-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K1bWhHf/iMJTjYQ5/YTWLgqF6j4rRHfLAxRAqDv19+8u8kZxJkoe03ZkBzN2EXY6 nigXD26dYC3e42or7vT0CA== 0000891092-04-003742.txt : 20040729 0000891092-04-003742.hdr.sgml : 20040729 20040729164343 ACCESSION NUMBER: 0000891092-04-003742 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040729 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARIAN MEDICAL SYSTEMS INC CENTRAL INDEX KEY: 0000203527 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 942359345 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07598 FILM NUMBER: 04939545 BUSINESS ADDRESS: STREET 1: 3100 HANSEN WAY CITY: PALO ALTO STATE: CA ZIP: 94304-1000 BUSINESS PHONE: 6504934000 MAIL ADDRESS: STREET 1: 3050 HANSEN WAY STREET 2: MAIL STOP E 224 CITY: PALO ALTO STATE: CA ZIP: 94304-1000 FORMER COMPANY: FORMER CONFORMED NAME: VARIAN ASSOCIATES INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VARIAN DELAWARE INC DATE OF NAME CHANGE: 19761123 8-K 1 e18633_8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) July 29, 2004 Varian Medical Systems, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 1-7598 94-2359345 - ---------------------------- ---------------- ------------------- (State or Other Jurisdiction (Commission File (IRS Employer of Incorporation) Number) Identification No.) 3100 Hansen Way, Palo Alto, CA 94304-1030 - ---------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (650) 493-4000 Not Applicable - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 7. Financial Statements and Exhibits. (c) Exhibits. 99.1 Press Release dated July 29, 2004 regarding Varian Medical Systems, Inc.'s announcement that: Varian Medical Systems Third Quarter Net Earnings Rise 32 Percent; Company Reports Global Growth in Sales, Net Orders, and Backlog. Item 12. Results of Operations and Financial Condition. (a) On July 29, 2004, Varian Medical Systems, Inc. issued a press release announcing that: Varian Medical Systems Third Quarter Net Earnings Rise 32 Percent; Company Reports Global Growth in Sales, Net Orders, and Backlog. A copy of the press release is attached as Exhibit 99.1. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Varian Medical Systems, Inc. By: /s/ JOSEPH B. PHAIR ---------------------------------- Name: Joseph B. Phair Title: Vice President, Administration, General Counsel and Secretary Dated: July 29, 2004 3 EXHIBIT INDEX Number Exhibit ------ ------- 99.1 Press Release dated July 29, 2004 regarding Varian Medical Systems, Inc.'s announcement that: Varian Medical Systems Third Quarter Net Earnings Rise 32 Percent; Company Reports Global Growth in Sales, Net Orders, and Backlog. EX-99.1 2 e18633ex99-1.txt PRESS RELEASE Exhibit 99.1 Varian Medical Systems Third Quarter Net Earnings Rise 32 Percent; Company Reports Global Growth in Sales, Net Orders, and Backlog PALO ALTO, Calif., July 29 /PRNewswire-FirstCall/ -- Varian Medical Systems (NYSE: VAR) today is reporting results for the third quarter of fiscal year 2004 with net earnings of $43 million up 32 percent from $32 million in the year-ago period. Adjusting for the previously announced 2-for-1 stock split that will take effect this July 30, net earnings for the third quarter were $0.30 per diluted share, up 30 percent from $0.23 per diluted share recorded in the third quarter of last fiscal year. The company reported third quarter sales of $303 million, up 14 percent versus the year-ago quarter. Net orders for the third quarter were $328 million, up 15 percent from the year-ago period. Backlog at the end of the third quarter stood at $903 million, up 14 percent from the same time last fiscal year. The company generated record quarterly operating cash flow and ended the quarter with about $414 million in cash and marketable securities. During the quarter, the company spent $49 million to buy back company stock. "We will continue to buy back shares under our ongoing repurchase program," said Richard M. Levy, the company's chairman and chief executive officer. Oncology Systems Oncology Systems' sales of Clinac(R) accelerators as well as accessories, software, and services for radiation therapy totaled $252 million for the third quarter, up 15 percent from the year-ago period. Third-quarter net orders in the Oncology Systems business totaled $275 million, up 14 percent from the year-ago period. "We believe we have maintained or increased our leading position in radiation oncology worldwide," Levy said. "The worldwide net order growth rate in our Oncology Systems business has remained strong, expanding on a 12-month trailing basis at between 16 and 21 percent for each of the last 16 quarters," added Levy. For the trailing 12- months, global Oncology Systems net orders grew 17 percent versus the comparable prior period, including 27 percent in international markets and 10 percent in North America. For the quarter, Oncology Systems net order growth was up strongly in international markets and essentially flat in North America, which represented 55 percent of the total orders for the period. "Varying regional growth rates are not unusual for this geographically diverse business," said Levy. "We continued to make excellent progress with product launches, including our new Trilogy(TM) accelerator and on-board imager for image-guided radiation therapy (IGRT) for more precise forms of radiation therapy," Levy said. "Since its introduction earlier this year, we have experienced strong demand for our new on-board imaging accessory. It's in the field and working well. We have created the world's first fully-integrated, automated, clinically- practical system for IGRT-enabled ultra-precise treatments. It is deeply gratifying to see years of technological advances coming to fruition for cancer patients." X-Ray Products Third-quarter sales in the X-Ray Products business, including X-ray tubes and amorphous silicon flat-panel digital imagers, were $41 million, up 10 percent from the third quarter of the last fiscal year. "Sales expanded at a faster rate than normal for this business segment, partly because of growth in our flat panel X-ray imager product line," said Levy. "Our flat panel imagers are now contributing to our profitability and the strong order growth shows that this product line is beginning to demonstrate its potential as a future growth driver for the company." Other The company's Ginzton Technology Center and its BrachyTherapy unit recorded combined third quarter sales of $10 million, about flat from the year-ago quarter. Combined third-quarter net orders for these operations were $11 million, up 29 percent from the year-ago quarter. Outlook "Our performance for the first three quarters leads us to expect an increase in earnings per diluted share for fiscal year 2004 about 25 percent above our split-adjusted earnings of $0.92 per diluted share in fiscal year 2003," said Levy. "We now believe that sales for fiscal year 2004 will rise by about 17 to 18 percent over fiscal year 2003 totals. For fiscal year 2005 at this early date, we expect that with our healthy backlog, total company sales will increase in the low double digits over the fiscal year 2004 totals. Earnings per diluted share for fiscal year 2005 should grow at a rate approaching 17 percent over the fiscal year 2004 total." Investor Conference Call Varian Medical Systems will conduct its fiscal year 2004 third-quarter conference call at 5 p.m. ET today. To hear a live webcast or replay of the call, visit the investor relations page on the company's web site at www.varian.com/investor. To access the call, dial 1-800-599-9795 from inside the U.S. or 1-617-786-2905 from outside the U.S. and enter confirmation code number 93474526. A replay can be accessed by dialing 1-888-286-8010 from inside the U.S. or 1-617-801-6888 from outside the U.S. and entering confirmation code 78913667. The replay will be archived and available on the company's website for one year. Varian Medical Systems, Inc., of Palo Alto, California is the world's leading manufacturer of integrated cancer therapy systems, which are treating thousands of patients per day. The company is also a premier supplier of X- ray tubes and flat-panel digital subsystems for imaging in medical, scientific, and industrial applications. Varian Medical Systems employs approximately 3,240 people who are located at manufacturing sites in North America and Europe and in its 56 sales and support offices around the world. In its most recent fiscal year ended September 26, 2003, Varian Medical Systems reported sales of over $1 billion. Additional information is available on the company's web site at www.varian.com Forward Looking Statements Except for historical information, this news release contains "forward- looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning industry outlook, including market acceptance of or transition to new products or technologies; growth drivers; the company's orders, sales, backlog, or earnings growth; future financial results and any statements using the terms "will," "should," "expect," "believe," "leads," "potential," or similar statements are forward-looking statements that involve risks and uncertainties that could cause the company's actual results to differ materially from those anticipated. Such risks and uncertainties include demand for the company's products; the company's ability to develop and commercialize new products; the impact of competitive products and pricing; the effect of economic conditions and currency exchange rates; the company's ability to maintain or increase operating margins; the high and growing percentage of our sales being derived from our international markets; the company's ability to protect the company's intellectual property; the company's reliance on sole or limited-source suppliers; the impact of reduced or limited sales to sole purchasers of certain X-ray tube products; the impact of managed care initiatives or other health care reforms on capital expenditures and/or third-party reimbursement levels; the impact of third- party reimbursement levels on orders and sales; the company's ability to meet FDA and other regulatory requirements or product clearances; the potential loss of key distributors or key personnel; consolidation in the X-ray tubes market; the possibility that material product liability claims could harm future sales or require us to pay uninsured claims; the ability to make strategic acquisitions and to successfully integrate the acquired operations into the company's business; the effect of changes in accounting principles; the risk of operations interruptions due to terrorism, disease, such as Severe Acute Respiratory Syndrome, and other events beyond the company's control; and the other risks listed from time to time in the company's filings with the Securities and Exchange Commission. We assume no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise. FOR INFORMATION CONTACT: Elisha Finney (650) 424-6803 elisha.finney@varian.com Spencer Sias (650) 424-5782 spencer.sias@varian.com A summary of earnings and other financial information follows: Varian Medical Systems, Inc. and Subsidiary Companies Consolidated Statements of Earnings (Dollars and shares in millions, except per share amounts) (Unaudited) Q3 QTR Q3 QTR Q3 YTD Q3 YTD 2004 2003 2004 2003 Net orders $328.5 284.7 985.2 829.4 Oncology Systems 275.1 242.0 819.4 694.5 X-Ray Products 42.2 34.0 136.0 111.6 Other 11.2 8.7 29.8 23.3 Order backlog $902.9 789.3 902.9 789.3 Sales $303.1 265.4 890.7 738.3 Oncology Systems 252.2 218.4 742.9 598.8 X-Ray Products 41.3 37.5 120.3 115.7 Other 9.6 9.5 27.5 23.8 Gross margin 130.7 105.1 369.6 291.2 As a percent of sales 43.1% 39.6% 41.5% 39.4% Operating expenses Research and development 17.7 15.9 53.8 42.5 Selling, general and administrative 47.7 41.6 139.2 116.9 Operating earnings 65.3 47.6 176.6 131.8 As a percent of sales 21.6% 17.9% 19.8% 17.8% Interest income, net (0.2) (1.3) (1.0) (2.6) Earnings before taxes 65.5 48.9 177.6 134.4 Taxes on earnings 23.0 16.8 62.2 47.1 Net earnings(1) $42.5 32.1 115.4 87.3 Net earnings per share - basic:(1)(2) $0.31 0.24 0.85 0.64 Net earnings per share - diluted:(1)(2) $0.30 0.23 0.81 0.61 Shares used in the calculation of net earnings per share:(2) Average shares outstanding - basic 136.6 136.4 136.4 136.1 Average shares outstanding - diluted 143.1 142.4 142.8 142.2 (1) Note: If the Company had elected to recognize stock compensation costs based on the fair value of options granted on their grant dates as prescribed by SFAS No. 123, net earnings for the third quarter of fiscal years 2004 and 2003 would have been reduced by $5.1M and $4.6M, respectively, and net earnings for the first nine months of fiscal years 2004 and 2003 would have been reduced by $15.5M and $15.1M, respectively. Net earnings per basic share for the third quarter of fiscal years 2004 and 2003 would have been $0.27 and $0.20, respectively, and net earnings per diluted share would have been $0.26 and $0.19, respectively. Net earnings per basic share for the first nine months of fiscal years 2004 and 2003 would have been $0.73 and $0.53, respectively, and net earnings per diluted share would have been $0.70 and $0.51, respectively. (2) Note: The results for the third quarter and the first nine months of fiscal year 2003 have been restated for the two-for-one stock split (effected in the form of a stock dividend) to be paid on July 30, 2004. Net earnings per basic share, pre stock split, for the third quarter of fiscal years 2004 and 2003 were $0.62 and $0.47, respectively, and net earnings per diluted share, pre stock split, for the same periods were $0.59 and $0.45, respectively. Net earnings per basic share, pre stock split, for the first nine months of fiscal years 2004 and 2003 were $1.69 and $1.28, respectively, and net earnings per diluted share, pre stock split, for the same periods were $1.62 and $1.23, respectively. Varian Medical Systems, Inc. and Subsidiary Companies Consolidated Balance Sheets (Dollars in thousands) July 2, September 26, 2004 2003 (Unaudited) Assets Current assets Cash and cash equivalents $270,338 $210,448 Short-term marketable securities 83,692 112,128 Accounts receivable, net 255,969 252,265 Inventories 133,395 116,815 Other current assets 118,111 113,868 Total current assets 861,505 805,524 Property, plant and equipment 248,736 236,077 Accumulated depreciation and amortization (165,893) (154,905) Net property, plant and equipment 82,843 81,172 Long-term marketable securities 60,093 84,820 Goodwill 111,531 59,979 Other non-current assets 45,667 21,992 Total assets $1,161,639 $1,053,487 Liabilities and Stockholders' Equity Current liabilities Accounts payable - trade $54,247 $47,169 Accrued expenses 242,105 240,406 Product warranty 38,785 36,040 Advance payments from customers 104,609 85,801 Current maturities of long term debt 5,250 -- Total current liabilities 444,996 409,416 Long-term accrued expenses and other 35,763 21,895 Long-term debt 53,250 58,500 Total liabilities 534,009 489,811 Stockholders' Equity Common stock(1) 136,212 135,942 Capital in excess of par value(1) 136,542 89,287 Retained earnings and accumulated other comprehensive loss 354,876 338,447 Total stockholders' equity 627,630 563,676 Total liabilities and stockholders' equity $1,161,639 $1,053,487 1) Note: The consolidated balance sheets as of July 2, 2004 and September 26, 2003 reflect the two-for-one stock split (effected in the form of a stock dividend) to be paid on July 30, 2004. SOURCE Varian Medical Systems, Inc. -0- 07/29/2004 /CONTACT: Elisha Finney, +1-650-424-6803 or elisha.finney@varian.com, or Spencer Sias, +1-650-424-5782 or spencer.sias@varian.com, both of Varian Medical Systems, Inc./ /Web site: http://www.varian.com / (VAR) CO: Varian Medical Systems, Inc. ST: California IN: HEA MTC BIO SU: ERN ERP CCA -----END PRIVACY-ENHANCED MESSAGE-----