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Varian Medical Systems Receives $5 Million X-ray Tube Order For Airport Explosive Detection Systems

PALO ALTO, Calif., June 26, 2002 – Varian Medical Systems(NYSE:VAR) today announced it has received a $5 million order from Analogic Corporation (NASDAQ:ALOG) of Peabody, Mass. for a new line of X-ray tubes that will be used in airport explosive detection systems (EDS). This is the first baggage screening tube produced by Varian Medical Systems, which is the world’s largest independent supplier of X-ray tubes for medical diagnostic equipment. Varian has begun production and shipment of the new tubes, and it expects to deliver on the majority of the order by the end of the calendar year.

"This order represents our successful entry into this important market for screening systems," said Richard Levy, president and CEO of Varian Medical Systems. "We are extending our expertise in X-ray tube technology into the development of new products for the security industry. This is a new growth opportunity for our business."

Varian’s new high-voltage, metal-ceramic X-ray tubes will be used in EDS scanners for "level two" screening of baggage or shipments that have been
selected for closer inspection in preliminary screening systems. Under recently adopted legislation, more than 400 airports in the U.S. will need to install "level two" EDS scanning systems by the end of the calendar year.

Ultimately, more than 2,000 EDS scanners will need to be manufactured and installed to complete the required security upgrade required under federal law. Varian Medical Systems is the only American supplier of X-ray tubes for these applications. "We hope to have a significant share of this business which should include new and replacement tubes," Levy said.

Homeland Security Summit

In addition to X-ray tubes for baggage screening, Varian Medical Systems is developing flat panel X-ray detection products for the security industry. It also supplies its Linatron-M™ linear accelerators for rapid screening of cargo containers and trucks that are entering the country. The company displayed these technologies recently at a two-day Homeland Security Summit sponsored by McGraw Hill in Washington, DC earlier this month.

PaxScan 4030R

Varian Medical Systems produces a PaxScan™ 4030R portable inspection system for screening luggage and other containers. The system employs a 40 X 30 cm amorphous silicon flat panel image detector to capture X-ray images of the contents. The panel incorporates a highly efficient gadolinium oxysulfide scintillator and an amorphous silicon TFT array to capture radiographic images. Using this technology, high-resolution, high contrast images are displayed on screen within seconds of scanning, making it possible to rapidly scan and view package contents in detail not achievable with other products on the market.

Varian’s PaxScan technology is already used in numerous industrial and medical settings, from steel mills and jet engine component factories to hospital oncology, radiology, and neonatal intensive care departments.

"Varian's PaxScan products are chosen over competing products and technologies because they are available, reliable, cost effective, and easy to integrate with any PC based system," said Chuck Blouir, marketing manager for Varian’s flat panel business. Last year, several PaxScan 4030R units were acquired by the National Security Agency. The technology enables inspectors to look inside containers without having to open them. "That means the risk of exposure to explosives or contamination is reduced, " said Blouir. "You can use this technology to look inside the walls of buildings, car trunks, shipping cases. Since September 11, we’ve all become concerned about security. As it is today, you could put about anything in a box and drop it off at a shipping company. Most packages are still not being screened."

Linatron M

Cargo containers that enter the U.S. through international ports are another potential hazard. According to James Johnson, Managing Director of Industrial Products at Varian Medical Systems, less than 2 percent of incoming cargo containers are currently being inspected in the U.S.

Varian Medical Systems’ Linatron™ M linear accelerator has been incorporated, by a number of cargo inspection system integrators around the world, into various fixed site and mobile cargo scan devices. The Linatron M is a high energy X-ray accelerator that is used primarily for industrial and nondestructive inspection purposes. The technology is used for field inspection of structures like bridges and buildings. It incorporates Varian Medical Systems’ reliable linear accelerator technology and can generate a wide range of X-ray energies for penetrating different substances, including steel.

The use of high-energy X-ray screening technology for cargo inspection is not widespread in the U.S. Countries like Algeria, Australia, Belgium, China, France, Germany, Ghana, Indonesia, Israel, Japan, Korea, Mexico, Saudi Arabia, Taiwan, Turkey, and the UK, use high-energy cargo screening systems, primarily for manifest verification and revenue enhancement. US Customs owns two mobile evaluation systems with Linatron accelerators from Varian.

"Prior to September 11, US Customs was primarily interested in drug enforcement," said Johnson. "But now, drugs are no longer the focus. There is universal recognition that un-inspected sea cargo containers and large air cargo represent a significant threat to security. If the U.S. government decides to step up cargo screening, Varian has the technology to help them do it."