Varian Medical Systems Inc.: Ten Years and Counting

April 8, 2009
Medical device manufacturer celebrates a decade of growth and innovation

Varian Medical Systems Inc. traces its roots back to the late 1940s when brothers Russell and Sigurd Varian, invented a high-frequency amplifier for generating microwaves known as the klystron tube. The tube became a key component of modern medical technology, including the use of linear accelerators in radiation therapy.

The brothers eventually formed Varian Associates, a company that stood until April 2, 1999 when the semiconductor and scientific instruments business were was spun off from the medical division.

Born from the breakup was Varian Medical Systems, a company with annual revenue of $542 million in 1998. By 2008, the company nearly quadrupled its revenue to $2.1 billion and increased its profit from $8 million to $295 million.

Varian Medical Systems Inc.
At A Glance

Varian Medical Systems Inc.
Palo Alto, Calif.
Primary Industry: Machinery
Number of Employees: 4,800
2007 In Review
Revenue: $1.78 billion
Profit Margin: 13.48%
Sales Turnover: 1.06
Inventory Turnover: 4.92
Revenue Growth: 11.19%
Return On Assets: 15.84%
Return On Equity: 30.04%
For the fourth-consecutive year Varian Medical Systems' success earned the Palo Alto, Calif.-based company a spot as an IW 50 Best Manufacturer.

Some of the company's highlights over the decade include the introduction of its RapidArc radiotherapy technology, more than 50 new X-ray tubes and the development of large-scale high-energy X-ray scanners that can automatically detect dangerous materials hidden in cargo containers.

The company also has shown an ability to thrive during tough economic times. The medical-device industry is one the few businesses that has sustained growth during the recession.

Varian Medical Systems ended the first quarter of 2009 with revenue of $508.7 million, up nearly 13% from the year-earlier period. Profit increased to $68.8 million, or 56 cents per share, compared with $55.5 million, or 46 cents a share, during the first three months of 2008.

The company benefited from strong sales in its Oncology Systems and X-Ray Products business segments, said Tim Guertin, president and CEO, in a Jan. 29 statement. Revenue increased 11% to $398 million in the Oncology Systems unit, while revenue rose 23% to $86 million in the X-Ray Products division.Guertin expects continued growth for the remainder of 2009.

"Despite continuing turbulent financial times, we believe that fiscal year 2009 revenues could grow by about 10 to 13%," he said.

For the second quarter, Guertin said revenue could grow 9% to 10%.

Interested in information related to this topic? Subscribe to our weekly Leadership Insights From The IW 50 eNewsletter.

About the Author

Jonathan Katz | Former Managing Editor

Former Managing Editor Jon Katz covered leadership and strategy, tackling subjects such as lean manufacturing leadership, strategy development and deployment, corporate culture, corporate social responsibility, and growth strategies. As well, he provided news and analysis of successful companies in the chemical and energy industries, including oil and gas, renewable and alternative.

Jon worked as an intern for IndustryWeek before serving as a reporter for The Morning Journal and then as an associate editor for Penton Media’s Supply Chain Technology News.

Jon received his bachelor’s degree in Journalism from Kent State University and is a die-hard Cleveland sports fan.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!