Varian Medical Systems2007-01-23 15:43:03
Varian Medical Systems Reports Earnings for First Quarter of Fiscal Year 2007; Company Raises Earnings Guidance for Fiscal Year 2007
First Quarter Net Earnings Per Diluted Share Rise 23 Percent to $0.37($0.43 Excluding Stock Option Expensing)
Varian Medical Systems (NYSE: VAR) today announced results for the first quarter of fiscal year 2007 with solid growth in net earnings, revenues, and backlog versus the first quarter of fiscal year 2006. Strong North American net order growth was offset by declines in international regions due in large measure to order timing.
The company reported net earnings of $50 million ($0.37 per diluted share) in the first quarter of fiscal year 2007 versus net earnings of $41 million ($0.30 per diluted share) in the year-ago quarter. Revenues for the quarter were $388 million, up 16 percent from the first quarter of last fiscal year. Net orders for the first quarter were $408 million, up 1 percent versus the same period last year; and backlog at the end of the quarter stood at $1.4 billion, up 14 percent from the end of the first quarter of fiscal 2006.
"We are pleased with the growth in our earnings, revenues, and backlog during the quarter," said Timothy Guertin, president and CEO of Varian Medical Systems. "Additionally, this quarter was highlighted by strong growth in net orders for image-guided radiotherapy and stereotactic radiosurgery products in North America and for flat-panel digital image detectors for filmless X-rays."
The company ended the first quarter with $363 million in cash and marketable securities after spending $77 million during the quarter to repurchase 1.5 million shares of its stock, completing a 6 million share repurchase authorization initiated at the beginning of calendar year 2006. The company has an additional 4.5 million share repurchase authorization that extends through the end of fiscal year 2007.
Oncology Systems
Oncology Systems' first quarter revenues totaled $316 million, up 15 percent from results for first quarter of last fiscal year. This business recorded first-quarter net orders of $330 million, up 1 percent from the same period last year. Net orders were up 19 percent in North America and down 16 percent in international markets.
"Continued rapid adoption of image-guided radiotherapy and stereotactic radiosurgery drove the strong net order growth in North America," Guertin said. "Meanwhile, we had an unusually tough quarter in Europe where delays in government tenders contributed to a significant decline from a strong year-ago quarter. Net orders in Asia also declined versus an exceptionally strong year-ago quarter when we experienced 54 percent growth over the comparable period in fiscal year 2005. Even with occasionally sharp fluctuations in order patterns from region to region and quarter to quarter, we remain confident in the long-term growth prospects for this business in both the international and domestic markets."
X-Ray Products
Revenues for the X-Ray Products business, including tubes and digital flat-panel detectors for filmless X-ray imaging, were $62 million for the first quarter of fiscal year 2007, up 19 percent from the year-ago quarter. Net orders for this business were $67 million, up 22 percent from the year-ago quarter.
"We had another outstanding quarter in X-Ray Products with rapid expansion of shipments in flat-panel detectors for filmless x-ray imaging," Guertin said. "Flat panel revenues doubled as customers continued to broadly integrate these products into new filmless x-ray imaging equipment for medical diagnostics, dental imaging, veterinary care, and industrial inspection."
Other Businesses The company's Security and Inspection Products business and Ginzton Technology Center reported combined first quarter revenues of $9 million, up $3 million from the year-ago quarter. Net orders for the quarter were $10 million, down by $10 million from an exceptionally strong first quarter in fiscal year 2006.
"While the timing of orders is difficult to predict, we are optimistic about the outlook for our security business as several governments around the world are taking steps to improve cargo screening measures at ports and border crossings," Guertin said.
The company earlier announced its intent to acquire ACCEL Instruments, GmbH, a supplier of proton therapy systems for cancer treatment and scientific research instruments. "We are very excited to be adding this emerging business to Varian's growth portfolio," Guertin said.
Outlook
"Excluding the impact of our intended acquisition of ACCEL Instruments, we continue to believe that revenues for fiscal year 2007 should increase above the fiscal 2006 total by about 13 percent with 7 to 9 percent growth in the second quarter," Guertin said. "Net earnings should be in the range of $1.89 to $1.91 per diluted share for the year, and approach $0.46 for the second quarter."
The company expects that the annual impact of stock option expensing will be about $0.22 per diluted share in fiscal year 2007. The company is footnoting the impact of stock option expensing on the consolidated statements of earnings attached to the company's quarterly earnings releases.
First Quarter Net Earnings Per Diluted Share Rise 23 Percent to $0.37($0.43 Excluding Stock Option Expensing)
Varian Medical Systems (NYSE: VAR) today announced results for the first quarter of fiscal year 2007 with solid growth in net earnings, revenues, and backlog versus the first quarter of fiscal year 2006. Strong North American net order growth was offset by declines in international regions due in large measure to order timing.
The company reported net earnings of $50 million ($0.37 per diluted share) in the first quarter of fiscal year 2007 versus net earnings of $41 million ($0.30 per diluted share) in the year-ago quarter. Revenues for the quarter were $388 million, up 16 percent from the first quarter of last fiscal year. Net orders for the first quarter were $408 million, up 1 percent versus the same period last year; and backlog at the end of the quarter stood at $1.4 billion, up 14 percent from the end of the first quarter of fiscal 2006.
"We are pleased with the growth in our earnings, revenues, and backlog during the quarter," said Timothy Guertin, president and CEO of Varian Medical Systems. "Additionally, this quarter was highlighted by strong growth in net orders for image-guided radiotherapy and stereotactic radiosurgery products in North America and for flat-panel digital image detectors for filmless X-rays."
The company ended the first quarter with $363 million in cash and marketable securities after spending $77 million during the quarter to repurchase 1.5 million shares of its stock, completing a 6 million share repurchase authorization initiated at the beginning of calendar year 2006. The company has an additional 4.5 million share repurchase authorization that extends through the end of fiscal year 2007.
Oncology Systems
Oncology Systems' first quarter revenues totaled $316 million, up 15 percent from results for first quarter of last fiscal year. This business recorded first-quarter net orders of $330 million, up 1 percent from the same period last year. Net orders were up 19 percent in North America and down 16 percent in international markets.
"Continued rapid adoption of image-guided radiotherapy and stereotactic radiosurgery drove the strong net order growth in North America," Guertin said. "Meanwhile, we had an unusually tough quarter in Europe where delays in government tenders contributed to a significant decline from a strong year-ago quarter. Net orders in Asia also declined versus an exceptionally strong year-ago quarter when we experienced 54 percent growth over the comparable period in fiscal year 2005. Even with occasionally sharp fluctuations in order patterns from region to region and quarter to quarter, we remain confident in the long-term growth prospects for this business in both the international and domestic markets."
X-Ray Products
Revenues for the X-Ray Products business, including tubes and digital flat-panel detectors for filmless X-ray imaging, were $62 million for the first quarter of fiscal year 2007, up 19 percent from the year-ago quarter. Net orders for this business were $67 million, up 22 percent from the year-ago quarter.
"We had another outstanding quarter in X-Ray Products with rapid expansion of shipments in flat-panel detectors for filmless x-ray imaging," Guertin said. "Flat panel revenues doubled as customers continued to broadly integrate these products into new filmless x-ray imaging equipment for medical diagnostics, dental imaging, veterinary care, and industrial inspection."
Other Businesses The company's Security and Inspection Products business and Ginzton Technology Center reported combined first quarter revenues of $9 million, up $3 million from the year-ago quarter. Net orders for the quarter were $10 million, down by $10 million from an exceptionally strong first quarter in fiscal year 2006.
"While the timing of orders is difficult to predict, we are optimistic about the outlook for our security business as several governments around the world are taking steps to improve cargo screening measures at ports and border crossings," Guertin said.
The company earlier announced its intent to acquire ACCEL Instruments, GmbH, a supplier of proton therapy systems for cancer treatment and scientific research instruments. "We are very excited to be adding this emerging business to Varian's growth portfolio," Guertin said.
Outlook
"Excluding the impact of our intended acquisition of ACCEL Instruments, we continue to believe that revenues for fiscal year 2007 should increase above the fiscal 2006 total by about 13 percent with 7 to 9 percent growth in the second quarter," Guertin said. "Net earnings should be in the range of $1.89 to $1.91 per diluted share for the year, and approach $0.46 for the second quarter."
The company expects that the annual impact of stock option expensing will be about $0.22 per diluted share in fiscal year 2007. The company is footnoting the impact of stock option expensing on the consolidated statements of earnings attached to the company's quarterly earnings releases.
For more information contact:
Securiy & Inspection Products
6883 Spencer Street
Las Vegas
Nevada
89119
United States Of America
Tel: 702-938-4859
Fax: 702-938-4833