Varex Imaging Corporation · NASDAQ:VREX
Varex Imaging — Investor Presentation (January 2018)
21 slides from Varex Imaging's investor presentation, Jan 11, 2018
Slide 1: A World Leader in Imaging Components
A World Leader in Imaging Components W VAREX IMAGING
Slide 2: Forward-Looking Statements
| Forward-Looking Statements is puceten contains “forward-looking” statements within the meaning of the Private Securities Li others, statements concerning industry cutlaok and information relating to Varex Imaging corporation" AG meres financial result , future tax rates, mpany’s products; the comp
Slide 3: Who We Are
WHO WE ARE Our mission at Varex Imaging is to be the world’s leader in imaging components HQ in Salt Lake City, : : : : USA through the delivery of high quality products that enable our customers’ success X-ray Imaging Innovators Efficient Manufacturers Sco bis 250+ patents >25,000 X-ray Tubes/year
Slide 4: Two Primary Markets
Two Primary Markets Medical We partner with medical, dental, and veterinary OEMs to help bring their products to market faster with our imaging components and technology. es ftware & w bles & interconnects « collimators Industrial Varex Imaging partners with many system integrators on the industrial
Slide 5: How We Win in Medical
How We Win in \ | Medical X — Pioneers in digital detectors Innovation leaders in CT Market Trends Broad product portfolio y — China healthcare expansion, e.g., CT Manufacturing scale — Portability and improved workflow Subsystem solutions for . — Increasing global adoption of digital technology spe
Slide 6: How We Win in Industrial & Security
Market Trends — New requirements for material discrimination and throughput A for airport baggage screening are expanding the use of CT How We Win in Industrial — New applications for the use of X-ray imaging to drive 6 productivity it in non-destructive testing and inspection in & Security manufact
Slide 7: FY 2017 Highlights
FY 2017 Highlights WV REX GING Revenues +13% to $698M +3% from organic business; +10% from acquisition that closed in May 2017 EPS of $1.36; Adjusted EPS* of $1.80 Cash from operations of $75M; FCF of $55M presentation in append nd ix of this € F e's Completed spin-off January 2017 VREX: $25.00 1/30
Slide 8: FY18 Outlook
FY18 Outlook Full year of acquired imaging business US reimbursement changes favor digital detectors over analog China CT OEMs transition from development to production New developments in airport security technologies Expand the portfolio with CT subsystems, collimators, CMOS Impact from Tax Law Ch
Slide 9: Growth Driver: Deep Customer Relationships
Growth Driver: Deep Customer Relationships Early engagement in customers’ Product Development Cycle Continuous Replacement Cycles due to product end of life and/or technology advances Engaged in several projects with customers at any time; in various stages of development cycle and in multiple modal
Slide 10: Growth Driver: China's Healthcare Reform Initiatives
Growth Driver: China’s Healthcare Reform Initiatives Government focused on improving delivery of healthcare services including imaging systems * Started with general radiographic imaging + Transitioning to expansion of CT as a modality of choice; estimate of un-met need for 25,000 new CT systems ver
Slide 11: Growth Driver: Changing Flat Panel Detector Landscape
Growth Driver: Varex well positioned to meet growing demand with Changing Flat Panel Detector Landscape |[BRRRaicieenmmnmeccacace mec (A-Si and CMOS) Shipped over 175,000 digital detectors Market trends driving digital adoption Increasing global adoption of digital detectors driven by + Legislative
Slide 12: Consolidation
Consolidation Completed PerkinElmer Imaging Business acquisition grew digital Pie in detector revenues by 55% to -$400M Acquisition Crawiin past Opportunities: OEM divestitures, detector manufacturers resulting in in revenue growth - - Portfolio Expansion MeVis acquisition expanded portfolio into im
Slide 13: Investment Highlights
Investment Highlights © Global leader in Ea | X-ray imaging components € Growing global markets US Deep relationships with leading OEMs ell positioned in $4B addressable rise Gare ae 10B rial component mi ive portfolio in both Average customer relationship’ rmedtealaae industrial; global reach: beyo
Slide 14: IMAGING
W IMAGING
Slide 15: Four Solution Lines
Four Solution Lines X-Ray Sources ~ 45% revenue Medical X-Ray tubes Industrial X-Ray Tubes Linear Accelerators Digital Detectors ~ 45% revenue Radiographic detectors Dynamic flat panel detectors Industrial detectors (Connect & Control ~ 5% revenue High-voltage cables & connectors Collimators AECs Bu
Slide 16: Experienced Leadership
Experienced Leadership Sunny Sanyal Clarence Verhoef CFO 76% of employee: in R 27 years 35 years and production i T T T Say lessee team with Brian Giambattista Mark Jonaitis Joel Nijenhuis Marcus Kirchhoff e ars, GM / Digital GM / X-ray GM / Connect & S$ ect ‘e Saal in Detectors Sources Control heal
Slide 17: Capital Structure
Capital Structure Year end FY17 (3 ee gis sos S88 EA Ls jas 206 ©3156 4s 1017, 2a17_ 30177 Cash conversion ratio for FY17 was 111% Cash conversion ratio for FY16 was 66% of Fund: Payment to Varian. ‘Acquisition of PE Imaging Business ‘= Credit Facility Fees = Working Capital m Available Balance Cred
Slide 18: Annual Financial Highlights - Adjusted
Annual Financial Highlights - Adjusted Fiscal Year Fiscal Year Fiscal Year mons 2015 2016 2017 Reverses ledical $ 534 84% $ 506 82% $ 557 80% nau 98 16% 114 18% 141 20% Total revenues S632 $620 S698 “Gross Margin Medical $ 207 $ 196 79% $ 194 76% Industrial 44 52 21% 60 24% Total gross margin $251 4
Slide 19: Quarterly Performance - Adjusted
Quarterly Performance - Adjusted Tarmcann coo Sam) a a a a A Revenves Mosca! 126 HHS 123 HS 59 HS 1d THIS IT HHS UST IHS OKT TORS I dust 42 16h Seas oa | 287 tek “eal roar 168 98 iia wai i574 ie i704 2167 “Gross Margin Mees! ee ee ee ee eT) 532 um 8S Industral no 45% 125 as 109 sez 4m | 17 wox 130 M
Slide 20: Reconciliation between GAAP and Adjusted Financial Measures
The ont Ended Year Ended {rrlions, excep per share amounts) September 29,2017 Sopterber 23 276 Soplonber 2017 — Septarber 7, 2076 ‘GROSS WARGIN RECONCILIATION ie even 3 ZT $ Tats was a Reconciliation Gen 3 78 § 2 $§ 2535 $ 2484 fmorzatn of tangible ssels 2a 06 33 18 Purchase price eccouning austment
Slide 21: Discussion of Adjusted Non-GAAP Financial Measures
Discussion of Adjusted Non-GAAP Financial Measures ‘This presenta res er US. generally accepted accounting dead providing ‘a reconciti hi dance We utilize a numberof it ing the use of the acustd cial spplemental data that al ro investors and others in ‘Adjustments to GAAP measures inclue the followi