Varian, Inc. Reports Second Quarter 2009 Results

PALO ALTO, Calif., April 29 /PRNewswire-FirstCall/ -- Varian, Inc. (NasdaqGS:
VARI) today reported second quarter fiscal year 2009 revenues of $205.4
million, a decrease of 17.2% from the second quarter of fiscal year 2008.

Non-GAAP (adjusted) diluted earnings per share for the second quarter of 2009
were $0.55 (including $0.05 of share-based compensation expense), a decrease
of 14.1% from the $0.64 (including $0.07 of share-based compensation expense)
in the second quarter of 2008. On a GAAP basis, diluted earnings per share in
the second quarter of 2009 were $0.35, compared to $0.52 in the second quarter
of 2008.

Adjusted operating profit margin was 11.8% in the second quarter of 2009,
compared to 12.0% in the prior-year quarter. On a GAAP basis, operating
profit margin was 7.5% in the second quarter of 2009, compared to 10.9% in the
same quarter a year ago.

Free cash flow, which is defined as operating cash flow less net fixed asset
purchases, was $25.5 million, or 250% of GAAP net earnings, in the second
quarter of 2009.

"We were able to maintain solid adjusted operating profit margins in the
quarter even with the expected lower revenues," said Garry W. Rogerson,
Chairman and Chief Executive Officer. "This was primarily due to the positive
impact of efficiency improvements we have implemented in recent years,
combined with benefits from the cost reduction activities we announced on
January 16, 2009 and positive foreign currency movements. We also generated
excellent free cash flow, which demonstrates the fundamental strength and
flexibility of our business, even in a challenging economic environment."

On a sequential basis, second quarter 2009 revenues of $205.4 million
decreased only 1.3% from first quarter 2009 revenues of $208.2 million.
Second quarter 2009 adjusted diluted earnings per share were $0.55, an
increase of 1.9% from the $0.54 reported in the first quarter of 2009. On a
GAAP basis, second quarter 2009 diluted earnings per share were $0.35,
compared to $0.45 in the prior quarter. Second quarter 2009 adjusted
operating profit margin was 11.8%, an increase of 40 basis points compared to
the 11.4% reported in the first quarter of 2009. On a GAAP basis, second
quarter 2009 operating profit margin was 7.5%, compared to 9.6% in the prior
quarter.

"We are encouraged by the stability reflected in the sequential results, with
essentially flat revenues and profitability on an adjusted basis," said
Rogerson. "Looking forward, the diversity of our products, the applications
we serve and our worldwide distribution position us well. There are a few
positive signs for the future, including governmental spending initiatives, a
global focus on environmental, food and product testing, and investments in
alternative energies such as solar, nuclear and biofuels. We believe that our
strategy is sound, but will remain vigilant with respect to the economic
situation, making the appropriate decisions to maintain solid profitability
and cash flow through this very difficult period and position ourselves for
profitable growth with the economic recovery."

For a complete reconciliation of non-GAAP (adjusted) financial information
used in this press release to the most directly comparable GAAP financial
information, please refer to the attached Reconciliations of GAAP to Adjusted
Results, Actual.

Results by Segment
Scientific Instruments revenues for the second quarter of 2009 were $170.9
million, a decrease of 16.4% from the second quarter of the prior year.
Adjusted operating profit margin was 12.0% in the second quarter of 2009,
compared to 12.3% in the second quarter of the prior year. On a GAAP basis,
operating profit margin was 7.3% in the second quarter of 2009, compared to
11.0% in the same quarter a year ago.

Vacuum Technologies revenues were $34.5 million in the second quarter of 2009,
a decrease of 21.0% from the second quarter of 2008. Adjusted operating
profit margin was 21.4% in the second quarter of 2009, compared to 20.1% in
the second quarter of the prior year. On a GAAP basis, operating profit
margin was 19.2% in the second quarter of 2009, compared to 20.1% in the
prior-year quarter.

Webcast Conference Call
Varian, Inc. will be providing a live webcast (in listen-only mode) of its
investor conference call to review its second quarter results later today,
April 29, 2009, at 2:00 p.m. Pacific time. The call may be heard via the
Internet by going to www.varianinc.com, clicking on the Investors link and
then clicking on the Live Webcast link.

Non-GAAP (Adjusted) Financial Measures
This press release includes non-GAAP (adjusted) financial measures for cost of
sales, selling, general and administrative expenses, research and development
expenses, operating earnings, operating profit margins, impairment of private
company equity investments, income tax expense, net earnings, diluted earnings
per share and free cash flow. With the exception of free cash flow, these
non-GAAP financial measures exclude acquisition-related intangible and
inventory write-up amortization, restructuring and other related costs, and
impairment of private company equity investments. Reconciliations of each of
these non-GAAP financial measures to the most directly comparable GAAP
financial measures are detailed in the Reconciliations of GAAP to Adjusted
Results attached to this press release. We believe that presentation of these
non-GAAP financial measures provides useful information to investors regarding
our results of operations and our cash flows.

We believe that excluding acquisition-related intangible and inventory
write-up amortization provides supplemental information and an alternative
presentation useful to investors' understanding of the company's core
operating results and trends. In addition, investors have indicated to us
that they analyze the benefits of acquisitions based on the cash return on the
investment made, and thus consider financial measures excluding
acquisition-related intangible and inventory write-up amortization as
important, useful information.

We similarly believe that excluding restructuring and other related costs
(principally related to facility closures and employee terminations to reduce
costs and improve operational efficiency) and impairment of private company
equity investments provides supplemental information and an alternative
presentation useful to investors' understanding of the company's core
operating results and trends, especially when comparing those results on a
consistent basis to results for previous periods and anticipated results for
future periods. Investors have indicated that they consider financial
measures of our results of operations excluding restructuring and other
related costs and impairment of private company equity investments as
important supplemental information useful to their understanding of our
historical results and estimating of our future results.

We also believe that, in excluding acquisition-related intangible and
inventory write-up amortization, restructuring and other related costs, and
impairment of private company equity investments, our non-GAAP financial
measures provide investors with transparency into what is used by management
to measure and forecast our results of operations, to compare on a consistent
basis our results of operations for the current period to that of prior
periods, to compare our results of operations on a more consistent basis
against that of other companies, in making financial and operating decisions
and to establish certain management compensation.

We believe that the presentation of free cash flow provides investors with
useful information on what is used by management to measure cash management
performance, in making financial and operating decisions and to establish
certain management compensation.

Although we believe, for the foregoing reasons, that our presentation of
non-GAAP financial measures provides useful supplemental information to
investors regarding our results of operations and our cash flows, our non-GAAP
financial measures should only be considered in addition to, and not as a
substitute for or superior to, our financial measures prepared in accordance
with GAAP.

Caution Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements are based
on management's current expectations, are not guarantees of future
performance, and involve certain risks and uncertainties that could cause the
company's actual results to differ materially from management's current
expectations and the forward-looking statements made in this press release.
Those risks and uncertainties include, but are not limited to, the following:
when and how quickly global economic conditions improve, and whether
conditions worsen before they improve; whether we will succeed in new product
development, release, commercialization, performance and acceptance; whether
we can achieve growth in sales for life science, environmental, energy and/or
applied research and other applications; whether we can achieve sales growth
in Europe, North America, Asia Pacific and/or Latin America; risks arising
from the timing of shipments, installations and the recognition of revenue on
certain research products, including nuclear magnetic resonance (NMR)
spectroscopy systems, magnetic resonance (MR) imaging and fourier-transform
mass spectrometer (FTMS) systems and superconducting magnets; the impact of
shifting product mix on profit margins; competitive products and pricing;
economic conditions in our various product and geographic markets; whether we
will see continued and timely delivery of key raw materials and components by
suppliers; foreign currency fluctuations that could adversely impact revenue
growth and/or earnings; whether we will see continued investment in capital
equipment, in particular given the global liquidity and credit crisis; whether
we will see reduced demand from customers that operate in cyclical industries;
whether the global liquidity and credit crisis will impact the collectability
of accounts receivable from our customers; the extent and timing of government
funding for research; our ability to successfully evaluate, negotiate,
complete and integrate acquisitions, in particular given the greater
difficulty to borrow in the current credit environment; the actual costs,
timing and benefits of restructuring activities (such as the employee
reductions and other actions announced on January 16, 2009 and our Northern
California operations consolidation) and other efficiency improvement
activities (such as our global procurement, lower-cost manufacturing and
outsourcing initiatives); variability in our effective income tax rate (due to
factors including the timing and amount of discrete tax events and changes to
unrecognized tax benefits); the timing and amount of share-based compensation;
and other risks detailed from time to time in our filings with the U.S.
Securities and Exchange Commission. We undertake no special obligation to
update any forward-looking statements, whether in response to new information,
future events or otherwise.

About Varian, Inc.
Varian, Inc. is a leading worldwide supplier of scientific instruments and
vacuum technologies for life science, environmental, energy, and applied
research and other applications. The company provides complete solutions,
including instruments, vacuum products, laboratory consumable supplies,
software, training and support through its global distribution and support
systems. Varian, Inc. employs approximately 3,600 people worldwide and
operates manufacturing facilities in North America, Europe and Asia Pacific.
Varian, Inc. had fiscal year 2008 sales of $1.0 billion, and its common stock
is traded on the NASDAQ Global Select Market under the symbol "VARI." Further
information is available on the company's Web site at
http://www.varianinc.com.

For Information Contact:
Investor Relations
Varian, Inc.
650.424.5471
ir@varianinc.com

VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
Second Quarter FY 2009 and Second Quarter FY 2008

Fiscal Quarter Ended
------------------------------
April 3, March 28,
2009 2008
--------- ----------
Sales $205,426 $248,165
Cost of sales 115,902 (1) 135,289 (7)
--------- ----------
Gross profit 89,524 112,876
--------- ----------
Operating expenses
Selling, general and administrative 59,278 (2) 67,603 (8)
Research and development 14,745 (3) 18,190 (9)
--------- ----------
Total operating expenses 74,023 85,793
--------- ----------

Operating earnings 15,501 (4) 27,083 (10)
Impairment of private company
equity investment - (3,018) (11)
Interest income 338 1,751
Interest expense (335) (435)
--------- ----------
Earnings before income taxes 15,504 25,381
Income tax expense 5,318 (5) 9,594 (12)
--------- ----------
Net earnings $10,186 (6) $15,787 (13)
========= ==========

Net earnings per diluted share $0.35 (6) $0.52 (13)
========= ==========
Diluted shares outstanding 28,952 30,243
========= ==========

NON-GAAP (ADJUSTED) FINANCIAL MEASURES (see also attached reconciliations
of GAAP to Adjusted results for each of these measures):

(1) $112,079 on an adjusted basis excluding $1,471 in acquisition-
related intangible amortization, $42 in acquisition-related
inventory write-up amortization and $2,310 in restructuring and
other related costs.
(2) $55,175 on an adjusted basis excluding $283 in acquisition-related
intangible amortization and $3,820 in restructuring and other
related costs.
(3) $13,901 on an adjusted basis excluding $844 in restructuring and
other related costs.
(4) $24,271 on an adjusted basis excluding the adjustments described in
items (1) - (3) above.
(5) $8,350 on an adjusted basis excluding the tax impact of the
adjustments described in items (1) - (3) above.
(6) $15,924 and $0.55 per diluted share, respectively, on an adjusted
basis excluding the adjustments (net of related tax effects)
described in items (1) - (3) above.
(7) $133,502 on an adjusted basis excluding $1,515 in acquisition-
related intangible amortization, $110 in acquisition-related
inventory write-up amortization and $162 in restructuring and
other related costs.
(8) $66,990 on an adjusted basis excluding $402 in acquisition-related
intangible amortization and $211 in restructuring and other related
costs.
(9) $18,015 on an adjusted basis excluding $175 in restructuring and
other related costs.
(10) $29,658 on an adjusted basis excluding the adjustments described in
items (7) - (9) above.
(11) $0 on an adjusted basis excluding $3,018 related to the impairment
of a private company equity investment.
(12) $11,712 on an adjusted basis excluding the tax impact of the
adjustments described in items (7) - (9) and (11) above.
(13) $19,262 and $0.64 per diluted share, respectively, on an adjusted
basis excluding the adjustments (net of related tax effects)
described in items (7) - (9) and (11) above.

VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
First Six Months FY 2009 and First Six Months FY 2008

Six Months Ended
------------------------------
April 3, March 28,
2009 2008
--------- ----------
Sales $413,662 $485,596
Cost of sales 228,817 (1) 265,418 (7)
--------- ----------
Gross profit 184,845 220,178
--------- ----------
Operating expenses
Selling, general and administrative 120,194 (2) 133,583 (8)
Research and development 29,259 (3) 35,370 (9)
--------- ----------
Total operating expenses 149,453 168,953
--------- ----------

Operating earnings 35,392 (4) 51,225 (10)
Impairment of private company
equity investment - (3,018) (11)
Interest income 925 3,688
Interest expense (657) (884)
---------
----------Earnings before income taxes 35,660 51,011
Income tax expense 12,433 (5) 17,640 (12)
--------- ----------
Net earnings $23,227 (6) $33,371 (13)
========= ==========

Net earnings per diluted share $0.80 (6) $1.09 (13)
========= ==========
Diluted shares outstanding 28,963 30,598
========= ==========

NON-GAAP (ADJUSTED) FINANCIAL MEASURES (see also attached reconciliations
of GAAP to Adjusted results for each of these measures):

(1) $222,439 on an adjusted basis excluding $3,074 in acquisition-
related intangible amortization, $59 in acquisition-related
inventory write-up amortization and $3,245 in restructuring and
other related costs.
(2) $115,080 on an adjusted basis excluding $735 in acquisition-
related intangible amortization and $4,379 in restructuring and
other related costs.
(3) $28,197 on an adjusted basis excluding $1,062 in restructuring and
other related costs.
(4) $47,946 on an adjusted basis excluding the adjustments described
in items (1) - (3) above.
(5) $16,729 on an adjusted basis excluding the tax impact of the
adjustments described in items (1) - (3) above.
(6) $31,485 and $1.09 per share, respectively, on an adjusted basis
excluding the adjustments (net of related tax effects) described
in items (1) - (3) above.
(7) $261,272 on an adjusted basis excluding $2,906 in acquisition-
related intangible amortization, $590 in acquisition-related
inventory write-up amortization and $650 in restructuring and
other related costs.
(8) $131,339 on an adjusted basis excluding $840 in acquisition-
related intangible amortization and $1,404 in restructuring
and other related costs.
(9) $34,875 on an adjusted basis excluding $495 in restructuring
and other related costs.
(10) $58,110 on an adjusted basis excluding the adjustments
described in items (7) - (9) above.
(11) $0 on an adjusted basis excluding $3,018 related to the
impairment of a private company equity investment.
(12) $21,262 on an adjusted basis excluding the tax impact of
the adjustments described in items (7) - (9) and (11) above.
(13) $39,652 and $1.30 per share, respectively, on an adjusted
basis excluding the adjustments (net of related tax
effects) described in items (7) - (9) and (11) above.

VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except par value amounts)

April 3, October 3,
2009 2008
--------- ---------
ASSETS

Current assets
Cash and cash equivalents $130,505 $103,895
Accounts receivable, net 156,694 199,420
Inventories 146,963 161,039
Deferred taxes 33,132 33,618
Prepaid expenses and other
current assets 14,239 15,663
--------- ---------
Total current assets 481,533 513,635
Property, plant and equipment, net 111,064 110,343
Goodwill 203,573 218,208
Intangible assets, net 29,511 36,972
Other assets 23,899 24,089
--------- ---------
Total assets $849,580 $903,247
========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable $57,924 $70,923
Deferred profit 12,252 10,957
Accrued liabilities 148,662 167,173
--------- ---------
Total current liabilities 218,838 249,053
Long-term debt 18,750 18,750
Deferred taxes 3,320 4,341
Other liabilities 42,869 43,431
--------- ---------
Total liabilities 283,777 315,575
--------- ---------

Stockholders' equity
Preferred stock-par value $0.01,
authorized-1,000 shares; issued-none - -
Common stock-par value $0.01,
authorized-99,000 shares; issued
and outstanding-28,778 shares
at April 3, 2009 and 28,917
shares at October 3, 2008 358,274 356,192
Retained earnings 206,115 186,009
Accumulated other comprehensive income 1,414 45,471
--------- ---------
Total stockholders' equity 565,803 587,672
--------- ---------
Total liabilities and
stockholders' equity $849,580 $903,247
========= =========

VARIAN, INC. AND SUBSIDIARY COMPANIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)

Fiscal Quarter Ended Six Months Ended
---------------------- ---------------------
April 3, March 28, April 3, March 28,
2009 2008 2009 2008
--------- ---------- --------- ---------
Cash flows from
operating activities
Net earnings $10,186 $15,787 $23,227 $33,371
Adjustments to reconcile
net earnings to net cash
provided by operating
activities:
Depreciation
and amortization 6,528 6,445 13,371 13,279
Loss (gain) on
disposition of property,
plant and equipment 23 (76) (4) (298)
Impairment of private
company equity investment - 3,018 - 3,018
Share-based
compensation expense 1,945 3,103 4,311 4,822
Deferred taxes (768) (2,421) (655) (1,656)
Unrealized loss (gain) on
currency remeasurement 323 971 (6,363) 642
Changes in assets and
liabilities, excluding
effects of acquisitions:
Accounts receivable, net 7,549 (15,505) 32,119 (1,732)
Inventories 9,124 (8,566) 1,182 (23,718)
Prepaid expenses and
other current assets 336 (1,264) 229 (992)
Other assets (119) (11) (1,148) (35)
Accounts payable (5,776) 4,659 (9,394) 3,287
Deferred profit 1,245 (2,220) 1,548 (4,474)
Accrued liabilities 8,719 7,132 (6,900) 3,813
Other liabilities (5,736) 1,577 (1,013) 405
--------- ---------- --------- ---------
Net cash provided
by operating activities 33,579 12,629 50,510 29,732
--------- ---------- --------- ---------
Cash flows from
investing activities
Proceeds from sale
of property, plant
and equipment 80 446 5,246 787
Purchase of property,
plant and equipment (8,194) (5,749) (15,137) (9,208)
Acquisitions, net of
cash acquired (1,521) (5,222) (2,247) (15,209)
Private company
equity investments - (18) - (18)
--------- ---------- --------- ---------
Net cash used in
investing activities (9,635) (10,543) (12,138) (23,648)
--------- ---------- --------- ---------
Cash flows from
financing activities
Repurchase of common stock (7,196) (56,421) (7,475) (71,523)
Issuance of common stock 1,406 3,715 2,315 13,233
Excess tax benefit
from share-based plans - 573 - 2,963
Transfers to Varian
Medical Systems, Inc. (219) (210) (365) (422)

--------- ---------- --------- ---------
Net cash used in
financing activities (6,009) (52,343) (5,525) (55,749)
--------- ---------- --------- ---------
Effects of exchange
rate changes on cash
and cash equivalents (4,359) 10,000 (6,237) 10,692
--------- ---------- --------- ---------
Net increase
(decrease) in cash and
cash equivalents 13,576 (40,257) 26,610 (38,973)
Cash and cash
equivalents at
beginning of period 116,929 197,680 103,895 196,396
--------- ---------- --------- ---------
Cash and cash
equivalents at
end of period $130,505 $157,423 $130,505 $157,423
========= ========== ========= =========

VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO ADJUSTED RESULTS - ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In thousands)

Second Quarter FY 2009 and Second Quarter FY 2008
and
First Six Months FY 2009 and First Six Months FY 2008

Fiscal Quarter Ended Six Months Ended
---------------------- ---------------------
April 3, March 28, April 3, March 28,
2009 2008 2009 2008
--------- ---------- --------- ---------
TOTAL COMPANY

Cost of Sales
U.S. GAAP as reported $115,902 $135,289 $228,817 $265,418
Adjustments:
Acquisition-related
intangible
amortization (1,471) (1,515) (3,074) (2,906)
Acquisition-related
inventory write-up
amortization (42) (110) (59) (590)
Restructuring and
other related costs (2,310) (162) (3,245) (650)
--------- ---------- --------- ---------
As adjusted $112,079 $133,502 $222,439 $261,272
========= ========== ========= =========

Selling, General
and Administrative
U.S. GAAP as reported $59,278 $67,603 $120,194 $133,583
Adjustments:
Acquisition-related
intangible
amortization (283) (402) (735) (840)
Restructuring and
other related costs (3,820) (211) (4,379) (1,404)
--------- ---------- --------- ---------
As adjusted $55,175 $66,990 $115,080 $131,339
========= ========== ========= =========

Research and
Development
U.S. GAAP as reported $14,745 $18,190 $29,259 $35,370
Adjustments:
Restructuring and
other related costs (844) (175) (1,062) (495)
--------- ---------- --------- ---------
As adjusted $13,901 $18,015 $28,197 $34,875
========= ========== ========= =========

VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO ADJUSTED RESULTS - ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In thousands, except margin data)

Second Quarter FY 2009 and Second Quarter FY 2008
and
First Six Months FY 2009 and First Six Months FY 2008

Fiscal Quarter Ended Six Months Ended
---------------------- ---------------------
April 3, March 28, April 3, March 28,
2009 2008 2009 2008
--------- ---------- --------- ---------
TOTAL COMPANY (Continued)

Operating Earnings
U.S. GAAP as reported $15,501 $27,083 $35,392 $51,225
Adjustments:
Acquisition-related
intangible
amortization 1,754 1,917 3,809 3,746
Acquisition-related
inventory write-up
amortization 42 110 59 590
Restructuring and
other related costs 6,974 548 8,686 2,549
--------- ---------- --------- ---------
As adjusted $24,271 $29,658 $47,946 $58,110
========= ========== ========= =========

Operating Margins
U.S. GAAP as reported 7.5% 10.9% 8.6% 10.5%
Adjustments:
Acquisition-related
intangible amortization 0.9 0.9 0.9 0.9
Acquisition-related
inventory write-up
amortization 0.0 0.0 0.0 0.1
Restructuring and
other related costs 3.4 0.2 2.1 0.5
--------- ---------- --------- ---------
As adjusted 11.8% 12.0% 11.6% 12.0%
========= ========== ========= =========

Impairment of Private
Company Equity Investment
U.S. GAAP as reported $ - $3,018 $ - $3,018
Adjustments:
Impairment of
private company
equity investment - (3,018) - (3,018)
--------- ---------- --------- ---------
As adjusted $ - $ - $ - $ -
========= ========== ========= =========

Income Tax
Expense
U.S. GAAP as reported $5,318 $9,594 $12,433 $17,640
Adjustments:
Tax impact
of adjustments:
Acquisition-related
intangible amortization 578 639 1,252 1,278
Acquisition-related
inventory write-up
amortization 12 82 17 249
Impairment of
private company
equity investment - 1,154 - 1,154
Restructuring and
other related costs 2,442 243 3,027 941
--------- ---------- --------- ---------
As adjusted $8,350 $11,712 $16,729 $21,262
========= ========== ========= =========

VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO ADJUSTED RESULTS - ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In thousands, except per share data)

Second Quarter FY 2009 and Second Quarter FY 2008
and
First Six Months FY 2009 and First Six Months FY 2008

Fiscal Quarter Ended Six Months Ended
---------------------- ---------------------
April 3, March 28, April 3, March 28,
2009 2008 2009 2008
--------- ---------- --------- ---------

TOTAL COMPANY (Continued)

Net Earnings
U.S. GAAP as reported $10,186 $15,787 $23,227 $33,371
Adjustments:
Acquisition-related
intangible
amortization 1,176 1,278 2,557 2,468
Acquisition-related
inventory write-up
amortization 30 28 42 341
Impairment of
private company
equity investment - 1,864 - 1,864
Restructuring and
other related costs 4,532 305 5,659 1,608
--------- ---------- --------- ---------
As adjusted $15,924 $19,262 $31,485 $39,652
========= ========== ========= =========

Diluted Earnings
Per Share
U.S. GAAP as reported $0.35 $0.52 $0.80 $1.09
Adjustments:
Acquisition-related
intangible
amortization 0.04 0.05 0.09 0.09
Acquisition-related
inventory write-up
amortization 0.00 0.00 0.00 0.01
Impairment of
private company
equity investment - 0.06 - 0.06
Restructuring and
other related costs 0.16 0.01 0.20 0.05
--------- ---------- --------- ---------
As adjusted $0.55 $0.64 $1.09 $1.30
========= ========== ========= =========

Free Cash Flow
U.S. GAAP as reported -
Net cash provided by
operating activities $33,579 $12,629 $50,510 $29,732
Adjustments:
Proceeds from sale of
property, plant
and equipment 80 446 5,246 787
Purchase of
property, plant
and equipment (8,194) (5,749) (15,137) (9,208)
--------- ---------- --------- ---------
As adjusted
- Free Cash Flow $25,465 $7,326 $40,619 $21,311
========= ========== ========= =========

VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO ADJUSTED RESULTS - ACTUAL
UNAUDITED RESULTS OF OPERATIONS
(In thousands, except margin data)

Second Quarter FY 2009 and Second Quarter FY 2008
and
First Six Months FY 2009 and First Six Months FY 2008

Fiscal Quarter Ended Six Months Ended
---------------------- ---------------------
April 3, March 28, April 3, March 28,
2009 2008 2009 2008
--------- ---------- --------- ---------
SCIENTIFIC INSTRUMENTS
SEGMENT

Operating Earnings
U.S. GAAP as reported $12,426 $22,508 $28,849 $42,310
Adjustments:
Acquisition-related
intangible
amortization 1,754 1,917 3,809 3,746
Acquisition-related
inventory write-up
amortization 42 110 59 590
Restructuring and
other related costs 6,216 548 7,807 2,549
--------- ---------- --------- ---------
As adjusted $20,438 $25,083 $40,524 $49,195
========= ========== ========= =========

Operating Margins
U.S. GAAP as Reported 7.3% 11.0% 8.4% 10.5%
Adjustments:
Acquisition-related
intangible
amortization 1.0 0.9 1.1 1.1
Acquisition-related
inventory write-up
amortization 0.0 0.1 0.0 0.1
Restructuring and
other related costs 3.7 0.3 2.3 0.6
--------- ---------- --------- ---------
As adjusted 12.0% 12.3% 11.8% 12.3%
========= ========== ========= =========

VACUUM TECHNOLOGIES
SEGMENT

Operating Earnings
U.S. GAAP as reported $6,640 $8,771 $13,676 $16,504
Adjustments:
Restructuring and
other related costs 758 - 879 -
--------- ---------- --------- ---------
As adjusted $7,398 $8,771 $14,555 $16,504
========= ========== ========= =========

Operating Margins
U.S. GAAP as reported 19.2% 20.1% 19.3% 19.6%
Adjustments:
Restructuring and
other related costs 2.2 - 1.2 -
--------- ---------- --------- ---------
As adjusted 21.4% 20.1% 20.5% 19.6%
========= ========== ========= =========

VARIAN, INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP TO ADJUSTED RESULTS - ACTUAL
UNAUDITED RESULTS OF OPERATIONS

Second Quarter FY 2009 and First Quarter FY 2009 (Sequential)

Fiscal Quarter Ended
----------------------------
April 3, January 2,
2009 2009
---------- ----------
TOTAL COMPANY
Operating Margins
U.S. GAAP as reported 7.5% 9.6%
Adjustments:
Acquisition-related
intangible amortization 0.9 1.0
Restructuring and other
related costs 3.4 0.8
---------- ----------
As adjusted 11.8% 11.4%
========== ==========

Diluted Earnings Per Share
U.S. GAAP as reported $0.35 $0.45
Adjustments:
Acquisition-related
intangible amortization 0.04 0.05
Restructuring and other
related costs 0.16 0.04
---------- ----------
As adjusted $0.55 $0.54
========== ==========

SOURCE Varian, Inc.

Investor Relations of Varian, Inc., +1-650-424-5471, ir@varianinc.com