Varian Medical Systems is today organized around three operations. Oncology Systems is the world's largest supplier of integrated cancer equipment and systems, including the market-leading Clinac medical linear accelerator. Its X-ray Tube Products operation is the leading independent supplier of X-ray tubes for the worldwide diagnostic imaging industry, including tubes expressly designed for the most advanced mammography and computed tomography (CT) scanning applications. Varian Medical Systems' Ginzton Technology Center has a mission to create, acquire, and manage bold new breakthrough technologies that will further advance medical diagnosis and treatment, while creating potentially high-growth opportunities. The center's current focus is on brachytherapy, digital X-ray imaging, and emerging biotechnologies. 

"For the second quarter Oncology Systems should have 19 percent growth in international orders and a 10 percent decline in North America -- an unpredicted reversal of what occurred in the first quarter when we had strong North American business and delays in international orders," said Tim Guertin, president and CEO of Varian Medical Systems. "We are experiencing greater variability in the length of our sales cycles caused by bigger deal sizes for more sophisticated equipment and more complex customer decision processes."

Compared to the second quarter of last year, net orders for the company's security and inspection business are expected to rise by more than 225 percent, and Varian's X-Ray Products business should have an estimated 16 percent increase in net orders, driven largely by demand for flat panel image detectors for filmless X-ray imaging. The company expects to report $22 million in net orders in the quarter for proton therapy and instrumentation products received subsequent to the ACCEL acquisition. Including consolidation of approximately $47 million in acquired backlog from ACCEL, the company estimates total orders for the second quarter should increase 23 percent and the quarter-ending backlog should increase 19 percent from the year ago period.

Second quarter revenues, including those from ACCEL, should increase by about 7 percent. "Excluding ACCEL, revenues for the quarter were a couple of percentage points weaker than expected due in part to construction delays at Oncology Systems customer sites," Guertin said. "While we are disappointed at the slowness in Oncology Systems for the first half of the fiscal year, it is gratifying to see how much growth these emerging businesses can contribute to our company. We remain confident in our long-term prospects, and we believe we can sustain 10 to 15 percent long-term growth for the company with contributions from our emerging businesses," Guertin said.

"Earnings per diluted share for the second quarter should be slightly ahead of previous guidance," Guertin said. The results provided in this release are preliminary numbers and the company will provide more detailed information on Wednesday, April 25 when it reports the full results for the quarter.

Investor Conference Call Today

Varian Medical Systems management has scheduled a conference call for 3 p.m. PT today to respond to questions related to this announcement. To hear a live webcast of the call, visit the investor relations page on the company's web site at http://www.varian.com/. To access the call via telephone, dial 1-800-573-4842 from inside the U.S. or 1-617-224-4327 from outside the U.S. and enter confirmation code 17947003. The replay can be accessed by dialing 1-888-286-8010 from inside the U.S. or 1-617-801-6888 from outside the U.S. and entering confirmation code 76538805. The telephone replay will be available through 5 p.m. PT, Friday, April 13, 2007. The replay will be archived on the company investor relations website for up to a year.

Following the call, the company will resume its quiet period until announcing the full results for the second quarter at 1 p.m. PT on Wednesday, April 25, 2007 followed by the management's regularly scheduled conference call at 2 p.m. PT. The April 25th call can be accessed via the company's website at http://www.varian.com/investor or via telephone, by dialing 1-866-543-6408 from inside the U.S. or 1-617-213-8899 from outside the U.S. and enter confirmation code 99648622. The replay can be accessed by dialing 1-888-286-8010 from inside the U.S. or 1-617-801-6888 from outside the U.S. and entering confirmation code 29487918. The telephone replay will be available through 5 p.m. PT, April 27, 2007. The replay will be archived and accessible on the company website for a year.