November 15, 2022

VAREX ANNOUNCES FINANCIAL RESULTS FOR FOURTH QUARTER AND FISCAL YEAR 2022

Varex Imaging Corporation (Nasdaq: VREX) today announced its unaudited financial results for the fourth quarter of fiscal year 2022.

SALT LAKE CITY, November 15, 2022 – Varex Imaging Corporation (Nasdaq: VREX) today announced its unaudited financial results for the fourth quarter of fiscal year 2022.

Q4 FY22 Summary

  • Record revenues of $231 million
  • GAAP gross margin 32% | Non-GAAP gross margin* 33%
  • GAAP operating expense $50 million | Non-GAAP operating expense* $47 million
  • GAAP operating margin 11% | Non-GAAP operating margin* 13%
  • GAAP net earnings $0.32 per diluted share | Non-GAAP net earnings* $0.42 per diluted share

FY22 Summary

  • Record revenues of $859 million
  • GAAP gross margin 33% | Non-GAAP gross margin* 34%
  • GAAP operating expense $195 million | Non-GAAP operating expense* $179 million
  • GAAP operating margin 10% | Non-GAAP operating margin* 13%
  • GAAP net earnings $0.73 per diluted share | Non-GAAP net earnings* $1.43 per diluted share

“I am pleased to announce a strong finish to another fiscal year, with revenues reaching $231 million in the fourth quarter of fiscal 2022, a new quarterly record for Varex. Global demand for our products was solid during the quarter and a slowly improving supply chain and our supplier diversification efforts allowed us to convert more orders to sales.” said Sunny Sanyal, Chief Executive Officer of Varex. Sanyal added, “As we start a new fiscal year, I look forward to our prospects to grow in fiscal 2023 and beyond.”

Varex’s revenues in the fourth quarter increased 8% sequentially from the third quarter of fiscal year 2022 with the Medical segment up 9% and the Industrial segment up 6%. Compared to prior year Q4, overall revenues grew 2% with Medical flat and Industrial up 9%. Non-GAAP gross margin was 33% percent and nonGAAP EPS of $0.42 was driven primarily by higher sales along with disciplined operating expense management.

Sanyal continued, “Fiscal year 2022 presented various challenges, including supply chain disruptions and inflationary pressure. Varex employees managed through these disruptions, leading to growth in sales and earnings, and we made progress with new products and investments in future growth.”

Balance Sheet & Cash Flow

Cash flow from operations was $17 million for the fourth quarter of fiscal year 2022. Cash, cash equivalents and marketable securities finished the quarter and fiscal year at $113 million. This included a $27 million financing cash outflow related to the bond redemption during the second quarter.

Outlook

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

  • Revenues are expected to be between $195 million and $215 million
  • Non-GAAP net earnings per diluted share is expected to be between $0.10 and $0.30
    • Non-GAAP EPS guidance takes into account the adoption of ASU 2020-06, related to the accounting for convertible instruments. Under this accounting standard, there may be scenarios where the EPS calculation adds back the convertible loan interest expense to net income and adds approximately 8 million shares underlying our convertible notes and associated bond hedge to the 41 million diluted shares. For an illustrative view of potential scenarios, please see the appendix of our Q4 FY22 earnings slide deck, which can be found on our website at vareximaging.com/quarterly-reports.

Guidance for the company’s net earnings per diluted share is provided on a non-GAAP basis only. This nonGAAP financial measure is forward-looking, and the company is unable to provide a meaningful or accurate GAAP forecast of net earnings per diluted share without unreasonable effort due to the uncertainty of amounts and timing of unusual items, such as restructuring costs.

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 2022 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 29th at 877-660-6853 from anywhere in the U.S. or 201-612-7415 from non-U.S. locations. The replay access code is 13733761. The listen-only webcast link is:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=OHmD3uwi

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 Varex’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; Q1FY23 revenue and earnings guidance; 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,” “outlook,” “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 and inflation generally; the severity and duration of the COVID-19 pandemic and its impact on both the global
economy and Varex’s business; shifts in product mix; the continued impact of tariffs or a global trade war on Varex’s products and customer purchasing patterns; economic and political conditions globally or regionally, including any impact due to armed conflicts (such as the recent conflict between Russia and Ukraine as well as governmental sanctions imposed in response); 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-K for the fiscal year 2022. 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

 

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