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VARLEN MAINTAINS RECOVERY; EARNINGS UP 92 PERCENT FOR THIRD QUARTER; TRANSPORTATION SEGMENT CONTINUES TO PACE GAINS

 NAPERVILLE, Ill., Nov. 18 ~PRNewswire~ -- Varlen Corp. (NASDAQ-NMS: VRLN), today announced it maintained its year-to-year recovery with a 92 percent increase in earnings on a 12 percent gain in sales over year-ago results for its fiscal third quarter.
 Richard L. Wellek, president and chief executive officer, said that Varlen continued to outpace the economy and many of the company's markets.
 "Our strong year-to-date results demonstrate the excellent operating leverage generated by higher volume and tight cost controls. All of our operating units remain focused on continuous improvement, product development and cost reduction," he said.
 For the three months ended Oct. 31, 1992, Varlen reported net earnings of $1,811,000 or 40 cents per share compared with $944,000 or 21 cents per share in the comparable 1991 period.
 Sales for the three-month period increased 12 percent to $66,502,000 compared with $59,521,000 in the 1991 third quarter.
 For the first nine months of the 1992 fiscal year, Varlen reported net earnings of $5,989,000 or $1.32 per share compared with $2,516,000 or 56 cents per share in the first nine months of the 1991 fiscal year.
 Sales for the first nine months of 1992 were $199,941,000 compared with $174,616,000 in the year-ago period.
 Wellek said that Varlen's backlog at the beginning of the fourth quarter of 1992 was 13 percent higher than at the same point a year ago. "While backlogs are not a firm indicator of the future since orders are subject to rescheduling and possible cancellation, the increase is encouraging," the Varlen CEO said.
 Transportation Segment Paces Gains
 Wellek noted that the company's earnings gains were largely due to favorable results at its transportation products business segment which reported a 24 percent increase in operating profit for the 1992 fiscal third quarter on a 19 percent increase in sales over the same period a year ago.
 He said the gains were led by strong sales to the heavy duty truck and trailer markets, and increased demand for the company's railroad products.
 "Sales of Class 8 trucks were strong during the quarter while railroad traffic, which slipped during much of the quarter, improved toward the end of the period," Wellek said.
 He said he believed that Varlen was "outperforming both of these markets."
 Wellek said that automotive industry production during the quarter was soft, resulting in a drop in sales and earnings in Varlen's automotive related business.
 Laboratory Products Up on Flat Sales
 Third quarter operating profits at Varlen's Laboratory and Other Products business segment were up 15 percent on a 1 percent decrease in revenues, Wellek said. "Sales of instruments to the petroleum industry increased while sales to research laboratories and tubular product customers fell," he said.
 Wellek noted that "underlying demand within the markets served by this segment weakened from earlier in the year." He said that "aggressive marketing combined with the benefit of new products and cost reduction programs allowed us to maintain and in some cases improve our position in these markets," he said.
 Varlen designs, manufactures and mrkets 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 CORPORATION AND SUBSIDIARIES
 Results of Operations
 (Unaudited)
 (In thousands, except per share amounts)
 Periods Three Months Nine Months
 Ended 10~31~92 11~2~91 10~31~92 11~2~91
 Net sales $66,502 $59,521 $199,941 $174,616
 Gross profit 15,231 12,949 47,858 38,221
 Selling, general and
 administrative expenses 10,449 9,355 32,177 28,367
 Interest expense, net 1,181 1,377 3,774 4,327
 Income taxes 1,790 1,273 5,918 3,011
 Net earnings $ 1,811 $ 944 $ 5,989 $ 2,516
 Net earnings per share $0.40 $0.21 $1.32 $0.56
 Weighted average shares
 outstanding 4,543 4,494 4,534 4,492
 Business Segments
 (Unaudited)
 (In thousands)
 Periods Three Months Nine Months
 Ended 10~31~92 11~2~91 10~31~92 11~2~91
 Net sales:
 Transportation products $46,394 $39,113 $137,565 $113,758
 Laboratory and other
 products 20,108 20,408 62,376 60,858
 Total $66,502 $59,521 $199,941 $174,616
 Operating profits (A):
 Transportation products $ 4,588 $ 3,704 $ 14,681 $ 9,714
 Laboratory and other
 products 1,100 960 4,060 3,366
 Total $ 5,688 $ 4,664 $ 18,741 $ 13,080
 (A) -- Before interest and general corporate expenses.
 -0- 11~18~92
 ~CONTACT: Richard L. Wellek, president and CEO, or Richard A. Nunemaker, vice president - finance and CFO of Varlen, 708-420-0400; or Nicholas G. Biro of O'Connor Biro & Associates, 708-498-2284, for Varlen~
 (VRLN)


CO: Varlen Corporation ST: Illinois IN: SU: ERN

GK -- NY026 -- 2267 11~18~92 10:47 EST
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Date:Nov 18, 1992
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