Varian, Inc. reports record sales and EPS
Nov 03, 2005
Fourth Quarter Non-GAAP Diluted EPS Up 22%, GAAP Diluted EPS Up 31%
Varian, Inc. (Nasdaq: VARI) reported fourth quarter 2005 non-GAAP (pro forma) net earnings of $16.1 million, or $0.50 pro forma diluted earnings per share, compared to $14.5 million, or $0.41 pro forma diluted earnings per share, in the fourth quarter of fiscal year 2004. On a GAAP basis, net earnings in the fourth quarter of fiscal year 2005 were $14.6 million, or $0.46 diluted earnings per share, compared to $12.5 million, or $0.35 diluted earnings per share, in the fourth quarter of fiscal year 2004. Throughout this release, all revenues, operating profit, operating profit margin, net earnings, earnings per share, and cash flow are presented on a continuing operations basis unless otherwise noted.
Revenues were $198.1 million in the fourth quarter of fiscal year 2005, an increase of 6.1% compared to $186.7 million in the fourth quarter of fiscal year 2004. Sales grew in all major geographic regions, with growth from products for both life science and industrial applications. Pro forma operating profit margin was 11.7% in the fourth quarter of fiscal year 2005 compared to 11.6% in the prior-year quarter. On a GAAP basis, operating profit margin was 10.6% in the fourth quarter of fiscal year 2005 compared to 9.9% in the same quarter a year ago. Unallocated corporate costs in the current-year quarter included approximately $1.5 million related to implementing Sarbanes-Oxley Act Section 404, which negatively impacted operating profit margins by 0.7% of sales.
Free cash flow (defined as operating cash flow less net fixed asset purchases) was a record $27.0 million for the fourth quarter. For the full year, free cash flow was $56.1 million, which represents 120% of net earnings.
During the fourth quarter of fiscal year 2005, the company also repurchased 1,048,443 shares of its common stock, bringing the total repurchased for the fiscal year to 4,771,094 shares.
"This was another good year for Varian," said Garry W. Rogerson, President and Chief Executive Officer. "We achieved record revenues and EPS from continuing operations and generated excellent free cash flow. Particularly pleasing was the revenue growth, even stronger order growth, and margin expansion seen in Scientific Instruments. More importantly, we made good progress toward our long-term strategy and internal goals."