GLOUCESTER, MA -- (Marketwire) -- 07/30/09 -- Varian Semiconductor Equipment Associates, Inc. ("Varian Semiconductor") (NASDAQ: VSEA) today announced results for its fiscal 2009 third quarter ended July 3, 2009.

Revenue for the third quarter of fiscal 2009 totaled $73.4 million, compared to revenue of $182.6 million for the same period a year ago. Varian Semiconductor recorded a net loss of $14.3 million, or $0.20 per diluted share during the third quarter of fiscal 2009, compared to net income of $18.3 million, or $0.25 per diluted share for the same period a year ago.

Gary Dickerson, Varian Semiconductor's chief executive officer, said, "The last nine months have been very challenging. With the great support of our employees, our tactical response was to quickly and aggressively tighten our belts. Our strategic response was to increase our level of spending on, and commitment to, growth opportunities in our existing and new markets. While it is very encouraging that business conditions in our current markets are improving, it is just as rewarding that the early results are quite positive in new markets. We anticipate that we will look back at 2008 and 2009 as similar to 2002 and 2003 -- as a time when we bridged difficult periods while sustaining the investments to fuel future growth."

Bob Halliday, chief financial officer, provided forward guidance for the fourth quarter of fiscal year 2009 by stating, "Fourth quarter revenue is expected to be between $104 and $114 million. Gross margins are projected to increase to between 43% and 44%. Earnings per share are anticipated to range from $0.01 to $0.06 per diluted share. These earnings per share include non-cash charges of approximately $9.0 million for depreciation and equity compensation expense."

Varian Semiconductor will hold a conference call, broadcast over the Internet, at 5:30 p.m. eastern time today to discuss Varian Semiconductor's operating results and outlook. Access to the call is available through the investor relations page on Varian Semiconductor's website at www.vsea.com. Replays will be available via the website for two weeks after the call.

About Varian Semiconductor Equipment Associates, Inc.

Varian Semiconductor is the leading producer of ion implantation equipment used in the manufacture of semiconductors. Varian Semiconductor is headquartered in Gloucester, Massachusetts, and operates worldwide. Varian Semiconductor maintains a website at www.vsea.com. The information contained in Varian Semiconductor's website is not incorporated by reference into this release, and the website address is included in this release as an inactive textual reference only.

Note: This press release contains forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. For this purpose, statements concerning the industry outlook, Varian Semiconductor's guidance for fourth quarter fiscal 2009 revenue, earnings per share, market share, expected product plans, financial performance, market conditions, Varian Semiconductor's investment in new product and application development, and any statements using the terms "believes," "anticipates," "will," "expects," "plans" or similar expressions, are forward-looking statements. The forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: volatility in the semiconductor equipment industry; intense competition in the semiconductor equipment industry; Varian Semiconductor's dependence on a small number of customers; fluctuations in Varian Semiconductor's quarterly operating results; Varian Semiconductor's transition to new products; Varian Semiconductor's exposure to risks of operating internationally; uncertain protection of Varian Semiconductor's patent and other proprietary rights; Varian Semiconductor's reliance on a limited group of suppliers; Varian Semiconductor's ability to manage potential growth, decline and strategic transactions; Varian Semiconductor's reliance on one primary manufacturing facility; and Varian Semiconductor's dependence on certain key personnel. These and other important risk factors that may affect actual results are discussed in detail under the caption "Risk Factors" in Varian Semiconductor's Quarterly Report on Form 10-Q for the quarter ended April 3, 2009 and in other reports filed by Varian Semiconductor with the Securities and Exchange Commission. Varian Semiconductor cannot guarantee any future results, levels of activity, performance or achievement. Varian Semiconductor undertakes no obligation to update any of the forward-looking statements after the date of this release.

              VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 (In thousands, except per share amounts)

                                Fiscal Three Months    Fiscal Nine Months
                                        Ended                 Ended
                                --------------------- ---------------------
                                 July 3,    June 27,   July 3,    June 27,
                                  2009        2008      2009        2008
                                ---------  ---------- ---------  ----------
Revenue
   Product                      $  62,695  $  159,283 $ 203,681  $  629,755
   Service                         10,663      23,307    40,813      62,183
   Royalty                             20          13        79          59
                                ---------  ---------- ---------  ----------
      Total revenue                73,378     182,603   244,573     691,997
Cost of revenue                    45,217      94,666   155,248     360,611
                                ---------  ---------- ---------  ----------
Gross profit                       28,161      87,937    89,325     331,386
                                ---------  ---------- ---------  ----------
Operating expenses
   Research and development        19,104      27,187    60,174      84,469
   Marketing, general and
    administrative                 22,150      32,116    73,000      97,517
   Restructuring                      672         646     8,972         646
                                ---------  ---------- ---------  ----------
      Total operating expenses     41,926      59,949   142,146     182,632
                                ---------  ---------- ---------  ----------
      Operating (loss) income     (13,765)     27,988   (52,821)    148,754
Interest income, net                1,043       1,773     3,512       6,636
Other (expense) income, net          (217)        179      (744)        272
                                ---------  ---------- ---------  ----------
(Loss) income before income
 taxes                            (12,939)     29,940   (50,053)    155,662
Provision for (benefit from)
 income taxes                       1,318      11,616    (2,614)     59,617
                                ---------  ---------- ---------  ----------
Net (loss) income               $ (14,257) $   18,324 $ (47,439) $   96,045
                                =========  ========== =========  ==========
Weighted average shares
 outstanding - basic               72,460      72,606    72,200      73,881
Weighted average shares
 outstanding - diluted             72,460      73,879    72,200      75,339
    Net (loss) income per
     share - basic              $   (0.20) $     0.25 $   (0.66) $     1.30
    Net (loss) income per
     share - diluted            $   (0.20) $     0.25 $   (0.66) $     1.27


              VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)
                                                       July 3,   October 3,
                                                        2009       2008
                                                      ---------  ---------
                         ASSETS
Current assets
      Cash and cash equivalents                       $ 177,641  $ 139,679
      Short-term investments                             53,791     68,996
      Accounts receivable, net                           99,401    128,904
      Inventories                                       102,521    165,201
      Deferred income taxes                              25,754     21,902
      Other current assets                               22,692     24,447
                                                      ---------  ---------
            Total current assets                        481,800    549,129
      Long-term investments                              62,798     69,491
      Property, plant and equipment, net                 67,486     66,636
      Other assets                                       14,791     14,889
                                                      ---------  ---------
                  Total assets                        $ 626,875  $ 700,145
                                                      =========  =========
        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
      Current portion of long-term debt               $     597  $     558
      Accounts payable                                   12,883     29,072
      Accrued expenses                                   25,661     45,485
      Product warranty                                    3,923      7,661
      Deferred revenue                                   19,617     32,285
                                                      ---------  ---------
            Total current liabilities                    62,681    115,061
      Long-term accrued expenses and other
       liabilities                                       64,716     63,627
      Deferred income taxes                               5,883      3,951
      Long-term debt                                      1,750      2,203
                                                      ---------  ---------
                  Total liabilities                     135,030    184,842
                                                      =========  =========
Stockholders' equity
      Common stock                                          943        935
      Capital in excess of par value                    603,513    581,492
      Less: Cost of treasury stock                     (714,877)  (714,877)
      Retained earnings                                 602,491    649,930
      Accumulated other comprehensive loss                 (225)    (2,177)
                                                      ---------  ---------
            Total stockholders' equity                  491,845    515,303
                                                      ---------  ---------
                  Total liabilities and stockholders'
                   equity                             $ 626,875  $ 700,145
                                                      =========  =========