Varex Imaging Corporation · NASDAQ:VREX
Varex Imaging — Q1 FY25 Earnings Presentation
25 slides from Varex Imaging's earnings presentation, Feb 6, 2025
Slide 1: Making the Invisible Visible: Q1 FY25 Earnings Presentation
Making the Invisible Visible Q1 FY25 Earnings Presentation February 6, 2025 2/6/2025 1
Slide 2: Forward Looking Statements / Non-GAAP Measures
Forward Looking Statements / Non-GAAP Measures Forward Looking Statements This supplement contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning financial results; earnings guidance; product demand; expected future fina
Slide 3: Q1 FY25 Results
Q1 FY25 Results Non-GAAP Non-GAAP Cash, Cash Equiv., Revenue Gross Margin1 EPS1 & Mkt. Sec.2 $200M $219M 35% $0.07 ➢ Solid demand in the quarter across both segments ➢ Headwinds from inventory destocking & China subsiding ➢ Revenue potential not fully realized in the quarter ➢ Gross margin benefited
Slide 4: Q1 FY25 Year-over-Year Performance
Q1 FY25 Year-over-Year Performance Revenue Gross Margin - Non-GAAP Adjusted EBITDA 35% $200 $24 $190 $19 31% +5% +350bps +26% Q1FY24 Q1FY25 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Diluted EPS - Non-GAAP Cash, Cash Equiv. & Mkt. Sec.* $219 $195 $0.07 $0.06 +17% +12% Q1FY24 Q1FY25 Q1FY24 Q1FY25 Note: $millions ex
Slide 5: Q1 FY25 Sales Performance
Q1 FY25 Sales Performance1 CT Mammography Radiography & Fluoroscopy Others Oncology Industrial Dental 1Sales performance is Q1FY25 sales compared to five quarter average trend 2/6/2025 5
Slide 6: Varex's Portfolio of Cargo and Vehicle Inspection Systems
Varex’s Portfolio of Cargo and Vehicle Inspection Systems Solid interest and adoption in newly launched security screening systems business Mobile System Gantry System VXM-6 VXG-6 Mobile Cargo and Gantry Cargo and Vehicle Inspection Vehicle Inspection System System Portal System Car Scanner VXP-6 VX
Slide 7: Total Addressable Market Size: Security and Cargo Inspection Systems Update
Security and Cargo Inspection Systems Update Varex’s Entry into Large Established and Growing Global Security Systems Market • >$1B TAM expected to grow at 7% CAGR • Leveraging imaging component over next 5 years expertise as a global leader in linear accelerator and high • Demand driven by global s
Slide 8: FY24 Revenue Splits
FY24 Revenue Splits Medical Industrial FY2024 Revenue by Modality FY2024 Revenue by Vertical Other Sterilization Mammography Automotive Power Gen Def. / Nat'l Dental Labs CT Oncology Aerospace Security $582M Oil & Gas $229M Fluoroscopy Gen. Mfg./ Other* Radiography FY2024 Revenue by Geography FY2024
Slide 9: Q1 FY25 Revenue Details
Q1 FY25 Revenue Details Segment Mix Geographic Mix ($ in millions) ($ in millions) $55 $75 $65 $145 $60 Medical Industrial Americas EMEA APAC Revenue, $M Q1 25 Q4 24 Q3 24 Q2 24 Q1 24 Revenue, $M Q1 25 Q4 24 Q3 24 Q2 24 Q1 24 Medical 145 144 149 149 140 Americas 65 66 70 68 62 Industrial 55 61 60 57
Slide 10: Quarterly Results - GAAP
Quarterly Results - GAAP $ in Millions, except per share data Q1 FY25 Q4 FY24 Q1 FY24 Revenue $200 $206 $190 Gross Margin 34% 33% 30% $57 $56 $53 Operating Expenses 29% 27% 28% $11 $11 $4 Operating Income 6% 5% 2% Net Earnings ($0) ($50) ($1) EPS, diluted ($0.01) ($1.22) ($0.01) Avg. shares, diluted
Slide 11: Quarterly Results – Non-GAAP
Quarterly Results – Non-GAAP1 $ in Millions, except per share data Q1 FY25 Q4 FY24 Q1 FY24 Revenue $200 $206 $190 Gross Margin (Non-GAAP) 35% 33% 31% $55 $53 $49 Operating Expenses (Non-GAAP) 27% 26% 26% $14 $15 $10 Operating Income (Non-GAAP) 7% 7% 5% Net Earnings (Non-GAAP) $3 $8 $2 EPS, diluted (
Slide 12: Select Balance Sheet Data
Select Balance Sheet Data $ in Millions Q1 FY25 Q4 FY24 Q1 FY24 Assets Cash, Cash Equiv., & Mkt. Sec.1 $219 $213 $195 Accounts Receivable, net $138 $158 $140 Inventories, net $280 $265 $290 Total Assets $1,333 $1,217 $1,242 Liabilities Accounts Payable $66 $59 $74 Total Debt, net $567 $443 $443 Tota
Slide 13: Select Debt and Cash Flow Statement Data
Select Debt and Cash Flow Statement Data $ in Millions Q1 FY25 Q4 FY24 Q1 FY24 Debt Gross Debt1 $571 $447 $448 (Ratings: Moody’s B2 / S&P BB-) Net Debt2 $228 $234 $253 Adjusted EBITDA3 Adjusted EBITDA $24 $23 $19 Adjusted EBITDA (TTM) $94 $89 $125 Net debt leverage (TTM) 2.4x 2.6x 2.0x Cash Flow Sta
Slide 14: Guidance Q2 FY25
Guidance Q2 FY25 Revenue Non-GAAP EPS, diluted $200 - $215M $0.05 - $0.20 Gross Margin: 32% – 34% Operating Expense: ~$52M Assumptions Interest & Other Expense, net: ($9M) – ($10M) Tax rate: ~22% Share count, diluted: ~41M shares 2/6/2025 14
Slide 15: Q&A
Making the Invisible Visible Q&A 2/6/2025 15
Slide 16: Non-GAAP Reconciliation
Making the Invisible Visible Non – GAAP Reconciliation 2/6/2025 16
Slide 17: Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited)
Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited) Three Months Ended (In millions, except per share amounts) January 3, 2025 December 29, 2023 GROSS PROFIT RECONCILIATION Revenues, net $ 199.8 $ 190.0 Gross profit 68.5 57.1 Amortization of intangible assets 0.5 1.8 Non-GAAP gro
Slide 18: Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited)
Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited) Three Months Ended (In millions, except per share amounts) January 3, 2025 December 29, 2023 SELLING, GENERAL AND ADMINISTRATIVE EXPENSE RECONCILIATION Selling, general, and administrative $ 33.8 $ 32.4 Amortization of intangibl
Slide 19: Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited)
Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited) Three Months Ended (In millions, except per share amounts) January 3, 2025 December 29, 2023 OPERATING INCOME RECONCILIATION Operating income $ 11.2 $ 4.2 Amortization of intangible assets (includes amortization impacts to cost
Slide 20: Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited)
Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited) Three Months Ended (In millions, except per share amounts) January 3, 2025 December 29, 2023 INCOME (LOSS) BEFORE TAXES RECONCILIATION Income (loss) before taxes $ 2.5 $ (0.6) Total operating earnings adjustments 3.2 5.6 Gain on
Slide 21: Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited)
Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited) Three Months Ended (In millions, except per share amounts) January 3, 2025 December 29, 2023 ADJUSTED EBITDA RECONCILIATION Net loss attributable to Varex $ (0.3) $ (0.5) Interest expense 7.9 7.3 Income tax expense (benefit) 2.6
Slide 22: 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 $20.00
Slide 23: Illustrative Impact of ASU 2020-06
Illustrative Impact of ASU 2020-06 Quarterly ASU 2020-06 Share Count Illustration GAAP NON-GAAP* Net Income before Incremental Dilutive Net Income before effect of Add-back of After-tax Shares for EPS effect of Add-back of After-tax Incremental Dilutive Convertible Notes ($M) Interest Expense Calcul
Slide 24: Discussion of Non–GAAP Financial Measures
Discussion of Non–GAAP Financial Measures This presentation includes non-GAAP financial measures derived from our Condensed Consolidated Statements of Operations. These measures are not presented in accordance with, nor are they a substitute for U.S. generally accepted accounting principles, or GAAP
Slide 25: Making the Invisible Visible
Making the Invisible Visible