-----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, UlGQ/CetQACLF2ZtIISr2sI1FivWcKqHD4maj4ZSGNr/VO4+GeNuwqvhlwVFVDEF pYYGsZDwJl/U4nI2vZSUlA== 0000891092-04-005134.txt : 20041027 0000891092-04-005134.hdr.sgml : 20041027 20041027164259 ACCESSION NUMBER: 0000891092-04-005134 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041027 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041027 DATE AS OF CHANGE: 20041027 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: 041099985 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 e19467_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) October 27, 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c)) ================================================================================ Item 2.02. Results of Operations and Financial Condition. On October 27, 2004, Varian Medical Systems Reports Record Earnings, Revenues, Net Orders, and Backlog for Fiscal Year 2004; Company Raises Guidance for Fiscal Year 2005. A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference. Item 7.01. Regulation FD Disclosure. On October 27, 2004, Varian Medical Systems Reports Record Earnings, Revenues, Net Orders, and Backlog for Fiscal Year 2004; Company Raises Guidance for Fiscal Year 2005. A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference. Item 9.01. Financial Statements and Exhibits. (c) Exhibits. 99.1 Press Release dated October 27, 2004 regarding Varian Medical Systems Reports Record Earnings, Revenues, Net Orders, and Backlog for Fiscal Year 2004; Company Raises Guidance for Fiscal Year 2005. 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: October 27, 2004 3 EXHIBIT INDEX Number Exhibit ------ ------- 99.1 Press Release dated October 27, 2004 regarding Varian Medical Systems Reports Record Earnings, Revenues, Net Orders, and Backlog for Fiscal Year 2004; Company Raises Guidance for Fiscal Year 2005. EX-99.1 2 e19467ex991.txt PRESS RELEASE Exhibit 99.1 Varian Medical Systems Reports Record Earnings, Revenues, Net Orders, and Backlog for Fiscal Year 2004; Company Raises Guidance for Fiscal Year 2005 PALO ALTO, Calif., Oct. 27 /PRNewswire-FirstCall/ -- Strong demand for new radiation therapy and X-ray imaging products contributed to another year of record earnings, revenues, net orders, and year-ending backlog for Varian Medical Systems (NYSE: VAR) in fiscal year 2004. The company today reported net earnings of $52 million ($0.37 per diluted share) for the fourth quarter of fiscal year 2004, versus net earnings of $44 million ($0.31 per diluted share) in the year-ago fourth quarter. Net earnings for fiscal year 2004 were up 28 percent to $167 million ($1.18 per diluted share) versus net earnings of $131 million ($0.92 per diluted share) for fiscal year 2003. Fourth-quarter revenues were $345 million, up 14 percent from the year-ago quarter, bringing revenues for the fiscal year to $1.2 billion, 19 percent higher than total revenues for fiscal year 2003. Net orders were $412 million for the fourth quarter, up 28 percent from the year ago quarter. Total net orders for fiscal year 2004 were $1.4 billion, up 21 percent from the fiscal year 2003 total. The backlog at year-end stood at $970 million, 20 percent higher than at the end of fiscal year 2003. "Our company had an outstanding quarter and fiscal year with growth in all of our segments," said Richard M. Levy, chairman and CEO of Varian Medical Systems. "We saw strong demand for new products that support more precise image-guided and stereotactic cancer treatments as well as solid revenue growth in our emerging flat-panel, brachytherapy, and security and inspection products." "Annual gross margin and operating margin increased to record levels," Levy added. "We generated operating cash flow of $63 million during the quarter and ended the fiscal year with $393 million in cash and marketable securities." The company repurchased $82 million of its common stock during the quarter, leaving a balance of 1.5 million shares in the existing repurchase authorization. Oncology Systems Oncology Systems' fourth quarter revenues for Clinac(R) accelerators and ancillary products as well as software and services for radiotherapy totaled $288 million, up12 percent from the fourth quarter of last fiscal year. Oncology Systems revenues for the fiscal year were $1 billion, up 20 percent from fiscal year 2003. This business recorded fourth-quarter net orders of $351 million, up 24 percent from the same period last year, and $1.2 billion for the fiscal year, up 20 percent from fiscal year 2003 totals. Net orders were up 10 percent in North America and up 37 percent in international markets for the year. "Orders for new products for image-guided radiotherapy (IGRT) and stereotactic treatments were robust during the quarter, and several centers have commenced routine IGRT procedures for their patients," Levy said. "Judging from strong customer response to our new products, we have successfully initiated another major technical advance in radiotherapy that makes it more precise, automated, and cost-effective than ever." Varian's Dynamic Targeting(R) IGRT technology adjusts for movements of tumors, making it possible to treat them with higher, more effective doses while protecting more of the surrounding healthy tissue. "This technology together with our new stereotactic products for ultra-precise, high dose delivery should make it possible to eradicate tumors using fewer treatments," Levy said. "These products also will help to expand the scope of radiation therapy to metastatic lesions and open the door to radiosurgical treatments using Varian technology." X-Ray Products Revenues for the X-Ray Products business, including tubes and amorphous silicon flat-panel digital imagers, were $45 million for the fourth quarter, up 21 percent from the year-ago quarter. For the full fiscal year 2004, revenues were a record $165 million, up 8 percent from fiscal year 2003. "Revenues and profits for our flat-panel imagers were up substantially in both the fourth quarter and the fiscal year," Levy said. "Gains in X-ray tube revenues contributed modestly to the top-line growth in this segment." Other The company's Ginzton Technology Center and its BrachyTherapy unit, recorded combined fourth quarter revenues of $12 million, up $3 million from the year-ago quarter. Combined fiscal year 2004 revenues for this segment were $40 million, up by $7 million from fiscal year 2003 levels. Outlook "With a healthy backlog and the successful addition of new products, we are raising our guidance," Levy said. "For fiscal 2005, total company revenues should increase in the 13 to 14 percent range; and earnings per diluted share should rise by nearly 20 percent over their respective 2004 totals. For the first quarter of fiscal 2005, total company revenues should increase in low double digits and earnings per diluted share should rise by nearly 20 percent over their respective totals for the comparable quarter in 2004." Investor Conference Call Varian Medical Systems is scheduled to conduct its fiscal year 2004 conference call at 2 p.m. PT 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 where it will be archived for a year. To access the call via telephone, dial 1-800-299-0148 from inside the U.S. or 1-617-801-9711 from outside the U.S. and enter confirmation code 77321343. The 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 98871400. The telephone replay will be available through 5 p.m. PT, October 29, 2004. Varian Medical Systems, Inc., of Palo Alto, California is the world's leading manufacturer of integrated cancer therapy systems, which are used to treat 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 3,280 people who are located at manufacturing sites in North America and Europe and in its 56 sales and support offices around the world. Additional information is available on the company's investor relations 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, revenues, backlog, or earnings growth; future financial results and any statements using the terms "should," "will," "guidance," 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 deploy 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 revenues 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 revenues; 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 revenues 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, 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. A summary of earnings and other financial information follows. FOR INFORMATION CONTACT: Elisha Finney (650) 424-6803 elisha.finney@varian.com Spencer Sias (650) 424-5782 spencer.sias@varian.com Varian Medical Systems, Inc. and Subsidiary Companies Consolidated Statements of Earnings (Unaudited) (Dollars and shares in millions, except per share amounts) Q4 QTR Q4 QTR Q4YTD Q4YTD 2004 2003 2004 2003 Net orders $412.4 322.3 1,397.6 1151.7 Oncology Systems 351.0 282.5 1,170.4 977.0 X-Ray Products 48.0 30.4 184.0 142.0 Other 13.4 9.4 43.2 32.7 Order backlog $970.5 808.4 970.5 808.4 Revenues $344.8 303.3 1,235.5 1041.6 Oncology Systems 287.6 256.8 1,030.5 855.6 X-Ray Products 45.1 37.2 165.4 152.9 Other 12.1 9.3 39.6 33.1 Gross margin 147.9 130.7 517.5 421.9 As a percent of revenues 42.9% 43.1% 41.9% 40.5% Operating expenses Research and development 18.3 16.7 72.1 59.2 Selling, general and administrative 50.2 47.4 189.4 164.3 Operating earnings 79.4 66.6 256.0 198.4 As a percent of revenues 23.0% 22.0% 20.7% 19.0% Interest income, net (0.3) (0.4) (1.3) (3.0) Earnings before taxes 79.7 67.0 257.3 201.4 Taxes on earnings 27.9 23.4 90.1 70.5 Net earnings(1) $51.8 43.6 167.2 130.9 Net earnings per share - basic:(1)(2) $0.38 0.32 1.23 0.96 Net earnings per share - diluted:(1)(2) $0.37 0.31 1.18 0.92 Shares used in the calculation of net earnings per share:(2) Average shares outstanding - basic 135.2 136.2 136.0 136.1 Average shares outstanding - diluted 140.5 142.2 142.2 142.2 (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 fourth quarter of fiscal years 2004 and 2003 would have been reduced by $4.8M and $5.1M, respectively, and net earnings for the twelve months of both fiscal years 2004 and 2003 would have been reduced by $20.3M. Net earnings per basic share for the fourth quarter of fiscal years 2004 and 2003 would have been $0.35 and $0.28, respectively, and net earnings per diluted share would have been $0.34 and $0.27, respectively. Net earnings per basic share for the twelve months of fiscal years 2004 and 2003 would have been $1.08 and $0.82, respectively, and net earnings per diluted share would have been $1.03 and $0.78, respectively. (2) Note: The results for the fourth quarter and the twelve months of fiscal year 2003 have been restated for the two-for-one stock split (effected in the form of a 100 percent stock dividend) paid on July 30, 2004. Net earnings per basic share, prior to the stock split, for the fourth quarter and twelve months of fiscal year 2003 were $0.64 and $1.92, respectively. Net earnings per diluted share, prior to the stock split, for the fourth quarter and twelve months of fiscal year 2003 were $0.61 and $1.84, respectively. Varian Medical Systems, Inc. and Subsidiary Companies Consolidated Balance Sheets (In thousands) October 1, September 26, 2004 2003(2) (Unaudited) Assets Current assets Cash and cash equivalents $239,470 $210,448 Short-term marketable securities 112,478 112,128 Accounts receivable, net 288,663 252,265 Inventories 127,701 116,815 Other current assets 116,824 113,868 Total current assets 885,136 805,524 Property, plant and equipment 254,712 236,077 Accumulated depreciation and amortization (169,335) (154,905) Net property, plant and equipment 85,377 81,172 Long-term marketable securities 40,970 84,820 Goodwill 112,653 59,979 Other non-current assets 46,056 21,992 Total assets $1,170,192 $1,053,487 Liabilities and Stockholders' Equity Current liabilities Accounts payable - trade $59,639 $53,231 Accrued expenses 255,519 234,344 Product warranty 40,654 36,040 Advance payments from customers 100,277 85,801 Current maturities of long term debt 5,250 -- Total current liabilities 461,339 409,416 Long-term accrued expenses and other 41,889 21,895 Long-term debt 53,250 58,500 Total liabilities 556,478 489,811 Stockholders' Equity Common stock (1) 134,045 135,942 Capital in excess of par value (1) 132,875 89,287 Retained earnings and accumulated other comprehensive loss 346,794 338,447 Total stockholders' equity 613,714 563,676 Total liabilities and stockholders' equity $1,170,192 $1,053,487 (1) Note: The consolidated balance sheets as of October 1, 2004 and September 26, 2003 reflect the two-for-one stock split (effected in the form of a 100 percent stock dividend) paid on July 30, 2004. (2) Note: Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation. These reclassifications have no impact on previously reported net earnings. SOURCE Varian Medical Systems, Inc. -0- 10/27/2004 /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: BIO MTC HEA SU: ERN ERP CCA -----END PRIVACY-ENHANCED MESSAGE-----