Home Press Release Varian Reports Results for Third Quarter of Fiscal Year 2020

Varian Reports Results for Third Quarter of Fiscal Year 2020

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PALO ALTO, Calif., Aug. 2, 2020 /PRNewswire/ — 

Third Quarter 2020 Abstract

  • Working efficiency displays a full quarter of COVID-19 influence throughout all geographies
  • Oncology Techniques gross orders down 14% in {dollars} and in fixed foreign money within the quarter; trailing twelve months gross orders grew 1% in {dollars} and in fixed foreign money
  • 7 EthosTM orders acquired, together with 5 in North America and a pair of in Europe, bringing whole orders since launch to 38 models
  • Complete firm revenues down 16% in {dollars} and 15% in fixed foreign money, to $694 million; natural revenues down 19%(1)
  • GAAP working earnings grew 11% at 8.6% of revenues; non-GAAP working earnings declined 32% at 14.1% of revenues
  • GAAP web earnings per diluted share of $0.67; non-GAAP web earnings per diluted share of $0.78

(1) Excludes the year-over-year influence of international change charges and development from CTSI and Interventional Options companies

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Varian (NYSE: VAR) at the moment introduced its third quarter fiscal yr 2020 outcomes.

“I’m proud of the workforce’s execution in the course of the quarter, particularly given the difficult working backdrop created by the pandemic,” stated Dow Wilson, President and Chief Govt Officer of Varian.  “Our continued investments in our strategic enablers, mixed with our sturdy monetary standing, place us effectively to exit the pandemic stronger, and lengthen our world management in oncology. As well as, we’re happy to announce a transaction with Siemens Healthineers – delivering instant and compelling worth to our shareholders, whereas bringing us even nearer to realizing our transformative imaginative and prescient. Our revolutionary and patient-centric tradition has enabled us to change into an iconic chief in radiotherapy and multi-disciplinary most cancers care, with a trusted world model and robust buyer loyalty. We’re thrilled to associate with Siemens Healthineers to increase our famend buyer care, serving clinicians and sufferers from the very first stage within the battle towards most cancers.”

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Abstract

({Dollars} and shares in tens of millions, besides per share quantities)

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Q3 2020


Q3 2019


Y/Y


Q3 FY20
YTD


Q3 FY19
YTD


  Y/Y       

Revenues

$

694.3



$

825.8



(16)

%


$

2,317.7



$

2,346.2



(1)

%


Gross margin as a proportion of revenues

43.0

%


42.5

%


50 bps


43.3

%


42.0

%


130 bps


GAAP web earnings attributable to Varian

$

61.2



$

29.4



109

%


$

192.6



$

221.2



(13)

%


GAAP web earnings per share – diluted

$

0.67



$

0.32



110

%


$

2.11



$

2.41



(12)

%


Internet money offered by working actions

$

83.0



$

126.5



(34)

%


$

217.5



$

254.0



(14)

%


Non-GAAP web earnings attributable to Varian (1)

$

70.8



$

120.8



(41)

%


$

255.0



$

314.3



(19)

%


Non-GAAP web earnings per share –
diluted (1)

$

0.78



$

1.32



(41)

%


$

2.79



$

3.42



(18)

%


Shares utilized in computing GAAP and non-
GAAP web earnings per diluted share

91.2


91.8




91.4


91.9





(1)

Non-GAAP web earnings and non-GAAP web earnings per diluted share are outlined as GAAP web earnings and GAAP web earnings per
diluted share adjusted to exclude the amortization of intangible property and amortization of stock step-up, acquisition and integration-
associated bills or advantages, impairment expenses, restructuring expenses, vital litigation expenses or advantages, authorized prices, positive aspects and
losses on fairness investments, and vital non-recurring tax expense or advantages. Reconciliation of GAAP and non-GAAP monetary
measures could be discovered on the finish of the press launch.

The corporate ended the quarter with $769 million in money and money equivalents and $580 million in debt.  Internet money offered by working actions was $83 million.

Oncology Techniques Section
Oncology Techniques revenues totaled $654 million, down 17%.  Gross orders had been $665 million, down 14%.  Gross orders within the Americas had been down 8%, together with North America, which was down 6%.  In EMEA, gross orders fell 32%.  In Asia-Pacific, gross orders had been up 4%.

Proton Options Section
Proton Options revenues totaled $33 million, up 6%, primarily pushed by continued development in providers revenues.

Different Section
Revenues for the Different phase had been $7 million.  The Different phase is comprised of the Interventional Options enterprise, together with cryoablation, embolic microspheres, and microwave ablation.  Moreover, it consists of investments in cardiac radioablation.

Non-GAAP Changes
This quarter, our GAAP working earnings and GAAP EPS included a $21 million acquire on an fairness funding that went public, a $14 million workforce restructuring cost and a $9 million impairment of our available-for-sale investments.  As a reminder, within the third quarter of fiscal yr 2019, GAAP web earnings and GAAP EPS included a $51 million goodwill impairment cost associated to our Proton Options enterprise and a $21 million cost related to the write-off of in-process analysis and growth acquired within the CyberHeart acquisition.

Cancellation of Convention Name
In gentle of the introduced transaction with Siemens Healthineers, Varian has cancelled its third quarter fiscal yr 2020 earnings convention name beforehand scheduled for 4:30 PM ET on August 5, 2020.

About Varian
At Varian, we envision a world with out worry of most cancers. For greater than 70 years, we’ve developed, constructed and delivered revolutionary most cancers care applied sciences and options for our medical companions across the globe to assist them deal with tens of millions of sufferers annually. With an Clever Most cancers Care method, we’re harnessing superior applied sciences like synthetic intelligence, machine studying and information analytics to reinforce most cancers therapy and increase entry to care. Our 10,000 workers throughout 70 areas maintain the affected person and our medical companions on the heart of our pondering as we energy new victories in most cancers care. As a result of, for most cancers sufferers all over the place, their battle is our battle. For extra data, go to http://www.varian.com and comply with @VarianMedSys on Twitter.

Ahead-Trying Statements 

Besides for historic data, this information launch accommodates forward-looking statements throughout the that means of the Personal Securities Litigation Reform Act of 1995. Statements regarding the firm’s future orders, potential to increase the Firm’s world management in oncology” and the anticipated influence of the COVID-19 pandemic on our enterprise; and any statements utilizing the phrases “may,” “consider,” “anticipate,” “promising,” “outlook,” “ought to,” “place us effectively,” “will” or related statements are forward-looking statements that contain dangers and uncertainties that would trigger the corporate’s precise outcomes to vary materially from these anticipated. Such dangers and uncertainties embrace the long run influence of the COVID-19 pandemic on our enterprise, together with however not restricted to, the influence on our workforce, operations, provide chain, demand for our services and products, and our monetary outcomes and situation; our potential to efficiently handle the challenges related to the COVID-19 pandemic; our potential to attain anticipated synergies from acquisitions; dangers related to integrating current acquisitions; world financial situations and adjustments to tendencies for most cancers therapy regionally; foreign money change charges and tax charges; the influence of the Tax Cuts and Jobs Act; the influence of  the Inexpensive Well being Care for America Act (together with excise taxes on medical units) and any additional healthcare reforms (together with adjustments to Medicare and Medicaid), and/or adjustments in third-party reimbursement ranges; current and potential future tariffs or a world commerce struggle; demand for and delays in supply of the corporate’s merchandise; the corporate’s potential to develop, commercialize and deploy new merchandise; the corporate’s potential to fulfill Meals and Drug Administration (FDA) and different regulatory necessities, rules or procedures; adjustments in regulatory environments; dangers related to the corporate offering financing for the development and start-up operations of particle remedy facilities, challenges related to commercializing the corporate’s Proton Options enterprise; challenges to public tender awards and the loss of such awards or different orders; the impact of opposed publicity; the corporate’s reliance on sole or limited-source suppliers; the corporate’s potential to keep up or enhance margins; the influence of aggressive merchandise and pricing; the potential loss of key distributors or key personnel; challenges associated to getting into into new enterprise traces; and the opposite dangers listed sometimes within the firm’s filings with the Securities and Change Fee, which by this reference are included herein. For added data regarding components that would trigger precise outcomes and occasions to vary materially from these projected herein, please confer with our Type 10-Okay for the yr ended September 27, 2019 and subsequent Kinds 8-Okay and 10-Q filed with the Securities and Change Fee. The corporate assumes no obligation to replace or revise the forward-looking statements on this launch as a result of of new data, future occasions, or in any other case.

Varian has not filed its Type 10-Q for the interval ended July 3, 2020. In consequence, all monetary outcomes described right here ought to be thought-about preliminary, and are topic to vary to replicate any needed changes, completion of buy accounting, or adjustments in accounting estimates, which are recognized previous to the time the corporate information the Type 10-Q.

Varian Medical Techniques, Inc. and Subsidiaries

Preliminary Condensed Consolidated Statements of Earnings

(Unaudited)










({Dollars} and shares in tens of millions, besides per share quantities)


Q3 2020


Q3 2019


Q3 FY20
YTD


Q3 FY19
YTD

Gross orders


$

682.2



$

891.6



$

2,346.7



$

2,384.2


Oncology Techniques


665.4



778.3



2,212.6



2,261.0


Proton Options


9.7



111.3



96.4



121.2


Different


7.1



2.0



37.7



2.0


Order backlog


3,213.6



3,118.4



3,213.6



3,118.4


Revenues


694.3



825.8



2,317.7



2,346.2


Oncology Techniques


654.5



792.9



2,197.4



2,242.2


Proton Options


32.7



30.9



82.6



102.0


Different


7.1



2.0



37.7



2.0


Price of revenues


395.8



474.4



1,315.2



1,360.5


Gross margin


298.5



351.4



1,002.5



985.7


As a proportion of revenues


43.0

%


42.5

%


43.3

%


42.0

%

Working bills









Analysis and growth


65.3



62.1



203.4



182.4


Promoting, normal and administrative


145.0



153.6



497.3



441.5


Impairment and restructuring expenses


23.1



50.6



63.6



50.6


Acquisition-related bills


5.2



31.2



13.4



35.8


Working earnings


59.9



53.9



224.8



275.4


As a proportion of revenues


8.6

%


6.5

%


9.7

%


11.7

%

Curiosity revenue (expense)


(0.2)



1.9



(3.1)



7.6


Different revenue, web


25.1



4.2



28.6



27.4


Earnings earlier than taxes


84.8



60.0



250.3



310.4


Taxes on earnings


23.9



30.5



57.4



88.6


Internet earnings


60.9



29.5



192.9



221.8


Much less: Internet earnings (loss) attributable to non-controlling pursuits


(0.3)



0.1



0.3



0.6


Internet earnings attributable to Varian


$

61.2



$

29.4



$

192.6



$

221.2











Internet earnings per share – fundamental


$

0.67



$

0.32



$

2.12



$

2.43


Internet earnings per share – diluted


$

0.67



$

0.32



$

2.11



$

2.41











Shares used within the calculation of web earnings per share:









Weighted common shares excellent – fundamental


90.8



91.0



90.8



91.0


Weighted common shares excellent – diluted


91.2



91.8



91.4



91.9


Varian Medical Techniques, Inc. and Subsidiaries

Preliminary Condensed Consolidated Stability Sheets

(Unaudited)






(In tens of millions)


July 3,


September 27,

2020

2019

Property





Present property:





Money and money equivalents


$

769.2



$

531.4


Commerce and unbilled receivables, web


987.4



1,106.3


Inventories                                       


600.4



551.5


Pay as you go bills and different present property


274.7



206.2


Complete present property                                       


2,631.7



2,395.4







Property, plant and tools, web                         


346.3



311.5


Working lease right-of-use property


123.6




Goodwill


607.4



612.2


Intangible property


265.7



300.7


Deferred tax property


92.3



84.7


Different property                                                   


387.4



397.2


Complete property                                              


$

4,454.4



$

4,101.7







Liabilities and Fairness





Present liabilities:                                                      





Accounts payable                                             


$

164.5



$

248.5


Accrued liabilities                                          


468.5



459.5


Deferred revenues


778.4



766.0


Brief-term borrowings                              


580.0



410.0


Complete present liabilities                                  


1,991.4



1,884.0


Lengthy-term lease liabilities


102.6




Different long-term liabilities


417.3



440.1


Complete liabilities                                           


2,511.3



2,324.1







Fairness:





Varian stockholders’ fairness:





Frequent inventory


90.9



90.8


Capital in extra of par worth


901.2



845.6


Retained earnings


1,054.9



934.0


Accrued different complete loss 


(113.5)



(102.1)


Complete Varian stockholders’ fairness                                 


1,933.5



1,768.3


Non-controlling pursuits


9.6



9.3


Complete fairness


1,943.1



1,777.6


Complete liabilities and fairness


$

4,454.4



$

4,101.7







Dialogue of Non-GAAP Monetary Measures
This press launch consists of the next non-GAAP monetary measures derived from our Condensed Consolidated Statements of Earnings: natural income development, non-GAAP working earnings, non-GAAP web earnings and non-GAAP web earnings per diluted share. We outline natural income development as income development much less the influence of income development from our CTSI and Interventional Options companies and adjusted for the influence of international change. We outline non-GAAP working earnings as working earnings excluding amortization of intangible property and amortization of stock step-up, acquisition and integration-related bills or advantages, restructuring expenses, impairment expenses, vital litigation expenses or advantages and authorized prices. These measures aren’t offered in accordance with, nor are they a substitute for U.S. typically accepted accounting rules, or GAAP. As well as, these measures could also be totally different from non-GAAP measures utilized by different corporations, limiting their usefulness for comparability functions. The non-GAAP monetary measures shouldn’t be thought-about in isolation from measures of monetary efficiency ready in accordance with GAAP. Traders are cautioned that there are materials limitations related to the use of non-GAAP monetary measures as an analytical device. We’ve offered a reconciliation of every non-GAAP monetary measure used on this earnings launch to probably the most immediately comparable GAAP monetary measure. We’ve not offered a reconciliation of non-GAAP steering measures to the corresponding GAAP measures on a forward-looking foundation as a result of potential vital variability and restricted visibility of the excluded objects mentioned beneath.

We make the most of a quantity of totally different monetary measures, each GAAP and non-GAAP, in analyzing and assessing the general efficiency of our enterprise, in making working selections, forecasting and planning for future intervals, and figuring out funds underneath compensation applications. We think about the use of the non-GAAP measures to be useful in assessing the efficiency of the continued operations of our enterprise. We consider that disclosing non-GAAP monetary measures offers helpful supplemental information that, whereas not a substitute for monetary measures ready in accordance with GAAP, permits for larger transparency within the overview of our monetary and operational efficiency. We additionally consider that disclosing non-GAAP monetary measures offers helpful data to traders and others in understanding and evaluating our working outcomes and future prospects in the identical method as administration and in evaluating monetary outcomes throughout accounting intervals and to these of peer corporations. Non-GAAP working earnings and non-GAAP web earnings exclude the next objects, besides for acquire and losses on fairness investments, and vital non-recurring tax expense or profit, that are solely excluded from non-GAAP web earnings:

Amortization of intangible property and amortization of stock step-up: We don’t purchase companies and property on a predictable cycle. The quantity of buy value allotted to intangible property, the step-up of stock values, and the time period of amortization can differ considerably and are distinctive to every acquisition or buy. We consider that excluding amortization of intangible property and amortization of stock step-up permits the customers of our monetary statements to raised overview and perceive the historic and present outcomes of our operations, and in addition facilitates comparisons to see corporations.

Acquisition and integration-related bills or advantages: We incur bills or advantages with respect to sure objects related to our acquisitions, corresponding to transaction prices, hedging positive aspects and losses, adjustments within the honest worth of contingent consideration liabilities, positive aspects or bills on settlement of pre-existing relationships, integration prices, and breakup charges. We exclude such bills or advantages as they’re associated to acquisitions and haven’t any direct correlation to the operations of our on-going enterprise.

Impairment and restructuring expenses: We incur impairment and restructuring expenses that outcome from occasions, which come up from unexpected circumstances and/or typically happen exterior of the extraordinary course of our on-going enterprise. Though these occasions are mirrored in our GAAP financials, these distinctive transactions might restrict the comparability of our on-going operations with prior and future intervals.

Important litigation expenses or advantages and authorized prices: We might incur expenses or advantages in addition to authorized prices sometimes associated to litigation and different contingencies. We exclude these expenses or advantages, when vital, in addition to authorized prices related to vital authorized issues, as a result of we don’t consider they’re reflective of on-going enterprise and working outcomes.

Beneficial properties and losses on fairness investments: We might incur positive aspects and losses from our fairness investments in public and privately-held corporations. We don’t commerce fairness investments, and we don’t plan on these investments for the funding of ongoing operations. We exclude such positive aspects and losses as a result of we don’t consider they’re reflective of our core enterprise.

Important non-recurring tax expense or profit: We might incur a major tax expense or profit because of this of tax laws and/or a change in judgment in regards to the want for a valuation allowance which are typically unrelated to the extent of enterprise exercise within the interval by which these tax results are reported. We exclude such bills or advantages from our non-GAAP web earnings as a result of we consider they don’t precisely replicate the underlying efficiency of our persevering with enterprise operations.

We apply our GAAP consolidated efficient tax price to our non-GAAP monetary measures, aside from when the underlying merchandise has a materially totally different tax therapy.

The next tables reconcile GAAP and non-GAAP monetary measures:





 

 

Varian Medical Techniques, Inc. and Subsidiaries
Reconciliation of Preliminary Income Progress and Natural Income Progress Monetary Measures
(Unaudited)

({Dollars} in tens of millions)


Q3 2020


Q3 2019


% Change


Affect from Acquisitions


Affect from
International Change


Natural Progress

Complete revenues


$

694.3



$

825.8



(16)

%


2

%


1

%


(19)

%






















Varian Medical Techniques, Inc. and Subsidiaries
Reconciliation of Preliminary GAAP and Non-GAAP Monetary Measures
(Unaudited)

({Dollars} and shares in tens of millions, besides per share quantities)


Q3 2020


Q3 2019


Q3 FY20
YTD


Q3 FY19
YTD

Non-GAAP changes









Amortization of intangible property and stock step-up (1)


$

8.6



$

6.8



$

27.5



$

17.1


Acquisition-related bills and in-process R&D  (2)


5.3



31.2



13.5



35.8


Impairment expenses (3)


9.2



50.6



49.7



50.6


Restructuring expenses


13.9





13.9




Litigation cost and authorized prices


0.9



1.0



5.7



2.7


Different




0.8





0.8


Complete non-GAAP changes to working earnings


37.9



90.4



110.3



107.0


Acquire on fairness investments (4)


(25.7)



(2.0)



(27.1)



(23.8)


Tax results of non-GAAP changes


(2.6)



(2.5)



(19.2)



(0.4)


Important results of tax laws (5)




5.5



(1.6)



7.8


Modifications in deferred tax associated to an acquisition (6)








2.5


Complete web earnings influence from non-GAAP changes


$

9.6



$

91.4



$

62.4



$

93.1


Working earnings reconciliation









GAAP working earnings


$

59.9



$

53.9



$

224.8



$

275.4


Complete working earnings influence from non-GAAP changes


37.9



90.4



110.3



107.0


Non-GAAP working earnings


$

97.8



$

144.3



$

335.1



$

382.4


Internet earnings and web earnings per diluted share reconciliation









GAAP web earnings attributable to Varian


$

61.2



$

29.4



$

192.6



$

221.2


Complete web earnings influence from non-GAAP changes


9.6



91.4



62.4



93.1


Non-GAAP web earnings attributable to Varian


$

70.8



$

120.8



$

255.0



$

314.3


GAAP web earnings per share – diluted


$

0.67



$

0.32



$

2.11



$

2.41


Non-GAAP web earnings per share – diluted


$

0.78



$

1.32



$

2.79



$

3.42


Shares utilized in computing GAAP and non-GAAP web earnings per diluted share


91.2



91.8



91.4



91.9




(1) 

Contains $1.5 million, $3.2 million, $5.7 million, and $8.0 million respectively, in price of revenues for the intervals offered.

(2) 

Features a $20.Eight million cost related to the write-off of in-process analysis and growth acquired within the CyberHeart
acquisition within the third quarter of fiscal yr 2019.

(3) 

Contains $9.2 million impairment to our available-for-sale securities within the third quarter of fiscal yr 2020, and a $40.5 million
impairment of loans receivable from CPTC within the year-to-date interval 2020.

(4)  

Features a $20.9 million acquire on an fairness funding that went public within the third quarter of fiscal yr 2020. Contains the $22.Zero million
acquire on sale of our fairness funding in Augmenix within the year-to-date interval 2019.

(5) 

Represents a one time tax impact of a change in regulation associated to the U.S. Tax Cuts and Jobs Act.

(6) 

Represents a cost to revenue tax expense as a result of enhance of a valuation allowance because of this of an acquisition.

Investor Relations Contact

Anshul Maheshwari
Vice President, Treasury and Investor Relations
+1 (650) 424-5163
[email protected]

Press Contact

Eric Brielmann / Kaitlin Kikalo / Sophie Throsby
Joele Frank, Wilkinson Brimmer Katcher
+ 1 (415) 869-3950 / +1 (212) 355-4449

SOURCE Varian

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