0001144204-15-004439.txt : 20150129 0001144204-15-004439.hdr.sgml : 20150129 20150129060053 ACCESSION NUMBER: 0001144204-15-004439 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20150128 ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20150129 DATE AS OF CHANGE: 20150129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARIAN MEDICAL SYSTEMS INC CENTRAL INDEX KEY: 0000203527 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 942359345 STATE OF INCORPORATION: DE FISCAL YEAR END: 0927 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07598 FILM NUMBER: 15556659 BUSINESS ADDRESS: STREET 1: 3100 HANSEN WAY CITY: PALO ALTO STATE: CA ZIP: 94304-1000 BUSINESS PHONE: 650-424-5834 MAIL ADDRESS: STREET 1: 3100 HANSEN WAY CITY: PALO ALTO STATE: CA ZIP: 94304-1000 FORMER COMPANY: FORMER CONFORMED NAME: VARIAN ASSOCIATES INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VARIAN DELAWARE INC DATE OF NAME CHANGE: 19761123 8-K 1 v399786_8k.htm FORM 8-K

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported) January 28, 2015

 

VARIAN MEDICAL SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)

 

Delaware   1-7598   94-2359345
(State or Other Jurisdiction
of Incorporation)		   (Commission File
Number)		   (IRS Employer
 Identification No.)

 

3100 Hansen Way, Palo Alto, CA   94304-1030
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant's telephone number, including area code (650) 493-4000

 

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 

 

Item 7.01. Regulation FD Disclosure.

 

On January 28, 2015, Varian Medical Systems, Inc. inadvertently released a confidential internal document relating to its financial results for its first fiscal quarter ended January 2, 2015. A copy of the document is attached as Exhibit 99.1.

 

Item 9.01. Financial Statements and Exhibits.

 

(d)Exhibits.

 

99.1Varian Medical Systems, Inc. First Quarter Fiscal Year 2015 Talking Points.

 

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SIGNATURES

 

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 hereunto duly authorized.

 

  Varian Medical Systems, Inc.
     
  By: /s/ John W. Kuo
  Name: John W. Kuo
  Title: Senior Vice President, General Counsel and Corporate Secretary

 

Dated: January 28, 2015

 

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EXHIBIT INDEX

 

Number   Exhibit
     
99.1   Varian Medical Systems, Inc. First Quarter Fiscal Year 2015 Talking Points.

  

 

 EX-99.1 2 v399786_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

Q115 Cheat Sheet (with FX Impact)

 

GROSS ORDERS   (Q115)                                
                          Backlog $3,124 M   + 13%
                          OS   $2,634 M   + 8%
Oncology Factory ( 55% ) $308 ( - 1% )         ICB   $325 M   + 37%
Oncology Service ( 45% ) $254 ( + 14% )   W/O FX   Other   $165 M   + 79%
Total Oncology       $562 ( + 5% )   +      8%              
                          Backlog Adj. -$34 M   - 27%
                          (Total Company)          
                                     
ICB       $163 ( + 34% )   W/O FX              
Other       $1 ( + $1M + 91% )                
TOTAL VMS       $726 ( + 11% )   +      13%              

 

Geographic Split:                                      
      Oncology       W/O FX     Total VMS         W/O FX  
Americas     49%   - 2%   - 2%   45% + 3%     + 3%  
EMEA     32%   + 12%   + 18%   29% + 7%     + 13%  
APAC     19%   + 17%   + 23%   26% + 34%     + 38%  
Total Company     100%   + 5%   + 8%   100% + 11%     + 13%  
                                     
North America     45%   - 3%   - 3%   41% + 2%     + 2%  
International     55%   + 13%   + 19%   59% + 18%     + 22%  
                                     
                                     

 

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Q115 Cheat Sheet (with FX Impact)

 

SALES (Q115)                
                   
Oncology Factory   (          55% )   $309 ( - 3% )  
Oncology Service   (          45% )   $254 ( + 14% )  
Total Oncology       $563 ( + 4% )  
                   
ICB       $166 ( + 3% )  
Other       $9 ( - 0.2M -     2%     )  W/O FX
TOTAL VMS       $738 ( + 4% )                    + 6%

  

Geographic Split:            
  Oncology     Total VMS   W/O FX
Americas 54% + 28%   50% + 24% + 24%
EMEA 30% - 11%   28% - 13% - 10%
APAC 16% - 22%   22% - 7% - 4%
Total Company 100% + 4%   100% + 4% + 6%
             
North America 52% + 31%   48% + 26% 26%
International 48% - 15%   52% - 11% - 7%
             

  

Gross Margin: (Q115 vs. Q114)

 

TOTAL Q1 FY15       TOTAL Q1 FY14
Oncology 45.6%   (+   68 pts) 44.9%
ICB 42.2%   (+   85 pts) 41.3%
Other 3.4%   (+   373 pts) -0.3%
VMS 44.3%   (+   81 pts) 43.5%
         
SG&A Q115         $140M or 19% of Revenue  
         
R&D Q115         $57M or 8% of Revenue  

 

 

EBIT by Segment: (Earnings Before Interest &Taxes)

  

  Q1FY15         Q1FY14   % Change in EBIT$
Oncology $126.1 M 22.4% ROS     22.3% ROS + 4.3%
ICB $41.2 M 24.8% ROS     25.2% ROS + 1.3%
Other ($13.6) M            
Corp ($24.3) M            
Rounding $0.1 M            
Total VMS $129.5 M 17.5% ROS     20.0% ROS - 8.8%

  

Interest (Q115) $0.9M income, up $0.5M from  $0.4M interest in Q114
   
(Interest per Press Release)  

  

Continuing Operations:  
   
Tax Rate (Q115 ) 28.5%     vs    31.2%  Q114
   
Net Earnings (Q115 ) $93M or 12.6% of Sales  vs  Q114  $98M or 13.8% of Sales (down 5% from Q114)
   
EPS (Q115) $0.92 per diluted share  vs  $0.91 Q114  ( 1% up  from Q114 )
   
Diluted Shares (Q115) Diluted Shares  101.6M  vs  107.4M Q114  ( down 5.8M shares from Q114)

  

 
Impact of $10.5M  Restructuring Charges
 
  With Restructuring Charges   Without Restructuring Charges  
SG&A  $140.5  M     $130.1  M  
EBIT  $129.5  M     $139.8  M  
Net Earnings    $93.3  M     $100.7  M  
EPS    $0.92       $0.99   

  

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Q115 Cheat Sheet (with FX Impact)

 

Balance Sheet

 

Cash & Cash Equivalents     $904.4M  (Q115)  vs $849.3M  (Q414)         (up $55.1M)
                                     
ST Investment        $68.5M   (Q115)  vs   $66.2M   (Q414)            
                                     
DSO         85 Days (Q115)    vs   94 Days (Q114)     (down 9 Days)  
                                     
          85 Days (Q115)    vs   85 Days (Q414)     (Flat)        
                                     
Inv Turns       2.0 x (Q114 = 2.3x)                  
                                     
Dep/Amort (Q115)       $15.4M / $1.6M   ( $17.0M Total)   vs   Q114  $16.1M Total        
                                     
Capex (from Cash Flow)     $21.7 M (Q115)       ($24.5M Q114)          
                                     
S/T Debt (Q115)       $150.0M ($100M LOC)     vs Q414  $50.0M        
                                     
L/T Debt (Q115)       $375.0M           vs Q414   $387.5M      
                                     
SH Equity       $1,616.1M                          
( Excludes noncontrolling interest)                                
                                 
Varian SH Equity per Share        $16.11                          
Return on Varian Equity     21.5% (Q115)  vs  23.7% (Q114)                

  

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Q115 Cheat Sheet (with FX Impact)

 

Cash Flow                    (Q115)            
             
Sources of Cash:       Uses of Cash:    
Operations   $79.0 M   Cap Ex   ($21.7) M
Stock Options   $34.8 M   Stock Repurchase   ($125.5) M
Excess Windfall Tax Benefits   $6.2 M   Repayment of Term Loan Debt   ($12.5) M
FX Impact   $9.0 M   Investment in Debt Security   ($0.9) M
Net Borrowings - LOC   $100.0 M   Employees' Taxes withheld for stock issued   ($11.4) M
Non-Controlling Interest   $1.8 M   Note Rec from Affiliate & Other   ($3.0) M
Other   $0.1 M   Other   ($0.8) M
Subtotal   $230.9 M   Subtotal   ($175.8) M
             
Net Increase in Cash   55.1 M        
Cash at Beg of Q1   $849.3 M        
Cash at End of Q1   $904.4 M        

 

Stock Repurchase Post Stock Split

 

Period   Total $   Avg. $   Total Shares    
FY12   $282 M   $63.70   4,433,718   12M Authorization complete (less 3M shares, expired on 9/28/12)
                 
Q113 Repurchase   $104 M   $69.03   1,500,000   Additional 8M Shares Authorized 09/29/12 thru 12/13/13
                 
Q213 per Cash Flow   $90 M            
Cash to settle in Q313   $11 M            
Q213 Repurchase   $101 M   $72.22   1,400,000    
Q313 Repurchase   $84 M   $67.56   1,250,000    
Q413 Repurchase   $135 M   $72.73   1,850,000    
                 
FY13 Repurchase   $424 M   $70.61   6,000,000    
                 
Q114 Repurchase   $152 M   $75.89   2,000,000   8M Authorization Complete Addl 6M authorized 12/30/13 thu 12/31/14
Q214 Repurchase   $159 M   $79.51   2,000,000  
Q314 Repurchase   $103 M   $82.18   1,250,000    
Q414 Repurchase   $210 M   $84.20   2,500,000   Additional 6M Shares Authorized 08/15/14 thru 12/31/15
Q4 FY14 YTD Repurchase   $624 M   $80.52   7,750,000    
                 
Q115 Repurchase   $126 M   $83.69   1,500,000   6M Authorization, 12/30/13 thru12/31/14, Complete
                 
Total Buy-back to-date   $4,046 M   $52.72   76,753,100   Shares
                 
Balance Remaining, end of Q115           4,750,000   Shares

 

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