Slide 1: Making the Invisible Visible - Q2 FY24 Earnings Presentation
Making the Invisible Visible™ Q2 FY24 Earnings Presentation May 2, 2024 5/2/2024 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 revenue and earnings guidance; supply chain and logistics challenges; cost
Slide 3: Q2 FY24 Results
Q2 FY24 Results Non-GAAP Non-GAAP Cash, Cash Equiv., Revenue Gross Margin1 EPS1 & Mkt. Sec.2 $206M $190M 33% $0.16 Q2 sales in line with our expectations China business softer than expected Operating expense higher than forecast 1Non-GAAP. For a reconciliation to the most directly comparable G
Slide 4: Q2 FY24 Year-over-Year Performance
Q2 FY24 Year-over-Year Performance Revenue Gross Margin - Non-GAAP Adjusted EBITDA $228 33% 33% $30 $206 $25 -10% Flat -18% Q2FY23 Q2FY24 Q2FY23 Q2FY24 Q2FY23 Q2FY24 Diluted EPS - Non-GAAP Cash, Cash Equiv. & Mkt. $0.26 Sec. $190 $0.16 $122 -38% +56% Q2FY23 Q2FY24 Q2FY23 Q2FY24 Note: $millions excep
Slide 5: Q2 FY24 Sales Performance
Q2 FY24 Sales Performance1 CT Mammography Radiography & Fluoroscopy Others Oncology Industrial Dental 1Sales performance is Q2FY24 sales compared to five quarter average trend 5/2/2024 5
Slide 6: Broad Photon Counting Portfolio
Broad Photon Counting Portfolio Segment Application Highlights • Low-dose, high speed • Fully body scan • Leading edge spectral imaging Medical • Panoramic dental imaging • Single and/or dual energy scanning applications • High-performance • Food inspection • Ultra fast, ideal for line scan/high-spe
Slide 7: Potential Photon Counting Revenue Growth
Potential Photon Counting Revenue Growth ~$40M+ ~$150M+ Potential photon counting ~$100M+ revenue drivers: • Photon counting CT • New and further penetration into Medical modalities • Expanded and new ~$20M Industrial applications FY2023A Medical Industrial FY2029F Growth Growth Medical Industrial 5
Slide 8: Q2 FY24 Revenue Details
Q2 FY24 Revenue Details Segment Mix Geographic Mix ($ in millions) ($ in millions) $57 $66 $68 $149 $72 Medical Industrial Americas EMEA APAC Revenue, $M Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 Revenue, $M Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 Medical 149 140 164 175 174 Americas 68 62 74 73 68 Industrial 57 50 64 57
Slide 9: Quarterly Results - GAAP
Quarterly Results - GAAP $ in Millions, except per share data Q2 FY24 Q1 FY24 Q2 FY23 Revenue $206 $190 $228 Gross Margin 32% 30% 32% $58 $53 $57 Operating Expenses 28% 28% 25% $8 $4 $16 Operating Income 4% 2% 7% Net Earnings1 $1 ($1) $4 EPS, diluted $0.03 ($0.01) $0.10 Avg. shares, diluted 41.2 40.
Slide 10: Quarterly Results – Non-GAAP
Quarterly results – Non-GAAP1 $ in Millions, except per share data Q2 FY24 Q1 FY24 Q2 FY23 Revenue $206 $190 $228 Gross Margin (Non-GAAP) 33% 31% 33% $54 $49 $52 Operating Expenses (Non-GAAP) 26% 26% 23% $13 $10 $23 Operating Income (Non-GAAP) 6% 5% 10% Net Earnings (Non-GAAP)2 $7 $2 $11 EPS, dilute
Slide 11: Select Balance Sheet Data
Select Balance Sheet Data $ in Millions Q2 FY24 Q1 FY24 Q2 FY23 Assets Cash, Cash Equiv., Mkt. Sec. & CDs $190 $195 $122 Accounts Receivable, net $152 $140 $160 Inventories $286 $290 $311 Total Assets $1,252 $1,242 $1,191 Liabilities Accounts Payable $69 $74 $74 Total Debt, net $443 $443 $443 Total
Slide 12: Select Debt and Cash Flow Statement Data
Select Debt and Cash Flow Statement Data $ in Millions Q2 FY24 Q1 FY24 Q2 FY23 Debt Gross Debt1 $447 $448 $449 (Ratings: Moody’s B2 / S&P BB-) Net Debt2 $257 $253 $327 Adjusted EBITDA3 Adjusted EBITDA $25 $19 $30 Adjusted EBITDA (TTM) $120 $125 $127 Net debt leverage (TTM) 2.1x 2.0x 2.6x Cash Flow S
Slide 13: Outlook Q3 FY24
Outlook Q3 FY24 Guidance Non-GAAP Revenues, $M $200 - $220 EPS Per Diluted Share $0.05 - $0.25 Assumptions Non-GAAP Gross Margin 33% - 34% Operating Expenses, $M $52 - $53 5/2/2024 13
Slide 14: Q&A
Making the Invisible Visible™ Q&A 5/2/2024 14
Slide 15: Non-GAAP Reconciliation
Making the Invisible Visible™ Non – GAAP Reconciliation 5/2/2024 15
Slide 16: Reconciliation between GAAP and Non-GAAP Financial measures
Reconciliation between GAAP and Non-GAAP Financial measures (unaudited) Three Months Ended Six Months Ended (In millions, except per share amounts) March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023 GROSS PROFIT RECONCILIATION Revenues, net $ 206.2 $ 228.2 $ 396.2 $ 433.8 Gross profit 65.8
Slide 17: Reconciliation between GAAP and Non-GAAP Financial measures
Reconciliation between GAAP and Non-GAAP Financial measures (unaudited) Three Months Ended Six Months Ended (In millions, except per share amounts) March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023 SELLING, GENERAL AND ADMINISTRATIVE EXPENSE RECONCILIATION Selling, general, and administrat
Slide 18: Reconciliation between GAAP and Non-GAAP Financial measures
Reconciliation between GAAP and Non-GAAP Financial measures (unaudited) Three Months Ended Six Months Ended (In millions, except per share amounts) March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023 OPERATING INCOME RECONCILIATION Operating income $ 7.7 $ 15.6 $ 11.9 $ 28.6 Amortization of
Slide 19: Reconciliation between GAAP and Non-GAAP Financial measures
Reconciliation between GAAP and Non-GAAP Financial measures (unaudited) Three Months Ended Six Months Ended (In millions, except per share amounts) March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023 INCOME (LOSS) BEFORE TAXES RECONCILIATION Income before taxes $ 2.3 $ 7.8 $ 1.7 $ 13.2 Total
Slide 20: Reconciliation between GAAP and Non-GAAP Financial measures
Reconciliation between GAAP and Non-GAAP Financial measures (unaudited) Three Months Ended Six Months Ended (In millions, except per share amounts) March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023 ADJUSTED EBITDA RECONCILIATION Net income attributable to Varex $ 1.4 $ 4.1 $ 0.9 $ 7.2 Inte
Slide 21: 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 $20.00
Slide 22: Illustrative Impact of ASU 2020-06
Illustrative Impact of ASU 2020-06 Quarterly ASU 2020-06 Share Count Illustration GAAP NON-GAAP* Net Income before Incremental Dilutive Net Income before effect of Add-back of After-tax Shares for EPS effect of Add-back of After-tax Incremental Dilutive Convertible Notes ($M) Interest Expense Calcul
Slide 23: 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 GA
Slide 24: Making the Invisible Visible
Making the Invisible Visible™