-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cf7ZJIUqNeqgsx6q2VmmE3pfmqvHOQBRr5TFToPECG0IQ3mrDMHienU1tJGwdtsu dxCTggHGeTzGHPWDA0Rn/w== 0001012870-00-000538.txt : 20000214 0001012870-00-000538.hdr.sgml : 20000214 ACCESSION NUMBER: 0001012870-00-000538 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARIAN INC CENTRAL INDEX KEY: 0001079028 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 770501995 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25393 FILM NUMBER: 536049 BUSINESS ADDRESS: STREET 1: 3050 HANSEN WAY CITY: PALO ALTO STATE: CA ZIP: 94304-1000 BUSINESS PHONE: 6504245352 10-Q 1 QUARTERLY REPORT FOR THE PERIOD ENDED 12/31/1999 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 December 31, 1999 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-25393 ---------------- VARIAN, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 77-0501995 (State or Other Jurisdiction (IRS Employer of Incorporation or Organization) Identification Number) 3120 Hansen Way, Palo Alto, California 94304-1030 (Address of Principal Executive Offices) (Zip Code)
(650) 213-8000 (Registrant's Telephone Number, Including Area Code) 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 that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [_] No The number of shares of the Registrant's common stock outstanding as of January 28, 2000 was 31,190,310. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- TABLE OF CONTENTS Part I. Financial Information.................................................................. 3 Item 1. Financial Statements................................................................... 3 Consolidated Statements of Earnings.................................................... 3 Consolidated Balance Sheets............................................................ 4 Consolidated Condensed Statements of Cash Flows........................................ 5 Notes to the Consolidated Financial Statements......................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 12 Item 3. Quantitative and Qualitative Disclosure about Market Risk.............................. 18 Part II. Other Information...................................................................... 19 Item 6. Exhibits and Reports on Form 8-K....................................................... 19
RISK FACTORS RELATING TO FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, which provides a "safe harbor" for these types of statements. These forward- looking statements are subject to risks and uncertainties that could cause actual results of Varian, Inc. (the "Company") to differ materially from management's current expectations. Those risks and uncertainties include, without limitation: new product development and commercialization; demand and acceptance for the Company's products; competitive products and pricing; economic conditions in the Company's product and geographic markets; foreign currency fluctuations; market investment in capital equipment; the lack of recent operating history for the Company as a separate entity; increased operating margins on higher sales; successful implementation by certain third parties of corrective action to address the impact of the Year 2000; and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VARIAN, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share amounts) (Unaudited)
Quarter Ended ----------------- Dec. 31, Jan. 1, 1999 1999 -------- -------- Sales.................................................... $159,952 $133,296 Cost of sales............................................ 98,099 80,665 -------- -------- Gross profit............................................. 61,853 52,631 -------- -------- Operating expenses Sales and marketing.................................... 29,805 30,096 Research and development............................... 6,982 7,163 General and administrative............................. 10,337 7,839 -------- -------- Total operating expenses............................... 47,124 45,098 -------- -------- Operating earnings....................................... 14,729 7,533 Interest expense (income), net........................... 691 (137) -------- -------- Earnings before income taxes............................. 14,038 7,670 Income tax expense....................................... 5,615 3,411 -------- -------- Net earnings............................................. $ 8,423 $ 4,259 ======== ======== Net earnings per share: Basic.................................................. $ 0.27 $ 0.14 ======== ======== Diluted................................................ $ 0.26 $ 0.14 ======== ======== Shares used in per share calculations: Basic.................................................. 30,775 30,423 ======== ======== Diluted................................................ 32,423 30,587 ======== ========
See accompanying Notes to the Consolidated Financial Statements. 3 VARIAN, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and par value amounts)
Dec. 31, Oct. 1, 1999 1999 ----------- -------- (Unaudited) ASSETS Current assets Cash and cash equivalents............................... $ 37,054 $ 23,348 Accounts receivable, net................................ 148,924 151,437 Inventories............................................. 75,901 66,634 Deferred taxes.......................................... 25,481 25,508 Other current assets.................................... 8,839 8,405 -------- -------- Total current assets.................................... 296,199 275,332 Property, plant, and equipment, net....................... 77,750 83,654 Other assets.............................................. 65,912 66,090 -------- -------- Total assets.............................................. $439,861 $425,076 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt....................... $ 6,382 $ 6,717 Accounts payable........................................ 47,139 40,442 Accrued liabilities..................................... 123,551 116,128 -------- -------- Total current liabilities............................... 177,072 163,287 Long-term debt............................................ 48,157 51,221 Deferred taxes............................................ 8,447 8,453 Other liabilities......................................... 7,449 7,453 -------- -------- Total liabilities......................................... 241,125 230,414 -------- -------- Contingencies (Note 9) Stockholders' equity Preferred stock--par value $.01, authorized--1,000,000 shares; issued--none................................... -- -- Common stock--par value $.01, authorized--99,000,000 shares; issued and outstanding--31,013,578 shares at Dec. 31, 1999 and 30,563,094 at Oct. 1, 1999........... 185,985 181,619 Retained earnings....................................... 21,466 13,043 Other comprehensive income (loss)....................... (8,715) -- -------- -------- Total stockholders' equity.............................. 198,736 194,662 -------- -------- Total liabilities and stockholders' equity................ $439,861 $425,076 ======== ========
See accompanying Notes to the Consolidated Financial Statements. 4 VARIAN, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Three Months Ended -------------------------- Dec. 31, 1999 Jan. 1, 1999 ------------- ------------ Net cash provided by operating activities.......... $18,413 $ 952 ------- ------- Investing activities Purchase of property, plant, and equipment......... (5,466) (5,122) ------- ------- Net cash used in investing activities.............. (5,466) (5,122) ------- ------- Financing activities Common stock option exercises...................... 4,367 -- Net issuance/(payment) of debt..................... (3,322) -- Net transfers from Varian Associates, Inc./Varian Medical Systems, Inc.............................. -- 5,445 ------- ------- Net cash provided by financing activities.......... 1,045 5,445 ------- ------- Effects of exchange rate changes on cash........... (286) (1,275) ------- ------- Net increase in cash and cash equivalents.......... 13,706 -- Cash and cash equivalents at beginning of period... 23,348 -- ------- ------- Cash and cash equivalents at end of period......... $37,054 $ -- ======= ======= Supplemental cash flow information: Income taxes paid.................................. $ 672 $ 53 ======= ======= Interest paid...................................... $ 979 $ 14 ======= =======
See accompanying Notes to the Consolidated Financial Statements. 5 VARIAN, INC. AND SUBSIDIARY COMPANIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Interim Consolidated Financial Statements These interim consolidated financial statements of Varian, Inc. and its subsidiary companies (collectively, the "Company") have been prepared 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. The year ended October 1, 1999 balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. These interim consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Form 10-K for the period ended October 1, 1999, which has been filed with the Securities and Exchange Commission. In the opinion of the Company's management, the interim 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 first quarter ended December 31, 1999 are not necessarily indicative of the results to be expected for a full year or for any other periods. Note 2. Description of Business and Basis of Presentation Varian, Inc., (the "Company") is a major supplier of scientific instruments and consumables, vacuum technology products and services, and contract electronics manufacturing services. These businesses primarily serve life science, health care, semiconductor processing, communications, industrial, and academic customers. Until April 2, 1999, the business of the Company was operated as the Instrument Business ("IB") of Varian Associates, Inc. ("VAI"). The interim consolidated financial statements generally reflect IB's results of operations and cash flows for the quarter ended January 1, 1999, and the Company's results of operations and cash flows for the quarter ended December 31, 1999. The interim consolidated financial results for the quarter ended January 1, 1999 were carved out from the interim financial statements of VAI using the historical results of operations of IB and include the accounts of IB after elimination of inter-business transactions. These interim consolidated financial results also include allocations of certain VAI corporate expenses (including legal, accounting, employee benefits, insurance services, information technology services, treasury, and other corporate overhead) to IB. The Company's fiscal years reported are the 52-week periods ending on the Friday nearest September 30. Fiscal year 2000 will comprise the 52-week period ending September 29, 2000, and fiscal year 1999 comprised of the 52-week period ended October 1, 1999. The fiscal quarters ended December 31, 1999, and January 1, 1999 each comprise 13 weeks. Note 3. Change in Functional Currency Statement of Financial Accounting Standards ("SFAS") 52 sets forth guidelines for determining the functional currency to be used for financial reporting. Subsequent to becoming independent from VAI, the Company made certain changes in the way it conducts business internationally. A majority of business transactions are now conducted in the local currencies of the respective subsidiaries. Accordingly, effective October 2, 1999, the Company changed its functional currency from the U.S. dollar to the local currencies of the respective subsidiaries as prescribed by FAS 52. Under FAS 52, when the local currencies are determined to be the functional currency, assets and liabilities are translated using current exchange rates at the balance sheet date, and income and expense accounts are translated at average exchange rates in effect during the period. Translation of assets and liabilities at a current exchange rate results in periodic translation gains and losses that are recorded in stockholders' equity as a component of other comprehensive income. Upon adopting a local currency functional currency, the Company recorded an initial translation loss of $6.6 million in the cumulative translation adjustment component of other comprehensive income (see Note 7). This loss principally related to translating property, plant, and equipment at current exchange rates versus the historical exchange rates previously used. 6 VARIAN, INC. AND SUBSIDIARY COMPANIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Note 4. Balance Sheet Detail
Dec. 31, Oct. 1, 1999 1999 (In thousands) -------- -------- INVENTORIES Raw materials and parts.................................. $ 41,905 $ 36,149 Work in process.......................................... 6,212 5,487 Finished goods........................................... 27,784 24,998 -------- -------- $ 75,901 $ 66,634 ======== ========
Inventories are valued at the lower of cost or market (net realizable value) using the last-in, first-out (LIFO) cost for certain U.S. inventories. All other inventories are valued principally at average cost. 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 $14.6 million at December 31, 1999 and $14.4 million at October 1, 1999. Note 5. Forward Exchange Contracts The Company's forward exchange contracts generally range from one to 12 months in original maturity. Forward exchange contracts outstanding as of December 31, 1999 that hedge the balance sheet and certain purchase commitments were effective December 31, 1999, and accordingly there were no unrealized gains or losses associated with such contracts and the fair value of these contracts approximates their notional values. Forward exchange contracts that were outstanding as of December 31, 1999 are summarized as follows:
Notional Notional Value Value Sold Purchased (In thousands) ---------- -------------- Australian Dollar................................. $ -- $18,214 Japanese Yen...................................... 17,835 -- British Pound..................................... 6,149 11,299 Euro.............................................. 4,568 -- Canadian Dollar................................... 4,447 -- Swedish Krona..................................... -- 1,160 ------- ------- Total........................................... $32,999 $30,673 ======= =======
Note 6. Net Earnings Per Share Basic earnings per share are calculated based on net earnings and the weighted-average number of shares outstanding during the reported period. Diluted earnings per share include dilution from potential common stock shares issuable pursuant to the exercise of outstanding stock options determined using the treasury stock method. For periods prior to April 3, 1999, pro forma earnings per share were calculated assuming that the weighted-average number of shares outstanding during the period equaled the number of shares of common stock outstanding as of the Distribution on April 2, 1999. Also, for computing pro forma diluted earnings per share, the additional shares issuable upon exercise of stock options were determined using the treasury stock method based on the number of replacement stock options issued as of the Distribution on April 2, 1999. For the fiscal quarter ended December 31, 1999, options to purchase 345,186 potential common stock shares with exercise prices greater than the average quarterly market value of such common stock were excluded from the calculation of diluted earnings per share. For the fiscal quarter ended January 1, 1999, options to purchase 3,030,355 potential common stock shares with exercise prices greater than the market value on April 2, 1999 of such common stock were excluded from the calculation of diluted earnings per share. 7 VARIAN, INC. AND SUBSIDIARY COMPANIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) A reconciliation follows:
Dec. 31, Jan. 1, 1999 1999 -------- ------- (In thousands except per share amounts) Basic Net earnings.............................................. $8,423 $4,259 Weighted average shares outstanding....................... 30,775 30,423 Net earnings per share.................................... $ 0.27 $ 0.14 ====== ====== Diluted Net earnings.............................................. $8,423 $4,259 Weighted average shares outstanding....................... 30,775 30,423 Net effect of dilutive stock options...................... 1,648 164 ------ ------ Total shares.............................................. 32,423 30,587 Net earnings per share.................................... $ 0.26 $ 0.14 ====== ======
Note 7. Comprehensive Income (Loss) Comprehensive income (loss) is comprised of net income and the currency translation adjustment. Comprehensive income (loss) was ($0.3) million and $4.3 million for the three months ended December 31, 1999 and January 1, 1999, respectively. Note 8. Debt and Credit Facilities The Distribution Agreement provided for the division among the Company, VSEA, and VMS of VAI's cash and debt as of April 2, 1999. Under the Distribution Agreement, the Company was to assume 50% of VAI's term loans and receive an amount of cash from VAI such that it would have net debt (defined in the Distribution Agreement as the amount outstanding under the term loans and notes payable, less cash and cash equivalents) equal to approximately 50% of the net debt of the Company and VMS, subject to such adjustment as was necessary to provide VMS with a net worth (as defined in the Distribution Agreement) of between 40% and 50% of the aggregate net worth of the Company and VMS, and subject to further adjustment to reflect the Company's approximately 50% share of the estimated proceeds, if any, to be received by VMS after the Distribution from the sale of VAI's long-term leasehold interest at certain of its Palo Alto facilities, together with certain related buildings and other corporate assets, and the Company's obligation for approximately 50% of any estimated transaction expenses to be paid by VMS after the Distribution (in each case reduced for estimated taxes payable or tax benefits received from all sales and transaction expenses). Since the amounts transferred immediately prior to the Distribution were based on estimates, these and other adjustments may be required following the Distribution. As a result of these adjustments, the Company may be required to make cash payments to VMS and/or may be entitled to receive cash payments from VMS. Adjustments through December 31, 1999, resulted in net cash payments from VMS and an increase in stockholders' equity. The amount of any other required adjustment cannot be estimated, but management believes that any further adjustments will not have a material effect on the Company's financial condition. Note 9. Contingencies Environmental Matters. In the Distribution Agreement, the Company and VSEA each agreed to indemnify VMS for one-third of certain environmental investigation and remediation costs (after adjusting for any insurance proceeds and tax benefits recognized or realized by VMS for such costs), as further described below. 8 VARIAN, INC. AND SUBSIDIARY COMPANIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) VMS has 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 nine sites where VAI is alleged to have shipped manufacturing waste for recycling, treatment, or disposal. VMS is also involved in various stages of environmental investigation, monitoring, and/or remediation under the direction of, or in consultation with, foreign, federal, state, and/or local agencies at certain current VMS or former VAI facilities. For certain of these sites and facilities, various uncertainties 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 undertaken. As of December 31, 1999, it was nonetheless estimated that the Company's share of the future exposure for environmental-related investigation and remediation costs for these sites and facilities ranged in the aggregate from $4.5 million to $10.5 million (without discounting to present value). The time frame over which these costs are expected to be incurred varies with each site and facility, ranging up to approximately 30 years as of December 31, 1999. No amount in the foregoing range of estimated future costs is believed to be more probable of being incurred than any other amount in such range, and the Company therefore accrued $4.5 million as of December 31, 1999. As to other sites and facilities, sufficient knowledge has been gained to be able to better estimate the scope and costs of future environmental activities. As of December 31, 1999, it was estimated that the Company's share of the future exposure for environmental-related investigation and remediation costs for these sites and facilities ranged in the aggregate from $8.1 million to $13.7 million (without discounting to present value). The time frame over which these costs are expected to be incurred varies with each site and facility, ranging up to approximately 30 years as of December 31, 1999. As to each of these sites and facilities, it was determined that a particular amount within the range of estimated costs was a better estimate of the future environmental liability than any other amount within the range, and that the amount and timing of these future costs were reliably determinable. Together, these amounts totaled $9.4 million at December 31, 1999. The Company therefore accrued $4.1 million as of December 31, 1999, which represents the best estimate of its share of these future costs discounted at 4%, net of inflation. This accrual is in addition to the $4.5 million described in the preceding paragraph. Claims for recovery of environmental investigation and remediation costs already incurred, and to be incurred in the future, have been asserted against various insurance companies and other third parties. VMS is now pursuing such recovery claims for the benefit of itself, VSEA, and the Company. An insurance company has agreed to pay a portion of VAI's (now VMS') future environmental- related expenditures for which the Company has an indemnity obligation, and the Company therefore has a $1.3 million receivable in Other Assets as of December 31, 1999 for the Company's share of such recovery. The Company has not reduced any environmental-related liability in anticipation of recovery with respect to claims made against third parties. The Company's management believes that its reserves for the foregoing and certain other environmental-related matters are adequate, but as the scope of its obligation becomes more clearly defined, these reserves may be modified and related charges or credits against earnings may be made. Although any ultimate liability arising from environmental-related matters described herein could result in significant expenditures that, if aggregated and assumed to occur within a single fiscal year, would be material to the Company's financial statements, the likelihood of such occurrence is considered remote. Based on information currently available and its best assessment of the ultimate amount and timing of environmental-related events, the Company's management believes that the costs of these environmental-related matters are not reasonably likely to have a material adverse effect on the Company's financial position or results of operations. Legal Proceedings. In the Distribution Agreement, the Company agreed to reimburse VMS for one-third of certain costs and expenses (after adjusting for any insurance proceeds and tax benefits recognized or realized 9 VARIAN, INC. AND SUBSIDIARY COMPANIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) by VMS for such costs and expenses) that are paid after April 2, 1999 and arise from actual or potential claims or legal proceedings relating to discontinued, former or corporate operations of VAI. These shared liabilities are generally managed by VMS, and expenses and losses (adjusted for any insurance proceeds and tax benefits recognized or realized by VMS for such costs and expenses) are generally borne one-third each by the Company, VMS, and VSEA. Also, from time to time, the Company is involved in a number of its own legal actions and could incur an uninsured liability in one or more of them. While the ultimate outcome of all of the foregoing legal matters is not determinable, management believes that these matters are not reasonably likely to have a material adverse effect on the Company's financial position or results of operations. Note 10. Restructuring Charges During the second quarter of fiscal year 1999, IB's management approved a program to consolidate field sales and service organizations in Europe, Australia and the United States so as to fall within the direct responsibility of management at principal factories in those countries, in order to reduce costs, simplify management structure, and benefit from the infrastructure existing in those factories. This restructuring entailed consolidating certain sales, service, and support operations. The consolidation resulted in exiting of a product line, closing or downsizing of sales offices, and termination of approximately 100 personnel. All restructuring activities are expected to be completed within one year, except for future lease payments. The following table sets forth certain details associated with this restructuring:
Cash Accrual at Payments Accrual at October 1, and Other December 31, 1999 Reductions 1999 ---------- ---------- ------------ (In thousands) Lease payments and other facility expenses.................................. $1,244 $113 $1,131 Severance and other related employee benefits.................................. 1,721 145 1,576 ------ ---- ------ Total...................................... $2,965 $258 $2,707 ====== ==== ======
Note 11. Industry Segments The Company's operations are grouped into three business segments: Scientific Instruments, Vacuum Technologies, and Electronics Manufacturing. Scientific Instruments is a supplier of instruments, consumable laboratory supplies, and after sales support used in studying the chemical composition and structure of myriad substances and for imaging. These products are tools for scientists engaged in drug discovery, life sciences, genetic engineering, health care, environmental analysis, quality control, and academic research. Vacuum Technologies provides products and solutions to create, maintain, contain, and measure an ultra-clean environment for complex industrial processes and research. Vacuum Technologies products are used in semiconductor manufacturing equipment, analytical instruments, industrial manufacturing, and quality control. Electronics manufacturing provides contract manufacturing services for technology companies with low-volume and high-mix requirements. Transactions between segments are accounted for at cost and are not included in sales. Accordingly, the following information is provided for purposes of achieving an understanding of operations, but may not be indicative of the financial results of the reported segments were they independent organizations. In addition, comparisons of the Company's operations to similar operations of other companies may not be meaningful. 10 VARIAN, INC. AND SUBSIDIARY COMPANIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Industry Segments
Pretax Sales Earnings ------------- ------------ Q1 00 Q1 99 Q1 00 Q1 99 (In millions) ------ ------ ----- ----- Scientific Instruments......................... $ 94.3 $ 89.7 $11.1 $ 6.8 Vacuum Technologies............................ 31.9 22.1 4.5 1.1 Electronics Manufacturing...................... 33.8 21.5 2.7 1.3 ------ ------ ----- ----- Total industry segments........................ 160.0 133.3 18.3 9.2 General corporate.............................. -- -- (3.6) (1.6) Interest (exp.)/inc., net...................... -- -- (0.7) 0.1 ------ ------ ----- ----- Continuing operations.......................... $160.0 $133.3 $14.0 $ 7.7 ====== ====== ===== =====
Note 12. Recent Accounting Pronouncements In June 1998, the Financial Accounting and Standards Board issued Statement of Financial Accounting Standards ("SFAS") 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 requires derivatives to be measured at fair value and to be recorded as assets or liabilities on the balance sheet. The accounting for gains or losses resulting from changes in the fair values of those derivatives would be dependent upon the use of the derivative and whether it qualifies for hedge accounting. SFAS 133 is effective for fiscal quarters and years beginning after June 15, 2000. The Company will adopt SFAS 133 in the fourth quarter of fiscal year 2000 and is in the process of determining the impact that adoption will have on the consolidated financial statements. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition," which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the Securities and Exchange Commission. SAB 101 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosures related to revenue recognition policies. SAB 101 is effective for the fiscal quarter beginning September 30, 2000, however earlier adoption is permitted. The Company has not yet determined the impact, if any, that adoption will have on the consolidated financial statements. 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Until April 2, 1999, the business of Varian, Inc. (the "Company") was operated as the Instruments Business ("IB") of Varian Associates, Inc. ("VAI"). IB included the business units that designed, manufactured, sold, and serviced scientific instruments and vacuum technologies, and a business unit that provided contract electronics manufacturing. VAI contributed IB to the Company; then on April 2, 1999, VAI distributed to the holders of record of VAI common stock on March 24, 1999 one share of common stock of the Company for each share of VAI common stock outstanding on April 2, 1999 (the "Distribution"). At the same time, VAI contributed its Semiconductor Equipment business to Varian Semiconductor Equipment Associates, Inc. ("VSEA") and distributed to the holders of record of VAI common stock on March 24, 1999 one share of common stock of VSEA for each share of VAI common stock outstanding on April 2, 1999. VAI retained its Health Care Systems business and changed its name to Varian Medical Systems, Inc. ("VMS") effective as of April 3, 1999. These transactions were accomplished under the terms of an Amended and Restated Distribution Agreement dated as of January 14, 1999 by and among the Company, VAI, and VSEA (the "Distribution Agreement"). For purposes of providing an orderly transition and to define certain ongoing relationships between and among the Company, VMS, and VSEA after the Distribution, the Company, VMS, and VSEA also entered into certain other agreements which include an Employee Benefits Allocation Agreement, an Intellectual Property Agreement, a Tax Sharing Agreement, and a Transition Services Agreement. The interim consolidated financial statements generally reflect IB's results of operations and cash flows for the quarter ended January 1, 1999, and the Company's results of operations and cash flows for the quarter ended December 31, 1999. The interim consolidated financial results for the quarter ended January 1, 1999 were carved out from the interim financial statements of VAI using the historical results of operations of IB and include the accounts of IB after elimination of inter-business transactions. These interim consolidated financial results also include allocations of certain VAI corporate expenses (including legal, accounting, employee benefits, insurance services, information technology services, treasury, and other corporate overhead) to IB. These amounts have been allocated to IB on the basis that is considered by management to reflect most fairly or reasonably the utilization of the services provided to or the benefit obtained by IB. Typical measures and activity indicators used for allocation purposes include headcount, sales revenue, and payroll expense. The Company's management believes that the methods used to allocate these amounts are reasonable. However, these allocations are not necessarily indicative of the amounts that would have been or that will be recorded by the Company on a stand-alone basis. This discussion and analysis of financial condition and results of operations is based upon and should be read in conjunction with the interim consolidated financial statements of the Company and the notes thereto, as well as the Instruments Business of Varian Associates, Inc. Combined Financial Statements and the Notes thereto, and the information contained under the headings "Business," "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Company's registration statement on Form 10K filed with the Securities and Exchange Commission. The Company's fiscal years reported are the 52-week periods ending on the Friday nearest September 30. Fiscal year 2000 will comprise the 52-week period ending September 29, 2000, and fiscal year 1999 comprised of the 52-week period ended October 1, 1999. The fiscal quarters ended December 31, 1999 and January 1, 1999 each comprise 13 weeks. 12 Results of Operations First Quarter of Fiscal Year 2000 Compared to First Quarter of Fiscal Year 1999 Sales. Sales were $160.0 million in the first quarter of fiscal year 2000, an increase of 20.0% from sales of $133.3 million in the first quarter of fiscal year 1999. Sales by the Scientific Instruments, Vacuum Technologies, and Electronics Manufacturing segments increased by 5.1%, 44.1%, and 57.3%, respectively. Geographically, sales in North America of $91.0 million, Europe of $44.2 million and the rest of the world of $24.7 million in the first quarter of fiscal year 2000 represented increases of 31.5%, 3.0%, and 16.8% respectively, as compared to the first quarter of fiscal year 1999. The significant increase in North America was largely due to the strong sales growth of the Electronics Manufacturing segment, the sales of which are all in North America. The increased sales in the rest of the world were primarily the result of improved economic conditions in the Asian market. Orders in the first quarter of fiscal year 2000 were $171.9 million, compared to $138.5 million in the first quarter of fiscal year 1999. All segments contributed to the orders growth. Gross Profit. Gross profit was $61.9 million (representing 38.7% of sales) in the first quarter of fiscal year 2000, compared to $52.6 million (representing 39.5% of sales) in the first quarter of fiscal year 1999. The decline in gross profit as a percent of sales resulted from a shift in sales mix among the Company's segments. Individually, each of the three segments had higher gross margin percentages. Sales and Marketing. Sales and marketing expenses were $29.8 million (representing 18.6% of sales) in the first quarter of fiscal year 2000, compared to $30.1 million (representing 22.6% of sales) in the first quarter of fiscal year 1999. The decline in sales and marketing expenses as a percent of sales resulted from a combination of cost savings from the restructuring and reorganization activities begun in the second quarter of fiscal year 1999, the lower sales and marketing expense ratio of the segments with higher year- to-year sales growth, and the overall leverage of higher sales. Research and Development. Research and development expenses were $7.0 million (representing 4.4% of sales) in the first quarter of fiscal year 2000, compared to research and development expenses of $7.2 million (representing 5.4% of sales) in the first quarter of fiscal year 1999. This decrease in research and development expenses resulted primarily from the timing of research and development spending. General and Administrative. General and administrative expenses were $10.3 million (representing 6.5% of sales) in the first quarter of fiscal year 2000, compared to $7.8 million (representing 5.9% of sales) in the first quarter of fiscal year 1999. These expenses are difficult to compare on a year-to-year basis because the expenses reported for the first quarter of fiscal year 1999 were based on the allocation of shared expenses of VAI. Net Interest Expense. Net interest expense was $0.7 million (representing 0.4% of sales) for the first quarter of fiscal year 2000. Prior to the Distribution on April 2, 1999, no debt had been allocated to the Company. See "Liquidity and Capital Resources" below. Taxes on Earnings. The effective income tax rate was 40.0% for the first quarter of fiscal year 2000, compared to 44.5% for the first quarter of fiscal year 1999. The fiscal year 1999 rate is higher because the Company realized a larger proportion of high tax-rate, foreign country income in fiscal year 1999 (due primarily to restructuring and related charges incurred in lower tax-rate countries) than it anticipates for fiscal year 2000. Net Earnings. The increase in net earnings to $8.4 million ($0.26 diluted net earnings per share) in the first quarter of fiscal year 2000, compared to net earnings of $4.3 million ($0.14 diluted net earnings per share) in the first quarter of fiscal year 1999, was primarily the result of revenue growth significantly exceeding operating expense growth. 13 Segments. Scientific Instruments sales of $94.3 million in the first quarter of fiscal year 2000 increased 5.1% compared to the first quarter of fiscal year 1999 sales of $89.7 million. Earnings from operations in the first quarter of fiscal year 2000 of $11.1 million (11.8% of sales) increased from $6.8 million (7.5% of sales) in the first quarter of fiscal year 1999. The increase in earnings resulted from a shift in mix to products with higher gross margins, and from lower operating expenses as a percent of sales primarily due to cost savings from restructuring and reorganization activities begun in the second quarter of fiscal 1999. Vacuum Technologies sales of $31.9 million in the first quarter of fiscal year 2000 increased 44.1% compared to the first quarter of fiscal year 1999 sales of $22.1 million. This increase in sales was primarily due to the recovery of the Asian economies and the improved demand from semiconductor equipment manufacturers and users. Earnings from operations in the first quarter of fiscal year 2000 of $4.5 million (14.2% of sales) increased from $1.1 million (4.8% of sales) in the first quarter of fiscal year 1999. This earnings improvement was primarily the result of the significantly higher sales. Electronics Manufacturing sales in the first quarter of fiscal year 2000 of $33.8 million increased 57.3% compared to the first quarter of fiscal year 1999 sales of $21.5 million. The increase in sales was principally due to improved demand from customers who had been impacted by the Asian economic weakness in the prior year and the movement of small to medium size manufacturing companies to outsource their manufacturing. Much of this increased demand came from customers in the communications and medical equipment market. Earnings from operations in the first quarter of $2.7 million (7.9% of sales) increased from $1.3 million (6.0% of sales) in the first quarter of fiscal year 1999. The increase in earnings from operations was primarily the result of the significantly higher sales. Liquidity and Capital Resources VAI Cash and Debt Allocations. The Distribution Agreement provided for the division among the Company, VSEA, and VMS of VAI's cash and debt as of April 2, 1999. Under the Distribution Agreement, the Company was to assume 50% of VAI's term loans and receive an amount of cash from VAI such that it would have net debt (defined in the Distribution Agreement as the amount outstanding under the term loans and notes payable, less cash and cash equivalents) equal to approximately 50% of the net debt of the Company and VMS, subject to such adjustment as was necessary to provide VMS with a net worth (as defined in the Distribution Agreement) of between 40% and 50% of the aggregate net worth of the Company and VMS, and subject to further adjustment to reflect the Company's approximately 50% share of the estimated proceeds, if any, to be received by VMS after the Distribution from the sale of VAI's long-term leasehold interest at certain of its Palo Alto facilities, together with certain related buildings and other corporate assets, and the Company's obligation for approximately 50% of any estimated transaction expenses to be paid by VMS after the Distribution (in each case reduced for estimated taxes payable or tax benefits received from all sales and transaction expenses). Since the amounts transferred immediately prior to the Distribution were based on estimates, these and other adjustments may be required following the Distribution. As a result of these adjustments, the Company may be required to make cash payments to VMS and/or may be entitled to receive cash payments from VMS. Adjustments through December 31, 1999, resulted in net cash payments from VMS and an increase in stockholders' equity. The amount of any other required adjustment cannot be estimated, but management believes that any further adjustments will not have a material effect on the Company's financial condition. Cash and Cash Equivalents. The Company generated $18.4 million of cash from operations in the first quarter of fiscal year 2000, which compares to $1.0 million in the first quarter of fiscal year 1999. The increase in operating cash resulted from improved net earnings and a reduction in working capital requirements for the quarter. The Company used $ 5.5 million of cash for the acquisition of capital equipment in the first quarter of fiscal year 2000, which compares to $5.1 million in the first quarter of fiscal year 1999. The Company's current business strategy contemplates possible acquisitions and/or facility expansions. Either of these possibilities could utilize free cash currently being generated by the Company. 14 The Distribution Agreement provides that the Company is responsible for certain litigation to which VAI was a party, and further provides that the Company will indemnify VMS and VSEA for one-third of the costs, expenses, and other liabilities relating to certain discontinued, former, and corporate operations of VAI, including certain environmental liabilities (see "Environmental Matters" and "Legal Proceedings" below). The Company's liquidity is affected by many other factors, some based on the normal ongoing operations of the business and others related to the uncertainties of the industry and global economies. Although the Company's cash requirements will fluctuate based on the timing and extent of these factors, management believes that cash generated from operations, together with the Company's borrowing capability, will be sufficient to satisfy commitments for capital expenditures and other cash requirements for fiscal year 2000. Environmental Matters The Company's operations are subject to various foreign, federal, state, and/or local laws regulating the discharge of materials into the environment or otherwise relating to the protection of the environment. This includes discharges into soil, water and air, and the generation, handling, storage, transportation, and disposal of waste and hazardous substances. In addition, several countries are reviewing proposed regulations that would require manufacturers to dispose of their products at the end of their useful life. These laws could increase costs and potential liabilities associated with the conduct of the Company's operations. In addition, under the Distribution Agreement, the Company and VSEA each agreed to indemnify VMS for one-third of certain environmental investigation and remediation costs (after adjusting for any insurance proceeds and tax benefits recognized or realized by VMS for such costs), as further described below. VMS has 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 nine sites where VAI is alleged to have shipped manufacturing waste for recycling, treatment, or disposal. VMS is also involved in various stages of environmental investigation, monitoring, and/or remediation under the direction of, or in consultation with, foreign, federal, state, and/or local agencies at certain current VMS or former VAI facilities. For certain of these sites and facilities, various uncertainties 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 undertaken. As of December 31, 1999, it was nonetheless estimated that the Company's share of the future exposure for environmental-related investigation and remediation costs for these sites and facilities ranged in the aggregate from $4.5 million to $10.5 million (without discounting to present value). The time frame over which these costs are expected to be incurred varies with each site and facility, ranging up to approximately 30 years as of December 31, 1999. No amount in the foregoing range of estimated future costs is believed to be more probable of being incurred than any other amount in such range, and the Company therefore accrued $4.5 million as of December 31, 1999. As to other sites and facilities, sufficient knowledge has been gained to be able to better estimate the scope and costs of future environmental activities. As of December 31, 1999, it was estimated that the Company's share of the future exposure for environmental-related investigation and remediation costs for these sites and facilities ranged in the aggregate from $8.1 million to $13.7 million (without discounting to present value). The time frame over which these costs are expected to be incurred varies with each site and facility, ranging up to approximately 30 years as of December 31, 1999. As to each of these sites and facilities, it was determined that a particular amount within the range of estimated costs was a better estimate of the future environmental liability than any other amount within the range, and that the amount and timing of these future costs were reliably determinable. Together, these amounts totaled $9.4 million at December 31, 1999. The Company therefore accrued $4.1 million as of December 31, 1999, which represents the best estimate of its share of these future costs discounted at 4%, net of inflation. This accrual is in addition to the $4.5 million described in the preceding paragraph. 15 Claims for recovery of environmental investigation and remediation costs already incurred, and to be incurred in the future, have been asserted against various insurance companies and other third parties. VMS is now pursuing such recovery claims for the benefit of itself, VSEA, and the Company. An insurance company has agreed to pay a portion of VAI's (now VMS') future environmental- related expenditures for which the Company has an indemnity obligation, and the Company therefore has a $1.3 million receivable in Other Assets as of October 1, 1999 for the Company's share of such recovery. The Company has not reduced any environmental-related liability in anticipation of recovery with respect to claims made against third parties. The Company's management believes that its reserves for the foregoing and certain other environmental-related matters are adequate, but as the scope of its obligation becomes more clearly defined, these reserves may be modified, and related charges or credits against earnings may be made. Although any ultimate liability arising from environmental-related matters described herein could result in significant expenditures that, if aggregated and assumed to occur within a single fiscal year, would be material to the Company's financial statements, the likelihood of such occurrence is considered remote. Based on information currently available and its best assessment of the ultimate amount and timing of environmental-related events, the Company's management believes that the costs of these environmental-related matters are not reasonably likely to have a material adverse effect on the Company's financial position or results of operations. Legal Proceedings In the Distribution Agreement, the Company agreed to reimburse VMS for one- third of certain costs and expenses (after adjusting for any insurance proceeds and tax benefits recognized or realized by VMS for such costs and expenses) that are paid after April 2, 1999 and arise from actual or potential claims or legal proceedings relating to discontinued, former, or corporate operations of VAI. These shared liabilities are generally managed by VMS, and expenses and losses (adjusted for any insurance proceeds and tax benefits recognized or realized by VMS for such costs and expenses) are generally borne one-third each by the Company, VMS, and VSEA. Also, from time to time, the Company is involved in a number of its own legal actions and could incur an uninsured liability in one or more of them. While the ultimate outcome of all of the foregoing legal matters is not determinable, management believes that these matters are not reasonably likely to have a material adverse effect on the Company's financial position or results of operations. Year 2000 General. The "Year 2000" problem refers to computer programs and other equipment with embedded microprocessors ("non-IT systems") which use only the last two digits to refer to a year, and which therefore might not properly recognize a year that begins with "20" instead of the familiar "19." As a result, those computer programs and non-IT systems might be unable to operate or process accurately certain date-sensitive data before or after January 1, 2000. State of Readiness. The Company completed a comprehensive assessment of potential Year 2000 problems with respect to (1) the Company's internal systems, (2) the Company's products, and (3) significant third parties with which the Company does business. The Company assessed potential Year 2000 problems in internal systems, including enterprise information systems, enterprise networking and telecommunications, factory-specific information systems, non-IT systems, computers and packaged software, and facilities systems. The Company has not experienced any significant Year 2000 problems in its internal systems. The Company assessed potential year 2000 problems in its current and previously sold products. With respect to current products, the Company believes that all of its current products are Year 2000 capable; however, that conclusion is based in substantial part on Year 2000 assurances or warranties from suppliers of computers, software, and non-IT systems which are integrated into or sold with the Company's products. With respect to previously sold products, the Company did not assess year 2000 preparedness of every product it ever sold. 16 Rather it focused its assessments on products that were still under written warranties or were still relatively early in their useful life, were more likely to be dependent on non-IT systems that were not Year 2000 capable, and/or could not be easily upgraded with readily available externally utilized computers and packaged software. Where the Company identified previously sold products that were not Year 2000 capable, the Company in some cases developed and offered to sell upgrades or retrofits, identified corrective measures which the customer could itself undertake, or identified for the customer other suppliers of upgrades or retrofits. There could still be instances where the Company will be required to repair and/or upgrade such products at its own expense, but no such instances have been reported. The Company assessed potential Year 2000 problems of third parties with which the Company has material relationships, primarily suppliers of products or services. This assessment identified and prioritized critical suppliers and reviewed those suppliers' written assurances on their own assessments and correction of Year 2000 problems. There still could be instances where the Company experiences supply interruption of services or products related to Year 2000 problems of third parties, but no such interruptions have been reported. Costs. The Company estimates that it had incurred approximately $1.7 million as of December 31, 1999 to assess and correct Year 2000 problems. Based on its assessment and experience to date, the Company does not expect that it will incur any significant additional costs as a result of Year 2000 problems. However, there can be no assurance that the Company will not incur costs with respect to Year 2000 problems not yet experienced or reported. Risks. If the Company experiences Year 2000 problems not yet experienced, the Company's operations could be adversely impacted. If the Company's previously sold or current products experience Year 2000 problems, the Company could experience warranty or similar claims by users of products and could incur higher warranty and service costs. If the significant third parties with which the Company does business have not adequately corrected Year 2000 problems, the Company could experience interruptions in the supply of key components or services from those parties. However, management does not currently believe that such risks are reasonably likely to have a material adverse effect on the Company's business, results of operations, or financial condition. Recent Accounting Pronouncements In June 1998, the Financial Accounting and Standards Board issued Statement of Financial Accounting Standards ("SFAS") 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 requires derivatives to be measured at fair value and to be recorded as assets or liabilities on the balance sheet. The accounting for gains or losses resulting from changes in the fair values of those derivatives would be dependent upon the use of the derivative and whether it qualifies for hedge accounting. SFAS 133 is effective for fiscal quarters and years beginning after June 15, 2000. The Company will adopt SFAS 133 in the fourth quarter of fiscal year 2000 and is in the process of determining the impact that adoption will have on the consolidated financial statements. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition," which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the Securities and Exchange Commission. SAB 101 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosures related to revenue recognition policies. SAB 101 is effective for the fiscal quarter beginning September 30, 2000, however earlier adoption is permitted. The Company has not yet determined the impact, if any, that adoption will have on the consolidated financial statements. 17 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Foreign Currency Exchange Risk. The Company typically hedges its currency exposures associated with certain assets and liabilities denominated in non- functional currencies and with anticipated foreign currency cash flows. As a result, the effect of an immediate 10% change in exchange rates would not be material to the Company's financial condition or results of operations. The Company's forward exchange contracts have generally ranged from one to 12 months in original maturity, and no forward exchange contract has had an original maturity greater than one year. Forward exchange contracts outstanding as of December 31, 1999 that hedge the balance sheet and certain purchase commitments were effective December 31, 1999, and accordingly there were no unrealized gains or losses associated with such contracts and the fair value of these contracts approximates their notional values. Forward Exchange Contracts Outstanding as of December 31, 1999
Notional Notional Value Value Sold Purchased (In thousands) ---------- -------------- Australian Dollar................................. $ -- $18,214 Japanese Yen...................................... 17,835 -- British Pound..................................... 6,149 11,299 Euro.............................................. 4,568 -- Canadian Dollar................................... 4,447 -- Swedish Krona..................................... -- 1,160 ------- ------- Total........................................... $32,999 $30,673 ======= =======
Interest Rate Risk The Company has no material exposure to market risk for changes in interest rates. The Company invests primarily in short-term U.S. Treasury securities, and changes in interest rates would not be material to the Company's financial condition or results of operations. The Company primarily enters into debt obligations to support general corporate purposes, including working capital requirements, capital expenditures, and acquisitions. At December 31, 1999 the Company's debt obligations had fixed interest rates. The estimated fair value of the Company's debt obligations approximates the principal amounts reflected below on rates currently available to the Company for debt with similar terms and remaining maturities. Although payments under certain of the Company's operating leases for its facilities are tied to market indices, the Company is not exposed to material interest rate risk associated with its operating leases. Debt Obligations Principal Amounts and Related Weighted Average Interest Rates By Year of Maturity
Nine Months Fiscal Years Ended Sep. 29, -------------------------------------- 2000 2001 2002 2003 2004 2005 Thereafter Total (In thousands) -------------- ------ ------ ------ ------ ------ ---------- ------- Long-term debt (including current portion)............... $3,382 $6,420 $6,464 $3,003 $2,770 $2,500 $30,000 $54,539 Average interest rate... 6.6% 6.9% 6.9% 6.3% 6.7% 7.2% 6.8% 6.8%
18 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits required to be filed by Item 601 of Regulation S-K:
Exhibit No. Description ----------- ----------- 27.1 Financial Data Schedule.
(b) Reports on Form 8-K filed during the quarter ended December 31, 1999: None. 19 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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, INC. (Registrant) /s/ G. Edward McClammy By: _________________________________ G. Edward McClammy Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) Date: February 11, 2000 20 INDEX OF EXHIBITS
Exhibit No. Description ----------- ----------- 27.1 Financial Data Schedule.
21 EX-27.1 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM VARIAN, INC.'S DECEMBER 31, 1999 FORM 10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS SEP-29-2000 OCT-02-1999 DEC-31-1999 37,054 0 148,924 0 75,901 296,199 194,521 116,771 439,861 177,072 0 0 0 310 198,426 439,861 159,952 159,952 98,099 145,223 0 0 691 14,038 5,615 8,423 0 0 0 8,423 0.27 0.26
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