VAREX ANNOUNCES FINANCIAL RESULTS FOR FOURTH QUARTER AND FISCAL YEAR 2023

SALT LAKE CITY, November 14, 2023 – Varex Imaging Corporation (Nasdaq: VREX) today announced its unaudited financial results for the fourth quarter of fiscal year 2023.

Q4 FY23 Summary

• Revenues of $227 million
• GAAP gross margin 34% | Non-GAAP gross margin* 36%
• GAAP operating expense $54 million | Non-GAAP operating expense* $51 million
• GAAP operating margin 11% | Non-GAAP operating margin* 13%
• GAAP net income $0.66 per diluted share | Non-GAAP net income* $0.45 per diluted share
• Cash flow from operations $47 million

FY23 Summary

• Record revenues of $893 million
• GAAP gross margin 32% | Non-GAAP gross margin* 33%
• GAAP operating expense $213 million | Non-GAAP operating expense* $199 million
• GAAP operating margin 9% | Non-GAAP operating margin* 11%
• GAAP net income $1.08 per diluted share | Non-GAAP net income* $1.27 per diluted share
• Cash flow from operations $108 million

“We are pleased to report another solid quarter. Revenue of $227 million in the fourth quarter of fiscal 2023 was the result of the strong performance in our Industrial segment, offset primarily by lower revenue in China in our Medical segment.” said Sunny Sanyal, Chief Executive Officer of Varex. Sanyal added, “Cash generation remained robust due to solid profitability and a continued focus on inventory management, enabling us to finish the fiscal year with $195 million of cash and marketable securities on the balance sheet.”

Varex’s revenues in the fourth quarter decreased 2% sequentially from the third quarter of fiscal year 2023 with the Medical segment down 7% and the Industrial segment up 12%. Compared to the fourth quarter of fiscal year 2022, overall revenues decreased 2% with Medical down 10% and Industrial up 27%. Non-GAAP gross margin of 36% percent and non-GAAP EPS of $0.45 was driven primarily by a higher proportion of Industrial sales and better price realization.

Sanyal continued, “We believe we are well positioned to grow in China when the anti-corruption campaign winds down and the healthcare market improves. At the same time, through investments in new products and applications, we are encouraged by the long-term growth potential of our Industrial segment.”

Balance Sheet & Cash Flow

Cash flow from operations was $47 million for the fourth quarter of fiscal year 2023. Cash, cash equivalents, marketable securities, and certificates of deposits as of the end of fiscal year 2023 totaled $195 million.

Outlook

The following guidance is provided for the first quarter of fiscal year 2024:
• Revenues are expected to be between $180 million and $200 million
• Non-GAAP net income per diluted share is expected to be between $0.00 and $0.20

Guidance for the company’s net income 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 income 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 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 fourth 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 vareximaging.com/investors. 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. A replay of the call will be available from today through November 28th at 877-660-6853 from anywhere in the U.S. or 201-612-7415 from non-U.S. locations. The replay access code is 13741953.

The listen-only webcast link is: https://event.choruscall.com/mediaframe/webcast.html?webcastid=jaQBhURj

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 2,400 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; industry or market outlook; growth potential performance, and marketing positioning; revenues, product volumes, cash generation or other expected future financial results or performance; and any statements using the terms “believe,” “expect,” “encouraged,” “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 reduction in or loss of business of one or more of our large customers; inability to effectively compete with competitors; market erosion due to pricing pressures and other factors; failure to meet customers’ needs and demands; economic instability, shifting political environments, changing tax treatment, reactionary regulatory regimes, and other risks associated with doing business internationally; supply chain disruptions; inability to maintain or defend intellectual property rights, and the high cost of protecting such rights and defending against infringement claims; disruption of critical information systems or material security breaches of such systems; non-compliance with product-related regulations and delays in obtain regulatory clearances or approvals; 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 statement 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-K for the 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 the Form 10-K.

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