<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 1, 1994
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSISTION PERIOD FROM _________TO _________
COMMISSION FILE NUMBER: 1-7598
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER:
VARIAN ASSOCIATES, INC.
<TABLE>
<S> <C>
STATE OR OTHER JURISDICTION OF IRS EMPLOYER
INCORPORATION OR ORGANIZATION: IDENTIFICATION NO.:
DELAWARE 94-2359345
</TABLE>
Address of principal executive offices:
3050 Hansen Way, Palo Alto, California 94304-1000
Telephone No., including area code:
(415) 493-4000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B)OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
<S> <C>
Common Stock, New York Stock Exchange
$1 par value Pacific Stock Exchange
Preferred Stock New York Stock Exchange
Purchase Rights Pacific Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G)OF THE ACT:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO___
An index of exhibits filed with this Form 10-Q is located on page 14.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of August 1, 1994: 34,247,000 shares of $1 par value common
stock.
1 of 17
<PAGE> 2
PART 1. FINANCIAL INFORMATION
VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF EARNINGS
UNAUDITED
<TABLE>
<CAPTION>
THIRD QUARTER ENDED NINE MONTHS ENDED
(DOLLARS IN THOUSANDS JULY 1, JULY 2, JULY 1, JULY 2,
EXCEPT PER SHARE AMOUNTS) 1994 1993 1994 1993
<S> <C> <C> <C> <C>
SALES $ 393,054 $ 327,883 $ 1,111,338 $ 944,519
----------- ------------ -------------- ------------
OPERATING COSTS AND EXPENSES
Cost of sales 262,599 219,333 747,006 636,444
Research and development 19,513 18,646 59,418 54,744
Marketing 48,225 43,626 136,058 128,445
General and administrative 27,530 25,746 83,150 76,773
---------- ----------- ------------- ------------
TOTAL OPERATING COSTS AND EXPENSES 357,867 307,351 1,025,632 896,406
---------- ----------- ------------- ------------
OPERATING EARNINGS 35,187 20,532 85,706 48,113
Interest (income)/expense, net (991) 1,225 1,136 3,230
---------- ----------- ------------- ------------
EARNINGS BEFORE TAXES 36,178 19,307 84,570 44,883
Taxes on earnings 13,750 7,340 32,140 17,060
----------- ----------- ------------- -----------
NET EARNINGS $ 22,428 $ 11,967 $ 52,430 $ 27,823
=========== =========== ============= ===========
AVERAGE SHARES OUTSTANDING INCLUDING
COMMON STOCK EQUIVALENTS (1) 35,528 35,934 35,703 36,546
=========== =========== ============= ===========
EARNINGS PER SHARE - FULLY DILUTED (1) $ 0.63 $ 0.33 $ 1.47 $ 0.76
=========== =========== ============= ===========
Dividends Declared Per Share (1) $ 0.06 $ 0.05 $ 0.17 $ 0.15
Order Backlog $ 803,500 $ 632,400
</TABLE>
(1) Note: Prior periods restated for two-for-one stock split effected in
the form of a stock dividend in Q2 FY94.
See accompanying notes to the consolidated financial statements.
-2-
<PAGE> 3
VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
JULY 1, OCTOBER 1,
(DOLLARS IN THOUSANDS EXCEPT PAR VALUES) 1994 1993
<S> <C> <C>
ASSETS
- - ------
CURRENT ASSETS
Cash and cash equivalents $ 76,806 $ 73,307
Accounts receivable 314,266 290,513
Inventories
Raw materials and parts 114,468 89,708
Work in process 60,403 44,705
Finished goods 19,110 27,000
------------- -------------
Total Inventories 193,981 161,413
Other current assets 72,474 65,793
------------- -------------
TOTAL CURRENT ASSETS 657,527 591,026
Property, Plant, and Equipment 568,255 544,316
Accumulated depreciation and amortization (337,685) (313,841)
------------- -------------
NET PROPERTY, PLANT, AND EQUIPMENT 230,570 230,475
Other Assets 49,724 57,506
------------ ------------
TOTAL ASSETS $ 937,821 $ 879,007
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 38,854 $ 22,858
Accounts payable - trade 65,320 58,654
Accrued expenses 211,818 203,848
Product warranty 41,603 35,615
Advance payments from customers 63,988 61,282
------------ ------------
TOTAL CURRENT LIABILITIES 421,583 382,257
Long-Term Debt 60,399 60,470
Deferred Taxes 21,392 21,361
------------ -----------
TOTAL LIABILITIES 503,374 464,088
------------ -----------
SHAREHOLDERS' EQUITY
Preferred stock
Authorized 1,000,000 shares, par value $1, issued none - -
Common stock
Authorized 99,000,000 shares, par value $1, issued and
outstanding 34,290,000 shares at July 1,1994 and 34,684,000
shares at October 1, 1993 (1) 34,290 17,342
Retained earnings 400,157 397,577
------------ --------------
TOTAL SHAREHOLDERS' EQUITY 434,447 414,919
------------ --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 937,821 $ 879,007
============ ==============
</TABLE>
(1) Outstanding shares have been adjusted on a retroactive basis for the
two-for-one stock split effected in the form of a stock dividend in
Q2 FY94.
See accompanying notes to the consolidated financial statements.
-3-
<PAGE> 4
VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JULY 1, JULY 2,
(DOLLARS IN THOUSANDS) 1994 1993
<S> <C> <C>
OPERATING ACTIVITIES
Net Cash Provided by Operating Activities $56,801 $16,267
INVESTING ACTIVITIES
Purchase of property, plant, and equipment (41,001) (32,554)
Other, net 5,314 (242)
------- -------
Net Cash Used by Investing Activities (35,687) (32,796)
FINANCING ACTIVITIES
Net borrowings on short-term obligations 15,996 41,581
Proceeds from long-term borrowings - 20,000
Proceeds from common stock issued to employees 18,984 19,936
Purchase of common stock (46,029) (60,728)
Other, net (5,902) (10,667)
------- -------
Net Cash (Used)/Provided by Financing Activities (16,951) 10,122
EFFECTS OF EXCHANGE RATE CHANGES ON CASH (664) 2,027
------ ------
Net Increase/(Decrease) in Cash and Cash Equivalents 3,499 (4,380)
Cash and Cash Equivalents at Beginning of Period 73,307 66,743
------- -------
Cash and Cash Equivalents at End of Period $76,806 $62,363
======== =======
</TABLE>
See accompanying notes to the consolidated financial statements.
-4-
<PAGE> 5
VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
(Dollars in Millions)
NOTE 1: The consolidated financial statements include the accounts of
Varian Associates, Inc. and its subsidiaries and have been
prepared by the Company, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. It is suggested that
these financial statements be read in conjunction with the
financial statements and the notes thereto included in the
Company's latest Form 10-K annual report. In the opinion of
management, the consolidated financial statements include all
normal recurring adjustments necessary to present fairly the
information required to be set forth therein. The results of
operations for the third quarter ended July 1, 1994, and July
2, 1993, are not necessarily indicative of the results to be
expected for a full year or for any other periods.
NOTE 2: Inventories are valued at the lower of cost or market
(realizable value) using the last-in, first-out (LIFO) cost
for the U.S. inventories of the Health Care Systems (except
for X-Ray Tube Products), Instruments, and Semiconductor
Equipment segments. All other inventories are valued
principally at average cost. Approximately half of total
gross inventories are valued using the LIFO method. If the
first-in, first-out (FIFO) method had been used for those
operations valuing inventories on a LIFO basis, inventories
would have been higher than reported by $51.4 at July 1, 1994,
$50.8 at October 1, 1993, $52.7 at July 2, 1993, and $52.0 at
October 2,1992.
NOTE 3: The Company enters into forward exchange contracts to mitigate
the effects of operational (sales orders and purchase
commitments) and balance sheet exposures to fluctuations in
foreign currency exchange rates. When the Company's foreign
exchange contracts hedge operational exposure, the effects of
movements in currency exchange rates on these instruments are
recognized in income when the related revenue and expenses are
recognized. When foreign exchange contracts hedge balance
sheet exposure, such effects are recognized in income when the
exchange rate changes. Because the impact of movements in
currency exchange rates on foreign exchange contracts
generally offsets the related impact on the underlying items
being hedged, these instruments do not subject the Company to
risk
-5-
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 3: (Continued)
that would otherwise result from changes in currency exchange
rates. At July 1, 1994, the Company had forward exchange
contracts with maturities of twelve months or less to sell
foreign currencies totaling $65.0 million (7.5 million
Canadian dollars, 3.0 million Swiss francs, 15.4 million
Deutsche marks, 118.7 million French francs, 8.5 million
British pounds, 13.9 billion Italian lira and 568.0 million
Japanese yen) and to buy foreign currencies totaling $17.4
million (1.3 million Swiss francs, 4.5 million British pounds
and 1.0 billion Japanese yen).
NOTE 4: In November 1992, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS) 112,
Employers' Accounting for Postemployment Benefits. It is
effective for the Company's fiscal year 1995. Its adoption
will not have a material effect on the financial statements of
the Company.
N0TE 5: During the first quarter of fiscal year 1994, the Company
adopted SFAS 109, "Accounting for Income Taxes". Adoption was
made on a retroactive basis, and resulted in a charge against
beginning retained earnings at September 28, 1991, of $6.9
million. The audited balance sheet at October 1, 1993, has
been restated to reflect adoption of this new standard.
Adoption of SFAS 109 did not have a material effect on income
tax expense, as previously reported, for any periods
subsequent to fiscal 1991.
Significant components of deferred tax assets and liabilities
as of the beginning of fiscal 1994 are as follows:
<TABLE>
<S> <C>
Assets:
Inventory $11.6
Product warranty 11.3
Deferred compensation 8.6
Estimated loss contingencies 6.3
Insurance 3.3
Other 7.3
-----
$48.4
=====
Liabilities:
Depreciation $22.0
Other (0.6)
-----
$21.4
=====
</TABLE>
-6-
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6: On September 21, 1988, Rodney Shields, who purported to be a
stockholder of the Company, filed a stockholder's derivative
action in the Superior Court of the State of California,
County of Santa Clara. The complaint alleged that the Company
obtained certain defense contracts by illegal means,
overcharged the government in connection with other defense
contracts, and that certain named individuals, including 17
present or former directors or officers of the Company,
breached their fiduciary duties. On November 2, 1993, the
California Court of Appeal issued a writ of mandate directing
entry of summary judgment in favor of all defendants. Mr.
Shields did not seek further judicial review of that writ, and
a judgment of dismissal was entered by the Superior Court on
December 27, 1993.
In February 1990, a purported class action was brought by
Panache Broadcasting of Pennsylvania, Inc. on behalf of all
purchasers of electron tubes in the U.S. against the Company
and a joint- venture partner, alleging that the activities of
their joint venture in the power-grid tube industry violated
antitrust laws. The complaint seeks injunctive relief and
unspecified damages which may be trebled under the antitrust
laws. In February 1993, the U.S. District Court in Chicago
granted the Company's motion to dismiss the complaint with
leave to amend. Panache Broadcasting filed an amended
complaint in March 1993. The Company's motion to dismiss that
complaint was granted in part and denied in part. No
determination has been made regarding the plaintiff's request
to certify the purported class. The Company believes that it
has meritorious defenses to the Panache lawsuit.
In addition to the above-referenced matters, the Company is
currently a defendant in a number of legal actions and could
incur an uninsured liability in one or more of them. In the
opinion of management, the outcome of the above litigation
will not have a material adverse effect on the financial
condition of the Company.
The Company has also been named by the U.S. Environmental
Protection Agency or third parties as a potentially
responsible party under the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended,
at six sites to which Varian is alleged to have shipped
manufacturing waste for disposal. The Company is also
involved in various stages of environmental investigation
and/or remediation under the direction of, or in consultation
with, local and/or state agencies at certain current or former
Company facilities. Uncertainty as to (a) the extent to which
the Company caused, if at all, the conditions being
investigated, (b) the extent of environmental contamination
and risks, (c) the applicability of changing and complex
environmental laws, (d) the number and financial viability of
other potentially responsible parties, (e) the stage of the
investigation and/or remediation, (f) the unpredictability of
investigation and/or remediation costs (including as to when
they will be incurred), (g) applicable clean-up standards,
(h) the remediation (if any) which will ultimately be
required, and (i) available technology make it difficult to
assess the likelihood and scope of further investigation or
remediation activities or to estimate the future costs of such
activities if
-7-
<PAGE> 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6: (Continued)
undertaken. In addition, the Company believes that it has
rights to contribution and/or reimbursement from financially
viable, potentially responsible parties and/or insurance
companies, and has filed a lawsuit against 36 insurance
companies with respect to most of the above-referenced sites.
The Company has established reserves for these environmental
matters, which reserves management believes are adequate.
Based on information currently available, management believes
that the costs of these matters are otherwise not reasonably
likely to have a material adverse effect on the financial
condition of the Company.
NOTE 7: All share and per share information has been restated to
reflect a two-for-one stock split, effected in the form of a
stock dividend, which was distributed in March 1994.
-8-
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
On July 21, Varian reported net profits of $22.4 million ($0.63/share), up 87%
over the $12.0 million of 1993's comparable period. Third-quarter orders rose
27% to $441 million. Quarterly sales of $393 million were up 20%, and backlog
of $804 million was 27% higher than the level of a year ago. Earnings for
1994's first nine months increased 88% to $52 million ($1.47/share). Year-to-
date orders reached $1.3 billion, up 29%. Sales for the nine months rose 18%
to $1.1 billion.
Orders for Varian's Health Care Systems business rose 12% year-to-date, as the
business posted its fifth straight quarter of over $100 million in bookings.
Sales for the nine months were up 11%, and operating margins also improved.
Backlog of $300 million remained at a record level. The higher orders
reflected continuing demand for the Company's radiation therapy equipment for
treating cancer. The X-ray tube side of this business offset general softness
in the diagnostic equipment market by expanding sales to a broader base of OEM
customers and by expanding its capabilities to include tube rebuilding and
field service support.
Orders and sales for the Instruments business rose slightly for the nine
months, while backlog increased by 19% to $89 million. Profits were slightly
lower than in the year-ago period. Instrument markets worldwide have been
relatively soft and very price competitive. Good demand for Varian's nuclear
magnetic resonance instruments and vacuum products helped offset slower
conditions in other sectors.
Semiconductor equipment orders for the first nine months of 1994 rose to $479
million, sales rose 65%, and backlog of $246 million was up 138% over last
year. Operating margins improved compared to last year's break-even
performance. Orders were broad-based, both geographically and across all the
Company's product lines, with sputtering and ion implantation bookings rising
88% above last year's levels. While the U.S. and the Pacific Rim, outside of
Japan, drove the orders increase, bookings in Japan and Europe were up as well.
Some easing in demand is anticipated in the fourth quarter and beyond.
Orders for Varian's Electron Devices business were up 7% for the nine months
over 1993, while sales were about flat. Backlog advanced to $153 million, up
5% from a year ago. The profitability of this business also improved over the
prior year.Orders for commercial products such as electronic components and
satellite amplifiers have more than offset the decline in the defense markets
served by this business. This has led to relatively stable demand over the
last two years.
- 9 -
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
In November 1992, the FASB issued SFAS 112, Employer's Accounting for
Postemployment Benefits. It is effective for the Company's fiscal year 1995.
Its adoption will not have a material effect on the financial statements of the
Company.
FINANCIAL CONDITION
The Company's financial condition remained strong during the first nine
months of fiscal 1994. Operating activities provided cash of $56.8 million in
the first nine months of fiscal 1994 compared to $16.3 million in the same
period last year. Investing activities used $35.7 million and $32.8 million in
1994 and 1993, respectively, mainly for the purchase of property, plant and
equipment. Financing activities used $17.0 million in the first nine months of
fiscal 1994, and provided $10.1 million in the same period last year. Total
debt as a percentage of total capital decreased to 18.6% at the end of the
third quarter of fiscal 1994 as compared with 22.3% a year ago. The ratio of
current assets to current liabilities increased slightly to 1.56 to 1 at July
1, 1994, from 1.55 to 1 at fiscal year end, 1993. The Company has available $50
million in unused lines of credit.
OUTLOOK
Despite the favorable financial results described above, future revenue and
profitability remain difficult to predict. The Company continues to face
various risks associated with its business operations including uncertain
general worldwide economic conditions, lingering worldwide recessionary
conditions (particularly in Europe and Japan), and uncertainty regarding
proposed legislation and private initiatives in the U.S. to control health
care costs. Such conditions could affect the Company's future performance.
As discussed in the Annual Report Form 10-K for the fiscal year ended October
1, 1993, the Company is involved in certain environmental matters. The Company
has established reserves for these environmental matters, which reserves
management believes are adequate. Based on information currently available,
management continues to believe that the costs of these matters, individually
or in the aggregate, are otherwise not reasonably likely to have a material
adverse effect on the financial condition or results of operations of the
Company.
-10-
<PAGE> 11
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Varian Associates, Inc.:
We have reviewed the consolidated balance sheet of Varian Associates, Inc. and
subsidiary companies as of July 1, 1994, and the related consolidated
statements of earnings and the condensed consolidated statements of cash flows
for the quarters and nine months ended July 1, 1994 and July 2, 1993. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the aforementioned financial statements for them to be in conformity
with generally accepted accounting principles.
/s/ Coopers & Lybrand
COOPERS & LYBRAND
San Jose, California
July 20, 1994
-11-
<PAGE> 12
PART II. OTHER INFORMATION
Item 1 Legal Proceedings
In February 1990, a purported class action was brought by Panache Broadcasting
of Pennsylvania, Inc. on behalf of all purchasers of electron tubes in the U.S.
against the Company and a joint-venture partner, alleging that the activities
of their joint venture in the power-grid tube industry violated antitrust laws.
The complaint seeks injunctive relief and unspecified damages which may be
trebled under the antitrust laws. In February 1993, the U.S. District Court in
Chicago granted the Company's motion to dismiss the complaint with leave to
amend. Panache Broadcasting filed an amended complaint in March 1993. The
Company's motion to dismiss that complaint was granted in part and denied in
part. No determination has been made regarding the plaintiff's request to
certify the purported class. The Company believes that it has meritorious
defenses to the Panache lawsuit.
<TABLE>
<CAPTION>
Item 6 Exhibits and Reports on Form 8-K
- - ------ --------------------------------
<S> <C>
(a) Exhibit 10.9 Description of Certain Compensatory Arrangements
Between Registrant and Directors.
(b) Exhibit 11 Computation of Earnings Per Share.
(c) Exhibit 15 Letter Regarding Unaudited Interim Financial Information.
(d) Reports on Form 8-K:
There were no reports on Form 8-K filed for the third quarter ended July 1,
1994.
</TABLE>
-12-
<PAGE> 13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VARIAN ASSOCIATES, INC.
Registrant
August 11, 1994
Date
/s/ Wayne P. Somrak
Wayne P. Somrak
Vice President and Controller
-13-
<PAGE> 14
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Page
- - ------ ----
<S> <C> <C>
10.9 Description of Certain Compensatory Arrangements Between
Registrant and Directors 15
11 Computation of Earnings Per Share 16
15 Letter Regarding Unaudited Interim Financial Information 17
</TABLE>
-14-
<PAGE> 15
EXHIBIT 10.9
AMENDED AND RESTATED
DESCRIPTION OF CERTAIN COMPENSATORY ARRANGEMENTS
BETWEEN REGISTRANT AND DIRECTORS
Each of Registrant's non-management directors and advisory directors receives
an annual retainer fee of $19,000 ($17,500 prior to August 1993) and an
attendance fee of $1,000 for each Board of Director's and Board Committee
meeting attended (including those attended by telephone). Each non-management
director chairing one or more Board Committees receives an additional annual
retainer of $7,000 for such services.
A non-management director or advisory director may elect on an annual basis to
defer some or all cash compensation. The deferred amount earns interest at a
rate determined by the Organization and Compensation Committee of the Board of
Directors.
-15-
<PAGE> 16
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE IN ACCORDANCE
WITH INTERPRETIVE RELEASE NO. 34-9083
UNAUDITED
<TABLE>
<CAPTION>
THIRD QUARTER ENDED NINE MONTHS ENDED
------------------- -------------------
JULY 1, JULY 2, JULY 1, JULY 2,
(SHARES IN THOUSANDS) 1994 1993 1994 1993
<S> <C> <C> <C> <C>
Actual weighted average shares outstanding for the
period(1)............................................ 34,354 35,012 34,465 35,584
Dilutive employee stock options(1)..................... 1,174 922 1,238 962
-------- -------- -------- --------
Weighted average shares outstanding for the
period(1)............................................ 35,528 35,934 35,703 36,546
======= ======= ======= =======
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Earnings applicable to fully diluted earnings per
share................................................ $ 22,428 $ 11,967 $ 52,430 $ 27,823
======= ======= ======= =======
Earnings per share based on SEC interpretive release
No. 34-9083:
Earnings per share -- Fully Diluted(1)(2).............. $ 0.63 $ 0.33 $ 1.47 $ 0.76
======= ======= ======= =======
</TABLE>
(1) Prior periods restated for two-for-one stock split effected in the form of a
stock dividend in March 1994.
(2) There is no significant difference between fully diluted earnings per share
and primary earnings per share.
-16-
<PAGE> 17
EXHIBIT 15
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Varian Associates, Inc.
Registrations on Forms S-8 and S-3
We are aware that our report dated July 20, 1994 on our review of the interim
financial information of Varian Associates, Inc. for the quarter ended July 1,
1994 included in this Form 10-Q is incorporated by reference in the Company's
registration statements on Forms S-8, Registration Statement Numbers 33-46000,
33-33661, 33-33660, and 2-95139 and Forms S-8 and S-3, Registration Statement
Number 33-40460. Pursuant to Rule 436(c) under the Securities Act of 1933 this
report should not be considered a part of the registration statements prepared
or certified by us within the meaning of Sections 7 and 11 of that Act.
/s/ Coopers & Lybrand
Coopers & Lybrand
San Jose, California
August 10, 1994
- 17 -
