Varian (NYSE: VAR) today announced its first-quarter fiscal year 2018 results. All comparisons in this announcement are year-over-year unless noted otherwise. As a reminder, Varian adopted revenue Accounting Standard Codification 606 at the beginning of fiscal year 2018. First quarter fiscal year 2018 also reflects the impact from the new Tax Cuts and Jobs Act. As such the GAAP effective tax rate for the first quarter is 191.5 percent; Non-GAAP effective tax rate is 22.5 percent, which excludes the tax expense due to the mandatory deemed repatriation of foreign earnings and lower corporate tax rate's impact on our deferred tax assets. The results that we disclose today, and any forward-looking statements, including guidance, reflect the new accounting standard and tax legislation.
Summary
($ in millions except EPS)
Q1 2018
Q1 2017
Revenues (from Continuing Operations)
$
678.5
$
601.5
Gross Margin
44.6
%
44.4
%
GAAP Net (Loss) Earnings (1)
$
(112.2)
$
8.0
GAAP Net (Loss) Earnings per Diluted Share (1)
$
(1.22)
$
0.08
Net Cash Provided by Operating Activities
$
179.0
$
82.2
Non-GAAP Net Earnings (1) (2)
$
98.4
$
47.5
Non-GAAP Net Earnings per Diluted Share (1) (2)
$
1.06
$
0.50
(1)
GAAP Net (Loss) Earnings and Net (Loss) Earnings Per Diluted Share and Non-GAAP Net Earnings and Non-GAAP Net Earnings Per Diluted Share refer only to continuing operations. For the quarter ended December 29, 2017, GAAP and Non-GAAP Net Earnings Per Diluted Share were calculated based on diluted shares of 91.6 million and 92.7 million, respectively. For the quarter ended December 30, 2016, the number of diluted shares was 94.2 million.
(2)
Non-GAAP Net Earnings and Non-GAAP Net Earnings Per Diluted Share are defined as GAAP Net (Loss) Earnings and GAAP Net (Loss) Earnings Per Diluted Share adjusted to exclude the amortization of intangible assets, acquisition-related expenses and benefits, restructuring and impairment charges, and significant litigation charges or benefits, legal costs and significant effects of the new tax legislation.
"We are very pleased with the strong start to the new fiscal year," said Dow Wilson, Chief Executive Officer of Varian. "We generated healthy orders, revenues and operating earnings growth in our Oncology business, and added two more proton therapy orders."
The company ended the quarter with $823 million in cash and cash equivalents and $340 million of debt. Net cash provided by operating activities was $179 million. During the quarter, the company invested $57 million to repurchase 525,000 shares of common stock.
"I'm delighted with our operational focus and execution in delivering these strong financial results during the quarter" added Gary E. Bischoping Jr., Chief Financial Officer of Varian.
