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VARLEN REPORTS RECORD FIRST QUARTER SALES & EARNINGS FROM CONTINUING OPERATIONS; TRANSPORTATION PRODUCTS SEGMENT PACES GAINS

 NAPERVILLE, Ill., May 14 /PRNewswire/ -- Varlen Corp. (NASDAQ-NMS: VRLN) today reported record sales and earnings from continuing operations for its 1993 fiscal first quarter which Richard L. Wellek, Varlen president and chief executive officer, described as the best three-month period in the company's history.
 Wellek said that the favorable performance was paced by the company's transportation products business segment with all operating companies in the segment exceeding last year's results.
 For the three months ended May 1, 1993, Varlen reported net earnings of $3,541,000 or $1.09 per share compared with $1,177,000 or 26 cents per share in the comparable year-ago period.
 The 1992 fiscal first quarter reflected a charge of $1,351,000 or 30 cents per share for the cumulative effect of a change in accounting for retiree health care and life insurance costs in accordance with Statement of Financial Accounting Standards No. 106.
 Wellek noted that the 1993 per share amount was positively affected by the repurchase 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 first quarter were $78,607,000, a 10.5 percent gain over the $71,111,000 reported in the 1992 fiscal first quarter. Wellek noted that increased volume had a significant impact on the company's operating margin.
 Transportation Segment Strong
 Wellek said that operating profit in the company's transportation segment increased 52.6 percent on a 23.1 percent increase in sales.
 He also said that sales to the railroad, large truck and automotive industries all exceeded the prior year's first quarter, particularly in the large truck business.
 Laboratory and Other Products Down
 Earnings and sales in the company's laboratory and other products business segment were down due primarily to anticipated government funding not being released, a continued slowdown in international markets, and a decline in pharmaceutical and oil refinery capital expenditures, Wellek said.
 Additionally, operating profits of this segment were adversely affected by pretax costs and losses of $633,000 related to the operation and disposition of a small laboratory products facility. This facility had sales of approximately $9,500,000 in 1992.
 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 5/1/93 5/2/92
 Net sales $78,607 $71,111
 Gross profit 19,880 17,645
 Selling, general and
 administrative expenses 12,018 11,575
 Interest expense, net 1,364 1,337
 Income taxes 2,957 2,205
 Earnings before cumulative
 effect of change in
 accounting principle 3,541 2,528
 Cumulative effect of
 accounting change -- (1,351)
 Net earnings $3,541 $1,177
 Earnings per share:
 Before cumulative effect of
 change in accounting
 principle $1.09 $0.56
 Cumulative effect of
 accounting change -- (0.30)
 Net earnings $1.09 $0.26
 Weighted average number of
 shares outstanding 3,250 4,517
 Business Segments
 (Unaudited, in thousands)
 Net Sales:
 Transportation products $59,840 $48,604
 Laboratory and other
 products 18,767 22,507
 Total $78,607 $71,111
 Operating Profits(A):
 Transportation products $8,652 $5,669
 Laboratory and other
 products 399 1,540
 Total $9,051 $7,209
 (A) -- Before interest and general corporate expenses.
 -0- 5/14/93
 /CONTACT: Richard L. Wellek, president and CEO, or Richard A. Nunemaker, vice president, finance and CFO of Varlen Corp., 708-420-0400; or Nicholas G. Biro of O'Connor Biro & Associates, 708-498-2284, for Varlen Corp./
 (VRLN)


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

TS -- NY051 -- 8673 05/14/93 13:47 EDT
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Publication:PR Newswire
Date:May 14, 1993
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