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VARLEN REPORTS SUBSTANTIAL EARNINGS AND SALES GAINS FOR SECOND QUARTER AND SIX MONTHS; TRANSPORTATION SEGMENT PACES GROWTH

VARLEN REPORTS SUBSTANTIAL EARNINGS AND SALES GAINS FOR SECOND QUARTER
 AND SIX MONTHS; TRANSPORTATION SEGMENT PACES GROWTH
 NAPERVILLE, Ill., Aug. 24 /PRNewswire/ -- Paced by strong performance from its transportation products segment, Varlen Corp. (NASDAQ: VRLN) reported substantial gains in earnings and sales for both its fiscal second quarter and six month periods. For the reported periods, earnings per share compared to the prior year more than doubled on improved sales.
 The company also said it intends to file shortly a registration statement with the Securities and Exchange Commission for a common stock offering of 1,800,000 shares of which 1,000,000 shares are to be sold by the company and 800,000 shares are to be sold by The Dyson-Kissner-Moran Corporation. The proceeds from the sale by the company will be used to reduce long-term debt.
 SECOND QUARTER STRONG
 Commenting on second quarter results, Richard L. Wellek, president and chief executive officer, said that this was the fourth consecutive quarter in which earnings exceeded those in the comparable period in the prior year.
 "Our ongoing cost reduction programs coupled with increased volume continue to have a positive impact on profits," Wellek said. "The second quarter's results confirm the benefit Varlen is receiving from operating improvements at its facilities, as well as from new product developme nt.
 "We are focused on continuous improvement -- both operationally and financially," Wellek said.
 He noted that both of the company's business segments were able to achieve increased earnings during the quarter and first half.
 For the second quarter ended Aug. 1, 1992, Varlen reported net income of $1,728,000 or 38 cents per share, more than double the $745,000 or 17 cents per share reported in the year-ago period.
 Sales for the second quarter were $62,328,000, a 10 percent increase over the $56,435,000 reported in the comparable 1991 period.
 For the first six months of the 1992 fiscal year, Varlen reported net income of $4,178,000 or 92 cents per share compared with $1,572,000 or 35 cents per share in the 1991 fiscal first half.
 Sales for the 1992 fiscal first half were $133,439,000 compared with $115,095,000, in the comparable 1991 period, a 16 percent gain.
 Wellek noted that the company's backlog of orders at the end of the second quarter was 14 percent higher than a year ago.
 TRANSPORTATION PRODUCTS LEAD GAINS
 Commenting on the company's transportation products segment, Wellek said that operating profit for the 1992 second quarter increased 39 percent on a 16 percent gain in sales compared to the year-ago period.
 "Led by strong sales to the heavy duty truck and trailer markets, our transportation related companies continue to recover from last year's depressed demand for capital goods and passenger vehicles.
 "During the first six months of 1992, railroad traffic increased approximately 4 percent and the sales of Class 8 trucks showed the first real signs of sustained recovery in two years," Wellek noted.
 He pointed out that sales of the company's automotive-related parts flattened as General Motors curtailed production for two weeks during July.
 At Varlen's laboratory and other products segment, operating profit during the quarter increased 13 percent on level sales, reflecting plant efficiency improvements.
 "Revenue gains from our laboratory related companies were offset by lower sales of tubular products," Wellek pointed out.
 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. The common stock is traded over-the- counter on the NASDAQ National Market System under the symbol VRLN.
 VARLEN CORP. AND SUBSIDIARIES
 Results of Operations
 (Unaudited -- in thousands, except per share amounts)
 Three months ended Six months ended
 8/1/92 8/3/91 8/1/92 8/3/91
 Net sales $62,328 $56,435 $133,439 $115,095
 Gross profit 14,842 12,686 32,627 25,272
 Selling, general and
 administrative expenses 10,180 9,570 21,728 19,012
 Interest expense, net 1,256 1,469 2,593 2,950
 Income taxes 1,678 902 4,128 1,738
 Net earnings 1,728 745 4,178 1,572
 Net earnings per share $0.38 $0.17 $0.92 $0.35
 Weighted average shares
 outstanding 4,544 4,491 4,531 4,491
 BUSINESS SEGMENTS
 (Unaudited -- in Thousands)
 Three Months Ended Six Months Ended
 8/1/92 8/3/91 8/1/92 8/3/91
 Net sales:
 Transportation products $42,567 $36,645 $91,171 $74,645
 Laboratory and other
 products 19,761 19,790 42,268 40,450
 $62,328 $56,435 $133,439 $115,095
 Operating profit (A)
 Transportation products $4,271 $3,063 $10,293 $6,010
 Laboratory and other
 products 1,406 1,246 3,112 2,406
 $5,677 $4,309 $13,405 $8,416
 (A) Before interest and general corporate expenses
 -0- 8/24/92
 /CONTACT: Richard L. Wellek, president and CEO, or Richard A. Nunemaker, vice president, Finance and CFO of Varlan, 708-420-0400; or Nicholas G. Biro of O'Connor Biro & Associates, 708-498-2284, for Varlen/
 (VRLN) CO: Varlen Corp. ST: Illinois IN: TRN SU: ERN


SH -- NY059 -- 2643 08/24/92 14:33 EDT
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Date:Aug 24, 1992
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