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VARLEN REPORTS RECORD SECOND QUARTER; TRANSPORTATION PRODUCTS PACE 75 PERCENT EARNINGS GAIN ON 15 PERCENT SALES INCREASE

 NAPERVILLE, Ill., Aug. 23 /PRNewswire/ -- Led by record sales to the heavy duty truck and trailer, and automotive industries, Varlen Corp. (NASDAQ: VRLN) reported a 75 percent increase in net earnings on a 15 percent increase in sales for its fiscal second quarter.
 Richard L. Wellek, president and chief executive officer, said that sales and earnings from continuing operations were the highest for any second quarter in the company's history and demonstrated the excellent operating leverage that Varlen has been able to achieve with careful attention to cost control and asset management.
 For the three months ended July 31, 1993, Varlen reported net earnings of $3,025,000 or 92 cents per share, 78 cents per share fully diluted, compared with $1,731,000 or 38 cents per share, primary and fully diluted, in the comparable year-ago period.
 Wellek noted that the 1993 per share amounts were positively affected by the re-purchase of approximately 30 percent of the company's outstanding common stock from its founding stockholder in late fiscal 1992 as well as by increased earnings.
 Sales for the 1993 fiscal second quarter were $71,824,000 compared with $62,328,000 in the 1992 fiscal second quarter.
 For the six months ended July 31, 1993, Varlen reported net earnings of $6,566,000 or $2.01 per share, $1.82 fully diluted, compared with $4,259,000 or 94 cents per share, primary and fully diluted, in the year-ago period, before considering the 1992 first quarter charge of $1,351,000 or 30 cents per share for a change in accounting principle.
 Sales for the first six months of the 1993 fiscal year were $150,431,000 compared with $133,439,000 for the first six months of the 1992 fiscal year.
 TRANSPORTATION SEGMENT OPERATING PROFIT UP 84 PERCENT
 Operating profit for the company's transportation products business segment increased 84 percent on a 29 percent gain in sales compared to the comparable period last year.
 "All operating units in this segment produced higher sales and earnings than in the second quarter of 1992," Wellek said.
 Strong operating profit increases in the company's heavy duty truck and light passenger vehicle businesses were accompanied by more modest gains in the railroad products businesses, the sales of which were slightly impacted late in the quarter by heavy flooding in the Midwest.
 LABORATORY PRODUCTS REMAIN WEAK
 Results in the company's laboratory and other products segment remained weak during the quarter although sales and operating profit in its petroleum instrument businesses improved from both the previous quarter and year-ago second quarter.
 Wellek said that the majority of the decline in this business segment came in its research laboratory equipment business. "Although higher than the first quarter rate, orders for laboratory appliances remain soft and were below what we anticipated for the period," Wellek said.
 He said, "Sales of laboratory appliances were impacted by the European recession, delays in releasing government funding and uncertainty about health care legislation that has depressed the demand for equipment used in life science research."
 Also impacting results in this business segment was the sale in May 1993 of a facility that had sales of approximately $2,500,000 in the 1992 second quarter, Wellek said.
 Varlen's backlog at the end of the second quarter was 13 percent higher than a year ago and the company's outlook for the remainder of the year is favorable, Wellek said.
 Varlen designs, manufactures and markets engineered industrial products, primarily for specialized applications in the transportation and laboratory equipment markets. The company serves U.S. and foreign markets with operating locations in the United States and Germany. Headquarters are in Naperville, Ill. The common stock is traded on the NASDAQ National Market under the symbol VRLN, and the 6-1/2 percent convertible subordinated debentures are traded on the NASDAQ SmallCap Market under the symbol VRLNG.
 VARLEN CORP. AND SUBSIDIARIES
 Results of Operations
 (Unaudited, In Thousands, Except Per Share Amounts)
 For The Three Months Ended July 31, 1993 Aug. 1, 1992
 Net sales $71,824 $62,328
 Gross profit 17,199 14,702
 Selling, general and
 administrative expenses 10,178 10,208
 Interest expense, net 1,472 1,256
 Income taxes 2,524 1,507
 Net earnings $ 3,025 $ 1,731
 Earnings per share:
 Primary earnings per share $ 0.92 $ 0.38
 Fully diluted earnings per share $ 0.78 $ 0.38
 Weighted average number of
 shares outstanding:
 Primary 3,290 4,544
 Fully diluted 4,511 4,544
 For The Six Months Ended July 31, 1993 Aug. 1, 1992
 Net sales $150,431 $133,439
 Gross profit 37,079 32,347
 Selling, general and
 administrative expenses 22,196 21,783
 Interest expense, net 2,836 2,593
 Income taxes 5,481 3,712
 Earnings before cumulative
 effect of change in accounting
 principle 6,566 4,259
 Cumulative effect of accounting
 change -- (1,351)
 Net earnings $ 6,566 $ 2,908
 Primary earnings per share:
 Before cumulative effect of
 change in accounting principle $ 2.01 $ 0.94
 Cumulative effect of accounting
 change -- (0.30)
 Primary earnings per share $ 2.01 $ 0.64
 Fully diluted earnings per share $ 1.82 $ 0.64
 Weighted average number of
 shares outstanding:
 Primary 3,268 4,531
 Fully diluted 3,882 4,531
 VARLEN CORP. AND SUBSIDIARIES
 Business Segments
 (Unaudited, In thousands)
 For The Three Months Ended July 31, August 1,
 1993 1992
 Net Sales:
 Transportation products $54,850 $42,567
 Laboratory and other products 16,974 19,761
 $71,824 $62,328
 Operating Profits (A):
 Transportation products $ 7,579 $ 4,118
 Laboratory and other products 751 1,391
 $ 8,330 $ 5,509
 For The Six Months Ended July 31, August 1,
 1993 1992
 Net Sales:
 Transportation products $114,690 $ 91,171
 Laboratory and other products 35,741 42,268
 $150,431 $133,439
 Operating Profits (A):
 Transportation products $ 16,231 $ 9,787
 Laboratory and other products 1,150 2,931
 $ 17,381 $ 12,718
 (A) Before interest and general corporate expenses
 -0- 8/23/93
 /CONTACT: Varlen Corp., Naperville, Ill., Richard L. Wellek, president and CEO, or Richard A. Nunemaker, vice president, finance and CFO, 708-420-0400, or O'Connor Biro & Associates, Northbrook, Ill., Nicholas G. Biro, 708-498-2284, for Varlen Corp./
 (VRLN)


CO: Varlen Corp. ST: Illinois IN: SU: ERN

LD -- NY059 -- 5175 08/23/93 16:39 EDT
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Date:Aug 23, 1993
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