-----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, E/i/NIN6DbR6Iu117p7CxLja58TymPsKMHhJI02YH7XCHXXir7c7P651SJPVJ11D A8JSFlIF3WmUhMeK51Zg3Q== 0000891618-96-000376.txt : 19960514 0000891618-96-000376.hdr.sgml : 19960514 ACCESSION NUMBER: 0000891618-96-000376 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARIAN ASSOCIATES INC /DE/ CENTRAL INDEX KEY: 0000203527 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 942359345 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07598 FILM NUMBER: 96560906 BUSINESS ADDRESS: STREET 1: 3100 HANSEN WAY STREET 2: MAIL STOP E 224 CITY: PALO ALTO STATE: CA ZIP: 94304-1030 BUSINESS PHONE: 4154934000 MAIL ADDRESS: STREET 1: 3100 HANSEN WAY STREET 2: MAIL STOP E 224 CITY: PALO ALTO STATE: CA ZIP: 94304-1030 FORMER COMPANY: FORMER CONFORMED NAME: VARIAN DELAWARE INC DATE OF NAME CHANGE: 19761123 10-Q 1 VARIAN ASSOCIATES FORM 10-Q PERIOD ENDING 3/31/96 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 29, 1996 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSISTION PERIOD FROM TO COMMISSION FILE NUMBER: 1-7598 EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER: VARIAN ASSOCIATES, INC. STATE OR OTHER JURISDICTION OF IRS EMPLOYER INCORPORATION OR ORGANIZATION: IDENTIFICATION NO.: DELAWARE 94-2359345 Address of principal executive offices: 3050 Hansen Way, Palo Alto, California 94304-1000 Telephone No., including area code: (415) 493-4000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceeding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- An index of exhibits filed with this Form 10-Q is located on page 14. Number of shares of Common Stock, par value $1 per share, outstanding as of the close of business on April 26, 1996: 31,036,000 shares. 2 PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF EARNINGS UNAUDITED
SECOND QUARTER ENDED SIX MONTHS ENDED - ----------------------------------------------------------------------------------------------- (AMOUNTS IN THOUSANDS MARCH 29, MARCH 31, MARCH 29, MARCH 31, EXCEPT PER SHARE AMOUNTS) 1996 1995 1996 1995 - ----------------------------------------------------------------------------------------------- SALES $417,603 $428,637 $768,850 $774,779 -------- -------- -------- -------- OPERATING COSTS AND EXPENSES Cost of sales 263,382 285,453 481,497 516,355 Research and development 27,278 22,295 51,795 42,049 Marketing 51,016 47,598 97,740 90,419 General and administrative 23,275 30,748 46,480 54,190 -------- -------- -------- -------- Total Operating Costs and Expenses 364,951 386,094 677,512 703,013 -------- -------- -------- -------- OPERATING EARNINGS 52,652 42,543 91,338 71,766 Interest (income)/expense, net 1,055 580 (165) 1,510 -------- -------- -------- -------- EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES 51,597 41,963 91,503 70,256 Taxes on earnings 18,570 15,528 32,940 25,998 -------- -------- -------- -------- EARNINGS FROM CONTINUING OPERATIONS $ 33,027 $ 26,435 $ 58,563 $ 44,258 DISCONTINUED OPERATIONS - NET OF TAXES 0 3,257 0 6,184 -------- -------- -------- -------- NET EARNINGS $ 33,027 $ 29,692 $ 58,563 $ 50,442 ======== ======== ======== ======== AVERAGE SHARES OUTSTANDING INCLUDING COMMON STOCK EQUIVALENTS 32,169 35,100 32,227 35,182 ======== ======== ======== ======== EARNINGS PER SHARE - FULLY DILUTED CONTINUING OPERATIONS $ 1.03 $ 0.75 $ 1.82 $ 1.26 DISCONTINUED OPERATIONS 0.00 0.10 0.00 0.18 -------- -------- -------- -------- NET EARNINGS PER SHARE $ 1.03 $ 0.85 $ 1.82 $ 1.44 ======== ======== ======== ======== - ----------------------------------------------------------------------------------------------- Dividends Declared Per Share $ 0.08 $ 0.07 $ 0.15 $ 0.13 Order Backlog $716,172 $668,834 - -----------------------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements -2- 3 VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS UNAUDITED
- ------------------------------------------------------------------------------------------------------------- MARCH 29, SEPTEMBER 29, (DOLLARS IN THOUSANDS EXCEPT PAR VALUES) 1996 1995 - ------------------------------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 87,764 $ 122,728 Accounts receivable 363,482 346,330 Inventories Raw materials and parts 114,681 98,402 Work in process 71,462 52,616 Finished goods 29,231 20,684 ---------- ---------- Total Inventories 215,374 171,702 Other current assets 111,514 116,958 ---------- ---------- TOTAL CURRENT ASSETS 778,134 757,718 Property, Plant, and Equipment 456,270 431,303 Accumulated depreciation and amortization (252,133) (239,422) ---------- ---------- NET PROPERTY, PLANT, AND EQUIPMENT 204,137 191,881 Other Assets 56,809 54,183 ---------- ---------- TOTAL ASSETS $1,039,080 $1,003,782 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 56,118 $ 1,755 Accounts payable - trade 88,326 82,851 Accrued expenses 249,949 316,419 Product warranty 50,563 48,076 Advance payments from customers 58,380 51,600 ---------- ---------- TOTAL CURRENT LIABILITIES 503,336 500,701 Long-Term Accrued Expenses 28,151 29,026 Long-Term Debt 60,258 60,329 Deferred Taxes 19,299 18,797 ---------- ---------- TOTAL LIABILITIES 611,044 608,853 ---------- ---------- STOCKHOLDERS' EQUITY Preferred stock Authorized 1,000,000 shares, par value $1, issued none - - Common stock Authorized 99,000,000 shares, par value $1, issued and outstanding 31,035,000 shares at March 29,1996 and 31,052,000 shares at September 29, 1995 31,035 31,052 Retained earnings 397,001 363,877 ---------- ---------- TOTAL STOCKHOLDERS' EQUITY 428,036 394,929 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,039,080 $1,003,782 ========== ==========
See accompanying notes to the consolidated financial statements. -3- 4 VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED
FOR THE SIX MONTHS ENDED - ------------------------------------------------------------------------------------------------------- MARCH 29, MARCH 31, (DOLLARS IN THOUSANDS) 1996 1995 - ------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Net Cash (Used)/Provided by Operating Activities $(26,751) $ 26,555 INVESTING ACTIVITIES Purchase of property, plant, and equipment (34,730) (27,587) Purchase of businesses, net of cash acquired - (12,754) Other, net (3,490) 2,593 -------- -------- Net Cash Used by Investing Activities (38,220) (37,748) FINANCING ACTIVITIES Net borrowings on short-term obligations 54,363 33,675 Proceeds from common stock issued to employees 17,166 14,471 Purchase of common stock (38,259) (30,452) Other, net (4,434) (4,467) -------- -------- Net Cash Provided by Financing Activities 28,836 13,227 EFFECTS OF EXCHANGE RATE CHANGES ON CASH 1,171 (3,750) -------- -------- Net Decrease in Cash and Cash Equivalents (34,964) (1,716) Cash and Cash Equivalents at Beginning of Period 122,728 78,872 -------- -------- Cash and Cash Equivalents at End of Period $ 87,764 $ 77,156 ======== ========
See accompanying notes to the consolidated financial statements. -4- 5 VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Unaudited (Dollars in Millions) NOTE 1: The consolidated financial statements include the accounts of Varian Associates, Inc. and its subsidiaries and have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest Form 10-K annual report. In the opinion of management, the consolidated financial statements include all normal recurring adjustments necessary to present fairly the information required to be set forth therein. The results of operations for the second quarter and six months ended March 29, 1996, and March 31, 1995, are not necessarily indicative of the results to be expected for a full year or for any other periods. NOTE 2: Inventories are valued at the lower of cost or market (net realizable value) using the last-in, first-out (LIFO) cost for the U.S. inventories of the Health Care Systems (except for X-ray Tube Products), Instruments, and Semiconductor Equipment segments. All other inventories are valued principally at average cost. If the first-in, first-out (FIFO) method had been used for those operations valuing inventories on a LIFO basis, inventories would have been higher than reported by $47.7 at March 29, 1996, $45.6 at September 29, 1995, $50.2 at March 31, 1995, and $49.0 at September 30, 1994. NOTE 3: The Company enters into forward exchange contracts to mitigate the effects of operational (sales orders and purchase commitments) and balance sheet exposures to fluctuations in foreign currency exchange rates. When the Company's foreign exchange contracts hedge operational exposure, the effects of movements in currency exchange rates on these instruments are recognized in income when the related revenue and expenses are recognized. When foreign exchange contracts hedge balance sheet exposure, such effects are recognized in income when the exchange rate changes. Because the impact of movements in currency exchange rates on foreign exchange contracts generally offsets the related impact on the 5 6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 3 (CONTINUED) underlying items being hedged, these instruments do not subject the Company to risk that would otherwise result from changes in currency exchange rates. At March 29, 1996, the Company had forward exchange contracts with maturities of twelve months or less to sell foreign currencies totaling $120.2 million ($31.7 million of French francs, $20.6 million of Japanese yen, $19.9 million of Canadian dollars, $14.8 million of British pounds, $13.9 million of Deutsche marks, $9.5 million of Italian lira, $3.5 million of Swiss francs, $2.7 million Swedish krona, $1.8 million each of Austrian schillings and Australian dollars) and to buy foreign currencies totaling $64.9 million ($16.2 million of British pounds, $15.6 million of French francs, $10.9 million of Japanese yen, $6.6 million of Swiss francs, $4.8 million of Australian dollars, $3.2 million each of Canadian dollars, Deutsche marks and Italian lira, and $1.2 million of Swedish krona). NOTE 4: In February 1990, a purported class action was brought by Panache Broadcasting of Pennsylvania, Inc. on behalf of all purchasers of electron tubes in the U.S. against the Company and a joint-venture partner, alleging that the activities of their joint venture in the power-grid tube industry violated antitrust laws. The complaint seeks injunctive relief and unspecified damages, which may be trebled under the antitrust laws. In February 1993, the U.S. District Court in Chicago granted in part and denied in part the Company's motion to dismiss the complaint. Panache Broadcasting filed an amended complaint in March 1993. In October 1995, the Court affirmed a federal Magistrate's recommendation to grant in part and deny in part the Company's motion to dismiss the amended complaint. Also in October 1995, the Magistrate recommended denial of plaintiff's request to certify the purported class and recommended certification of a different and narrower class than that defined by plaintiff. The Company is appealing that proposed class certification to the District Court, and believes that it has meritorious defenses to the Panache lawsuit. In addition to the above-referenced matter, the Company is currently a defendant in a number of legal actions and could incur an uninsured liability in one or more of them. In the opinion of management, the outcome of the above litigation will not have a material adverse effect on the financial condition of the Company. The Company has also been named by the U.S. Environmental Protection Agency or third parties as a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, at eight sites to which Varian is alleged to have shipped manufacturing waste for recycling or disposal. The Company is also involved in various stages of environmental investigation and/or remediation under the direction of, or in 6 7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 4 (CONTINUED) consultation with, federal, state, and/or local agencies at certain current or former Company facilities. Uncertainty as to (a) the extent to which the Company caused, if at all, the conditions being investigated, (b) the extent of environmental contamination and risks, (c) the applicability of changing and complex environmental laws, (d) the number and financial viability of other potentially responsible parties, (e) the stage of the investigation and/or remediation, (f) the unpredictability of investigation and/or remediation costs (including as to when they will be incurred), (g) applicable clean-up standards,(h) the remediation (if any) that will ultimately be required, and (i) available technology make it difficult to assess the likelihood and scope of further investigation or remediation activities or to estimate the future costs of such activities if undertaken. Nevertheless, the Company continues to estimate the amounts of these future costs in periodically establishing reserves, based partly on progress made in determining the magnitude of such costs, experience gained from sites on which remediation is ongoing or has been completed, and the timing and extent of remedial actions required by the applicable governmental authorities. As of March 29, 1996, the Company estimated that the present value of the Company's future exposure for environmental related investigation and remediation expenditures, including operating and maintenance costs, ranged from approximately $33.4 million to $56.0 million. The time frame over which the Company expects to incur such costs varies with each site, ranging up to 30 years. Management believes that no amount in the foregoing range of estimated future costs is more probable of being incurred than any other amount in such range and therefore has accrued $33.4 million in estimated environmental costs at March 29, 1996. Although any ultimate liability arising from an environmental related matter described herein could result in significant expenditures that, if aggregated and assumed to occur within a single fiscal year, would be material to the Company's financial condition, the likelihood of such occurrence is considered remote. Based on information currently available to management and its best assessment of the ultimate amount and timing of environmental related events, management believes that the costs of these environmental related matters are not reasonably likely to have a material adverse effect on the financial condition of the Company. The Company evaluates its liability for environmental related investigation and remediation in light of the liability and financial wherewithal of potentially responsible parties and insurance companies with respect to which the Company believes that it has rights to contribution, indemnity and/or reimbursement. 7 8 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 4: (CONTINUED) Claims for recovery of environmental investigation and remediation costs already incurred and to be incurred in the future have been asserted against various insurance companies and other third parties. In 1992, the Company filed a lawsuit against 36 insurance companies with respect to most of the above-referenced sites. The Company received certain settlements during 1995 and 1996 and has a $6.5 million receivable in Other Current Assets at March 29, 1996. 8 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS On April 18, 1996, the Company reported record second-quarter orders and net earnings. Earnings per share also rose to a new high of $1.03 for the quarter, up 37% from last year's $.75. Earnings for the quarter were $33.0 million, a 25% increase over last year's $26.4 million. Second-quarter orders rose 14% to $430 million. Second-quarter sales of $418 million were slightly below the year-ago quarter of $429 million, but rose 8% after adjusting for the effect of an equipment distribution agreement with Tokyo Electron Ltd. (TEL) that was terminated at the end of fiscal 1994. Backlog of $716 million was above last year's $669 million, but declined from the first quarter's record $725 million. For the first six months of Fiscal 1996, the Company had net earnings of $58.6 million, up 32% from the prior year's $44.3 million. Earnings per share of $1.82 were 44% ahead of 1995's $1.26. Orders rose to $866 million from last year's $810 million. First-half sales of $769 million were down slightly from the year-ago's $775 million, but grew 11% when adjusted for the termination of the TEL distribution agreement. The strong performance was driven largely by the Company's Semiconductor Equipment business and by continuing improved performance in its Instruments business. Good international orders and sales were also a factor and represent a growing proportion of the Company's totals in line with its strategy to strengthen its presence in markets outside the U.S. All three of the Company's business segments experienced growing demand from abroad, particularly from the Far East. Semiconductor Equipment orders grew 18% compared to 1995's first half and were a record $207 million in the second quarter. First-half sales increased 28% from the prior year, after adjustment for the previously mentioned TEL resale agreement. Backlog rose 30% above the year-ago period to a record high of $324 million. Second-quarter operating margins for this business improved over the prior year, and nearly matched the all-time record set in the first quarter. Orders for both ion implantation and thin film systems were good, particularly for the Company's leading-edge systems. However, the orders momentum may moderate to some degree in coming months as the rapid growth of the semiconductor industry slows somewhat. Demand for the Company's products was spread across multiple geographic regions, with particular strength in Korea and other areas of the Far East. Year-to-date orders for the Company's Health Care Systems business declined 9% from the 1995 period. Second quarter orders rose 4% from a year ago, topping the $100 million mark for the twelfth consecutive quarter. Sales declined 7% in the first half, and backlog increased 2%. A softening in the U.S. market for oncology products was partially offset by strengthening international orders for X-ray tubes and cancer treatment systems. A multi-year program to develop and broaden distribution in overseas markets has positioned the business to take good advantage of increasing world demand for cancer care equipment and ancillary products, particularly in Europe and the Far East. A 9 10 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) continuing stream of system enhancements is planned to allow the Company to offer previously unavailable techniques and approaches in advanced cancer therapy. Along with growing overseas demand, these developments should help this business achieve continued, but somewhat slower, growth and maintain its margins. Instruments business orders, and sales rose 17% and 9%, respectively, over the prior year's first half. Operating margins improved as well. The strong demand was driven largely by good volume in the vacuum products and nuclear magnetic resonance instrument sectors. Second-quarter orders of $122 million and sales of $118 million reached new second quarter highs, while backlog rose to $122 million, a record for any period. Instruments business has an array of new products that should continue to fuel its growth at a pace above the prior year. An expanding international infrastructure is also providing new distribution channels in developing countries with good potential for future expansion. FINANCIAL CONDITION The Company's financial condition remained strong during the first six months of fiscal 1996. Operating activities consumed cash of $26.8 million in the first-half of fiscal 1996 and provided $26.6 million in the same period last year. Investing activities in the first half of fiscal 1996 used $38.2 million, $34.7 million for the purchase of property, plant and equipment. Investing activities in the same period last year used $37.7 million, $12.8 million for the purchase of businesses, and $27.6 million for the purchase of property, plant and equipment. Financing activities provided $28.8 million during the first-half of 1996 and $13.2 million during the same period last year. Total debt as a percentage of total capital increased to 21.4% at the end of the second quarter of fiscal 1996 as compared with 13.6% at fiscal year end. The ratio of current assets to current liabilities increased to 1.55 to 1 at March 29, 1996, from 1.51 to 1 at fiscal year end, 1995. The Company has available $50 million in unused committed lines of credit. OUTLOOK Except for historical information, this discussion contains forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include: product demand and market acceptance risks; the effect of general economic conditions and foreign currency fluctuations; the impact of competitive products and pricing; new product development and commercialization; the impact of slower growth in worldwide semiconductor demand; the effect of the continuing shift in growth from domestic to international health care customers, and the impact of managed care initiatives in the United States; the continued improvement of the various instruments markets the company serves; the ability to hire and retain sufficient qualified personnel; and the ability to increase operating margins on higher sales; and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. 10 11 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Varian Associates, Inc.: We have reviewed the consolidated balance sheet of Varian Associates, Inc. and subsidiary companies as of March 29, 1996 and March 31, 1995, and the related consolidated statements of earnings for the quarters and semi-annual periods ended March 29, 1996 and March 31, 1995, and the condensed consolidated statements of cash flows for the semi-annual periods ended March 29, 1996 and March 31, 1995. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the aforementioned financial statements for them to be in conformity with generally accepted accounting principles. /s/ Coopers & Lybrand L.L.P. ------------------------------ COOPERS & LYBRAND L.L.P. San Jose, California April 17, 1996 11 12 PART II. OTHER INFORMATION Item 4 Submission of Matters to a Vote of Security Holders At the Company's Annual Meeting of Stockholders held on February 15, 1996, the stockholders of the Company voted on the election of five directors to the Company's Board of Directors for three-year terms. The voting on each such nominee for director was as follows:
Votes Votes Broker Nominee For Withheld Abstentions Nonvotes(1) - -------------------- ---------- -------- ----------- ----------- Angus A. MacNaughton 25,539,122 289,104 0 John G. McDonald 25,538,640 289,586 0 Wayne R. Moon 25,324,427 503,799 0 Burton Richter 25,543,036 285,190 0 Elizabeth E. Tallett 25,526,053 302,173 0
(1) Pursuant to the Rules of the New York Stock Exchange, this election of directors constituted a routine matter, and therefore brokers were permitted to vote without receipt of instructions from clients. Item 6 Exhibits and Reports on Form 8-K - ------ -------------------------------- (a) Exhibits: Exhibit 11 Computation of Earnings Per Share. Exhibit 15 Letter Regarding Unaudited Interim Financial Information. Exhibit 27 Financial Data Schedule (EDGAR filing only). (b) Reports on Form 8-K: There were no reports on Form 8-K filed for the second quarter ended March 29, 1996. 12 13 SIGNATURE 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 thereunto duly authorized. VARIAN ASSOCIATES, INC. Registrant May 9, 1996 Date /s/ Wayne P. Somrak ----------------------------- Wayne P. Somrak Vice President and Controller (Chief Accounting Officer) 13 14 INDEX OF EXHIBITS Exhibit Number Page - ------- ---- 11 Computation of Earnings Per Share 15 15 Letter Regarding Unaudited Interim Financial Information 16 27 Financial Data Schedule (EDGAR filing only) - 14 EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 EXHIBIT 11 COMPUTATION OF EARNINGS PER SHARE IN ACCORDANCE WITH INTERPRETIVE RELEASE NO. 34-9083 UNAUDITED
SECOND QUARTER ENDED SIX MONTHS ENDED MARCH 29, MARCH 31, MARCH 29, MARCH 31, (SHARES IN THOUSANDS) 1996 1995 1996 1995 - ------------------------------------------------------------------------------------------------------------------------------- Actual weighted average shares outstanding for the period 31,076 33,782 31,078 33,838 Dilutive employee stock options 1,093 1,318 1,149 1,344 ------- ------- ------- ------- Weighted average shares outstanding for the period 32,169 35,100 32,227 35,182 ======= ======= ======= ======= (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Earnings from continuing operations 33,027 26,435 58,563 44,258 Earnings from discontinued operations - 3,257 - 6,184 ------- ------- ------- ------- Earnings applicable to fully diluted earnings per share $33,027 $29,692 $58,563 $50,442 ======= ======= ======= ======= Earnings per share based on SEC interpretive release No. 34-9083: Earnings from continuing operations 1.03 0.75 1.82 1.26 Earnings from discontinued operations - 0.10 - 0.18 ------- ------- ------- ------- Earnings per share - Fully Diluted (1) $ 1.03 $ 0.85 $ 1.82 $ 1.44 ======= ======= ======= =======
(1) There is no significant difference between fully diluted earnings per share and primary earnings per share. -15- EX-15 3 LETTER REGARDING UNAUDITED INTERIM FINANCIAL INFO. 1 EXHIBIT 15 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 RE: Varian Associates, Inc. Registrations on Forms S-8 and S-3 We are aware that our report dated April 17, 1996 on our review of the interim financial information of Varian Associates, Inc. for the three-month and six month periods ended March 29, 1996 included in this Form 10-Q is incorporated by reference in the Company's registration statements on Forms S-8, Registration Statement Numbers 33-46000, 33-33661, 33-33660, and 2-95139 and Forms S-8 and S-3, Registration Statement Number 33-40460. Pursuant to Rule 436(c) under the Securities Act of 1933 this report should not be considered a part of the registration statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. /s/ Coopers & Lybrand L.L.P. ---------------------------- Coopers & Lybrand L.L.P San Jose, California May 9, 1996 16 EX-27 4 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS SEP-27-1996 SEP-30-1995 MAR-29-1996 87,764 0 365,833 2,351 215,374 778,134 456,270 252,133 1,039,080 503,336 0 0 0 31,035 397,001 1,039,080 768,850 768,850 481,497 677,512 0 0 (165) 91,503 32,940 58,563 0 0 0 58,563 0 1.82
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