Based on preliminary data, the company expects earnings for the fourth quarter to be in the range of $0.28 to $0.30 diluted earnings per share. This included some unusual charges, including workforce reductions and an unusual level of bad debt expense in September. Excluding these unusual charges, the company expects earnings for the fourth quarter would be in the range of $.32 to $.34 diluted earnings per share.
The revenue shortfall is attributed to the company’s Scientific Instruments business, where transportation-related delays affected in particular the nuclear magnetic resonance product line, and the Vacuum Technologies business, which continued to be impacted by depressed capital spending. Preliminary results indicate that fourth quarter sales, compared to the prior-year quarter, grew about 10% in the Scientific Instruments segment, grew about 8% in the Electronics Manufacturing segment and declined approximately 26% in the Vacuum Technologies segment.
Like many other companies, the catastrophic events in September and the general economic conditions affected our business, said Allen J. Lauer, President and CEO, Varian, Inc. September is typically an important month for the company, following the heavy vacation months of July and August. Output from our factories declined in the week following September 11, and then we incurred extra costs as we worked to catch-up and meet our customers’ requirements. We were also faced with transportation disruptions that resulted in delayed revenues and higher costs.
Orders were very good in September for our Scientific Instrument segment, continued Lauer. Orders were weak for our Vacuum Technologies segment, and the company does not expect much change for the first quarter of fiscal 2002. After September 11, our Electronics Manufacturing segment experienced some requests to delay deliveries going forward, so revenue growth for this segment will most likely be modest for the first quarter compared to last year and slightly down sequentially from the fourth quarter.
However, the company continues its commitment to focus on the high growth markets of life sciences and health care research, said Lauer. We have been successful in shifting our product focus to leverage our broad, core technologies and continue to execute on providing the best tools and solutions for our customers.
These results are based on pre-SAB101 revenue recognition guidelines, which is consistent with the basis of the guidance the company provided at the beginning of the fourth quarter. As stated at that time, Varian, Inc. will report results for the fourth quarter and the full year on both a pre-SAB101 and SAB101 basis. Varian, Inc. will be officially announcing its fourth quarter earnings results for fiscal year 2001 on Thursday, October 25, 2001 and will be providing further guidance at that time.
SOURCE: COMPANY PRESS RELEASE
