Varex Announces Financial Results for Third Quarter of Fiscal Year 2020

About this update from Varex Imaging Corporation

[{"type":"text","content":" SALT LAKE CITY--(BUSINESS WIRE)--\nVarex Imaging Corporation (Nasdaq: VREX) today announced its unaudited financial results for the third quarter of fiscal year 2020.\n\n\n3QFY20 Summary\n\n\n\nRevenues were $171 million\n\n\nGAAP gross margin was 15% | non-GAAP gross margin* was 26%\n\n\nGAAP operating earnings margin was (15.7)% | non-GAAP operating earnings margin* was (0.7)%\n\n\nGAAP net loss was ($0.73) per diluted share | non-GAAP net loss* was ($0.20) per diluted share\n\n\n\n“During the third quarter of fiscal year 2020, the impact of COVID-19 resulted in declining sales and a sizeable unfavorable shift in product mix that reduced our revenues, margins and profitability. While sales of CT tubes and other radiographic products used in COVID-19 related diagnostic imaging applications increased significantly, total revenues declined 13% from the year ago quarter due to sales declines in other products, such as those for oncology, dental and industrial applications,” said Sunny Sanyal, Chief Executive Officer of Varex.\n\n\nIn response to the decline in revenues and gross margin, Varex has taken a number of actions that are expected to reduce annual operating costs by more than $25 million, including:\n\n\n\nAccelerating the previously announced closure of its Santa Clara facility, with most assembly operations shut down in June.\n\n\nDiscontinuing certain low margin, low demand products resulting in a $16 million pretax non-cash charge during the third quarter of fiscal year 2020 for the write-down of associated inventory and restructuring activity.\n\n\nDownsizing the workforce by eliminating 94 positions at the end of July, which when combined with other actions, is expected to result in an overall workforce reduction of about 10% in calendar year 2020.\n\n\nClosely managing discretionary spending and capital expenditures.\n\n\n\n“We believe that these and other actions, as well as a continued focus on pursuing productivity gains, will better position Varex when the imaging markets recover from the downturn caused by COVID-19,” said Sanyal.\n\n\nAdditional financial information is provided in the unaudited financial statements attached to this press release.\n\n\nConvertible Notes Offering\n\n\nDuring the third quarter of fiscal year 2020, Varex restructured its debt with an issuance of $200 million of 4.00% Convertible...

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