Compared to the same period last fiscal year, fourth-quarter revenues grew 15 percent to $593 million and operating earnings increased 19 percent to $136 million. Fiscal year 2008 revenues grew 18 percent to $2.1 billion and operating earnings increased 24 percent to $419 million. Net orders for the quarter rose 15 percent to $725 million and net orders for the fiscal year increased 15 percent to $2.3 billion. The fiscal 2008 year-ending backlog increased to $1.9 billion, up 14 percent from prior fiscal year.
"We finished the fiscal year on a strong note with solid contributions from our major businesses," said Tim Guertin, CEO of Varian Medical Systems. "We did not see contraction in our businesses as a result of tightening credit markets during the quarter. Customers were able to finance purchases and move ahead with deployment of our technology for better cancer treatments, filmless X-ray imaging, and enhanced security at ports and borders."
The company ended the year with $397 million in cash and cash equivalents and $40 million of debt. During the quarter, the company spent $85 million to repurchase 1.5 million shares of common stock. Throughout the fiscal year, the company spent $262 million to repurchase 5.1 million shares, which helped to reduce average diluted shares outstanding by 3 million from the prior year to 128 million. The company ended the quarter with accounts receivable days sales outstanding of 74, an improvement of 14 days from the year-ago quarter.
Oncology Systems' fourth quarter revenues totaled $483 million, up 13 percent from the same period last fiscal year. Oncology revenues for the fiscal year were $1.7 billion, up 16 percent from the fiscal year 2007 total.
Fourth-quarter net orders were $611 million, up 17 percent with 15 percent growth in North America and 19 percent growth in international markets. Total net orders for the fiscal year rose to $1.9 billion, up 14 percent from last year, with 13 percent growth in North America and 16 percent growth in international markets.
"Our Oncology Systems business remained on a solid growth track with continued strong demand for our image guidance and RapidArc® products as well as our software and service," said Guertin. "Since its introduction in March of this year, we have taken more than 300 orders for our RapidArc products for faster, more precise cancer treatments. We now have installed more than 1,000 On-Board Imager devices. Varian is far ahead of the competition in both volumetric arc and image-guided radiotherapy and radiosurgery."
Fourth quarter revenues for the X-Ray Products business were $83 million, up 25 percent from the year-ago quarter, and revenues for the full fiscal year were $305 million, up 19 percent from fiscal year 2007 levels. Compared to corresponding periods in fiscal year 2007, X-Ray Products' fourth quarter net orders rose 19 percent to $94 million and fiscal year net orders rose 24 percent to $337 million.
"Flat panel detectors for filmless X-ray imaging continued to lead the strong growth in quarterly and annual revenues and net orders for this business with gains in all market segments including medical diagnostics, dentistry, veterinary care and security," Guertin said. "Flat panel products represented nearly 40 percent of the net orders taken by X-Ray Products in the fiscal year."
The company's Other category, which is comprised of the Security and Inspection Products business, the ACCEL proton therapy business, and the Ginzton Technology Center, recorded fourth quarter revenues of $27 million, up 20 percent from the year-ago period. Revenues for the fiscal year totaled $93 million, up $35 million or 62 percent from fiscal year 2007. Fourth-quarter net orders in this category were $21 million, down by 32 percent from the year-ago quarter and net orders for fiscal year 2008 were $95 million, down 7 percent from fiscal year 2007.
"Compared to the corresponding periods last fiscal year, our security and inspection business grew revenues by 20 percent for the fourth quarter and 69 percent for the fiscal year," Guertin said. "Net orders in this business were down by 32 percent versus a strong year-ago quarter, but annual orders were up 10 percent versus fiscal 2007. Governments around the world have been moving ahead with deployment of this technology."
During the quarter, the company approved a plan to sell the research instruments portion of its ACCEL business in order to focus exclusively on the development of its proton therapy solutions. Consequently, the company determined to account for the research business as a discontinued operation. This discontinued operation reported a loss per diluted share of $0.06 for the fourth quarter and $0.12 for the fiscal year. This includes an expected loss upon disposal.
Varian Medical Systems, Inc., of Palo Alto, California, is the world's leading manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy, and brachytherapy. The company supplies informatics software for managing comprehensive cancer clinics, radiotherapy centers and medical oncology practices. Varian is a premier supplier of tubes and digital detectors for X-ray imaging in medical, scientific, and industrial applications and also supplies X-ray imaging products for cargo screening and industrial inspection. Varian Medical Systems employs approximately 4,800 people who are located at manufacturing sites in North America, Europe, and China and approximately 60 sales and support offices around the world. For more information, visit http://www.varian.com