VAREX ANNOUNCES FINANCIAL RESULTS FOR SECOND QUARTER FISCAL YEAR 2025

SALT LAKE CITY, May 8, 2025 – Varex Imaging Corporation (Nasdaq: VREX) today announced its unaudited financial results for the second quarter of fiscal year 2025.

2QFY25 Summary

• Revenues of $213 million
• GAAP gross margin 36% | Non-GAAP gross margin* 36%
• GAAP operating margin 10% | Non-GAAP operating margin* 12%
• GAAP net earnings $0.17 per diluted share | Non-GAAP net earnings* $0.26 per diluted share
• Cash flow from operations was $17 million

Sunny Sanyal, Chief Executive Officer, stated, “Demand remained strong in the second quarter, driving year-over-year sales growth across both segments. Higher volumes, improved sales mix and productivity gains drove margin expansion, profitability and cash generation in the quarter.” Sanyal added, “Due to high tariffs imposed by China on U.S. products, several of our China-based customers have paused purchases, causing us to reduce our outlook for the short term.”

 Varex’s revenue of $213 million was up 3% year-over-year. Medical segment revenue of $154 million was up 3% year-over-year. Industrial segment revenue of $59 million was up 3% year-over-year. Non-GAAP gross margin was 36% in the quarter compared to 33% in the second quarter of fiscal year 2024 and non-GAAP EPS increased to $0.26 in the quarter from $0.16 in the second quarter of fiscal year 2024.

Balance Sheet & Cash Flow

Cash flow from operations was $17 million in the second quarter of fiscal year 2025. Cash, cash equivalents, and marketable securities at the end of the second quarter of fiscal year 2025 was $226 million, excluding the $125 million of restricted cash related to the Senior Secured Note Add On, and compares to $213 million at the end of fiscal year 2024.

Convertible Debt Maturity

We plan to repay the outstanding principal of our Convertible Notes, due June 2025 upon maturity. Sam Maheshwari, Chief Financial Officer, stated, “Paying off convertible notes will reduce our overall debt burden and simplify our capital structure.”

 Outlook

Our guidance for the third quarter of fiscal year 2025 is as follows:

• Revenues are expected to be between $180 million and $200 million, assuming sales in China of approximately $10 million
• Non-GAAP net earnings per diluted share is expected to be between -$0.05 and $0.10

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 second quarter of fiscal year 2025 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 May 22nd at 877-660-6853 from anywhere in the U.S. or 201-612-7415 from non-U.S. locations. The replay access code is 13753373. The webcast and accompanying slide presentation containing financial information can be accessed by visiting the investor section of the website at https://www.vareximaging.com/news/.

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, as well as X-ray imaging systems for industrial applications. 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 the Private Securities Litigation Reform Act of 1995. Statements concerning unaudited financial results; earnings guidance; tariffs and their impact on our customers; industry or business outlook, including for our business in China; product demand; payoff of our convertible debt, expected future financial results or performance; and any statements using the terms “assume,” “believe,” “expect,” “can,” “will,” “could,” “may,” “plan,” and “potential” or similar statements are forward-looking statements that involve risks and uncertainties that could cause Varex’s actual results and the outcome and timing of certain events to differ materially from those anticipated. While forward-looking statements are based on assumptions and analyses made by management of Varex that it believes to be reasonable under the circumstances, whether actual results and developments will meet such expectations depends on a number of risks and uncertainties which could cause actual results, performance, and financial condition to differ materially from such expectations. Such risks and uncertainties include: reduction in or loss of business of one or more of our limited OEM customers; changes in import/export regulatory regimes, tariffs, trade wars, and national policies; loss of business to, and an inability to effectively compete with, competitors; pricing pressures and other factors that could result in market erosion or loss of customers; failure to meet customers’ needs and demands; global, regional, and country-specific economic instability, shifting political environments, changing tax treatment, import/export regulatory, tariff, and trade policy regimes, and other risks associated with international manufacturing, operations and sales; 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 breaches in the security of such systems; non-compliance with regulations applicable to marketing, manufacturing, labeling, and distributing our products and delays in obtaining regulatory clearances or approvals; limitations imposed by operating and financial restrictions of our debt financing agreements; 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 in this news release speaks only as of the date on which it is made. Factors or events that could cause Varex’s actual results to differ may emerge from time to time, and it is not possible 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 second quarter of fiscal year 2025. 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 | investors@vareximaging.com