PALO ALTO, Calif., Nov. 3 /PRNewswire-FirstCall/ -- Varian, Inc. today reported that fourth quarter non-GAAP (pro forma) and GAAP diluted earnings per share increased 14% and 29%, respectively, over the year-ago quarter, establishing new records for both measures. Pro forma net earnings were $17.9 million, or $0.50 pro forma diluted earnings per share, for the fourth quarter of fiscal year 2004, compared to $15.5 million, or $0.44 pro forma diluted earnings per share, in the fourth quarter of fiscal year 2003. On a GAAP basis, net earnings in the fourth quarter of fiscal year 2004 were $15.9 million, or $0.44 diluted earnings per share, compared to $11.8 million, or $0.34 diluted earnings per share, in the fourth quarter of fiscal year 2003.
Sales were $234.0 million for the fourth quarter of fiscal year 2004, compared to sales of $238.6 million for the fourth quarter of fiscal year 2003. Sales levels were as expected for the core business of Scientific Instruments and Vacuum Technologies. However, sales for Electronics Manufacturing were impacted by order delays resulting from a large customer’s inventory adjustments due to improvements in their operational practices. For the total company, comparability to the same quarter a year ago was impacted by the fact that the fourth quarter of fiscal year 2004 comprised thirteen weeks, compared to fourteen weeks in the fourth quarter of fiscal year 2003, as well as stronger-than-expected sales at the end of the third quarter of this year, which had an adverse impact on fourth quarter sales.
Fiscal year 2004 revenues totaled a record $916.0 million, an increase of 8.0% compared to the $847.7 million reported for fiscal year 2003. Pro forma net earnings in fiscal year 2004 increased 13% to $63.5 million, compared to $56.4 million in the prior year. Pro forma diluted earnings per share in fiscal year 2004 increased 11% to $1.78, compared to $1.61 in fiscal year 2003. On a GAAP basis, net earnings for fiscal year 2004 were $59.5 million, or $1.66 diluted earnings per share, compared to $49.1 million, or $1.40 diluted earnings per share, in fiscal year 2003. (For a complete reconciliation of non-GAAP (pro forma) financial information used in this press release to the most directly comparable GAAP financial information, please refer to the attached Reconciliations of GAAP to Pro Forma Results - Actual, Unaudited Condensed Consolidated Statements of Earnings and Unaudited Results of Operations.)
“This has been a good year with record profits and revenues. Our balanced approach to developing products for both industrial and life science customers is continuing to pay off,” said Garry W. Rogerson, President and Chief Executive Officer. “We saw a mix shift to higher-margin products, and also saw the positive effects of the efficiency improvements we’ve been implementing. As a result, pro forma operating profit margins in the fourth quarter expanded to the highest level this year.”
Results by Segment
Scientific Instruments revenues for the fourth quarter of fiscal year 2004 were $151.6 million, representing a 3.3% decrease from revenues of $156.8 million in the fourth quarter of the prior year. The fourteen-week fourth quarter in the prior year contributed to this decrease, as did stronger-than- expected sales at the end of the third quarter of this year. Sales growth in Europe and the rest of the world was offset by lower North American sales in the fourth quarter of fiscal year 2004. Operating profit margin for the fourth quarter of fiscal year 2004 was 11.1% on a pro forma basis and 9.1% on a GAAP basis. The improvement in the segment’s pro forma operating margin from 10.8% in the prior-year quarter was primarily the result of changes in product mix to higher-margin products and the positive effect of efficiency improvements.
For the full year, revenues for Scientific Instruments grew 6% to $584.9 million. Operating profit margin for the full year was 10.5% on a pro forma basis and 9.2% on a GAAP basis.
Vacuum Technologies revenues of $35.0 million increased 14.3% in the fourth quarter of fiscal year 2004 compared to revenues of $30.7 million in the fourth quarter of fiscal year 2003. The Company experienced good growth in sales for both life science and industrial applications. Vacuum Technologies operating profit margin in the fourth quarter of fiscal year 2004 was 19.0% on a pro forma basis and 18.9% on a GAAP basis. Pro forma operating margins improved from 12.4% in the prior-year quarter, primarily as a result of sales volume leverage and favorable product mix changes.
For the full year, revenues for Vacuum Technologies increased 19% to $139.6 million. Operating profit margin for the full year was 16.9% on both a pro forma basis and a GAAP basis.
Electronics Manufacturing revenues were $47.4 million in the fourth quarter of fiscal year 2004, representing a decrease of 7.3% from revenues of $51.1 million in the fourth quarter of fiscal year 2003. The decrease in revenue resulted primarily from the shorter quarter and a large customer’s inventory adjustments which will also negatively impact the current quarter. Normal shipment levels to this customer are expected to resume in the second quarter of fiscal year 2005. The pro forma and GAAP operating profit margin for Electronics Manufacturing was 10.4% in the fourth quarter of fiscal year 2004 compared to 10.9% in the prior-year quarter; the margin decline was primarily as a result of higher new customer start-up costs.
For the full year, revenues for Electronics Manufacturing increased 7% to $191.5 million. Operating profit margin for the full year was 10.8% on both a pro forma basis and a GAAP basis.
Outlook
“The drivers of growth in our industry are new products and services. We released many new products this year that gave our customers reasons to buy,” said Rogerson. “We also acquired infrared spectroscopy products and, more recently, magnet product lines to expand our product portfolio in Scientific Instruments.
“We have set aggressive internal goals and will continue to develop and release products with greater speed, acquire more technologies and product lines, and reduce our cost structure further. We are well positioned to execute on these initiatives.”
For the first time, Varian, Inc. provided fiscal year 2005 earnings per share guidance. “We are guiding toward higher sales and increased pro forma profitability in fiscal year 2005,” said Rogerson. “Consistent with the Company’s usual seasonal pattern, sales for the first quarter of fiscal year 2005 should increase over the year-ago quarter, but be down sequentially from the fourth quarter of fiscal year 2004. As fiscal year 2005 progresses, sales should increase sequentially quarter-by-quarter. Pro forma diluted earnings per share for the first quarter of fiscal year 2005 should be in the $0.38 to $0.43 range and between $1.85 to $1.96 for the full fiscal year. The pro forma results for the first quarter of fiscal year 2005 will be impacted by transition costs of two recent acquisitions. Our guidance reflects some caution given the uncertainty on the direction of the overall economy.”
The GAAP results for the first quarter of fiscal year 2005 and the full fiscal year are expected to include the following items:
-- Restructuring and other related costs of approximately $1.2 million for the first quarter of fiscal year 2005 and $2.9 million for the full fiscal year. Of the costs anticipated in the first quarter, approximately $0.8 million relates to the completion of the previously announced consolidation of consumables factories in Southern California, which was previously expected to be completed in the fourth quarter of fiscal year 2004. The other costs of approximately $0.4 million expected in the first quarter and $2.1 million for the full fiscal year relate to the rationalization of the Company’s field support administration in the United Kingdom (announced earlier this quarter) in connection with the acquisition of Magnex Scientific Ltd.,
-- Settlement of a defined benefit pension plan in Australia resulting in a loss of approximately $1.5 million (as previously announced, this was expected to occur in the fourth quarter of fiscal year 2004 and will offset a related curtailment gain of approximately $1.2 million recognized in fiscal year 2004 in connection with the same plan),
-- Acquired in-process research and development charges as well as the impact on cost of sales of writing up acquired inventory in connection with the Digilab, LLC and Magnex Scientific Ltd. acquisitions, the amounts of which cannot currently be estimated, but which could be significant, and
-- A one-time reduction in income tax expense resulting from a change in the treatment of foreign tax credits under new U.S. tax law enacted during the current quarter, the amount of which cannot currently be estimated, but which could be significant.
Due to the fact that the amount of certain of these items cannot currently be estimated, GAAP earnings guidance cannot be given for the first quarter of fiscal year 2005 or the full fiscal year at this time.
Varian, Inc. will be holding a conference call with securities analysts and investors later today, November 3, 2004, at 2:00 p.m. Pacific time. Interested investors are invited to listen to the call by going to http://www.varianinc.com/ and clicking on the Investors link at the right side of the screen.
Non-GAAP (Pro Forma) Financial Measures
This press release includes non-GAAP (pro forma) financial measures for operating profit, operating profit margins, net earnings and diluted earnings per share. In each case, these non-GAAP financial measures exclude acquisition-related intangible amortization, restructuring and other related costs, acquisition transition costs, and defined benefit pension plan curtailment gains, as is detailed in the Reconciliations of GAAP to Pro Forma Results attached to this press release. We believe that presentation of these non-GAAP financial measures provides useful information to investors regarding our results of operations.
We believe that excluding acquisition-related intangible amortization provides supplemental information and an alternative presentation useful to investors’ understanding of the company’s core operating results and trends. In addition, investors have indicated to us that they analyze the benefits of acquisitions based on the cash return on the investment made, and thus consider financial measures excluding acquisition-related intangible amortization as important, useful information.
We similarly believe that excluding restructuring and other related costs (principally related to facility closures and employee terminations to improve operational efficiency), acquisition transition costs, and defined benefit pension plan curtailment gains provides supplemental information and an alternative presentation useful to investors’ understanding of the company’s core operating results and trends, especially when comparing those results on a consistent basis to results for previous periods and anticipated results for future periods. Investors have indicated that they consider financial measures of our results of operations excluding restructuring and other related costs, acquisition transition costs, and defined benefit pension plan curtailment gains as important supplemental information useful to their understanding of our historical results and estimating of our future results.
In the case of defined benefit pension plan curtailment gains, we consider this an unusual event. We anticipate a defined benefit pension plan settlement loss in the first quarter of fiscal year 2005 relating to one of the pension plans that was curtailed during fiscal year 2004.
We also believe that, in excluding acquisition-related intangible amortization, restructuring and other related costs, acquisition transition costs, and defined benefit pension plan curtailment gains, our non-GAAP financial measures provide investors with transparency into what is used by management to measure and forecast results of operations, to compare on a consistent basis our results of operations for the current period to that of prior periods, to compare our results of operations on a more consistent basis against that of other companies, in making financial and operating decisions and to establish certain management compensation.
Although we believe, for the foregoing reasons, that our presentation of non-GAAP financial measures provides useful supplemental information to investors regarding our results of operations, our non-GAAP financial measures should only be considered in addition to, and not as a substitute for or superior to, our financial measures prepared in accordance with GAAP.
Caution Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, including those relating to: anticipated revenue growth and diluted earnings per share for the first quarter of fiscal year 2005 and the full fiscal year 2005. These forward-looking statements are based on management’s current expectations, are not guarantees of future performance, and involve certain risks and uncertainties that could cause the company’s actual results to differ materially from management’s current expectations and the forward-looking statements made in this press release. Those risks and uncertainties include, but are not limited to, the following: whether we will succeed in new product development, commercialization, performance, and acceptance, particularly in life science applications; whether we can achieve continued growth in sales in life science applications; risks arising from the timing of shipments, installations, and the recognition of revenues on leading-edge NMR systems; whether we can increase margins on newer leading-edge NMR products; the impact of shifting product mix on profit margins in the Scientific Instruments segment; whether we will see continued strong demand for vacuum products and for electronics manufacturing services; competitive products and pricing; economic conditions in the company’s product and geographic markets; whether we will see continued and timely delivery of key raw materials and components by suppliers; foreign currency fluctuations that could adversely impact revenue growth and earnings; whether we will see sustained market investment in capital equipment; whether we will see reduced demand from customers that operate in cyclical industries; the impact of any delay or reduction in government funding for research; our ability to successfully integrate acquisitions; the actual cost of anticipated restructuring activities and their timing and impact on future costs; and other risks detailed from time to time in the company’s filings with the Securities and Exchange Commission. We disclaim any intent or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise.
About Varian, Inc.
Varian, Inc. is a major supplier of scientific instruments, vacuum technologies, and specialized contract electronics manufacturing services. These businesses serve a broad range of life science and industrial customers worldwide. The Company manufactures in 14 locations in North America, Europe, and the Pacific Rim and employs some 4,400 people. Varian, Inc. had fiscal year 2004 sales of $916 million. Additional information about Varian, Inc. is available at http://www.varianinc.com/.
For Information Contact: Laurie Alire Varian, Inc. 650.424.5225 laurie.alire@varianinc.com VARIAN, INC. AND SUBSIDIARY COMPANIES RECONCILIATION OF GAAP TO PRO FORMA RESULTS - ACTUAL UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (In thousands, except per share amounts) Fourth Quarter FY 2004 and Fourth Quarter FY 2003 Fiscal Quarter Ended Fiscal Quarter Ended October 1, 2004 October 3, 2003 GAAP Pro Forma GAAP Pro Forma Sales $234,045 $234,045 $238,648 $238,648 Cost of sales 144,340 144,340 149,437 149,437 Gross profit 89,705 89,705 89,211 89,211 Operating expenses Sales and marketing 39,930 39,930 39,761 39,761 Research and development 12,405 12,405 11,625 11,625 General and administrative 13,200 10,180(1) 19,448 13,827(3) Purchased in-process research and development 101 --(2) -- -- Total operating expenses 65,636 62,515 70,834 65,213 Operating earnings 24,069 27,190 18,377 23,998 Interest income (expense) Interest income 940 940 438 438 Interest expense (576) (576) (602) (602) Total interest income (expense), net 364 364 (164) (164) Earnings before income taxes 24,433 27,554 18,213 23,834 Income tax expense 8,552 9,644 6,374 8,321 Net earnings $15,881 $17,910 $11,839 $15,513 Net earnings per diluted share $0.44 $0.50 $0.34 $0.44 Diluted shares outstanding 35,730 35,730 35,207 35,207 SUMMARY OF RECONCILING ITEMS: (1) Excludes $777 in acquisition-related intangible amortization, $2,412 in restructuring and other related costs, and a pension curtailment gain of ($169). (2) Excludes $101 related to a purchased in-process research and development charge. (3) Excludes $738 in acquisition-related intangible amortization, $3,783 in restructuring and other related costs, and $1,100 in patent suit settlement costs. VARIAN, INC. AND SUBSIDIARY COMPANIES RECONCILIATION OF GAAP TO PRO FORMA RESULTS - ACTUAL UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (In thousands, except per share amounts) Full Year FY 2004 and Full Year FY 2003 Fiscal Year Ended Fiscal Year Ended October 1, 2004 October 3, 2003 GAAP Pro Forma GAAP Pro Forma Sales $915,963 $915,963 $847,739 $847,739 Cost of sales 568,746 568,746 525,893 525,424(3) Gross profit 347,217 347,217 321,846 322,315 Operating expenses Sales and marketing 157,323 157,323 144,089 144,089 Research and development 48,731 48,731 45,653 45,653 General and administrative 50,139 44,087(1) 55,499 44,797(4) Purchased in-process research and development 101 --(2) -- -- Total operating expenses 256,294 250,141 245,241 234,539 Operating earnings 90,923 97,076 76,605 87,776 Interest income (expense) Interest income 3,055 3,055 1,495 1,495 Interest expense (2,393) (2,393) (2,490) (2,490) Total interest income (expense), net 662 662 (995) (995) Earnings before income taxes 91,585 97,738 75,610 86,781 Income tax expense 32,055 34,209 26,463 30,373 Net earnings $59,530 $63,529 $49,147 $56,408 Net earnings per diluted share $1.66 $1.78 $1.40 $1.61 Diluted shares outstanding 35,773 35,773 35,057 35,057 SUMMARY OF RECONCILING ITEMS: (1) Excludes $2,892 in acquisition-related intangible amortization, $4,613 in restructuring and other related costs, and pension curtailment gains of ($1,453). (2) Excludes $101 related to a purchased in-process research and development charge. (3) Excludes $469 in acquisition transition costs. (4) Excludes $2,647 in acquisition-related intangible amortization, $6,918 in restructuring and other related costs, $1,100 in patent suit settlement costs and $37 in acquisition transition costs. VARIAN, INC. AND SUBSIDIARY COMPANIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (In thousands, except par value amounts) October 1, October 3, 2004 2003 ASSETS Current assets Cash and cash equivalents $184,982 $135,791 Accounts receivable, net 182,843 165,049 Inventories 135,344 125,649 Deferred taxes 30,008 26,464 Other current assets 18,986 17,788 Total current assets 552,163 470,741 Property, plant, and equipment, net 120,239 120,088 Goodwill 131,441 126,411 Intangible assets, net 21,279 16,762 Other assets 5,543 3,050 Total assets $830,665 $737,052 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current portion of long-term debt $ 6,673 $ 2,811 Accounts payable 70,667 61,209 Deferred profit 11,306 14,385 Accrued liabilities 160,710 141,938 Total current liabilities 249,356 220,343 Long-term debt 30,000 36,273 Deferred taxes 9,411 12,454 Other liabilities 14,687 10,413 Total liabilities 303,454 279,483 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 - 34,838 shares at October 1, 2004 and 34,181 shares at October 3, 2003 257,083 252,630 Retained earnings 253,096 193,566 Accumulated other comprehensive income 17,032 11,373 Total stockholders’ equity 527,211 457,569 Total liabilities and stockholders’ equity $830,665 $737,052 VARIAN, INC. AND SUBSIDIARY COMPANIES UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) Fiscal Quarter Ended Fiscal Year Ended Oct. 1, Oct. 3, Oct. 1, Oct. 3, 2004 2003 2004 2003 Cash flows from operating activities Net earnings $15,881 $11,839 $59,530 $49,147 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 6,536 6,650 25,481 24,082 (Gain) loss on disposition of property, plant, and equipment (185) 31 (163) (93) Purchased in-process research and development 101 -- 101 -- Tax benefit from stock option exercises 9,550 559 13,266 1,910 Deferred taxes (11,421) 5,870 (12,573) 8,735 Changes in assets and liabilities, excluding effects of acquisitions: Accounts receivable, net (6,164) 3,542 (9,271) 17,628 Inventories 10,501 9,187 (5,800) 1,332 Other current assets 3,346 4,010 643 6,595 Other assets (549) 423 (589) 677 Accounts payable (4,943) 33 6,287 5,351 Deferred profit 507 (2,302) (3,130) (6,715) Accrued liabilities 6,673 (2,198) 19,066 12,630 Other liabilities 565 (258) 72 318 Net cash provided by operating activities 30,398 37,386 92,920 121,597 Cash flows from investing activities Proceeds from sale of property, plant, and equipment 1,332 115 2,551 588 Purchase of property, plant, and equipment (5,662) (11,095) (22,968) (26,656) Purchase of businesses, net of cash acquired (11,898) (1,427) (12,968) (25,013) Private company equity investments -- -- (1,318) -- Net cash used in investing activities (16,228) (12,407) (34,703) (51,081) Cash flows from financing activities Repayment of debt (1,787) (2,823) (4,602) (5,905) Issuance of debt -- -- 2,037 3,198 Repurchase of common stock (7,773) -- (31,668) (10,368) Issuance of common stock 2,734 3,584 22,855 9,184 Transfers to Varian Medical Systems, Inc. (216) (162) (1,110) (901) Net cash (used in) provided by financing activities (7,042) 599 (12,488) (4,792) Effects of exchange rate changes on cash and cash equivalents 1,959 (925) 3,462 4,922 Net increase in cash and cash equivalents 9,087 24,653 49,191 70,646 Cash and cash equivalents at beginning of period 175,895 111,138 135,791 65,145 Cash and cash equivalents at end of period $184,982 $135,791 $184,982 $135,791 VARIAN, INC. AND SUBSIDIARY COMPANIES RECONCILIATION OF GAAP TO PRO FORMA RESULTS - ACTUAL UNAUDITED RESULTS OF OPERATIONS (In millions, except margin and per share data) Fourth Quarter FY 2004 and Fourth Quarter FY 2003 and Full Year FY 2004 and Full Year FY 2003 Fiscal Quarter Ended Fiscal Year Ended Oct. 1, Oct. 3, Oct. 1, Oct. 3, 2004 2003 2004 2003 TOTAL COMPANY Operating Profit U.S. GAAP as reported $24.1 $18.4 $90.9 $76.6 Pro forma adjustments: Acquisition-related intangible amortization 0.8 0.7 2.9 2.7 Restructuring and other related costs 2.4 3.8 4.6 6.9 Acquisition transition costs -- -- -- 0.5 Patent suit settlement costs -- 1.1 -- 1.1 Pension curtailment gains (0.2) -- (1.4) -- In-process research and development 0.1 -- 0.1 -- Pro forma as presented $27.2 $24.0 $97.1 $87.8 Operating Margins U.S. GAAP as reported 10.3% 7.7% 9.9% 9.0% Pro forma adjustments: Acquisition-related intangible amortization 0.3 0.3 0.3 0.4 Restructuring and other related costs 1.0 1.6 0.5 0.8 Acquisition transition costs -- -- -- 0.1 Patent suit settlement costs -- 0.5 -- 0.1 Pension curtailment gains (0.1) -- (0.1) -- In-process research and development 0.1 -- -- -- Pro forma as presented 11.6% 10.1% 10.6% 10.4% Net Earnings U.S. GAAP as reported $15.9 $11.8 $59.5 $49.1 Pro forma adjustments: Acquisition-related intangible amortization 0.5 0.5 1.9 1.8 Restructuring and other related costs 1.6 2.5 3.0 4.5 Acquisition transition costs -- -- -- 0.3 Patent suit settlement costs -- 0.7 -- 0.7 Pension curtailment gains (0.1) -- (0.9) -- In-process research and development -- -- -- -- Pro forma as presented $17.9 $15.5 $63.5 $56.4 Diluted Earnings Per Share U.S. GAAP as reported $0.44 $0.34 $1.66 $1.40 Pro forma adjustments: Acquisition-related intangible amortization 0.02 0.01 0.05 0.05 Restructuring and other related costs 0.04 0.07 0.09 0.13 Acquisition transition costs -- -- -- 0.01 Patent suit settlement costs -- 0.02 -- 0.02 Pension curtailment gains -- -- (0.02) -- In-process research and development -- -- -- -- Pro forma as presented $0.50 $0.44 $1.78 $1.61 VARIAN, INC. AND SUBSIDIARY COMPANIES RECONCILIATION OF GAAP TO PRO FORMA RESULTS - ACTUAL UNAUDITED RESULTS OF OPERATIONS (In millions, except margin data) Fourth Quarter FY 2004 and Fourth Quarter FY 2003 and Full Year FY 2004 and Full Year FY 2003 Fiscal Quarter Ended Fiscal Year Ended Oct. 1, Oct. 3, Oct. 1, Oct. 3, 2004 2003 2004 2003 SCIENTIFIC INSTRUMENTS SEGMENT Operating Profit U.S. GAAP as reported $13.8 $12.7 $54.0 $51.7 Pro forma adjustments: Acquisition-related intangible amortization 0.7 0.7 2.8 2.6 Restructuring and other related costs 2.3 3.5 4.5 5.7 In-process research and development 0.1 -- 0.1 -- Pro forma as presented $16.9 $16.9 $61.4 $60.0 Operating Margins U.S. GAAP as reported 9.1% 8.1% 9.2% 9.4% Pro forma adjustments: Acquisition-related intangible amortization 0.4 0.5 0.5 0.5 Restructuring and other related costs 1.5 2.2 0.8 1.0 In-process research and development 0.1 -- -- -- Pro forma as presented 11.1% 10.8% 10.5% 10.9% VACUUM TECHNOLOGIES SEGMENT Operating Profit U.S. GAAP as reported $6.6 $2.4 $23.5 $13.0 Pro forma adjustments: Acquisition-related intangible amortization 0.1 -- 0.1 0.1 Restructuring and other related costs -- 0.3 -- 0.8 Patent suit settlement costs -- 1.1 -- 1.1 Pro forma as presented $6.7 $3.8 $23.6 $15.0 Operating Margins U.S. GAAP as reported 18.9% 7.9% 16.9% 11.2% Pro forma adjustments: Acquisition-related intangible amortization 0.1 -- -- 0.1 Restructuring and other related costs -- 0.9 -- 0.7 Patent suit settlement costs -- 3.6 -- 0.8 Pro forma as presented 19.0% 12.4% 16.9% 12.8% VARIAN, INC. AND SUBSIDIARY COMPANIES RECONCILIATION OF GAAP TO PRO FORMA RESULTS - ACTUAL UNAUDITED RESULTS OF OPERATIONS (In millions, except margin data) Fourth Quarter FY 2004 and Fourth Quarter FY 2003 and Full Year FY 2004 and Full Year FY 2003 Fiscal Quarter Ended Fiscal Year Ended Oct. 1, Oct. 3, Oct. 1, Oct. 3, 2004 2003 2004 2003 ELECTRONICS MANUFACTURING SEGMENT Operating Profit U.S. GAAP as reported $5.0 $5.6 $20.8 $20.8 Pro forma adjustments: Acquisition transition costs -- -- -- 0.5 Pro forma as presented $5.0 $5.6 $20.8 $21.3 Operating Margins U.S. GAAP as reported 10.4% 10.9% 10.8% 11.6% Pro forma adjustments: Acquisition transition costs -- -- -- 0.3 Pro forma as presented 10.4% 10.9% 10.8% 11.9% GENERAL CORPORATE Operating Profit U.S. GAAP as reported $(1.3) $(2.3) $(7.4) $(8.9) Pro forma adjustments: Restructuring and other related costs 0.1 -- 0.1 0.4 Pension curtailment gains (0.2) -- (1.4) -- Pro forma as presented $(1.4) $(2.3) $(8.7) $(8.5)
Varian, Inc.
CONTACT: Laurie Alire of Varian, Inc., +1-650-424-5225 orlaurie.alire@varianinc.com
Web site: http://www.varianinc.com/
