Varian has reported that revenues for the first quarter of fiscal year 2007 increased 11.3 percent from the first quarter of fiscal year 2006, with double-digit sales growth for both industrial and life science applications. Demand was particularly strong within Europe and Asia Pacific, which more than offset softness in North America. Revenues were $217.9 million in the first quarter of fiscal year 2007, compared to $195.7 million in the first quarter of fiscal year 2006.
Non-GAAP (adjusted) net earnings for the first quarter of fiscal year 2007 increased 34.3% to $18.9 million, or $0.61 diluted earnings per share, compared to $14.1 million, or $0.44 diluted earnings per share, in the first quarter of fiscal year 2006. On a GAAP basis, net earnings in the first quarter of fiscal year 2007 were $15.4 million, or $0.49 diluted earnings per share, compared to $9.7 million, or $0.30 diluted earnings per share, in the first quarter of fiscal year 2006.
Adjusted operating earnings increased 34.5 percent to $28.4 million in the first quarter of fiscal year 2007, compared to $21.1 million in the first quarter last year. Adjusted operating profit margin was 13.0 percent in the first quarter of fiscal year 2007, compared to 10.8 percent in the prior-year quarter. The improvements in adjusted operating earnings and adjusted operating profit margin were primarily the result of a mix shift toward higher-margin products, the transition to internally sourced magnets for magnetic resonance products and sales volume leverage. On a GAAP basis, operating earnings were $22.9 million and operating profit margin was 10.5 percent in the first quarter of fiscal year 2007, compared to $14.7 million and 7.5 percent, respectively, in the same quarter a year ago.
"Our strategy continues to work and resulted in another quarter of strong growth in revenues and profitability," commented Garry W. Rogerson, President and CEO. "Demand in most markets continues to be robust and our newer products are gaining traction. The strength and breadth of our product lines and of our sales and support organization position us to deliver another record year."
In further news, Varian also announced that its Board of Directors has authorized the repurchase of up to $100 million in shares of its common stock. The repurchase program is effective until December 31, 2008. "This new share repurchase program is another example of our continued focus on capital allocation management to enhance long-term value for our shareholders," said G. Edward McClammy, Senior Vice President, Chief Financial Officer and Treasurer. "With the strength of our cash position, balance sheet and cash flow, we have the financial capacity to complete this repurchase authorization and continue our strategy of acquiring businesses that complement our existing product range."
Stock repurchases under this program may be made in the open market or in private transactions, at times and in amounts that management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price and regulatory requirements. The Company's previous $100 million stock repurchase program, which was approved in November 2005 and effective until September 30, 2007, was completed in December 2006. Under that program, the Company repurchased 2,335,597 shares of its common stock. As of December 29, 2006, the Company had 30,226,962 common shares outstanding.
