Varex Imaging Corporation · NASDAQ:VREX

Varex Imaging — Q2 2023 Earnings Presentation

23 slides from Varex Imaging's earnings presentation, May 2, 2023

1. Slide 1: Making the Invisible Visible: Q2 FY23 Earnings Presentation

   Making the Invisible Visible Q2 FY23 Earnings Presentation May 2, 2023 5/2/2023 1

2. Slide 2: Forward Looking Statements / Non-GAAP Measures

   Forward Looking Forward Looking Statements Statements / Non-GAAP Measures Certain statements in this supplement contain “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. Forward looking statements incl

3. Slide 3: Q2 FY23 Results

   Q2 FY23 Results Non-GAAP Non-GAAP Cash, Cash Equiv., Revenue Gross Margin* EPS* & Mkt. Sec.** $228M $122M 33% $0.26 ➢ Stronger Industrial demand than anticipated ➢ Medical demand in line with expectations ➢ Supply and demand in balance ➢ Solid cash flow from operations * Non-GAAP. For a reconciliati

4. Slide 4: Q2 FY23 Sequential Performance

   Q2 FY23 Sequential Performance Revenue Gross Margin - Non-GAAP Adjusted EBITDA 32% 33% $228 $30 $25 $206 +11% +100bps +19% Q1FY23 Q2FY23 Q1FY23 Q2FY23 Q1FY23 Q2FY23 Diluted EPS - Non-GAAP Cash, Cash Equiv. & Mkt. Sec. $122 $108 $0.26 $0.21 +24% +13% Q1FY23 Q2FY23 Q1FY23 Q2FY23 Note: $millions except

5. Slide 5: Q2 FY23 Sales Performance

   Q2 FY23 Sales Performance1 CT Mammography Radiography & Fluoroscopy Others Oncology Industrial Dental 1 – Sales performance is Q2FY23 sales compared to fiv e quarter av erage trend 5/2/2023 5

6. Slide 6: Photon Counting Projects

   Photon Counting Projects Medical Industrial Photon Counting CT Photon Counting Inspection • Project Partners • Project Partners • Varex Imaging • Varex Imaging • Schleifring • Multiple sponsors • Munich Institute of Biomedical Engineering (MIBE) • PARSEC project – Parcel & letter security for postal

7. Slide 7: Q2 FY23 Revenue Details

   Q2 FY23 Revenue Details Segment Mix Geographic Mix ($ in millions) ($ in millions) $54 $68 $91 $174 $70 Medical Industrial Americas EMEA APAC Revenue, $M Q2 23 Q1 23 Q4 22 Q3 22 Q2 22 Revenue, $M Q2 23 Q1 231 Q4 22 Q3 22 Q2 22 Medical 174 160 181 167 170 Americas 68 67 80 64 68 Industrial 54 46 50 4

8. Slide 8: Quarterly Results - GAAP

   Quarterly Results - GAAP $ in Millions, except per share data Q2 FY23 Q1 FY23 Q2 FY22 Revenue $228 $206 $215 Gross Margin 32% 31% 33% $57 $50 $44 Operating Expenses 25% 24% 21% $16 $13 $27 Operating Income 7% 6% 12% Net Earnings $4 $3 $8 EPS, diluted $0.10 $0.08 $0.18 Avg. shares, diluted 40.5 40.6

9. Slide 9: Quarterly results – Non-GAAP

   Quarterly results – Non-GAAP* $ in Millions, except per share data Q2 FY23 Q1 FY23 Q2 FY22 Revenue $228 $206 $215 Gross Margin (Non-GAAP) 33% 32% 34% $52 $47 $41 Operating Expenses (Non-GAAP) 23% 23% 19% $23 $18 $32 Operating Income (Non-GAAP) 10% 9% 15% Net Earnings (Non-GAAP) $11 $8 $15 EPS, dilut

10. Slide 10: Select Balance Sheet Data

    Select Balance Sheet Data $ in Millions Q2 FY23 Q1 FY23 Q2 FY22 Assets Cash, Cash Equiv., M kt. Sec. & CDs $122 $108 $115 Accounts Receivable, net $160 $158 $154 Inventories $311 $320 $270 Total Assets $1,191 $1,181 $1,143 Liabilities Accounts Payable $74 $86 $79 Debt, net $443 $443 $411 Total Liabi

11. Slide 11: Select Debt and Cash Flow Data

    Select Debt and Cash Flow Data $ in Millions Q2 FY23 Q1 FY23 Q2 FY22 Debt Gross Debt $449 $450 $452 (Ratings: Moody’s B2 / S&P B+) Net Debt1 $327 $342 $337 Adjusted EBITDA2 Adjusted EBITDA $30 $25 $38 Cash Performance Cash Flow from Operations $27 ($4) ($8) Capital Expenditures ($6) ($6) ($4) Cash I

12. Slide 12: Outlook Q3 FY23

    Outlook Q3 FY23 Guidance Non-GAAP Revenues, $M $220 - $240 EPS Per Diluted Share $0.20 - $0.40 Assumptions Non-GAAP Gross Margin 32% - 33% Operating Expenses, $M $47 - $48 5/2/2023 12

13. Slide 13: Q&A

    Making the Invisible Visible Q&A 5/2/2023 13

14. Slide 14: Non-GAAP Reconciliation

    Making the Invisible Visible Non – GAAP Reconciliation 5/2/2023 14

15. Slide 15: Reconciliation between GAAP and Non-GAAP Financial measures (unaudited)

    Reconciliation between GAAP and Non-GAAP Financial measures (unaudited) Three Months Ended Six Months Ended (In millions, except per share amounts) March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 GROSS PROFIT RECONCILIATION Revenues, net $ 228.2 $ 214.7 $ 433.8 $ 413.5 Gross profit $ 72.7

16. Slide 16: Reconciliation between GAAP and Non-GAAP Financial measures (unaudited)

    Reconciliation between GAAP and Non-GAAP Financial measures (unaudited) Three Months Ended Six Months Ended (In millions, except per share amounts) March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 SELLING, GENERAL AND ADMINISTRATIVE EXPENSE RECONCILIATION Selling, general and administrative

17. Slide 17: Reconciliation between GAAP and Non-GAAP Financial measures (unaudited)

    Reconciliation between GAAP and Non-GAAP Financial measures (unaudited) Three Months Ended Six Months Ended (In millions, except per share amounts) March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 OPERATING INCOME RECONCILIATION Operating income $ 15.6 $ 26.6 $ 28.6 $ 40.6 Amortization of i

18. Slide 18: Reconciliation between GAAP and Non-GAAP Financial measures (unaudited)

    Reconciliation between GAAP and Non-GAAP Financial measures (unaudited) Three Months Ended Six Months Ended March 31, (In millions, except per share amounts) 2023 April 1, 2022 March 31, 2023 April 1, 2022 INCOME (LOSS) BEFORE TAXES RECONCILIATION Income (loss) before taxes $ 7.8 $ 13.6 $ 13.2 $ 16.

19. Slide 19: Reconciliation between GAAP and Non-GAAP Financial measures (unaudited)

    Reconciliation between GAAP and Non-GAAP Financial measures (unaudited) Three Months Ended Six Months Ended (In millions, except per share amounts) March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING RECONCILIATION GAAP weighted average common shares

20. Slide 20: Effect of Convertible Note Hedge and Warrants on Non-GAAP Diluted Share count

    Effect of Convertible Note Hedge and Warrants on Non-GAAP Diluted Share count Impact of Warrants and Convertible Note Hedge at Various Share Prices Shares added back for non- GAAP related to convertible Impact of Warrants on GAAP note hedge Share Price* Diluted Shares Non-GAAP Diluted Shares $20.00

21. Slide 21: Illustrative Impact of ASU 2020-06

    Illustrative Impact of ASU 2020-06 Quarterly ASU 2020-06 Share Count Illustration GAAP NON-GAAP* Net Income before Incremental Dilutive Net Income before effect of Add-back of After-tax Shares for EPS effect of Add-back of After-tax Incremental Dilutive Convertible Notes ($M) Interest Expense Calcul

22. Slide 22: Discussion of Non – GAAP Financial Measures

    Discussion of Non – GAAP Financial Measures This presentatio n includes non-GAAP financial measures derived from our Condensed Consolidated Statements of Operations. These m easures are not presented in accordance with, nor are they a substitute for U.S. generally accepted accounting principles, or

23. Slide 23: Making the Invisible Visible

    Making the Invisible Visible

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