PALO ALTO, Calif., May 4, 2020 /PRNewswire/ --
Second Quarter 2020 Summary
- Oncology Systems gross orders grew 1% in dollars or 2% in
constant currency in the quarter; trailing twelve months gross
orders grew 5% in dollars or 6% in constant currency
- 15 EthosTM orders received, including 11 in
North America, 3 in Europe and 1 in Asia-Pacific
- Two Proton orders awarded in Asia-Pacific
- Total company revenues grew 2% in dollars, or 3% in constant
currency, to $794 million; organic
revenues declined 1%(1)
- GAAP operating earnings declined 50% at 6.9% of revenues;
non-GAAP operating earnings declined 14% at 12.9% of revenues
- GAAP net earnings per diluted share of $0.47; non-GAAP net earnings per diluted share of
$0.85
- The company is withdrawing fiscal year 2020 guidance due to
uncertainty surrounding the severity and duration of COVID-19
(1)
|
Excludes the
year-over-year impact of foreign exchange rates and growth from
CTSI and Interventional Solutions businesses
|
Varian (NYSE: VAR) today announced its second quarter fiscal
year 2020 results.
"On behalf of everyone at Varian, I want to express our
gratitude to all individuals on the frontlines dedicated to
fighting this global pandemic. I also want to thank Varian
employees worldwide who continue to focus on cancer patients
receiving vital care during these turbulent times," said Dow
Wilson, Chief Executive Officer of Varian. "While COVID-19
has created some unique challenges, our business has solid
liquidity and is well-positioned strategically and organizationally
to navigate through this challenging environment, continue to grow
our market leadership, and deliver best-in-class solutions to
cancer patients globally."
Summary
(Dollars and shares
in millions, except per share amounts)
|
Q2
2020
|
|
Q2
2019
|
|
Y/Y
|
|
FY 2020
YTD
|
|
FY 2019
YTD
|
|
Y/Y
|
Revenues
|
$
|
794.5
|
|
|
$
|
779.4
|
|
|
2
|
%
|
|
$
|
1,623.4
|
|
|
$
|
1,520.4
|
|
|
7
|
%
|
Gross margin as a
percentage of revenues
|
42.5
|
%
|
|
40.8
|
%
|
|
160
bps
|
|
43.4
|
%
|
|
41.7
|
%
|
|
170
bps
|
GAAP net earnings
attributable to Varian
|
$
|
43.2
|
|
|
$
|
88.6
|
|
|
(51)
|
%
|
|
$
|
131.4
|
|
|
$
|
191.8
|
|
|
(32)
|
%
|
GAAP net earnings per
share - diluted
|
$
|
0.47
|
|
|
$
|
0.96
|
|
|
(51)
|
%
|
|
$
|
1.43
|
|
|
$
|
2.09
|
|
|
(31)
|
%
|
Net cash provided by
operating activities
|
$
|
21.9
|
|
|
$
|
(13.4)
|
|
|
263
|
%
|
|
$
|
134.5
|
|
|
$
|
127.5
|
|
|
5
|
%
|
Non-GAAP net earnings
attributable to Varian (1)
|
$
|
77.6
|
|
|
$
|
96.2
|
|
|
(19)
|
%
|
|
$
|
184.2
|
|
|
$
|
193.5
|
|
|
(5)
|
%
|
Non-GAAP net earnings
per share - diluted (1)
|
$
|
0.85
|
|
|
$
|
1.05
|
|
|
(19)
|
%
|
|
$
|
2.01
|
|
|
$
|
2.10
|
|
|
(4)
|
%
|
Shares used in
computing GAAP and non-GAAP net earnings per diluted
share
|
91.4
|
|
|
91.9
|
|
|
|
|
91.6
|
|
|
92.0
|
|
|
|
|
|
(1)
|
Non-GAAP net earnings
and non-GAAP net earnings per diluted share are defined as GAAP net
earnings and GAAP net earnings per diluted share adjusted to
exclude the amortization of intangible assets and amortization of
inventory step-up, acquisition and integration-related expenses or
benefits, impairment charges, significant litigation charges or
benefits, legal costs, gains and losses on equity investments, and
significant non-recurring tax expense or benefits. Reconciliation
of GAAP and non-GAAP financial measures can be found at the end of
the press release.
|
The company ended the quarter with $668
million in cash and cash equivalents and $521 million in debt. Net cash provided by
operating activities was $22
million. During the quarter, the company invested
$40 million to repurchase three
hundred and fifteen thousand shares of common stock.
Impact of COVID-19 Pandemic
The impact of the pandemic
in the quarter has varied by region based on the stage of
containment and government actions. The impact on revenues in
the quarter was primarily due to timing delays associated with
installations and acceptance of the company's products and
solutions, as well as delays in the delivery of interventional
oncology procedures. As shared in the March
9 press release, the preliminary impact from COVID-19 for
the fiscal second quarter was limited to the Asia-Pacific geography. Between
March 9 and the end of the quarter,
the pandemic spread and impacted the company's operating
performance in the Americas and EMEA (Europe, Middle
East, India, and
Africa) geographies. The
company estimates the operational delays after March 9 negatively impacted revenues in those two
geographies by approximately $30
million. This was partially offset by better
performance across Asia-Pacific
during the last three weeks of the quarter as China and South
Korea began to recover from the pandemic.
Oncology Systems Segment
Oncology Systems revenues
totaled $761 million, up 2%.
GAAP operating earnings were $111
million, down 16%. Gross orders were $773 million, up 1%. Gross orders in the
Americas were down 3%, including North
America down 1%. In EMEA, gross orders rose 11% driven
by two large orders, in Russia and
the United Kingdom. In Asia-Pacific, gross orders were down
5%. Gross orders globally were impacted by delays related to
COVID-19.
Proton Solutions Segment
The company received two new
system orders in Asia-Pacific in
the quarter. Proton Solutions revenues totaled $22 million, down 32%. Operating earnings
benefited from higher service revenues which were offset by project
mix.
Other Segment
Revenues for the Other segment were
$12 million. The Other segment
is comprised of the Interventional Solutions business, including
cryoablation, embolic microspheres, and microwave ablation.
Additionally, it includes investments in cardiac radioablation.
Non-GAAP Adjustments
GAAP operating earnings and GAAP
EPS included a $41 million impairment
of loan receivables from California Proton Therapy Center and a
$9 million benefit from the reversal
of acquisition-related earnouts.
Guidance Withdrawn for Full Fiscal Year 2020
Since the
previous update provided by the company on March 9, 2020, the severity of the COVID-19
pandemic has expanded globally and resulted in a shift in the
macroeconomic environment. The uncertainty around the
severity and duration of COVID-19 has impacted the company's
ability to reliably estimate the financial impact of the pandemic
for the balance of the fiscal year. As a result, the company
is withdrawing its fiscal year 2020 guidance. Additionally,
as a precautionary measure, the company has paused share buybacks
to preserve liquidity.
Investor Conference Call
Varian Medical Systems is
scheduled to conduct its second quarter fiscal year 2020 conference
call at 1:30 p.m. Pacific Time
today. To access the live webcast or replay of the call,
visit the Investor Relations page on the company's website at
www.varian.com/investors. To access the call via telephone,
dial 1-877-869-3847 from inside the U.S. or 1-201-689-8261 from
outside the U.S. The replay can be accessed by dialing
1-877-660-6853 from inside the U.S. or 1-201-612-7415 from outside
the U.S. and entering conference ID 13700412. The teleconference
replay will be available until 5:00 p.m.
Pacific Time, Friday, May 8,
2020.
About Varian
At Varian, we envision a world without
fear of cancer. For more than 70 years, we have developed, built
and delivered innovative cancer care technologies and solutions for
our clinical partners around the globe to help them treat millions
of patients each year. With an Intelligent Cancer Care approach, we
are harnessing advanced technologies like artificial intelligence,
machine learning and data analytics to enhance cancer treatment and
expand access to care. Our 10,000 employees across 70 locations
keep the patient and our clinical partners at the center of our
thinking as we power new victories in cancer care. Because, for
cancer patients everywhere, their fight is our fight. For more
information, visit http://www.varian.com and follow @VarianMedSys
on Twitter.
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 the company's future
orders and the anticipated impact of the COVID-19 pandemic on our
business; and any statements using the terms "could," "believe,"
"expect," "promising," "outlook," "should," "well-positioned,"
"will" 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 the future impact of the COVID-19
pandemic on our business, including but not limited to, the impact
on our workforce, operations, supply chain, demand for our products
and services, and our financial results and condition; our ability
to successfully manage the challenges associated with the COVID-19
pandemic; our ability to achieve expected synergies from
acquisitions; risks associated with integrating recent
acquisitions; global economic conditions and changes to trends for
cancer treatment regionally; currency exchange rates and tax rates;
the impact of the Tax Cuts and Jobs Act; the impact of the
Affordable Health Care for America Act (including excise taxes on
medical devices) and any further healthcare reforms (including
changes to Medicare and Medicaid), and/or changes in third-party
reimbursement levels; recent and potential future tariffs or a
global trade war; demand for and delays in delivery of the
company's products; the company's ability to develop, commercialize
and deploy new products; the company's ability to meet Food and
Drug Administration (FDA) and other regulatory requirements,
regulations or procedures; changes in regulatory environments;
risks associated with the company providing financing for the
construction and start-up operations of particle therapy centers,
challenges associated with commercializing the company's Proton
Solutions business; challenges to public tender awards and the loss
of such awards or other orders; the effect of adverse publicity;
the company's reliance on sole or limited-source suppliers; the
company's ability to maintain or increase margins; the impact of
competitive products and pricing; the potential loss of key
distributors or key personnel; challenges related to entering into
new business lines; and the other risks listed from time to time in
the company's filings with the Securities and Exchange Commission,
which by this reference are incorporated herein. For additional
information concerning factors that could cause actual results and
events to differ materially from those projected herein, please
refer to our Form 10-K for the year ended September 27, 2019 and subsequent Forms 8-K and
10-Q filed with the Securities and Exchange Commission. The company
assumes no obligation to update or revise the forward-looking
statements in this release because of new information, future
events, or otherwise.
Varian has not filed its Form 10-Q for the period ended
April 3, 2020. As a result, all
financial results described here should be considered preliminary,
and are subject to change to reflect any necessary adjustments,
completion of purchase accounting, or changes in accounting
estimates, that are identified prior to the time the company files
the Form 10-Q.
Investor Relations Contact
Anshul Maheshwari
Vice President, Treasury and Investor Relations
+1 (650) 424-5163
investors@varian.com
Press Contact
Rosemarie Smith-Wood
Sr. Director, Global Brand and Marketing
+1 (650) 424-5208
rosemarie.smith-wood@varian.com
Varian Medical
Systems, Inc. and Subsidiaries
|
Preliminary
Condensed Consolidated Statements of Earnings
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
(Dollars and
shares in millions, except per share amounts)
|
|
Q2
2020
|
|
Q2
2019
|
|
FY 2020
YTD
|
|
FY 2019
YTD
|
Gross
orders
|
|
$
|
845.9
|
|
|
$
|
770.9
|
|
|
$
|
1,664.5
|
|
|
$
|
1,492.6
|
|
Oncology
Systems
|
|
773.4
|
|
|
766.2
|
|
|
1,547.2
|
|
|
1,482.7
|
|
Proton
Solutions
|
|
60.8
|
|
|
4.7
|
|
|
86.7
|
|
|
9.9
|
|
Other
|
|
11.7
|
|
|
—
|
|
|
30.6
|
|
|
—
|
|
Order
backlog
|
|
3,286.0
|
|
|
3,117.9
|
|
|
3,286.0
|
|
|
3,117.9
|
|
Revenues
|
|
794.5
|
|
|
779.4
|
|
|
1,623.4
|
|
|
1,520.4
|
|
Oncology
Systems
|
|
760.5
|
|
|
746.8
|
|
|
1,542.9
|
|
|
1,449.3
|
|
Proton
Solutions
|
|
22.3
|
|
|
32.6
|
|
|
49.9
|
|
|
71.1
|
|
Other
|
|
11.7
|
|
|
—
|
|
|
30.6
|
|
|
—
|
|
Cost of
revenues
|
|
457.3
|
|
|
461.2
|
|
|
919.4
|
|
|
886.1
|
|
Gross
margin
|
|
337.2
|
|
|
318.2
|
|
|
704.0
|
|
|
634.3
|
|
As a percentage of
revenues
|
|
42.5
|
%
|
|
40.8
|
%
|
|
43.4
|
%
|
|
41.7
|
%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Research and
development
|
|
71.0
|
|
|
59.4
|
|
|
138.1
|
|
|
120.3
|
|
Selling, general and
administrative
|
|
175.3
|
|
|
146.8
|
|
|
352.3
|
|
|
287.9
|
|
Impairment
charges
|
|
40.5
|
|
|
—
|
|
|
40.5
|
|
|
—
|
|
Acquisition-related
expenses (benefits)
|
|
(4.5)
|
|
|
2.2
|
|
|
8.2
|
|
|
4.6
|
|
Operating
earnings
|
|
54.9
|
|
|
109.8
|
|
|
164.9
|
|
|
221.5
|
|
As a percentage of
revenues
|
|
6.9
|
%
|
|
14.1
|
%
|
|
10.2
|
%
|
|
14.6
|
%
|
Interest income
(expense)
|
|
(1.2)
|
|
|
3.0
|
|
|
(2.9)
|
|
|
5.7
|
|
Other income
(expense), net
|
|
(0.9)
|
|
|
0.2
|
|
|
3.5
|
|
|
23.2
|
|
Earnings before
taxes
|
|
52.8
|
|
|
113.0
|
|
|
165.5
|
|
|
250.4
|
|
Taxes on
earnings
|
|
9.7
|
|
|
24.6
|
|
|
33.5
|
|
|
58.1
|
|
Net
earnings
|
|
43.1
|
|
|
88.4
|
|
|
132.0
|
|
|
192.3
|
|
Less: Net earnings
(loss) attributable to non-controlling interests
|
|
(0.1)
|
|
|
(0.2)
|
|
|
0.6
|
|
|
0.5
|
|
Net earnings
attributable to Varian
|
|
$
|
43.2
|
|
|
$
|
88.6
|
|
|
$
|
131.4
|
|
|
$
|
191.8
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share - basic
|
|
$
|
0.48
|
|
|
$
|
0.97
|
|
|
$
|
1.45
|
|
|
$
|
2.11
|
|
Net earnings per
share - diluted
|
|
$
|
0.47
|
|
|
$
|
0.96
|
|
|
$
|
1.43
|
|
|
$
|
2.09
|
|
|
|
|
|
|
|
|
|
|
Shares used in the
calculation of net earnings per share:
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding - basic
|
|
90.7
|
|
|
91.0
|
|
|
90.8
|
|
|
91.0
|
|
Weighted average
shares outstanding - diluted
|
|
91.4
|
|
|
91.9
|
|
|
91.6
|
|
|
92.0
|
|
Varian Medical
Systems, Inc. and Subsidiaries
|
Preliminary
Condensed Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
(In
millions)
|
|
April
3,
|
|
September
27,
|
2020
|
2019
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
667.8
|
|
|
$
|
531.4
|
|
Trade and unbilled
receivables, net
|
|
1,004.8
|
|
|
1,106.3
|
|
Inventories
|
|
604.0
|
|
|
551.5
|
|
Prepaid expenses and
other current assets
|
|
224.3
|
|
|
206.2
|
|
Total current
assets
|
|
2,500.9
|
|
|
2,395.4
|
|
|
|
|
|
|
Property, plant and
equipment,
net
|
|
341.9
|
|
|
311.5
|
|
Operating lease
right-of-use assets
|
|
123.8
|
|
|
—
|
|
Goodwill
|
|
614.7
|
|
|
612.2
|
|
Intangible
assets
|
|
281.6
|
|
|
300.7
|
|
Deferred tax
assets
|
|
93.6
|
|
|
84.7
|
|
Other
assets
|
|
387.4
|
|
|
397.2
|
|
Total
assets
|
|
$
|
4,343.9
|
|
|
$
|
4,101.7
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
198.4
|
|
|
$
|
248.5
|
|
Accrued
liabilities
|
|
433.2
|
|
|
459.5
|
|
Deferred
revenues
|
|
798.1
|
|
|
766.0
|
|
Short-term
borrowings
|
|
520.0
|
|
|
410.0
|
|
Total current
liabilities
|
|
1,949.7
|
|
|
1,884.0
|
|
Long-term lease
liabilities
|
|
100.4
|
|
|
—
|
|
Other long-term
liabilities
|
|
423.1
|
|
|
440.1
|
|
Total
liabilities
|
|
2,473.2
|
|
|
2,324.1
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
Varian stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
90.7
|
|
|
90.8
|
|
Capital in excess of
par value
|
|
878.2
|
|
|
845.6
|
|
Retained
earnings
|
|
993.7
|
|
|
934.0
|
|
Accumulated other
comprehensive loss
|
|
(101.8)
|
|
|
(102.1)
|
|
Total Varian
stockholders'
equity
|
|
1,860.8
|
|
|
1,768.3
|
|
Non-controlling
interests
|
|
9.9
|
|
|
9.3
|
|
Total
equity
|
|
1,870.7
|
|
|
1,777.6
|
|
Total liabilities
and equity
|
|
$
|
4,343.9
|
|
|
$
|
4,101.7
|
|
|
|
|
|
|
Discussion of Non-GAAP Financial Measures
This press
release includes the following non-GAAP financial measures derived
from our Condensed Consolidated Statements of Earnings: organic
revenue growth, non-GAAP operating earnings, non-GAAP net earnings
and non-GAAP net earnings per diluted share. We define organic
revenue growth as revenue growth less the impact of revenue growth
from our CTSI and Interventional Solutions businesses and adjusted
for the impact of foreign exchange. We define non-GAAP operating
earnings as operating earnings excluding amortization of intangible
assets and amortization of inventory step-up, acquisition and
integration-related expenses or benefits, impairment charges,
significant litigation charges or benefits and legal costs. These
measures are not presented in accordance with, nor are they a
substitute for U.S. generally accepted accounting principles, or
GAAP. In addition, these measures may be different from non-GAAP
measures used by other companies, limiting their usefulness for
comparison purposes. The non-GAAP financial measures should not be
considered in isolation from measures of financial performance
prepared in accordance with GAAP. Investors are cautioned that
there are material limitations associated with the use of non-GAAP
financial measures as an analytical tool. We have provided a
reconciliation of each non-GAAP financial measure used in this
earnings release to the most directly comparable GAAP financial
measure. We have not provided a reconciliation of non-GAAP guidance
measures to the corresponding GAAP measures on a forward-looking
basis due to the potential significant variability and limited
visibility of the excluded items discussed below.
We utilize a number of different financial measures, both GAAP
and non-GAAP, in analyzing and assessing the overall performance of
our business, in making operating decisions, forecasting and
planning for future periods, and determining payments under
compensation programs. We consider the use of the non-GAAP measures
to be helpful in assessing the performance of the ongoing
operations of our business. We believe that disclosing non-GAAP
financial measures provides useful supplemental data that, while
not a substitute for financial measures prepared in accordance with
GAAP, allows for greater transparency in the review of our
financial and operational performance. We also believe that
disclosing non-GAAP financial measures provides useful information
to investors and others in understanding and evaluating our
operating results and future prospects in the same manner as
management and in comparing financial results across accounting
periods and to those of peer companies. Non-GAAP operating earnings
and non-GAAP net earnings exclude the following items, except for
gain and losses on equity investments, and significant
non-recurring tax expense or benefit, which are only excluded from
non-GAAP net earnings:
Amortization of intangible assets and amortization of
inventory step-up: We do not acquire businesses and
assets on a predictable cycle. The amount of purchase price
allocated to intangible assets, the step-up of inventory values,
and the term of amortization can vary significantly and are unique
to each acquisition or purchase. We believe that excluding
amortization of intangible assets and amortization of inventory
step-up allows the users of our financial statements to better
review and understand the historic and current results of our
operations, and also facilitates comparisons to peer companies.
Acquisition and integration-related expenses or
benefits: We incur expenses or benefits with respect to
certain items associated with our acquisitions, such as transaction
costs, hedging gains and losses, changes in the fair value of
contingent consideration liabilities, gains or expenses on
settlement of pre-existing relationships, integration costs, and
breakup fees. We exclude such expenses or benefits as they are
related to acquisitions and have no direct correlation to the
operations of our on-going business.
Impairment charges: We incur impairment charges
that result from events, which arise from unforeseen circumstances
and/or often occur outside of the ordinary course of our on-going
business. Although these events are reflected in our GAAP
financials, these unique transactions may limit the comparability
of our on-going operations with prior and future periods.
Significant litigation charges or benefits and legal
costs: We may incur charges or benefits as well as legal costs
from time to time related to litigation and other contingencies. We
exclude these charges or benefits, when significant, as well as
legal costs associated with significant legal matters, because we
do not believe they are reflective of on-going business and
operating results.
Gains and losses on equity investments: We may incur
gains and losses from our equity investments in privately-held
companies. We do not trade equity investments, and we do not plan
on these investments for the funding of ongoing operations. We
exclude such gains and losses because we do not believe they are
reflective of our core business.
Significant non-recurring tax expense or benefit:
We may incur a significant tax expense or benefit as a result of
tax legislation and/or a change in judgment about the need for a
valuation allowance that are generally unrelated to the level of
business activity in the period in which these tax effects are
reported. We exclude such expenses or benefits from our non-GAAP
net earnings because we believe they do not accurately reflect the
underlying performance of our continuing business operations.
We apply our GAAP consolidated effective tax rate to our
non-GAAP financial measures, other than when the underlying item
has a materially different tax treatment.
The following tables reconcile GAAP and non-GAAP financial
measures:
Varian Medical
Systems, Inc. and Subsidiaries
|
Reconciliation of
Preliminary Revenue Growth and Organic Revenue Growth Financial
Measures
|
(Unaudited)
|
|
(Dollars in
millions)
|
|
Q2
2020
|
|
Q2
2019
|
|
Percent
Change
|
|
Impact from
Acquisitions
|
|
Impact from
Foreign
Exchange
|
|
Organic
Growth
|
Total
revenues
|
|
$
|
794.5
|
|
|
$
|
779.4
|
|
|
2
|
%
|
|
(4)
|
%
|
|
1
|
%
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Varian Medical
Systems, Inc. and Subsidiaries
|
Reconciliation of
Preliminary GAAP and Non-GAAP Financial Measures
|
(Unaudited)
|
|
(Dollars and
shares in millions, except per share amounts)
|
|
Q2
2020
|
|
Q2
2019
|
|
FY 2020
YTD
|
|
FY 2019
YTD
|
Non-GAAP
adjustments
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets and inventory step-up (1)
|
|
$
|
9.1
|
|
|
$
|
6.1
|
|
|
$
|
18.9
|
|
|
$
|
10.3
|
|
Acquisition-related
expenses (benefits) (2)
|
|
(4.5)
|
|
|
2.2
|
|
|
8.2
|
|
|
4.6
|
|
Impairment charges
(3)
|
|
40.5
|
|
|
—
|
|
|
40.5
|
|
|
—
|
|
Litigation charge and
legal costs
|
|
2.7
|
|
|
0.8
|
|
|
4.8
|
|
|
1.7
|
|
Total non-GAAP
adjustments to operating earnings
|
|
47.8
|
|
|
9.1
|
|
|
72.4
|
|
|
16.6
|
|
(Gain) loss on equity
investments (4)
|
|
—
|
|
|
0.2
|
|
|
(1.4)
|
|
|
(21.8)
|
|
Tax effects of
non-GAAP adjustments
|
|
(13.4)
|
|
|
(1.7)
|
|
|
(16.6)
|
|
|
2.1
|
|
Significant effects of
tax legislation (5)
|
|
—
|
|
|
—
|
|
|
(1.6)
|
|
|
2.3
|
|
Changes in deferred
tax related to an acquisition (6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
Total net earnings
impact from non-GAAP adjustments
|
|
$
|
34.4
|
|
|
$
|
7.6
|
|
|
$
|
52.8
|
|
|
$
|
1.7
|
|
Operating earnings
reconciliation
|
|
|
|
|
|
|
|
|
GAAP operating
earnings
|
|
$
|
54.9
|
|
|
$
|
109.8
|
|
|
$
|
164.9
|
|
|
$
|
221.5
|
|
Total operating
earnings impact from non-GAAP adjustments
|
|
47.8
|
|
|
9.1
|
|
|
72.4
|
|
|
16.6
|
|
Non-GAAP operating
earnings
|
|
$
|
102.7
|
|
|
$
|
118.9
|
|
|
$
|
237.3
|
|
|
$
|
238.1
|
|
Net earnings and
net earnings per diluted share reconciliation
|
|
|
|
|
|
|
|
|
GAAP net earnings
attributable to Varian
|
|
$
|
43.2
|
|
|
$
|
88.6
|
|
|
$
|
131.4
|
|
|
$
|
191.8
|
|
Total net earnings
impact from non-GAAP adjustments
|
|
34.4
|
|
|
7.6
|
|
|
52.8
|
|
|
1.7
|
|
Non-GAAP net earnings
attributable to Varian
|
|
$
|
77.6
|
|
|
$
|
96.2
|
|
|
$
|
184.2
|
|
|
$
|
193.5
|
|
GAAP net earnings per
share - diluted
|
|
$
|
0.47
|
|
|
$
|
0.96
|
|
|
$
|
1.43
|
|
|
$
|
2.09
|
|
Non-GAAP net earnings
per share - diluted
|
|
$
|
0.85
|
|
|
$
|
1.05
|
|
|
$
|
2.01
|
|
|
$
|
2.10
|
|
Shares used in
computing GAAP and non-GAAP net earnings per diluted
share
|
|
91.4
|
|
|
91.9
|
|
|
91.6
|
|
|
92.0
|
|
|
|
(1)
|
Includes $2.0
million, $2.9 million, $4.2 million, and $4.8 million
respectively, in cost of revenues for the periods
presented.
|
(2)
|
Includes the release
of $8.9 million in contingent consideration earnout liabilities in
the second quarter of fiscal year 2020 and an $8.8 million change
in the fair value of a contingent consideration in the year-to-date
period 2020.
|
(3)
|
Includes a $40.5
million impairment of loans receivable from CPTC in the second
quarter of fiscal year 2020.
|
(4)
|
Represents the gain
on sale of our equity investment in Augmenix in the year-to-date
period 2019.
|
(5)
|
Represents the tax
effect of a change in law related to the U.S. Tax Cuts and Jobs
Act.
|
(6)
|
Represents the charge
to income tax expense due to the increase of a valuation allowance
as a result of an acquisition.
|
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SOURCE Varian