acquisition-related intangible amortizationprovides supplemental information and an alternative presentation useful toinvestors' understanding of the company's core operating results and trends.In addition, investors have indicated to us that they analyze the benefits ofacquisitions based on the cash return on the investment made, and thusconsider financial measures excluding acquisition-related intangibleamortization as important, useful information.

We similarly believe that excluding restructuring and other related costs(principally related to facility closures and employee terminations to improveoperational efficiency) provides supplemental information and an alternativepresentation useful to investors' understanding of the company's coreoperating results and trends, especially when comparing those results on aconsistent basis to results for previous periods and anticipated results forfuture periods. Investors have indicated that they consider financialmeasures of our results of operations excluding restructuring and otherrelated costs as important supplemental information useful to theirunderstanding of our historical results and estimating of our future results.

We also believe that, in excluding acquisition-related intangibleamortization and restructuring and other related costs, our non-GAAP financialmeasures provide investors with transparency into what is used by managementto measure and forecast our results of operations, to compare on a consistentbasis our results of operations for the current period to that of priorperiods, to compare our results of operations on a more consistent basisagainst that of other companies, in making financial and operating decisionsand to establish certain management compensation.

Although we believe, for the foregoing reasons, that our presentation ofnon-GAAP financial measures provides useful supplemental information toinvestors regarding our results of operations, our non-GAAP financial measuresshould only be considered in addition to, and not as a substitute for orsuperior to, our financial measures prepared in accordance with GAAP.

Caution Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaningof Section 27A of the Securities Act of 1933 and Section 21E of the SecuritiesExchange Act of 1934, as amended. These forward-looking statements are basedon management's current expectations, are not guarantees of futureperformance, and involve certain risks and uncertainties that could cause thecompany's actual results to differ materially from management's currentexpectations and the forward-looking statements made in this press release.Those risks and uncertainties include, but are not limited to, the following:whether actual financial results for the first quarter of the company's fiscalyear 2009 will differ materially from the preliminary results reported above;risks arising from the timing of shipments, installations and the recognitionof revenue on research products; and other risks detailed from time to time inthe company's filings with the Securities and Exchange Commission. Weundertake no special obligation to update any forward-looking statements,whether in response to new information, future events or otherwise.

Varian, Inc. is a leading worldwide supplier of scientific instruments andvacuum technologies for life science and industrial applications. The companyprovides complete solutions, including instruments, vacuum products,laboratory consumable supplies, software, training and support through itsglobal distribution and support systems. Varian, Inc. employs approximately3,900 people worldwide and operates manufacturing facilities in North America,Europe and Asia Pacific. Varian, Inc. had fiscal year 2008 sales of $1.0billion, and its common stock is traded on the NASDAQ Global Select Marketunder the symbol "VARI." Further information is available on the company's Website: :342d:


                         RESULTS OF OPERATIONS
                   Fiscal Quarter Ended January 2, 2009

                                                   Preliminary Results

    Preliminary Diluted Earnings Per Share
     Preliminary U.S. GAAP                            $0.41 - $0.45
      Preliminary acquisition-related
       intangible amortization                            $0.05
      Preliminary restructuring and other
       related costs                                      $0.04

     Preliminary as adjusted                          $0.50 - $0.54

    Preliminary Operating Margins
     Preliminary U.S. GAAP                             9.4% - 9.6%
      Preliminary acquisition-related
       intangible amortization                             1.0%
      Preliminary restructuring and other
       related costs                                       0.8%

     Preliminary as adjusted                          11.2% - 11.4%

     For More Information Contact:
     Investor Relations
     Varian, Inc.

Source: PRNewsWire

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