VAREX ANNOUNCES FINANCIAL RESULTS FOR THIRD QUARTER FISCAL YEAR 2023

SALT LAKE CITY, August 1, 2023 – Varex Imaging Corporation (Nasdaq: VREX) today announced its unaudited financial results for the third quarter of fiscal year 2023.

3QFY23 Summary

• Revenues $232 million
• GAAP gross margin 33% | Non-GAAP gross margin* 34%
• GAAP operating margin 10% | Non-GAAP operating margin* 13%
• GAAP net earnings $0.21 per diluted share | Non-GAAP net earnings* $0.37 per diluted share
• Cash flow from operations $38 million

“We are pleased to report another solid quarter, with revenues reaching $232 million in the third quarter of fiscal 2023, a new quarterly record for Varex, and non-GAAP gross margin of 34% exceeding our expectations. These results were helped by the continued strength in our Industrial segment.” said Sunny Sanyal, Chief Executive Officer of Varex. Sanyal added, “Our efforts to reduce inventory levels coupled with profitability resulted in an increase in overall cash position by $30 million in the quarter.”

Varex’s revenue of $232 million was up 2% sequentially and 8% year-over-year. Medical segment revenue of $175 million was up 1% sequentially and 5% year-over-year. Industrial segment revenue of $57 million was up 5% sequentially and 20% year-over-year. Non-GAAP gross margin was 34% in the quarter compared to 33% in the second quarter of fiscal year 2023 and non-GAAP EPS increased to $0.37 from $0.26 in the second quarter.

Balance Sheet & Cash Flow

Cash flow from operations was $38 million in the third quarter of fiscal year 2023, due primarily to improved earnings and a reduction in inventory. Cash, cash equivalents, marketable securities and CDs increased $30 million sequentially to $152 million at the end of the third quarter.

 Outlook

The following guidance is provided for the fourth quarter of fiscal year 2023:

• Revenues are expected to be between $220 million and $240 million
• Non-GAAP net earnings per diluted share is expected to be between $0.20 and $0.40

Guidance for the company’s net earnings per diluted share is provided on a non-GAAP basis only. This non-GAAP financial measure is forward-looking, and the company is unable to provide a meaningful or accurate reconciliation to a GAAP forecast of net earnings per diluted share without unreasonable effort due to certain of these reconciling items being uncertain, out of our control, and the amount and timing of these items being unable to be reasonably predicted. The actual amounts of such reconciling items could have a significant impact on the company’s GAAP net income (loss) per diluted share.

Non-GAAP Financial Measures

*Please refer to “Reconciliation between GAAP and non-GAAP Financial Measures” below for a reconciliation of non-GAAP items to the comparable GAAP measures.

Conference Call Information

Varex will conduct its earnings conference call for the third quarter of fiscal year 2023 today at 3:00 p.m. Mountain Time. The conference call, including a supplemental slide presentation, will be webcast live and can be accessed at Varex’s website at www.vareximaging.com/investor-relations. Access will also be available by dialing 877-524-8416 from anywhere in the U.S. or by dialing 412-902-1028 from non-U.S. locations. The webcast and supplemental slide presentation will be archived on Varex’s website at www.vareximaging.com/financial-reports. A replay of the call will be available from today through August 15th at 877-660-6853 from anywhere in the U.S. or 201-612-7415 from non-U.S. locations. The replay access code is 13739792. The listen-only webcast link is: https://event.choruscall.com/mediaframe/webcast.html?webcastid=AmdkMU2w

About Varex

Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components, which include X-ray tubes, digital detectors and other image processing solutions that are key components of X-ray imaging systems. With a 70+ year history of successful innovation, Varex’s products are used in medical imaging as well as in industrial and security imaging applications. Global OEM manufacturers incorporate the company’s X-ray sources, digital detectors, connecting devices and imaging software in their systems to detect, diagnose, protect and inspect. Headquartered in Salt Lake City, Utah, Varex employs approximately 2,300 people located in North America, Europe, and Asia. For more information visit vareximaging.com.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements concerning unaudited financial results; supply chain diversification activities; industry or market outlook; customer demand and revenue trends; revenues, product volumes, or other expected future financial results or performance; and any statements using the terms “believe,” “expect,” “intend,” “outlook,” “future,” “anticipate,” “will,” “could,” “estimate,” “guidance,” or similar statements are forward-looking statements that involve risks and uncertainties that could cause Varex’s actual results to differ materially from those anticipated. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. Such risks and uncertainties include supply chain and logistical challenges; price increases from suppliers and service providers, inflation generally and expense management; shifts in product mix; the continued impact of tariffs or a global trade war on Varex’s products and customer purchasing patterns; global economic conditions and political conditions globally or regionally, including any impact due to armed conflicts (such as the conflict between Russia and Ukraine as well as governmental sanctions imposed in response and increasing tensions between China and Taiwan); demand for and delays in delivery of products of Varex or its customers; litigation costs; Varex’s ability to develop, commercialize and deploy new products; the impact of reduced or limited demand by purchasers of certain X-ray products; the impact of competitive products and pricing; and the other risks listed from time to time in our filings with the U.S. Securities and Exchange Commission, which by this reference are incorporated herein. Any forward-looking statements made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Varex assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.

Varex has not filed its Form 10-Q for the third quarter of fiscal year 2023. All financial results described here should be considered preliminary and are subject to change to reflect any necessary adjustments or changes in accounting estimates that are identified prior to the time Varex files its Form 10-Q.

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For Information Contact:
Christopher Belfiore
Director of Investor Relations
Varex Imaging Corporation
801.973.1566 | christopher.belfiore@vareximaging.com