# EDGAR Filing Document

**Accession Number:** 0001681622
**File Stem:** 0001681622-26-000052
**Filing Date:** 2026-5
**Character Count:** 287654
**Document Hash:** eff5b21c44b37bfd2407a0a1bc2c62df
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001681622-26-000052.hdr.sgml**: 20260507

**ACCESSION NUMBER**: 0001681622-26-000052

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 95

**CONFORMED PERIOD OF REPORT**: 20260403

**FILED AS OF DATE**: 20260507

**DATE AS OF CHANGE**: 20260507

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Varex Imaging Corp
- **CENTRAL INDEX KEY:** 0001681622
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTRONIC COMPONENTS, NEC [3679]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 813434516
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1002

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-37860
- **FILM NUMBER:** 26953853

**BUSINESS ADDRESS:**
- **STREET 1:** 1678 S. PIONEER ROAD
- **CITY:** SALT LAKE CITY
- **STATE:** UT
- **ZIP:** 84104
- **BUSINESS PHONE:** 801-972-5000

**MAIL ADDRESS:**
- **STREET 1:** 1678 S. PIONEER ROAD
- **CITY:** SALT LAKE CITY
- **STATE:** UT
- **ZIP:** 84104

?xml version='1.0' encoding='ASCII'? var-20260403

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

____________________________________________________________

**FORM 10-Q** 

____________________________________________________________

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**<br>

**For the quarterly period ended April 3, 2026** 

**or**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**<br>

**For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to** 

**Commission File Number 001-37860** 

____________________________________________________________

![logoa37.jpg](var-20260403_g1.jpg)

**VAREX IMAGING CORPORATION** 

**(Exact name of registrant as specified in its charter)**

____________________________________________________________

---

| | |
|:---|:---|
| **Delaware** | **81-3434516** |
| **(State or other jurisdiction of**<br>**incorporation or organization)** | **(I.R.S. Employer**<br>**Identification Number)** |
| **1678 S. Pioneer Road, Salt Lake City, Utah** | **84104** |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

**(801) 972-5000** 

**(Registrant's telephone number, including area code)**

____________________________________________________________

**Securities registered pursuant to Section 12(b) of the Act:**

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock | VREX | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). &nbsp;&nbsp;&nbsp;&nbsp;Yes ☒ &nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large Accelerated filer | ☐ | Accelerated filer | ☒ |
| Non-Accelerated filer | ☐ | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |

---

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2026, there were 42.1 million shares of the registrant's common stock outstanding.

------

**VAREX IMAGING CORPORATION**

**FORM 10-Q**

**For the Quarter Ended April 3, 2026** 

**INDEX**

---

| | | |
|:---|:---|:---|
| **<u>[Part I.](#ia7d21d8b68b849839e40c0843b044805_13)</u>** | <u>[Financial Information](#ia7d21d8b68b849839e40c0843b044805_13)</u> | <u>[2](#ia7d21d8b68b849839e40c0843b044805_13)</u> |
| &nbsp;&nbsp;<u>[Item 1.](#ia7d21d8b68b849839e40c0843b044805_16)</u> | <u>[Unaudited Financial Statements](#ia7d21d8b68b849839e40c0843b044805_16)</u> | <u>[2](#ia7d21d8b68b849839e40c0843b044805_16)</u> |
| | <u>[Condensed Consolidated Statements of Operations](#ia7d21d8b68b849839e40c0843b044805_22)</u> | <u>[2](#ia7d21d8b68b849839e40c0843b044805_22)</u> |
| | <u>[Condensed Consolidated Statements of C](#ia7d21d8b68b849839e40c0843b044805_25)</u><u>[omprehensive](#ia7d21d8b68b849839e40c0843b044805_25)(Loss) Income</u> | <u>[3](#ia7d21d8b68b849839e40c0843b044805_25)</u> |
| | <u>[Condensed Consolidated Balance Sheets](#ia7d21d8b68b849839e40c0843b044805_28)</u> | <u>[4](#ia7d21d8b68b849839e40c0843b044805_28)</u> |
| | <u>[Condensed Consolidated Statements of Stockholders' Equity](#ia7d21d8b68b849839e40c0843b044805_31)</u> | <u>[5](#ia7d21d8b68b849839e40c0843b044805_31)</u> |
| | <u>[Condensed Consolidated Statements of Cash Flows](#ia7d21d8b68b849839e40c0843b044805_40)</u> | <u>[7](#ia7d21d8b68b849839e40c0843b044805_40)</u> |
| | <u>[Notes to the Condensed Consolidated Financial Statements](#ia7d21d8b68b849839e40c0843b044805_43)</u> | <u>[8](#ia7d21d8b68b849839e40c0843b044805_43)</u> |
| &nbsp;&nbsp;<u>[Item 2.](#ia7d21d8b68b849839e40c0843b044805_322)</u> | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#ia7d21d8b68b849839e40c0843b044805_322)</u> | <u>[29](#ia7d21d8b68b849839e40c0843b044805_322)</u> |
| &nbsp;&nbsp;<u>[Item 3.](#ia7d21d8b68b849839e40c0843b044805_415)</u> | <u>[Quantitative and Qualitative Disclosures About Market Risk](#ia7d21d8b68b849839e40c0843b044805_415)</u> | <u>[39](#ia7d21d8b68b849839e40c0843b044805_415)</u> |
| &nbsp;&nbsp;<u>[Item 4.](#ia7d21d8b68b849839e40c0843b044805_418)</u> | <u>[Controls and Procedures](#ia7d21d8b68b849839e40c0843b044805_418)</u> | <u>[41](#ia7d21d8b68b849839e40c0843b044805_418)</u> |
| **<u>[Part II.](#ia7d21d8b68b849839e40c0843b044805_421)</u>** | <u>[Other Information](#ia7d21d8b68b849839e40c0843b044805_421)</u> | <u>[42](#ia7d21d8b68b849839e40c0843b044805_421)</u> |
| &nbsp;&nbsp;<u>[Item 1.](#ia7d21d8b68b849839e40c0843b044805_427)</u> | <u>[Legal Proceedings](#ia7d21d8b68b849839e40c0843b044805_427)</u> | <u>[42](#ia7d21d8b68b849839e40c0843b044805_427)</u> |
| &nbsp;&nbsp;<u>[Item 1A.](#ia7d21d8b68b849839e40c0843b044805_433)</u> | <u>[Risk Factors](#ia7d21d8b68b849839e40c0843b044805_433)</u> | <u>[42](#ia7d21d8b68b849839e40c0843b044805_433)</u> |
| &nbsp;&nbsp;<u>[Item 2.](#ia7d21d8b68b849839e40c0843b044805_445)</u> | <u>[Unregistered Sales of Equity Securities and Use of Proceeds](#ia7d21d8b68b849839e40c0843b044805_445)</u> | <u>[56](#ia7d21d8b68b849839e40c0843b044805_445)</u> |
| &nbsp;&nbsp;<u>[Item 3.](#ia7d21d8b68b849839e40c0843b044805_448)</u> | <u>[Defaults Upon Senior Securities](#ia7d21d8b68b849839e40c0843b044805_448)</u> | <u>[56](#ia7d21d8b68b849839e40c0843b044805_448)</u> |
| &nbsp;&nbsp;<u>[Item 4.](#ia7d21d8b68b849839e40c0843b044805_451)</u> | <u>[Mine Safety Disclosures](#ia7d21d8b68b849839e40c0843b044805_451)</u> | <u>[57](#ia7d21d8b68b849839e40c0843b044805_451)</u> |
| &nbsp;&nbsp;<u>[Item 5.](#ia7d21d8b68b849839e40c0843b044805_454)</u> | <u>[Other Information](#ia7d21d8b68b849839e40c0843b044805_454)</u> | <u>[57](#ia7d21d8b68b849839e40c0843b044805_454)</u> |
| &nbsp;&nbsp;<u>[Item 6.](#ia7d21d8b68b849839e40c0843b044805_460)</u> | <u>[Exhibits](#ia7d21d8b68b849839e40c0843b044805_460)</u> | <u>[58](#ia7d21d8b68b849839e40c0843b044805_460)</u> |
| <u>[Signatures](#ia7d21d8b68b849839e40c0843b044805_463)</u> | <u>[Signatures](#ia7d21d8b68b849839e40c0843b044805_463)</u> | <u>[59](#ia7d21d8b68b849839e40c0843b044805_463)</u> |

---

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**PART I**

**FINANCIAL INFORMATION**

**Item 1. Unaudited Financial Statements**

**VAREX IMAGING CORPORATION**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(In millions, except per share amounts)** | **April 3, 2026** | **April 4, 2025** | **April 3, 2026** | **April 4, 2025** |
| Revenues, net | $216 | $212.9 | $425.6 | $412.7 |
| Cost of revenues | 143.4 | 136.2 | 283.2 | 267.5 |
| &nbsp;&nbsp;Gross profit | 72.6 | 76.7 | 142.4 | 145.2 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;Research and development | 22.2 | 22.0 | 43.9 | 45.5 |
| &nbsp;&nbsp;Selling, general, and administrative | 36.0 | 32.6 | 68.7 | 66.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 58.2 | 54.6 | 112.6 | 111.9 |
| Operating income | 14.4 | 22.1 | 29.8 | 33.3 |
| &nbsp;&nbsp;Interest income | 0.4 | 2.9 | 1.0 | 5.0 |
| &nbsp;&nbsp;Interest expense | (17.2) | (10.2) | (25.1) | (18.2) |
| &nbsp;&nbsp;Other expense, net | (4.0) | (4.0) | (8.3) | (6.8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other expense, net | (20.8) | (11.3) | (32.4) | (20.0) |
| (Loss) income before taxes | (6.4) | 10.8 | (2.6) | 13.3 |
| &nbsp;&nbsp;Income tax expense | 1.6 | 3.7 | 3.0 | 6.3 |
| Net (loss) income | (8.0) | 7.1 | (5.6) | 7.0 |
| &nbsp;&nbsp;Less: Net income attributable to noncontrolling interests | 0.1 | 0.2 | 0.2 | 0.4 |
| Net (loss) income attributable to Varex | $(8.1) | $6.9 | $(5.8) | $6.6 |
| **Net (loss) income per common share attributable to Varex** |  |  |  |  |
| Basic | $(0.19) | $0.17 | $(0.14) | $0.16 |
| Diluted | $(0.19) | $0.17 | $(0.14) | $0.16 |
| **Weighted average common shares outstanding** |  |  |  |  |
| Basic | 42.0 | 41.4 | 41.9 | 41.2 |
| Diluted | 42.0 | 51.2 | 41.9 | 41.6 |

---

*See accompanying Notes to the Condensed Consolidated Financial Statements.*

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**VAREX IMAGING CORPORATION**

**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **April 3, 2026** | **April 4, 2025** |
| Net (loss) income | $(8.0) | $7.1 | $(5.6) | $7.0 |
| Other comprehensive (loss) income |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss on interest rate swap contracts | (0.6) |  | (0.6) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | 0.5 | (2.1) | 0.2 | 0.5 |
| Total comprehensive (loss) income | (8.1) | 5.0 | (6.0) | 7.5 |
| &nbsp;&nbsp;&nbsp;Less: Comprehensive income attributable to noncontrolling interests | 0.1 | 0.2 | 0.2 | 0.4 |
| Comprehensive (loss) income attributable to Varex | $(8.2) | $4.8 | $(6.2) | $7.1 |

---

*See accompanying Notes to the Condensed Consolidated Financial Statements.*

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**VAREX IMAGING CORPORATION**

**CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)**

---

| | | |
|:---|:---|:---|
| **(In millions, except share and per share amounts)** | **April 3, 2026** | **October 3, 2025** |
| **Assets** | | |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $85.3 | $145.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketable securities | 3.0 | 10.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for credit losses of $1.7 million and $2.1 million at April 3, 2026 and October 3, 2025, respectively | 148.1 | 156.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories, net | 346.7 | 299.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 42.5 | 30.7 |
| Total current assets | 625.6 | 641.8 |
| Property, plant, and equipment, net | 163.4 | 157.8 |
| Goodwill | 197.8 | 198.4 |
| Intangible assets, net | 13.2 | 14.0 |
| Investments in privately-held companies | 20.0 | 24.5 |
| Deferred tax assets | 2.9 | 2.9 |
| Operating lease assets | 29.0 | 29.4 |
| Other assets | 37.5 | 38.6 |
| **Total assets** | $1089.4 | $1107.4 |
| **Liabilities and stockholders' equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $96.4 | $69.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities and other current liabilities | 61.1 | 98.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current operating lease liabilities | 4.7 | 4.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current maturities of long-term debt, net | 18.6 | 1.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenues | 14.5 | 13.0 |
| Total current liabilities | 195.3 | 187.2 |
| Long-term debt, net | 329.0 | 366.0 |
| Deferred tax liabilities | 5.8 | 5.5 |
| Operating lease liabilities | 23.0 | 24.0 |
| Other long-term liabilities | 48.2 | 38.1 |
| **Total liabilities** | 601.3 | 620.8 |
| Stockholders' equity: |  |  |
| Preferred stock, $0.01 par value: 20,000,000 shares authorized, none issued |  |  |
| Common stock, $0.01 par value: 150,000,000 shares authorized |  |  |
| &nbsp;&nbsp;&nbsp;Shares issued and outstanding: 42,146,485 and 41,689,672 at April 3, 2026 and October 3, 2025, respectively | 0.4 | 0.4 |
| Additional paid-in capital | 491.1 | 483.3 |
| Accumulated other comprehensive loss | (5.6) | (5.2) |
| Accumulated deficit | (11.7) | (5.9) |
| Total Varex stockholders' equity | 474.2 | 472.6 |
| Noncontrolling interests | 13.9 | 14.0 |
| **Total stockholders' equity** | 488.1 | 486.6 |
| **Total liabilities and stockholders' equity** | $1089.4 | $1107.4 |

---

*See accompanying Notes to the Condensed Consolidated Financial Statements.*

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**VAREX IMAGING CORPORATION**

**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended April 3, 2026** | **Three Months Ended April 3, 2026** | **Three Months Ended April 3, 2026** | **Three Months Ended April 3, 2026** | **Three Months Ended April 3, 2026** | **Three Months Ended April 3, 2026** | **Three Months Ended April 3, 2026** | **Three Months Ended April 3, 2026** |
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Accumulated Deficit** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Accumulated Deficit** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| **(In millions)** | **Shares** | **Amount** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Accumulated Deficit** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| **January 2, 2026** | 41.9 | $0.4 | $485.6 | $(5.5) | $(3.6) | $476.9 | $13.9 | $490.8 |
| Net (loss) income |  |  |  |  | (8.1) | (8.1) | 0.1 | (8.0) |
| Common stock issued under employee stock purchase plan | 0.2 |  | 1.7 |  |  | 1.7 |  | 1.7 |
| Share-based compensation |  |  | 3.9 |  |  | 3.9 |  | 3.9 |
| Unrealized loss on interest rate swap contracts |  |  |  | (0.6) |  | (0.6) |  | (0.6) |
| Foreign currency translation adjustments |  |  |  | 0.5 |  | 0.5 |  | 0.5 |
| Other |  |  | (0.1) |  |  | (0.1) | (0.1) | (0.2) |
| **April 3, 2026** | 42.1 | $0.4 | $491.1 | $(5.6) | $(11.7) | $474.2 | $13.9 | $488.1 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended April 4, 2025** | **Three Months Ended April 4, 2025** | **Three Months Ended April 4, 2025** | **Three Months Ended April 4, 2025** | **Three Months Ended April 4, 2025** | **Three Months Ended April 4, 2025** | **Three Months Ended April 4, 2025** | **Three Months Ended April 4, 2025** |
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Retained Earnings** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Retained Earnings** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| **(In millions)** | **Shares** | **Amount** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Retained Earnings** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| **January 3, 2025** | 41.2 | $0.4 | $470.0 | $(0.3) | $64.1 | $534.2 | $14.0 | $548.2 |
| Net income |  |  |  |  | 6.9 | 6.9 | 0.2 | 7.1 |
| Common stock issued upon vesting of restricted shares | 0.1 |  |  |  |  |  |  |  |
| Shares withheld for taxes on vesting of restricted stock |  |  | (0.7) |  |  | (0.7) |  | (0.7) |
| Common stock issued under employee stock purchase plan | 0.2 |  | 1.7 |  |  | 1.7 |  | 1.7 |
| Share-based compensation |  |  | 3.8 |  |  | 3.8 |  | 3.8 |
| Foreign currency translation adjustments |  |  |  | (2.1) |  | (2.1) |  | (2.1) |
| Other |  |  | (0.1) |  |  | (0.1) |  | (0.1) |
| **April 4, 2025** | 41.5 | $0.4 | $474.7 | $(2.4) | $71.0 | $543.7 | $14.2 | $557.9 |

---

*See accompanying Notes to the Condensed Consolidated Financial Statements.*

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

 **VAREX IMAGING CORPORATION**

**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended April 3, 2026** | **Six Months Ended April 3, 2026** | **Six Months Ended April 3, 2026** | **Six Months Ended April 3, 2026** | **Six Months Ended April 3, 2026** | **Six Months Ended April 3, 2026** | **Six Months Ended April 3, 2026** | **Six Months Ended April 3, 2026** |
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Accumulated Deficit** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Accumulated Deficit** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| (In millions) | **Shares** | **Amount** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Accumulated Deficit** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| **October 3, 2025** | 41.7 | $0.4 | $483.3 | $(5.2) | $(5.9) | $472.6 | $14.0 | $486.6 |
| Net (loss) income |  |  |  |  | (5.8) | (5.8) | 0.2 | (5.6) |
| Common stock issued upon vesting of restricted shares | 0.3 |  |  |  |  |  |  |  |
| Shares withheld for taxes on vesting of restricted stock | (0.1) |  | (1.5) |  |  | (1.5) |  | (1.5) |
| Common stock issued under employee stock purchase plan | 0.2 |  | 1.7 |  |  | 1.7 |  | 1.7 |
| Share-based compensation |  |  | 7.7 |  |  | 7.7 |  | 7.7 |
| Unrealized loss on interest rate swap contracts |  |  |  | (0.6) |  | (0.6) |  | (0.6) |
| Foreign currency translation adjustments |  |  |  | 0.2 |  | 0.2 |  | 0.2 |
| Other |  |  | (0.1) |  |  | (0.1) | (0.3) | (0.4) |
| **April 3, 2026** | 42.1 | $0.4 | $491.1 | $(5.6) | $(11.7) | $474.2 | $13.9 | $488.1 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended April 4, 2025** | **Six Months Ended April 4, 2025** | **Six Months Ended April 4, 2025** | **Six Months Ended April 4, 2025** | **Six Months Ended April 4, 2025** | **Six Months Ended April 4, 2025** | **Six Months Ended April 4, 2025** | **Six Months Ended April 4, 2025** |
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Retained Earnings** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Retained Earnings** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| (In millions) | **Shares** | **Amount** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive Loss** | **Retained Earnings** | **Total Varex Equity** | **Noncontrolling Interests** | **Total Stockholders' Equity** |
| **September 27, 2024** | 41.1 | $0.4 | $467.2 | $(2.9) | $64.4 | $529.1 | $14.1 | $543.2 |
| Net income |  |  |  |  | 6.6 | 6.6 | 0.4 | 7.0 |
| Common stock issued upon vesting of restricted shares | 0.3 |  |  |  |  |  |  |  |
| Shares withheld for taxes on vesting of restricted stock | (0.1) |  | (1.9) |  |  | (1.9) |  | (1.9) |
| Common stock issued under employee stock purchase plan | 0.2 |  | 1.7 |  |  | 1.7 |  | 1.7 |
| Share-based compensation |  |  | 7.8 |  |  | 7.8 |  | 7.8 |
| Foreign currency translation adjustments |  |  |  | 0.5 |  | 0.5 |  | 0.5 |
| Other |  |  | (0.1) |  |  | (0.1) | (0.3) | (0.4) |
| **April 4, 2025** | 41.5 | $0.4 | $474.7 | $(2.4) | $71.0 | $543.7 | $14.2 | $557.9 |

---

*See accompanying Notes to the Condensed Consolidated Financial Statements.*

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**VAREX IMAGING CORPORATION**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)**

---

| | | |
|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |
| **Cash flows from operating activities:** | | |
| &nbsp;&nbsp;Net (loss) income | $(5.6) | $7.0 |
| &nbsp;&nbsp;Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation expense | 7.8 | 7.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 11.4 | 11.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible assets | 2.2 | 1.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred taxes | 0.5 | 0.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from equity method investments | 4.5 | 3.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred loan costs | 0.8 | 1.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory write-down | 2.7 | 1.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 9.4 | 0.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other, net | 2.1 | 2.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 7.8 | 11.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories, net | (51.9) | (21.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (9.5) | (4.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 28.3 | 11.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities and other current and long-term liabilities | (30.2) | (11.7) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenues | 2.1 | 2.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by operating activities | (17.6) | 26.1 |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property, plant, and equipment | (16.9) | (11.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales of marketable debt securities |  | 10.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from maturities of marketable debt securities | 7.1 | 40.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of marketable debt securities |  | (30.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from maturities of certificates of deposit |  | 3.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other, net | (1.0) | (1.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by investing activities | (10.8) | 11.7 |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of term loans | 345.5 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes related to net share settlement of equity awards | (1.5) | (1.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of senior secured notes |  | 126.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt extinguishment costs | (7.2) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of borrowings | (373.1) | (1.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from revolver borrowings | 7.0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of revolver borrowings | (2.6) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of debt issuance costs |  | (0.5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from shares issued under employee stock purchase plan | 1.7 | 1.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other, net | (0.7) | (0.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by financing activities | (30.9) | 124.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effects of exchange rate changes on cash and cash equivalents and restricted cash | (0.1) | (0.2) |
| &nbsp;&nbsp;Net (decrease) increase in cash and cash equivalents and restricted cash | (59.4) | 161.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents and restricted cash at beginning of period | 147.1 | 170.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents and restricted cash at end of period | $87.7 | $332.2 |
| Supplemental cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $26.9 | $13.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes paid, net of refunds | 8.7 | 14.0 |
| Supplemental non-cash activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property, plant, and equipment financed through accounts payable | $3.6 | $0.9 |

---

*See accompanying Notes to the Condensed Consolidated Financial Statements.*

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**VAREX IMAGING CORPORATION**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)**

**1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Description of Business***

&nbsp;&nbsp;&nbsp;&nbsp;Varex Imaging Corporation (the "Company" or "Varex") designs, manufactures, sells, and services a broad range of medical products, which include X-ray imaging components including X-ray tubes, flat panel and photon counting detectors and accessories, ionization chambers, high voltage connectors, image processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, automatic exposure control devices, generators, and heat exchangers. The Company sells its products to imaging system original equipment manufacturer ("OEM") customers for incorporation into new medical diagnostic, radiation therapy, dental, and veterinary equipment, as well as to independent service companies and distributors, and directly to end-users for replacement purposes.

&nbsp;&nbsp;&nbsp;&nbsp;The Company also designs, manufactures, sells and services industrial products, which include Linatron® X-ray linear accelerators, X-ray tubes, digital detectors, high voltage connectors, coolers, imaging processing software and image detection products for security and inspection purposes, such as cargo screening at ports and borders and nondestructive examination in a variety of applications. The Company generally sells security and inspection products to OEM customers who incorporate Varex's products into their inspection or irradiation systems and processes. The Company also manufactures and sells its own X-ray imaging systems for industrial applications. The Company conducts an active research and development program to focus on new technologies and applications in both medical and industrial X-ray imaging.

***Basis of Presentation***

&nbsp;&nbsp;&nbsp;&nbsp;The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these unaudited Condensed Consolidated Financial Statements include all adjustments necessary for a fair presentation of the results for the interim periods. The Company has consolidated all of its majority owned subsidiaries and entities over which it has control. All intercompany balances and transactions have been eliminated as part of the consolidation.

&nbsp;&nbsp;&nbsp;&nbsp;These Condensed Consolidated Financial Statements and the accompanying notes are unaudited and should be read in conjunction with the Consolidated Financial Statements and notes thereto for the fiscal year ended October 3, 2025 included in the Company's Annual Report on Form 10-K, which was filed with the SEC on November 18, 2025. The Company considers events or transactions that occur after the balance sheet date, but before the financial statements are issued, to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures. Except for the change in certain policies upon adoption of the accounting standards described below, there have been no material changes to the Company's significant accounting policies, compared to the accounting policies described in Note 1, *Summary of Significant Accounting Policies*, in the Company's Annual Report on Form 10-K for fiscal year 2025.

***Reclassification of Prior Period Presentation***

&nbsp;&nbsp;&nbsp;&nbsp;Certain prior period amounts in the Notes to the Condensed Consolidated Financial Statements have had a change in presentation to conform to current period presentation. This change does not affect previously reported results.

***Segment Reporting***

&nbsp;&nbsp;&nbsp;&nbsp;The Company has two reportable operating segments; (i) Medical and (ii) Industrial, which aligns with how its Chief Executive Officer, who is the Company's Chief Operating Decision Maker ("CODM"), reviews the Company's performance. See Note 13, *Segment Information*, for further information on the Company's segments.

***Fiscal Year***

&nbsp;&nbsp;&nbsp;&nbsp;The fiscal years of the Company as reported are the 52 or 53-week periods ending on the Friday nearest September 30. Fiscal year 2026 is the 52-week period ending October 2, 2026. Fiscal year 2025 was the 53-week period that ended on October 3, 2025. The fiscal quarters ended April 3, 2026 and April 4, 2025 were both 13-week periods. The six-month fiscal periods ended April 3, 2026 and April 4, 2025 were a 26-week period and a 27-week period, respectively.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***Use of Estimates***

&nbsp;&nbsp;&nbsp;&nbsp;The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include the valuation of inventories, valuation of goodwill and intangible assets, receivables, warranties, refund liabilities, long-lived asset valuations, impairment of investments, valuation of financial instruments, and taxes on income. Actual results could differ from these estimates.

***Cash and Cash Equivalents***

&nbsp;&nbsp;&nbsp;&nbsp;The Company considers unrestricted currency on hand, demand deposits, time deposits, and all highly-liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents.

***Restricted Cash***

&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash primarily consists of cash collateral related to certain leases and inventory arrangements. Restricted cash is included in other assets on the Company's Condensed Consolidated Balance Sheets. Cash and cash equivalents and restricted cash as reported within the Condensed Consolidated Statements of Cash Flows consisted of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **April 3, 2026** | **April 3, 2026** | **April 4, 2025** | **April 4, 2025** |
| **(In millions)** | **Beginning of Period** | **End of Period** | **Beginning of Period** | **End of Period** |
| Cash and cash equivalents | $145.0 | $85.3 | $168.7 | $205.1 |
| Restricted cash | 2.1 | 2.4 | 1.7 | 127.1 |
| Total as presented in the Condensed Consolidated Statements of Cash Flows | $147.1 | $87.7 | $170.4 | $332.2 |

---

***Concentration of Risk***

&nbsp;&nbsp;&nbsp;&nbsp;Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash, cash equivalents, marketable securities, certificates of deposit, and trade accounts receivable. Cash held with financial institutions may exceed the Federal Deposit Insurance Corporation insurance limits or similar limits in foreign jurisdictions. To date, the Company has not realized any losses on its deposits of cash and cash equivalents. The Company performs ongoing credit evaluations of its customers and, except for government tenders, group purchases, and orders with a letter of credit, its industrial customers often provide a down payment. The Company maintains an allowance for credit losses based upon the expected collectability of all accounts receivable. The Company obtains some of the components in its products from a limited group of suppliers or from a single-source supplier. When these suppliers are unable to meet the Company's supply needs, the Company's production is negatively impacted.

&nbsp;&nbsp;&nbsp;&nbsp;Credit is extended to customers based on an evaluation of the customer's financial condition, and collateral is not required. In certain circumstances, a customer may be required to prepay all or a portion of the contract price prior to transfer of control. During the periods presented, one of the Company's customers accounted for a significant portion of revenues, as set forth below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| | **April 3, 2026** | **April 4, 2025** | **April 3, 2026** | **April 4, 2025** |
| Canon Medical Systems Corporation | 19.2% | 19.0% | 17.5% | 17.9% |

---

&nbsp;&nbsp;&nbsp;&nbsp;Canon Medical Systems Corporation accounted for 13.3% and 14.0% of the Company's accounts receivable as of April 3, 2026 and October 3, 2025, respectively.

***Equity Method Investments***

&nbsp;&nbsp;&nbsp;&nbsp;The Company accounts for its equity investments in privately-held companies under the equity method of accounting if the Company has the ability to exercise significant influence in, but not control of, these investments. The Company records impairment losses on its equity method investments if an impairment exists and is deemed to be other-than-temporary, which is based on various factors, including but not limited to, the length of time the fair value of the investment is below the carrying value, the absence of an ability to recover the carrying amount of the investment, and the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. There were no impairments recorded during the three and six months ended April 3, 2026 and April 4, 2025.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***Marketable Securities***

&nbsp;&nbsp;&nbsp;&nbsp;The Company's marketable securities consist primarily of financial instruments such as United States treasury securities, United States agency obligations, certificates of deposit, corporate bonds, commercial paper, money market funds, and equity securities.

*Marketable Debt Securities*

&nbsp;&nbsp;&nbsp;&nbsp;The Company's marketable debt securities are classified as available-for-sale. Classification of marketable debt securities is determined at the time of purchase, and the Company reevaluates such classification as of each balance sheet date. Marketable debt securities are recorded at estimated fair value and included in cash and cash equivalents, marketable securities, and other assets within the Condensed Consolidated Balance Sheets. Any unrealized gains or losses are included in accumulated other comprehensive loss within the Condensed Consolidated Balance Sheets. When the fair value of a marketable debt security declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in the Condensed Consolidated Statements of Operations. When the fair value of a marketable debt security declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in other comprehensive (loss) income and are recognized in the Condensed Consolidated Statements of Operations only if the Company sells or intends to sell the security before recovery of its cost basis. There were no impairments related to marketable debt securities recorded during the three and six months ended April 3, 2026 and April 4, 2025.

*Marketable Equity Securities*

&nbsp;&nbsp;&nbsp;&nbsp;Marketable equity securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date and included in other assets within the Condensed Consolidated Balance Sheets. All unrealized gains and losses on marketable equity securities are recorded as part of other expense, net in the Company's Condensed Consolidated Statements of Operations. See Note 4, *Fair Value*, for further details.

***Goodwill and Intangible Assets***

&nbsp;&nbsp;&nbsp;&nbsp;Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net identified tangible and intangible assets acquired. Purchased intangible assets are carried at cost, net of accumulated amortization, and are included in intangible assets, net in the Company's Condensed Consolidated Balance Sheets. Intangible assets with finite lives are amortized over their estimated useful lives of primarily two to seven years using the straight-line method.

***Business Combinations***

&nbsp;&nbsp;&nbsp;&nbsp;The Company uses the acquisition method of accounting for acquired businesses. Under the acquisition method, the Company's financial statements reflect the operations of an acquired business starting from the date of acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Useful lives of identified tangible and intangible assets are determined based on the expected time period in which the cash flows of the related assets are expected to be realized. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Any excess of the estimated fair values of the identifiable net assets acquired over the purchase price is recorded as a gain on bargain purchase.

&nbsp;&nbsp;&nbsp;&nbsp;Transactions between entities under common control are excluded from the scope of the business combinations guidance. The Company accounts for transfers of assets, net assets or equity interests between entities under common control prospectively at the parent's carrying values.

***Impairment of Long-lived Assets, Intangible Assets, and Goodwill***

&nbsp;&nbsp;&nbsp;&nbsp;The Company reviews long-lived assets and identifiable intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company assesses these assets for impairment based on their estimated undiscounted future cash flows. If the carrying value of the assets exceeds the estimated future undiscounted cash flows, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets.

&nbsp;&nbsp;&nbsp;&nbsp;The Company evaluates goodwill for impairment at least annually at the beginning of the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The evaluation includes consideration of qualitative factors including industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit. If the Company determines that a quantitative analysis is necessary, the Company performs a step one analysis, which consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***Loss Contingencies***

&nbsp;&nbsp;&nbsp;&nbsp;From time to time, the Company is involved in legal proceedings, claims, and government inspections or investigations, customs and duties audits, and other contingency matters, both inside and outside the United States, arising in the ordinary course of its business or otherwise. The Company accrues amounts for probable losses, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss (including, among other things, probable settlement value). A loss or a range of loss is disclosed when it is reasonably possible that a material loss will be incurred and can be estimated or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision. When a loss contingency is probable but not reasonably estimable, the nature of the contingency and the fact that an estimate cannot be made is disclosed.

***Supplier Finance Programs***

&nbsp;&nbsp;&nbsp;&nbsp;The Company previously participated in voluntary supply chain finance programs with a financial intermediary that provided participating suppliers the option to be paid by the intermediary earlier than the original invoice due date. The Company's responsibility under these arrangements was limited to making payments on the terms originally negotiated with its suppliers, regardless of whether the intermediary paid the supplier in advance of the original due date. The Company did not receive fees, payments, extended payment terms, or other direct economic benefits from the intermediary.

&nbsp;&nbsp;&nbsp;&nbsp;The Company discontinued its participation in these supply chain finance programs during the second quarter of fiscal 2026. As of April 3, 2026, there was an outstanding amount of $1.9 million due to the financial intermediary to settle supplier invoices under this program. As of October 3, 2025, the total amount due to the financial intermediary was $2.9 million. These amounts are included within accounts payable in the Condensed Consolidated Balance Sheets.

***Environmental Obligations***

&nbsp;&nbsp;&nbsp;&nbsp;The Company's operations and facilities, past and present, are subject to environmental laws, including laws that regulate the handling, storage, transport, and disposal of hazardous substances. Certain of those laws impose cleanup liabilities under certain circumstances. In connection with those laws and certain of our past and present operations and facilities, the Company is obligated to indemnify Varian Medical Systems, Inc. ("Varian") for the cleanup liabilities related to prior corporate restructuring activities. The Company anticipates that it will be obligated to reimburse Varian for 20% of the liabilities of Varian related to these sites (after adjusting for any insurance proceeds or tax benefits received by Varian). As of April 3, 2026 and October 3, 2025, the Company's estimated environmental liability for these sites was $2.7 million and $3.2 million, net of expected insurance proceeds, respectively.

***Product Warranty***

&nbsp;&nbsp;&nbsp;&nbsp;The Company warrants most of its products for a specific period of time, usually 12 to 27 months from delivery or acceptance, against material defects. The Company provides for the estimated future costs of warranty obligations in cost of revenues when the related revenues are recognized. The accrued warranty costs represent the best estimate at the time of sale of the total costs that the Company will incur to repair or replace product parts that fail while still under warranty.

&nbsp;&nbsp;&nbsp;&nbsp;The amount of the accrued estimated warranty costs obligation for established products is primarily based on historical experience of product failures, adjusted for current information on repair costs. For new products, estimates include the historical experience of similar products, as well as a reasonable allowance for warranty expenses associated with new products. On a quarterly basis, the Company reviews the accrued warranty costs and updates the historical warranty cost trends, if required.

&nbsp;&nbsp;&nbsp;&nbsp;The following table reflects the changes in the Company's accrued product warranty:

---

| | | |
|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |
| Accrued product warranty, at beginning of period | $8.5 | $10.8 |
| &nbsp;&nbsp;&nbsp;New accruals charged to cost of revenues | 7.6 | 7.0 |
| &nbsp;&nbsp;&nbsp;Product warranty expenditures | (8.0) | (7.7) |
| Accrued product warranty, at end of period | $8.1 | $10.1 |

---

***Leases***

&nbsp;&nbsp;&nbsp;&nbsp;The Company determines if an arrangement is or contains a lease at the inception of an arrangement. The Company's operating lease right-of-use ("ROU") assets represent the right to use an underlying asset over the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets may also include initial direct costs incurred and

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

prepaid lease payments, less lease incentives. Lease liabilities and their corresponding ROU assets are recognized based on the present value of lease payments over the lease term, discounted using the Company's incremental borrowing rate. The Company recognizes operating leases with lease terms of more than twelve months in operating lease assets, current operating lease liabilities, and operating lease liabilities on its Condensed Consolidated Balance Sheets. The Company recognizes finance leases with lease terms of more than twelve months in property, plant, and equipment, net, accrued liabilities and other current liabilities, and other long-term liabilities on its Condensed Consolidated Balance Sheets. For purposes of calculating lease liabilities and the corresponding ROU assets, the Company's lease term may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option.

***Revenue Recognition***

&nbsp;&nbsp;&nbsp;&nbsp;The Company's revenues are derived primarily from the sale of hardware and services. The Company recognizes its revenues net of any value-added or sales tax and net of sales discounts.

&nbsp;&nbsp;&nbsp;&nbsp;The Company sells a high proportion of its X-ray products to a limited number of OEM customers. X-ray imaging components including X-ray tubes, digital detectors and image-processing tools, and security and inspection products are generally sold on a stand-alone basis. However, the Company occasionally sells its digital detectors, X-ray tubes and imaging processing tools as a package that is optimized for digital X-ray imaging and sells its Linatron® X-ray linear accelerators together with its image processing software and image detection products to OEM customers that incorporate them into their inspection or irradiation systems and processes. Service contracts are often sold with certain security and inspection products and computer-aided detection products.

&nbsp;&nbsp;&nbsp;&nbsp;The Company determines revenue recognition through the following steps:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identification of the contract, or contracts, with a customer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identification of the performance obligations in the contract

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Determination of the transaction price

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Allocation of the transaction price to the performance obligations in the contract

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Recognition of revenue when, or as, a performance obligation is satisfied

*Contracts and Performance Obligations*

&nbsp;&nbsp;&nbsp;&nbsp;The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of the consideration is probable. The Company's performance obligations consist mainly of transferring control of products and services identified in the contracts or purchase orders. For each contract, the Company considers the obligation to transfer products and services to the customer, which are distinct, to be performance obligations.

*Transaction Price and Allocation to Performance Obligations*

&nbsp;&nbsp;&nbsp;&nbsp;Transaction prices of products or services are typically based on contracted rates. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method when there is a large number of transactions with similar characteristics or the most likely amount method when there are two possible outcomes, depending on the circumstances of the transaction, to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company's judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company's anticipated performance and all information (historical, current, and forecasted) that is reasonably available.

&nbsp;&nbsp;&nbsp;&nbsp;The Company allows customers to return specific parts of purchased X-ray tubes for a partial refund credit, which is identified as variable consideration. For sales with a right of return, revenue is reduced and a liability is recorded for expected returns, and an asset is recorded for the right to recover products from customers on settling the liability. The Company recognizes a reduction to revenue and cost of sales at the time of sale and a corresponding refund liability and right of return asset. The Company records this estimate based on the historical volume of product returns and adjusts the estimate on a quarterly basis based on the current quarter sales and current quarter returns.

&nbsp;&nbsp;&nbsp;&nbsp;If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation could be sold separately.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

*Recognition of Revenue*

&nbsp;&nbsp;&nbsp;&nbsp;Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer.

&nbsp;&nbsp;&nbsp;&nbsp;Product revenue is generally recognized when the customer obtains control of the Company's product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.

&nbsp;&nbsp;&nbsp;&nbsp;Service revenue is generally recognized over the term of the service contract. Services are expected to be transferred to the customer throughout the term of the contract, and the Company believes recognizing revenue ratably over the term of the contract best depicts the transfer of value to the customer.

*Disaggregation of Revenue*

&nbsp;&nbsp;&nbsp;&nbsp;Revenue is disaggregated from contracts between geography and by reportable operating segment, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. Refer to Note 13, *Segment Information*, for the disaggregation of the Company's revenue based on reportable operating segments and Note 2, *Revenue*, for the disaggregation of revenue by geographic region and country.

*Contract Balances*

&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities are included within the deferred revenues and other long-term liabilities balances in the Condensed Consolidated Balance Sheets. The Company does not have any material contract assets.

&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue represents the Company's obligation to transfer goods or services to its customers for which it has already received consideration (or the amount is due) from the customer. The Company's deferred revenue balance primarily relates to contract advances and billings for warranty contracts.

&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue that is estimated to be recognized during the following twelve-month period is recorded as deferred revenues and the remaining portion is recorded as other long-term liabilities in the Condensed Consolidated Balance Sheets.

*Costs to Obtain or Fulfill a Customer Contract*

&nbsp;&nbsp;&nbsp;&nbsp;The Company has certain costs to obtain and fulfill a customer contract, such as commissions and shipping costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Incremental costs of obtaining contracts that would be recognized over greater than one year are not material. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. These costs are included as a component of cost of revenues.

***Recently Adopted Accounting Pronouncements***

&nbsp;&nbsp;&nbsp;&nbsp;None.

***Recent Accounting Standards or Updates Not Yet Effective***

&nbsp;&nbsp;&nbsp;&nbsp;In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to the financial statements. This standard is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, but early adoption is permitted. The Company is currently evaluating the impact of this standard on its Condensed Consolidated Financial Statements and disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires public companies to annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 became effective for the Company's annual periods beginning in fiscal year 2026. The Company will provide the required disclosures in its Annual Report on Form 10-K for the year ended October 2, 2026.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**2. REVENUE**

***Disaggregation of Revenue***

&nbsp;&nbsp;&nbsp;&nbsp;Revenue is disaggregated from contracts by geographic region, country, and by reportable operating segment, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors.

&nbsp;&nbsp;&nbsp;&nbsp;The Company operates various manufacturing and marketing operations outside the United States. The Company's products are sold in three geographic regions: the Americas, EMEA, and APAC. The Americas includes North America (primarily the United States) and Latin America. EMEA includes Europe, the Middle East, India, and Africa. APAC includes Asia (other than India) and Australia. Revenues by region are based on the known final destination of products sold.

&nbsp;&nbsp;&nbsp;&nbsp;The following table disaggregates the Company's revenue by geographic region:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **April 3, 2026** | **April 4, 2025** |
| Americas | $78.7 | $69.4 | $154.0 | $133.8 |
| EMEA | 59.9 | 71.7 | 124.3 | 132.1 |
| APAC | 77.4 | 71.8 | 147.3 | 146.8 |
| &nbsp;&nbsp;Total revenues, net | $216.0 | $212.9 | $425.6 | $412.7 |

---

&nbsp;&nbsp;&nbsp;&nbsp;The following table disaggregates the Company's revenue by country:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **April 3, 2026** | **April 4, 2025** |
| United States | $70.5 | $64.8 | $136.0 | $126.1 |
| Japan | 42.0 | 39.0 | 74.9 | 76.0 |
| China | 33.4 | 31.0 | 68.2 | 66.0 |
| Other<sup>(1)</sup> | 70.1 | 78.1 | 146.5 | 144.6 |
| &nbsp;&nbsp;Total revenues, net | $216.0 | $212.9 | $425.6 | $412.7 |

---

<sup>(1)</sup> No individual country included in the Other category generated more than 10% of total revenues, net.

&nbsp;&nbsp;&nbsp;&nbsp;Refer to Note 13, *Segment Information,* for the disaggregation of the Company's revenue based on reportable operating segments.

***Right of Return Assets and Refund Liabilities***

&nbsp;&nbsp;&nbsp;&nbsp;Right of return assets are included within the prepaid expenses and other current assets and other assets balances in the Condensed Consolidated Balance Sheets. Refund liabilities are included within the accrued liabilities and other current liabilities and other long-term liabilities balances in the Condensed Consolidated Balance Sheets. The following table summarizes the changes in the right of return assets and refund liabilities for the six months ended April 3, 2026 and April 4, 2025:

---

| | | |
|:---|:---|:---|
| | **Right of Return Assets** | **Right of Return Assets** |
| | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |
| Balance at beginning of period | $24.9 | $25.2 |
| &nbsp;&nbsp;&nbsp;Costs recovered from product returns during the period | (3.1) | (3.6) |
| &nbsp;&nbsp;&nbsp;Right of return assets from shipments of products subject to return during the period | 3.5 | 3.3 |
| &nbsp;&nbsp;&nbsp;Adjustment for actual vs. reserved product returns | (0.3) | 0.2 |
| Balance at end of period | $25.0 | $25.1 |

---

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

---

| | | |
|:---|:---|:---|
| | **Refund Liabilities** | **Refund Liabilities** |
| | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |
| Balance at beginning of period | $27.7 | $28.0 |
| &nbsp;&nbsp;&nbsp;Release of refund liability included in beginning of year refund liability | (3.4) | (4.0) |
| &nbsp;&nbsp;&nbsp;Additions to refund liabilities | 3.9 | 3.7 |
| &nbsp;&nbsp;&nbsp;Adjustment for actual vs. reserved product returns | (0.5) | 0.2 |
| Balance at end of period | $27.7 | $27.9 |

---

***Contract Balances***

&nbsp;&nbsp;&nbsp;&nbsp;During the three and six months ended April 3, 2026, the Company recognized revenue of $1.2 million and $10.3 million, respectively, related to deferred revenues which existed at October 3, 2025. During the three and six months ended April 4, 2025, the Company recognized revenue of $0.4 million and $7.1 million, respectively, related to deferred revenues which existed at September 27, 2024.

**3. RELATED-PARTY TRANSACTIONS**

***Investment in Privately-Held Companies***

&nbsp;&nbsp;&nbsp;&nbsp;The Company has a 40% ownership interest in dpiX Holding Company LLC ("dpiX Holding"), a holding company that has a 100% ownership interest in dpiX LLC ("dpiX"), a supplier of amorphous silicon-based thin film transistor arrays for flat panels used in the Company's digital image detectors. In accordance with the dpiX Holding operating agreement, net profits or losses are allocated to the members in accordance with their ownership interests.

&nbsp;&nbsp;&nbsp;&nbsp;The investment in dpiX Holding is accounted for under the equity method of accounting. When the Company recognizes its share of net profits or losses of dpiX Holding, profits or losses in inventory purchased from dpiX are eliminated. During the three months ended April 3, 2026 and April 4, 2025, the Company recorded a loss on the equity investment in dpiX Holding of $1.3 million and $2.0 million, respectively. During the six months ended April 3, 2026, and April 4, 2025, the Company recorded a loss on the equity investment in dpiX Holding of $4.5 million and $3.6 million, respectively. The loss on the equity investment in dpiX Holding is included in other expense, net in the Condensed Consolidated Statements of Operations. The carrying value of the equity investment in dpiX Holding was $18.0 million and $22.5 million at April 3, 2026 and October 3, 2025, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;During the three months ended April 3, 2026 and April 4, 2025, the Company purchased glass transistor arrays from dpiX totaling $4.9 million and $5.2 million, respectively. During the six months ended April 3, 2026 and April 4, 2025, the Company purchased glass transistor arrays from dpiX totaling $11.3 million and $9.8 million, respectively. These purchases of glass transistor arrays are included as a component of inventories, net on the Condensed Consolidated Balance Sheets or cost of revenues in the Condensed Consolidated Statements of Operations.

&nbsp;&nbsp;&nbsp;&nbsp;As of April 3, 2026 and October 3, 2025, the Company had accounts payable to dpiX totaling $3.2 million and $1.9 million, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;In October 2013, the Company entered into an amended agreement with dpiX and other parties that, among other things, provides it with the right to 50% of dpiX's total manufacturing capacity. In addition, the Company is required to pay for 50% of dpiX's fixed costs, as determined at the beginning of each calendar year. In January 2026, the Company's fixed cost commitment was determined and approved by the dpiX board of directors to be $13.7 million for calendar year 2026. As of April 3, 2026, the Company estimated it has fixed cost commitments of $10.2 million related to the amended agreement with dpiX through the remainder of the calendar year 2026. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement).

&nbsp;&nbsp;&nbsp;&nbsp;The Company has determined that dpiX Holding is a variable interest entity because the at-risk equity holders, as a group, lack the characteristics of a controlling financial interest. Majority votes are required to direct the manufacturing activities, legal operations and other activities that most significantly affect dpiX's economic performance. The Company does not have majority voting rights and no power to unilaterally direct the activities of dpiX Holding, and therefore, is not the primary beneficiary of dpiX Holding. The Company's exposure to loss as a result of its involvement with dpiX Holding is limited to the carrying value of the Company's investment of $18.0 million and fixed cost commitments.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;In November 2018, the Company (through one of its wholly-owned subsidiaries) and CETTEEN GmbH ("CETTEEN"), formed a German limited liability company that governs the affairs and conduct of the business of VEC Imaging GmbH & Co. KG ("VEC"), a joint venture formed to develop technology for use in X-ray imaging components. In accordance with the VEC agreement, net profits or losses are allocated to the members in accordance with their ownership interest. The Company's investment in VEC is accounted for under the equity method of accounting. The Company has determined that VEC is a variable interest entity.

&nbsp;&nbsp;&nbsp;&nbsp;During the three and six months ended April 3, 2026 and April 4, 2025, the Company recorded no income on the equity investment in VEC. The Company's investment in VEC was $2.0 million as of each of April 3, 2026 and October 3, 2025. As of each of April 3, 2026 and October 3, 2025, the Company had loans and other receivables from VEC of $0.8 million, which are recorded in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.

**4. FAIR VALUE**

***Assets and Liabilities Measured at Fair Value on a Recurring Basis***

&nbsp;&nbsp;&nbsp;&nbsp;The fair values of certain of the Company's financial instruments, including bank deposits included in cash and cash equivalents, accounts receivable, net and accounts payable, approximate their fair values due to their short maturities. The carrying value of the Company's Term Loan, as defined in Note 6, *Borrowings*, approximates its fair value due to its variable interest rate, which resets periodically based on the SOFR benchmark and reflects current market conditions. The fair value of the Term Loan is classified within Level 2 of the fair value hierarchy, as it is based on observable market inputs, including current interest rates for similar secured, variable-rate instruments. The Company has elected to use the income approach to value its derivative instruments using standard valuation techniques and Level 2 inputs, such as currency spot rates, forward points and credit default swap spreads.

&nbsp;&nbsp;&nbsp;&nbsp;In the tables below, the Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Fair Value at April 3, 2026** | **Fair Value at April 3, 2026** | **Fair Value at April 3, 2026** | **Fair Value at April 3, 2026** |
| **(In millions)** | **Quoted Prices in Active Markets**<br>**(Level 1)** | **Significant Other**<br>**Observable Inputs**<br>**(Level 2)** | **Significant Unobservable Inputs**<br>**(Level 3)** | **Total** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Money market funds | $2.2 | $— | $— | $2.2 |
| &nbsp;&nbsp;&nbsp;Corporate notes/bonds |  | 2.0 |  | 2.0 |
| &nbsp;&nbsp;&nbsp;U.S. treasury bills |  | 1.0 |  | 1.0 |
| &nbsp;&nbsp;Derivative assets |  | 0.2 |  | 0.2 |
| &nbsp;&nbsp;Deferred compensation plan<sup>(1)</sup> | 7.8 |  |  | 7.8 |
| &nbsp;&nbsp;&nbsp;Marketable equity securities | 1.9 |  |  | 1.9 |
| Total assets measured at fair value | $11.9 | $3.2 | $— | $15.1 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;Derivative liabilities | $— | $10.2 | $— | $10.2 |
| Total liabilities measured at fair value | $— | $10.2 | $— | $10.2 |

---

<sup>(1)</sup> The assets held under the Company's deferred compensation plan are classified in Level 1, as they relate primarily to publicly traded mutual funds for which there are observable market prices in active markets.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Fair Value at October 3, 2025** | **Fair Value at October 3, 2025** | **Fair Value at October 3, 2025** | **Fair Value at October 3, 2025** |
| **(In millions)** | **Quoted Prices in Active Markets**<br>**(Level 1)** | **Significant Other**<br>**Observable Inputs**<br>**(Level 2)** | **Significant Unobservable Inputs**<br>**(Level 3)** | **Total** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial paper | $— | $2.0 | $— | $2.0 |
| &nbsp;&nbsp;&nbsp;Corporate notes/bonds |  | 4.0 |  | 4.0 |
| &nbsp;&nbsp;&nbsp;Government agencies |  | 2.0 |  | 2.0 |
| &nbsp;&nbsp;&nbsp;U.S. treasury bills |  | 15.8 |  | 15.8 |
| &nbsp;&nbsp;Deferred compensation plan<sup>(1)</sup> | 8.4 |  |  | 8.4 |
| &nbsp;&nbsp;&nbsp;Marketable equity securities | 3.6 |  |  | 3.6 |
| Total assets measured at fair value | $12.0 | $23.8 | $— | $35.8 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Derivative liabilities | $— | $10.4 | $— | $10.4 |
| Total liabilities measured at fair value | $— | $10.4 | $— | $10.4 |

---

<sup>(1)</sup> The assets held under the Company's deferred compensation plan are classified in Level 1, as they relate primarily to publicly traded mutual funds for which there are observable market prices in active markets.

***Marketable Debt Securities***

&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of marketable debt securities, which are included within the cash and cash equivalents, marketable securities, and other assets balances on the Condensed Consolidated Balance Sheets.

---

| | | |
|:---|:---|:---|
| | **April 3, 2026** | **April 3, 2026** |
| **(In millions)** | **Amortized Costs** | **Fair Value** |
| Corporate notes/bonds | $2 | $2 |
| U.S. treasury bills | 1.0 | 1.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total marketable debt securities | $3.0 | $3.0 |

---

---

| | | | |
|:---|:---|:---|:---|
| | **October 3, 2025** | **October 3, 2025** | **October 3, 2025** |
| **(In millions)** | **Amortized Costs** | **Unrealized Losses** | **Fair Value** |
| Commercial paper | $2.0 | $— | $2.0 |
| Corporate notes/bonds | 4.1 | (0.1) | 4.0 |
| U.S. treasury bills | 15.8 |  | 15.8 |
| Government agencies | 2.0 |  | 2.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total marketable debt securities | $23.9 | $(0.1) | $23.8 |

---

&nbsp;&nbsp;&nbsp;&nbsp;The contractual maturities of marketable debt securities as of April 3, 2026, are shown in the table below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations.

---

| | | |
|:---|:---|:---|
| | **April 3, 2026** | **April 3, 2026** |
| **(In millions)** | **Amortized Costs** | **Fair Value** |
| Contractual maturities: |  |  |
| &nbsp;&nbsp;&nbsp;Due within one year | $3.0 | $3.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total marketable debt securities | $3.0 | $3.0 |

---

&nbsp;&nbsp;&nbsp;&nbsp;During the three and six months ended April 3, 2026, there were no gross realized gains or losses from the sale of certain marketable debt securities that were reclassified out of accumulated other comprehensive loss.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;The following tables summarize the balance sheet locations for marketable debt securities:

---

| | | | |
|:---|:---|:---|:---|
| | **April 3, 2026** | **April 3, 2026** | **April 3, 2026** |
| **(In millions)** | **Corporate Notes/Bonds** | **Treasury Bills** | **Total** |
| Marketable securities | $2.0 | $1.0 | $3.0 |
| Total marketable debt securities | $2.0 | $1.0 | $3.0 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **October 3, 2025** | **October 3, 2025** | **October 3, 2025** | **October 3, 2025** | **October 3, 2025** |
| **(In millions)** | **Commercial Paper** | **Corporate Notes/Bonds** | **Government Agencies** | **Treasury Bills** | **Total** |
| Cash and cash equivalents | $— | $— | $— | $13.7 | $13.7 |
| Marketable securities | 2.0 | 4.0 | 2.0 | 2.1 | 10.1 |
| Total marketable debt securities | $2.0 | $4.0 | $2.0 | $15.8 | $23.8 |

---

**5. GOODWILL AND INTANGIBLE ASSETS**

&nbsp;&nbsp;&nbsp;&nbsp;The following table reflects goodwill by reportable operating segment:

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **Medical** | **Industrial** | **Total** |
| Balance at October 3, 2025 | $79.8 | $118.6 | $198.4 |
| Foreign currency translation adjustments | (0.2) | (0.4) | (0.6) |
| Balance at April 3, 2026 | $79.6 | $118.2 | $197.8 |
|  | **Medical** | **Industrial** | **Total** |
| Balance at April 3, 2026 |  |  |  |
| Goodwill | $173.5 | $118.2 | $291.7 |
| Accumulated impairment losses | (93.9) |  | (93.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total goodwill | $79.6 | $118.2 | $197.8 |

---

&nbsp;&nbsp;&nbsp;&nbsp;The following table reflects the gross carrying amount and accumulated amortization of the Company's finite-lived intangible assets included in intangible assets, net in the Condensed Consolidated Balance Sheets:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **April 3, 2026** | **April 3, 2026** | **April 3, 2026** | **October 3, 2025** | **October 3, 2025** | **October 3, 2025** |
| **(In millions)** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net Carrying Amount** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net Carrying Amount** |
| Acquired existing technology | $74.6 | $(66.7) | $7.9 | $74.9 | $(65.5) | $9.4 |
| Patents, licenses and other | 7.6 | (6.2) | 1.4 | 6.2 | (6.2) |  |
| Customer contracts and supplier relationship | 52.2 | (48.3) | 3.9 | 52.3 | (47.7) | 4.6 |
| &nbsp;&nbsp;Total intangible assets | $134.4 | $(121.2) | $13.2 | $133.4 | $(119.4) | $14.0 |

---

&nbsp;&nbsp;&nbsp;&nbsp;Amortization expense for intangible assets was $1.1 million and $1.0 million for the three months ended April 3, 2026 and April 4, 2025, respectively. Amortization expense for intangible assets was $2.2 million and $1.9 million for the six months ended April 3, 2026 and April 4, 2025, respectively. During the six months ended April 3, 2026, in connection with an asset acquisition, the Company recorded additional intangible assets of $1.5 million related to acquired licenses.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**6. BORROWINGS**

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the Company's short-term and long-term debt:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **April 3, 2026** | **October 3, 2025** | | |
| **(In millions, except for percentages)** | **Amount** | **Amount** | **Contractual Interest Rate** | **Effective Interest Rate** |
| **Current maturities of long-term debt:** | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;Term Loan Facility | $17.5 | $— | 6.2% | 6.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt | 1.1 | 1.5 |  |  |
| **Total current maturities of long-term debt** | $18.6 | $1.5 |  |  |
| **Non-current maturities of long-term debt:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Revolving Credit Facility | $4.4 | $— | 6.2% | 6.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Term Loan Facility | 328.1 |  | 6.2% | 6.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Senior Secured Notes |  | 368.0 | 7.9% | 8.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt |  | 0.4 |  |  |
| **Total non-current maturities of long-term debt** | $332.5 | $368.4 |  |  |
| **Unamortized issuance costs and debt premiums:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unamortized issuance costs - Term Loan Facility | $(3.5) | $— |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unamortized issuance costs, net of debt premium - Senior Secured Notes |  | (2.4) |  |  |
| **Total unamortized issuance costs and debt premiums** | (3.5) | (2.4) |  |  |
| **Total debt outstanding, net** | $347.6 | $367.5 |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the Company's interest expense:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **April 3, 2026** | **April 4, 2025** |
| &nbsp;&nbsp;Contractual interest coupon and other | $7.5 | $9.4 | $14.9 | $16.4 |
| &nbsp;&nbsp;Amortization of debt issuance costs | 0.3 | 0.8 | 0.8 | 1.7 |
| &nbsp;&nbsp;Loss on extinguishment of debt | 9.4 |  | 9.4 | 0.1 |
| **Total interest expense** | $**17.2** | $**10.2** | $**25.1** | $**18.2** |

---

***Credit and Guaranty Agreement***

&nbsp;&nbsp;&nbsp;&nbsp;On March 13, 2026, the Company entered into a Credit and Guaranty Agreement that provides for (i) an initial term loan facility in an aggregate principal amount of $350.0 million (the "Term Loan Facility"), (ii) a senior secured revolving credit facility with aggregate commitments of $100.0 million (the "Revolving Credit Facility"), and (iii) a delayed draw term loan facility with aggregate commitments of up to $40.0 million (the "Delayed Draw Term Loan Facility"). The Term Loan Facility, the Revolving Credit Facility, and the Delayed Draw Term Loan Facility are collectively referred to as the "Credit Facility."

&nbsp;&nbsp;&nbsp;&nbsp;The Term Loan Facility was fully funded on the closing date of the Credit and Guaranty Agreement. The net proceeds from the Credit Facility after deducting $5.1 million of settled and estimated debt issuance costs, were approximately $344.9 million. The Company used the proceeds from the offering, together with available cash, to repay the Senior Secured Notes (defined below), including accrued interest, fees, and expenses.

&nbsp;&nbsp;&nbsp;&nbsp;The Revolving Credit Facility is available for revolving loans in U.S. dollars and for the issuance of letters of credit, subject to a letter of credit sublimit, and permits the Company to borrow, repay, and reborrow amounts from time to time until the maturity of the Revolving Credit Facility.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;The Company had letter of credit sublimit capacity in the aggregate amounts of $55.0 million and $25.0 million under its credit facilities as of April 3, 2026 and October 3, 2025, respectively. As of April 3, 2026 and October 3, 2025, the Company had $2.3 million and $1.1 million, respectively, of standby letters of credit outstanding. These standby letters of credit primarily support certain lease obligations and a duty drawback agreement. Outstanding standby letters of credit reduce the amount available for borrowing under the Company's Revolving Credit Facility. The Company has not recorded a liability associated with these standby letters of credit, as no draws have been made and management does not believe it is probable that the guarantees will be drawn.

&nbsp;&nbsp;&nbsp;&nbsp;The Delayed Draw Term Loan Facility permits the Company to request one or more delayed draw term loans during the commitment period, which extends through the earlier of (i) the second anniversary of the closing date and (ii) the date on which all delayed draw term loan commitments have been fully funded, at which time any remaining unfunded commitments automatically terminate. During the commitment period of the Delayed Draw Term Loan Facility, the Company is required to pay a delayed draw unused commitment fee of between 0.30% and 0.40% per annum, payable quarterly on the actual daily unused portion of the Delayed Draw Term Loan Facility, depending on the consolidated total net leverage ratio of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;The Term Loan Facility and the Delayed Draw Term Loan Facility each mature on March 13, 2031. Borrowings under the Revolving Credit Facility mature, and lending commitments thereunder terminate, on March 13, 2031.

&nbsp;&nbsp;&nbsp;&nbsp;Borrowings under the Term Loan Facility are subject to scheduled amortization. Borrowings under the Credit Facility may be voluntarily prepaid, in whole or in part, without premium or penalty, subject to customary notice and procedural requirements, and are subject to mandatory prepayments upon the occurrence of certain events, as set forth in the Credit and Guaranty Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;The interest rate for borrowings by the Company under the Credit Facility is Term SOFR, subject to a floor of 0.00%, plus a margin of 2.00% to 3.00%, depending on the consolidated total net leverage ratio of the Company. Alternatively, the Company has the option of selecting a base rate equal to the highest of (a) the prime rate, (b) the Federal Funds Rate plus 0.50% and (c) Term SOFR for a one-month tenor plus 1.00%, in each case plus a margin of 1.00% to 2.00%, depending on the consolidated total net leverage ratio of the Company. Interest on base rate borrowings is payable quarterly in arrears, while interest on Term SOFR borrowings is payable at the end of each applicable interest period.

&nbsp;&nbsp;&nbsp;&nbsp;The obligations under the Credit Facility are secured by substantially all of the assets of the Company and certain of its subsidiaries, subject to customary exceptions, and are guaranteed by substantially all domestic subsidiaries and certain foreign subsidiaries, subject to customary exclusions.

&nbsp;&nbsp;&nbsp;&nbsp;The Credit Facility is subject to customary affirmative and negative covenants, including limitations on additional indebtedness, liens, asset sales, investments, and restricted payments, as well as financial maintenance covenants requiring the Company to maintain compliance with specified consolidated total net leverage and consolidated fixed charge coverage ratios.

&nbsp;&nbsp;&nbsp;&nbsp;As of April 3, 2026, the outstanding balance under the Term Loan Facility was $345.6 million. As of April 3, 2026, there was $4.4 million outstanding borrowings under the Revolving Credit Facility and the amount available under the Revolving Credit Facility was $95.6 million. As of April 3, 2026, no amounts had been drawn under the Delayed Draw Term Loan Facility.

***Senior Secured Revolving Credit Facility***

&nbsp;&nbsp;&nbsp;&nbsp;On March 26, 2024, the Company entered into a senior secured revolving credit agreement (the "Senior Secured Credit Agreement") providing for a senior secured revolving credit facility up to $155.0 million (the "Senior Secured Revolving Credit Facility"). Simultaneously with its entry into the Credit and Guaranty Agreement, the Company terminated its $155.0 million Senior Secured Revolving Credit Facility and recognized $0.2 million of the remaining unamortized issuance costs in interest expense in the Condensed Consolidated Statements of Operations, which excludes costs related to lenders that continued under the Revolving Credit Facility. There was no principal balance outstanding under the Senior Secured Revolving Credit Facility when it was terminated.

***Senior Secured Notes***

&nbsp;&nbsp;&nbsp;&nbsp;The Company issued $300.0 million aggregate principal amount of 7.875% Senior Secured Notes due 2027 (the "Senior Secured Notes") pursuant to an indenture dated September 30, 2020. Interest payments were paid semiannually on April 15 and October 15 of each year, beginning on April 15, 2021. The Senior Secured Notes were scheduled to mature on October 15, 2027.

&nbsp;&nbsp;&nbsp;&nbsp;On December 20, 2024, the Company issued an additional $125.0 million of Senior Secured Notes (the "Senior Secured Notes Add On") pursuant to the indenture, as supplemented by a supplemental indenture, dated December 20, 2024. The net proceeds from the Senior Secured Notes Add On after initial purchasers' premium, commissions, estimated fees, accrued interest in arrears, and expenses of $1.1 million, were approximately $123.9 million.

&nbsp;&nbsp;&nbsp;&nbsp;On July 15, 2021, the Company redeemed $30.0 million of the Senior Secured Notes, and redeemed another $27.0 million on March 18, 2022. On March 13, 2026, the Company redeemed the entire remaining outstanding principal amount of its $368.0 million

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

of Senior Secured Notes, in accordance with the terms and conditions of the governing indenture, by paying cash of $387.4 million, inclusive of the redemption premium and accrued interest, and recognized a $9.2 million loss related to the redemption premium and the write-off of previously recorded debt issuance costs. The redemption price of the redeemed notes was 102% of the principal amount, plus accrued and unpaid interest from, and including, October 15, 2025 to, but excluding, the redemption date of March 13, 2026.

**7. NET (LOSS) INCOME PER SHARE**

&nbsp;&nbsp;&nbsp;&nbsp;Basic net (loss) income per common share is computed by dividing the net (loss) income for the period by the weighted average number of shares of common stock outstanding during the reporting period. Diluted net (loss) income per common share reflects the effects of potentially dilutive securities, which is computed by dividing the sum of net (loss) income and any adjustments to net income by the sum of the weighted average number of common shares outstanding and dilutive common shares.

&nbsp;&nbsp;&nbsp;&nbsp;A reconciliation of the numerator and denominator used in the calculation of basic and diluted net (loss) income per common share is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(In millions, except per share amounts)** | **April 3, 2026** | **April 4, 2025** | **April 3, 2026** | **April 4, 2025** |
| **Net (loss) income per share - basic** | | | | |
| Net (loss) income attributable to Varex | $(8.1) | $6.9 | $(5.8) | $6.6 |
| Basic weighted average shares outstanding | 42.0 | 41.4 | 41.9 | 41.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic net (loss) income per share attributable to Varex | $(0.19) | $0.17 | $(0.14) | $0.16 |
| **Net (loss) income per share - diluted** |  |  |  |  |
| Net (loss) income attributable to Varex | $(8.1) | $6.9 | $(5.8) | $6.6 |
| Interest expense on Convertible Notes, net of tax |  | 1.6 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted net (loss) income | $(8.1) | $8.5 | $(5.8) | $6.6 |
| Basic weighted average shares outstanding | 42.0 | 41.4 | 41.9 | 41.2 |
| Dilutive effect of Convertible Notes |  | 9.6 |  |  |
| Dilutive effect of share-based awards and other |  | 0.2 |  | 0.4 |
| Diluted weighted average shares outstanding | 42.0 | 51.2 | 41.9 | 41.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted net (loss) income per share attributable to Varex | $(0.19) | $0.17 | $(0.14) | $0.16 |
| **Anti-dilutive share summary** |  |  |  |  |
| Share-based awards and other | 2.7 | 3.4 | 2.7 | 3.2 |
| Convertible notes |  |  |  | 9.6 |
| Warrants |  | 9.6 |  | 9.6 |
| &nbsp;&nbsp;&nbsp;Total anti-dilutive shares | 2.7 | 13.0 | 2.7 | 22.4 |

---

&nbsp;&nbsp;&nbsp;&nbsp;Potentially dilutive shares, which are based on the weighted-average shares of common stock underlying stock options, unvested stock awards, purchase rights granted under the employee stock purchase plan, warrants, and convertible notes using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted net (loss) income per share attributable to Varex when their effect is dilutive.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**8. LEASES**

&nbsp;&nbsp;&nbsp;&nbsp;The Company has operating and finance leases for office space, warehouse and manufacturing space, vehicles, and equipment. The following table presents supplemental balance sheet information related to the Company's operating and finance leases:

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **Balance Sheet Location** | **April 3, 2026** | **October 3, 2025** |
| **Assets** | | | |
| &nbsp;&nbsp;Operating lease right-of-use assets | *Operating lease assets* | $29.0 | $29.4 |
| &nbsp;&nbsp;Finance lease right-of-use assets | *Property, plant, and equipment, net* | 5.2 | 5.7 |
| **Liabilities** |  |  |  |
| &nbsp;&nbsp;Operating lease liabilities (current) | *Current operating lease liabilities* | 4.7 | 4.4 |
| &nbsp;&nbsp;Finance lease liabilities (current) | *Accrued liabilities and other current liabilities* | 0.4 | 0.4 |
| &nbsp;&nbsp;Operating lease liabilities (non-current) | *Operating lease liabilities* | 23.0 | 24.0 |
| &nbsp;&nbsp;Finance lease liabilities (non-current) | *Other long-term liabilities* | $5.3 | $5.6 |

---

&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information related to the Company's operating and finance leases:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **April 3, 2026** | **April 4, 2025** |
| Total operating lease costs<sup>(1)</sup> | $1.6 | $1.5 | $3.2 | $3.1 |
| Amortization of right-of-use assets | $0.2 | $0.2 | $0.5 | $0.5 |
| Interest on lease liabilities | 0.1 | 0.1 | 0.2 | 0.2 |
| &nbsp;&nbsp;Total finance lease costs | $0.3 | $0.3 | $0.7 | $0.7 |
| Operating cash flows from operating leases | $1.6 | $1.4 | $3.2 | $2.9 |
| Operating cash flows from finance leases | 0.1 | 0.1 | 0.2 | 0.2 |
| Financing cash flows from finance leases | 0.1 | 0.3 | 0.2 | 0.4 |
| &nbsp;&nbsp;Total cash paid for amounts included in the measurement of lease liabilities | $1.8 | $1.8 | $3.6 | $3.5 |
| Noncash operating right-of-use assets obtained in exchange for new lease liabilities | $1.2 | $0.5 | $2.0 | $0.8 |
| Noncash finance right-of-use assets obtained in exchange for new lease liabilities |  | 0.2 |  | 0.2 |
| &nbsp;&nbsp;Total right-of-use assets obtained in exchange for new lease liabilities | $1.2 | $0.7 | $2.0 | $1.0 |

---

<sup>(1)</sup> Includes variable and short-term lease expense which were immaterial for the three and six months ended April 3, 2026 and April 4, 2025.

**9. FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES**

&nbsp;&nbsp;&nbsp;&nbsp;As part of the Company's overall risk management practices, the Company enters into financial derivatives to manage its financial exposures to foreign currency exchange rates and interest rates.

&nbsp;&nbsp;&nbsp;&nbsp;The Company records all derivatives on the Condensed Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective, in which case the Company would test for effectiveness on a more frequent basis. The changes in fair value for all trades that are not designated for hedge accounting are recognized in current period income. The Company does not offset fair value amounts recognized for derivative instruments in its Condensed Consolidated Balance Sheets for presentation purposes.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;Credit risk related to derivative transactions reflect the risk that a party to the transaction could fail to meet its obligation under the derivative contracts. Therefore, the Company's exposure to the counterparty's credit risk is generally limited to the amounts, if any, by which the counterparty's obligations to the Company exceed the Company's obligations to the counterparty. The Company's policy is to enter into contracts only with financial institutions that meet certain minimum credit ratings to help mitigate counterparty credit risk.

***Derivatives Designated as Hedging Instruments - Net Investment Hedges***

&nbsp;&nbsp;&nbsp;&nbsp;The Company uses cross currency swap contracts as net investment hedges to manage its risk of variability in foreign currency-denominated net investments in wholly-owned international operations. All changes in fair value of the derivatives designated as net investment hedges are reported in accumulated other comprehensive loss along with the foreign currency translation adjustments on those investments. During the three months ended January 2, 2026, the Company completed a blend-and-extend transaction on its cross-currency swaps with an original maturity date in November 2025. The previous swaps were replaced with new fixed-to-fixed cross-currency swaps maturing in September 2027 with a notional amount of $51.8 million. Under the new contracts, the Company will receive fixed-rate United States dollar-denominated interest at contracted rates and will pay fixed-rate euro-denominated interest at a rate of 0%. These swaps have been designated as net investment hedges.

&nbsp;&nbsp;&nbsp;&nbsp;As of April 3, 2026, the Company had the following outstanding derivatives designated as net investment hedging instruments:

---

| | | |
|:---|:---|:---|
| **(In millions, except number of instruments)** | **Number of Instruments** | **Notional Value** |
| Cross currency swap contracts | 2 | $51.8 |

---

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the amount of pre-tax income recognized from derivative instruments for the periods indicated and the line items in the accompanying Condensed Consolidated Statements of Operations where the results are recorded for net investment hedges:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Amount of Gain (Loss) Recognized in OCI on Derivative<br>Three Months Ended** | **Amount of Gain (Loss) Recognized in OCI on Derivative<br>Three Months Ended** | **Location of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)** | **Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)<br>Three Months Ended** | **Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)<br>Three Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **Location of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)** | **April 3, 2026** | **April 4, 2025** |
| Cross currency swap contracts | $1.3 | $(3.7) | Interest expense | $0.1 | $0.2 |
|  | **Amount of Gain Recognized in OCI on Derivative<br>Six Months Ended** | **Amount of Gain Recognized in OCI on Derivative<br>Six Months Ended** | **Location of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)** | **Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)<br>Six Months Ended** | **Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)<br>Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **Location of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)** | **April 3, 2026** | **April 4, 2025** |
| Cross currency swap contracts | $0.9 | $1.1 | Interest expense | $0.1 | $0.4 |

---

&nbsp;&nbsp;&nbsp;&nbsp;These derivative instruments are subject to master netting agreements giving effect to rights of offset with each counterparty. None of the balances were eligible for netting. The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying Condensed Consolidated Balance Sheets where the instruments are recorded:

---

| | | | |
|:---|:---|:---|:---|
| | | **Derivative Assets and Liabilities** | **Derivative Assets and Liabilities** |
| **(In millions)**<br>**Derivatives Designated as Net Investment Hedges** |<br>**Balance Sheet Location** | **April 3, 2026** | **October 3, 2025** |
| Cross currency swap contracts | Prepaid expenses and other current assets | $0.1 | $— |
| Cross currency swap contracts | Accrued liabilities and other current liabilities |  | 10.4 |
| Cross currency swap contracts | Other long-term liabilities | $9.5 | $— |

---

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***Derivatives Designated as Hedging Instruments - Cash Flow Hedges***

&nbsp;&nbsp;&nbsp;&nbsp;The Company uses interest rate swap contracts to manage its exposure to variability in cash flows associated with forecasted interest payments on variable-rate debt. These interest rate swap contracts are designated as cash flow hedges.

&nbsp;&nbsp;&nbsp;&nbsp;Changes in the fair value of derivatives designated as cash flow hedges are recorded in accumulated other comprehensive loss and are reclassified into income in the same period or periods during which the hedged forecasted interest payments affect income.

&nbsp;&nbsp;&nbsp;&nbsp;During the three months ended April 3, 2026, the Company entered into an interest rate swap agreement with a notional amount of $350.0 million, effective March 13, 2026 and maturing on March 31, 2030. Under the terms of the swap, the Company pays a fixed interest rate of 3.65% and receives variable interest based on one-month SOFR, thereby effectively fixing a portion of the Company's interest payments on its variable-rate debt. The notional amount of the swap amortizes over time to align with the scheduled principal repayments of the underlying hedged debt.

&nbsp;&nbsp;&nbsp;&nbsp;As of April 3, 2026, the Company had the following outstanding derivatives designated as cash flow hedging instruments:

---

| | | |
|:---|:---|:---|
| **(In millions, except number of instruments)** | **Number of Instruments** | **Notional Value** |
| Interest Rate Swap Contracts | 1 | $345.6 |

---

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the amount of pre-tax income recognized from derivative instruments for the periods indicated and the line items in the accompanying Condensed Consolidated Statements of Operations where the results are recorded for cash flow hedges:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Amount of Loss Recognized in OCI on Derivative<br>Three Months Ended** | **Amount of Loss Recognized in OCI on Derivative<br>Three Months Ended** | **Location of Gain Reclassified from Accumulated OCI into Income** | **Amount of Gain Reclassified from Accumulated OCI into Income<br>Three Months Ended** | **Amount of Gain Reclassified from Accumulated OCI into Income<br>Three Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **Location of Gain Reclassified from Accumulated OCI into Income** | **April 3, 2026** | **April 4, 2025** |
| Interest Rate Swap Contracts | $(0.6) | $— | Interest expense | $— | $— |
|  | **Amount of Loss Recognized in OCI on Derivative<br>Six Months Ended** | **Amount of Loss Recognized in OCI on Derivative<br>Six Months Ended** | **Location of Gain Reclassified from Accumulated OCI into Income** | **Amount of Gain Reclassified from Accumulated OCI into Income<br>Six Months Ended** | **Amount of Gain Reclassified from Accumulated OCI into Income<br>Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **Location of Gain Reclassified from Accumulated OCI into Income** | **April 3, 2026** | **April 4, 2025** |
| Interest Rate Swap Contracts | $(0.6) | $— | Interest expense | $— | $— |

---

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying Condensed Consolidated Balance Sheets where the instruments are recorded:

---

| | | | |
|:---|:---|:---|:---|
| | | **Derivative Assets and Liabilities** | **Derivative Assets and Liabilities** |
| **(In millions)**<br>**Derivatives Designated as Net Investment Hedges** |<br>**Balance Sheet Location** | **April 3, 2026** | **October 3, 2025** |
| Interest Rate Swap Contracts | Prepaid expenses and other current assets | $0.1 | $— |
| Interest Rate Swap Contracts | Other long-term liabilities | $0.7 | $— |

---

***Balance Sheet Hedges***

&nbsp;&nbsp;&nbsp;&nbsp;The Company also enters into foreign currency forward contracts to hedge fluctuations associated with foreign currency-denominated monetary assets and liabilities, primarily cash, lease contracts, third-party accounts receivable and payable, and intercompany accounts receivable and payable. These forward contracts are generally entered into at the end of one fiscal period and expire by the end of the next fiscal period. These forward contracts are not designated for hedge accounting treatment; therefore, the change in fair value of these derivatives is recorded as a component of other expense, net in the Condensed Consolidated Statements of Operations and offsets the change in fair value of the foreign currency-denominated assets and liabilities, which are also recorded as a component of other expense, net. The Company has not and does not intend to use derivative financial instruments for speculative or trading purposes.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;The following table shows the notional amounts of outstanding foreign currency contracts as of April 3, 2026:

---

| | | |
|:---|:---|:---|
| | **Notional Value of Derivatives not Designated as Hedging Instruments:** | **Notional Value of Derivatives not Designated as Hedging Instruments:** |
| **(In millions of equivalent USD)** | **Buy Contracts** | **Sell Contracts** |
| Australian Dollar | $— | $1.9 |
| Chinese Renminbi |  | 4.4 |
| Euro |  | 27.0 |
| Indian Rupee |  | 1.1 |
| Japanese Yen | 8.1 |  |
| Mexican Peso |  | 1.2 |
| Philippine Peso | 17.6 |  |
| Swiss Franc | 2.0 |  |
| &nbsp;&nbsp;Total notional value | $27.7 | $35.6 |

---

**10. NONCONTROLLING INTERESTS**

&nbsp;&nbsp;&nbsp;&nbsp;In September 2018, the Company entered into a partnership in Saudi Arabia. The Company has majority voting rights with an approximate 75% interest. Accordingly, the Company has consolidated the operations of the Saudi Arabia partnership in its Condensed Consolidated Balance Sheets and recorded the noncontrolling interests. The noncontrolling interest related to the partner's approximate 25% interest is included in noncontrolling interests in the equity section of the Company's Condensed Consolidated Balance Sheets. Income representing the noncontrolling partner's share of income from operations is included in the Company's Condensed Consolidated Statements of Operations.

&nbsp;&nbsp;&nbsp;&nbsp;In April 2015, the Company acquired 73.5% of the then outstanding shares of MeVis Medical, a publicly traded company based in Bremen, Germany that provides image processing software and services for cancer screening. In August 2015, the Company, through one of its German subsidiaries, entered into a Domination and Profit and Loss Transfer Agreement (the "DPLTA") with MeVis Medical. In fiscal years 2017 and 2018, the Company purchased an additional 0.2% of outstanding shares such that the Company now owns 73.7% of the outstanding shares of common stock of MeVis Medical. Under the DPLTA, MeVis Medical subordinates its management to the Company and undertakes to transfer all its annual profits and losses to the Company. In return, the DPLTA grants the noncontrolling shareholders of MeVis Medical, an annual recurring net compensation of €0.95 per MeVis Medical share. At April 3, 2026, noncontrolling shareholders together held approximately 0.5 million shares of MeVis Medical, representing 26.3% of the outstanding shares.

&nbsp;&nbsp;&nbsp;&nbsp;The changes in noncontrolling interests were as follows:

---

| | | |
|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |
| Noncontrolling interests, at beginning of period | $14.0 | $14.1 |
| &nbsp;&nbsp;Net income attributable to noncontrolling interests | 0.2 | 0.4 |
| &nbsp;&nbsp;Other | (0.3) | (0.3) |
| Noncontrolling interests, at end of period | $13.9 | $14.2 |

---

**11. EMPLOYEE STOCK PLANS**

***Share-Based Compensation Expense***

&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation expense recognized in the Condensed Consolidated Statements of Operations is based on awards ultimately expected to vest. Share-based compensation expense includes expenses related to the Company's direct employees.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;The table below summarizes the effect of recording share-based compensation expense and the option value of the employee stock purchase plan shares:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **April 3, 2026** | **April 4, 2025** |
| Cost of revenues | $0.5 | $0.6 | $1.0 | $1.1 |
| Research and development | 0.8 | 0.8 | 1.6 | 1.7 |
| Selling, general, and administrative  | 2.7 | 2.4 | 5.2 | 5.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total share-based compensation expense | $4.0 | $3.8 | $7.8 | $7.9 |

---

***Stock Option Activity***

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes stock option activity under Varex's employee incentive plans for the Company's employees:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(In thousands, except per share amounts and the remaining term)** | **Options** | **Price Range** | **Weighted Average Exercise Price** | **Weighted Average Remaining Term (in years)** | **Aggregate Intrinsic Value**<sup>(1)</sup> |
| Outstanding at October 3, 2025 | 1830 | $13.61 - $31.42 | $25.61 | 5.1 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Canceled, expired or forfeited | (205) | $13.61 - $31.42 | 31.42 |  |  |
| Outstanding at April 3, 2026 | 1625 | $13.61 - $30.95 | $24.88 | 5.2 | $— |
| Exercisable at April 3, 2026 | 1538 | $13.61 - $30.95 | $25.07 | 5.1 | $— |

---

<sup>(1)</sup> The aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the exercise price and the closing price of Varex common stock of $10.50 as of April 2, 2026, the last trading date of the Company's second quarter, and which represents the amount that would have been received by the option holders had all option holders exercised their in-the-money options and sold the shares received upon exercise as of that date.

***Restricted Stock Units, Performance Stock Units, Restricted Stock Awards, and Deferred Stock Units***

&nbsp;&nbsp;&nbsp;&nbsp;The Company issues performance stock units ("PSUs") to certain officers and key employees in connection with our long-term incentive program. Each PSU represents the right to receive one share of our common stock, provided that the applicable performance and vesting conditions are satisfied. The fair value of PSUs are linked to the achievement of financial performance metrics or a market condition based on our relative total shareholder return over the performance period compared to a predetermined peer group.

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the activity for restricted stock units, performance stock units, restricted stock awards, and deferred stock units under the 2020 Omnibus Stock Plan:

---

| | | |
|:---|:---|:---|
| **(In thousands, except per share amounts)** | **Number of Shares** | **Weighted Average Grant-Date Fair Value** |
| Outstanding at October 3, 2025 | 1946 | $18.35 |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 1061 | 12.14 |
| &nbsp;&nbsp;&nbsp;&nbsp;Vested | (426) | 21.77 |
| &nbsp;&nbsp;&nbsp;&nbsp;Canceled or expired | (16) | 17.26 |
| Outstanding at April 3, 2026 | 2565 | $15.19 |

---

**12. TAXES ON (LOSS) INCOME**

&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended April 3, 2026, the Company recognized income tax expense of $1.6 million on $6.4 million of pre-tax loss. For the three months ended April 4, 2025, the Company recognized income tax expense of $3.7 million on $10.8 million of pre-tax income. For the six months ended April 3, 2026, the Company recognized income tax expense of $3.0 million on $2.6 million of pre-tax loss. For the six months ended April 4, 2025, the Company recognized income tax expense of $6.3 million on $13.3 million of pre-tax income. The Company is unable to recognize a tax benefit for pre-tax book losses in certain jurisdictions but has recognized tax expense for profitable jurisdictions.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;The Company's tax expense increased for the six months ended April 3, 2026, primarily due to higher pre-tax income in profitable jurisdictions.

&nbsp;&nbsp;&nbsp;&nbsp;The Organization for Economic Cooperation and Development ("OECD") enacted model rules for Pillar Two, which became effective for the Company in fiscal year 2025. On January 5, 2026, the OECD released new guidance providing for a side-by-side system where U.S.-parented groups, such as ours, would be exempted from certain provisions of Pillar Two. This guidance has not yet been enacted by any country where we operate and that implements the Pillar Two model rules. As a result, there remains a great deal of uncertainty.

&nbsp;&nbsp;&nbsp;&nbsp;On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions, including the option to expense certain research and development expenses immediately rather than capitalizing those. The legislation has multiple effective dates, with the expensing of certain research and development expenses starting to be effective during the fiscal year ending October 2, 2026, and others implemented through future years.

&nbsp;&nbsp;&nbsp;&nbsp;The Company is maintaining its reinvestment assertion with respect to foreign earnings for the three months ended April 3, 2026, which is that all earnings prior to fiscal year 2018 are permanently reinvested for all countries, and that post fiscal year 2017 earnings available for repatriation in entities incorporated in Sweden, Finland, the Philippines, Saudi Arabia, and India remain indefinitely reinvested. Due to the level of earnings available for repatriation, the treaty benefits applicable to jurisdictions in which those earnings are located, and the now favorable United States tax treatment of repatriated foreign earnings, the amount of deferred tax liability recorded related to the potential repatriation is immaterial. This estimated liability is for United States state income taxes and foreign withholding taxes that would apply if the foreign earnings were repatriated in the form of a dividend.

**13. SEGMENT INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;The Company has two reportable operating segments: Medical and Industrial, which aligns with how its CEO, who is the CODM, reviews the Company's performance. The segments align the Company's products and service offerings with customer use in medical and industrial markets and are consistent with how the Company's CEO evaluates the business for the allocation of resources. The CODM allocates resources to and evaluates the financial performance of each operating segment primarily based on revenues and gross profit. The operating and reportable segment structure provides alignment between business strategies and operating results.

***Description of Segments***

&nbsp;&nbsp;&nbsp;&nbsp;The Medical segment designs, manufactures, sells, and services X-ray imaging components, including X-ray tubes, digital detectors and accessories, ionization chambers, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, automatic exposure control devices, generators, and heat exchangers. These components are used in a range of medical imaging applications including CT, mammography, oncology, cardiac, surgery, dental, and other diagnostic radiography uses.

&nbsp;&nbsp;&nbsp;&nbsp;The Industrial segment designs, develops, manufactures, sells and services X-ray imaging products for use in a number of markets, including security applications for cargo screening at ports and borders, baggage screening at airports, and nondestructive testing, irradiation, and inspection applications used in a number of other vertical markets, as well as X-ray imaging systems for industrial applications. The Company's industrial products include Linatron® X-ray linear accelerators, non-intrusive cargo inspection systems, X-ray tubes, digital detectors, high voltage connectors, and coolers. In addition, the Company licenses proprietary image-processing and detection software designed to work with other Varex products to provide packaged sub-assembly solutions to industrial customers.

&nbsp;&nbsp;&nbsp;&nbsp;Accordingly, the following information is provided for purposes of achieving an understanding of operations, but it may not be indicative of the financial results of the reported segments were they independent organizations. In addition, comparisons of the Company's operations to similar operations of other companies may not be meaningful.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;Information related to the Company's segments is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** | **April 3, 2026** | **April 4, 2025** |
| Revenues, net |  |  |  |  |
| &nbsp;&nbsp;Medical | $156.2 | $153.8 | $301.0 | $298.4 |
| &nbsp;&nbsp;Industrial | 59.8 | 59.1 | 124.6 | 114.3 |
| Total revenues, net | 216.0 | 212.9 | 425.6 | 412.7 |
| Cost of revenues |  |  |  |  |
| &nbsp;&nbsp;Medical | 105.6 | 97.9 | 204.4 | 193.0 |
| &nbsp;&nbsp;Industrial | 37.8 | 38.3 | 78.8 | 74.5 |
| Total cost of revenues | 143.4 | 136.2 | 283.2 | 267.5 |
| Gross profit |  |  |  |  |
| &nbsp;&nbsp;Medical | 50.6 | 55.9 | 96.6 | 105.4 |
| &nbsp;&nbsp;Industrial | 22.0 | 20.8 | 45.8 | 39.8 |
| &nbsp;&nbsp;Total gross profit | 72.6 | 76.7 | 142.4 | 145.2 |
| Total operating expenses | 58.2 | 54.6 | 112.6 | 111.9 |
| Interest and other expense, net | (20.8) | (11.3) | (32.4) | (20.0) |
| (Loss) income before taxes | (6.4) | 10.8 | (2.6) | 13.3 |
| &nbsp;&nbsp;Income tax expense | 1.6 | 3.7 | 3.0 | 6.3 |
| Net (loss) income | (8.0) | 7.1 | (5.6) | 7.0 |
| &nbsp;&nbsp;Less: Net income attributable to noncontrolling interests | 0.1 | 0.2 | 0.2 | 0.4 |
| Net (loss) income attributable to Varex | $(8.1) | $6.9 | $(5.8) | $6.6 |

---

&nbsp;&nbsp;&nbsp;&nbsp;The Company does not disclose total assets by segment as this information is not provided to the CODM.

&nbsp;&nbsp;&nbsp;&nbsp;See Note 2, *Revenue,* for disaggregation of revenue by geographic region and country.

**14. OTHER FINANCIAL INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the Company's accrued liabilities and other current liabilities:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **April 3, 2026** | **October 3, 2025** |
| Accrued compensation and benefits | $30.7 | $43.4 |
| Product warranty | 8.1 | 8.5 |
| Taxes payable | 0.7 | 5.3 |
| Refund liability | 7.6 | 7.7 |
| Derivative liability |  | 10.4 |
| Accrued interest | 1.4 | 13.5 |
| Other | 12.6 | 9.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total accrued liabilities and other current liabilities | $61.1 | $98.4 |

---

**15. INVENTORIES**

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the Company's inventories, net:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **April 3, 2026** | **October 3, 2025** |
| Raw materials and parts | $260.4 | $228.1 |
| Work-in-process | 33.9 | 31.3 |
| Finished goods | 52.4 | 40.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total inventories, net | $346.7 | $299.4 |

---

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

 **Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

&nbsp;&nbsp;&nbsp;&nbsp;*The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited Condensed Consolidated Financial Statements and notes thereto that are contained in this Quarterly Report on Form 10-Q (this "Quarterly Report") as well as our Annual Report on Form 10-K for the fiscal year ended October 3, 2025 ("Annual Report") and our other filings, including the Current Reports on Form 8-K, that have been filed with the Securities and Exchange Commission ("SEC") through the date of this report.*

&nbsp;&nbsp;&nbsp;&nbsp;*In this Quarterly Report, unless otherwise specified or the context otherwise requires, the "Company," "Varex," "we," "us," and "our" refer to Varex Imaging Corporation.*

**Forward-Looking Statements**

&nbsp;&nbsp;&nbsp;&nbsp;This Quarterly Report contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, which provides a "safe harbor" for statements about future events, and financial performance that are based on the beliefs of, estimates made by, and information currently available to the management of Varex. Actual results and the outcome or timing of certain events described in these forward-looking statements are subject to risk and uncertainties and may differ significantly from those described. Important factors that could cause our actual results and financial condition to differ significantly from those projections or expectations include, among other things, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in import/export regulatory regimes, tariffs, trade wars, and national policies, including exemptions thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduction in or loss of business of one or more of our limited original equipment manufacturing ("OEM") customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• challenges in accurately predicting product demand and delivery schedules;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• loss of business to, and an inability to effectively compete with, competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pricing pressures and other factors that could result in margin erosion and loss of customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to meet customers' needs and demands;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• global, regional, and country-specific economic instability, shifting political environments, changing tax treatment, tariffs, trade wars, and other risks associated with international manufacturing, operations, and sales;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the financial results of our equity method investments, including joint ventures that we do not control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inflation and supply chain disruptions resulting in increased costs and delayed product delivery;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disruption of critical information systems or material breaches in the security of our systems or systems of third parties upon which we rely;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to maintain or defend our intellectual property rights, and costs associated with protecting our intellectual property and defending such rights and defending against infringement claims;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• noncompliance with regulations applicable to marketing, manufacturing, labeling, and distributing our products and delays in obtaining regulatory clearances or approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limitations imposed by operating and financial restrictions of our debt financing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other factors cited in Part I, Item 1A, "Risk Factors" in our Annual Report and in Part II, Item 1A, "Risk Factors" of this Quarterly Report.

&nbsp;&nbsp;&nbsp;&nbsp;Statements concerning legislative, tariff, and trade wars and trade policy reforms, government investigations, and the uncertainty resulting therefrom; geopolitical tensions; supply chain and logistics challenges; cost increases and expense management; changes in U.S. and worldwide economic conditions, such as the impact of inflation, changes in interest rates, and fluctuations in foreign currency exchange rates; industry or business segment outlook; customer acceptance of or transition to new products or technologies such as advanced X-ray tube and digital flat panel detector products; growth drivers; future orders, revenues, market share, backlog, earnings or other financial results; and any statements using the terms "believe," "expect," "anticipate," "can," "should," "would," "could," "estimate," "may," "intend," "potential," and "possible" or similar statements are forward-looking statements that involve risks and uncertainties that could cause our actual results and the outcome and timing of certain events to differ materially from those projected or management's current expectations.

&nbsp;&nbsp;&nbsp;&nbsp;Any forward-looking statement made in this Quarterly Report (including in any exhibits or documents incorporated by reference) is based on information currently available to Varex and its management and speaks only as of the date on which it is made. We have not assumed any obligation to, and you should not expect us to, update or revise those statements because of new information, future events or otherwise.

**Overview**

&nbsp;&nbsp;&nbsp;&nbsp;Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components including X-ray tubes, flat panel and photon counting detectors and accessories, linear accelerators, image software processing solutions, and stand-alone X-ray based systems in select application areas. Our components are used in medical diagnostic imaging, security inspection

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

systems, and industrial quality inspection systems, as well as for analysis and measurement applications in industrial manufacturing applications. Global OEMs incorporate our X-ray imaging components into their systems to detect, diagnose, protect, irradiate, and inspect. Varex has approximately 2,450 full-time equivalent employees, located at engineering, manufacturing, and service center sites in North America, Europe, and Asia.

&nbsp;&nbsp;&nbsp;&nbsp;Our products are sold in three geographic regions: the Americas, EMEA, and APAC. The Americas includes North America (primarily the United States) and Latin America. EMEA includes Europe, the Middle East, India, and Africa. APAC includes Asia (other than India) and Australia. Revenues by region are based on the known final destination of products sold.

&nbsp;&nbsp;&nbsp;&nbsp;Our success depends, among other things, on our ability to anticipate and respond to changes in our business, the direction of technological innovation, and the demand from our customers. We continually invest in research and development and employ approximately 400 individuals in product development related activities. Our focus on innovation and product performance along with strong and long-term customer relationships allows us to collaborate with our customers to deliver industry-leading X-ray imaging products. We continue to work to improve the life and quality of our imaging components and leverage our scale as one of the largest independent X-ray imaging component suppliers to provide cost-effective solutions for our customers.

**Debt Refinance**

&nbsp;&nbsp;&nbsp;&nbsp;During the quarter, we entered into a new $490 million secured credit facility, consisting of a $350 million term loan facility, a $100 million revolving credit facility and a $40 million delayed draw term loan facility, collectively the "Credit Facility." We borrowed the full $350 million term loan facility and used the proceeds, together with cash on hand, to redeem all $368 million aggregate principal amount of our outstanding 7.875% Senior Secured Notes due 2027. We also terminated our prior $155 million senior secured revolving credit facility.

&nbsp;&nbsp;&nbsp;&nbsp;Borrowings under the Credit Facility generally bear interest, at our option, at a variable rate based on Term SOFR or a base rate, plus an applicable margin. See Note 6 *Borrowings* to the accompanying Notes to the Condensed Consolidated Financial Statements for additional information regarding the terms of the Credit Facility. We expect the refinancing to reduce annual interest expense by more than $7 million, lower total outstanding debt, improve financial flexibility, and support continued investment in the business.

**Current Economic and Trade Environment**

&nbsp;&nbsp;&nbsp;&nbsp;The economic and trade environment remains dynamic and unpredictable. Changes to tariff policies in 2025 by the United States and other countries, particularly the bilateral United States and Chinese tariffs, impacted our results of operations and profitability in fiscal year 2025 and the first half of fiscal year 2026. In February 2026, the U.S. Supreme Court held that the International Emergency Economic Powers Act, or IEEPA, does not authorize the President to impose tariffs. The decision invalidated certain IEEPA-based tariffs, but did not resolve all questions about refund timing, refund mechanics, or the potential use of other tariff authorities.

&nbsp;&nbsp;&nbsp;&nbsp;Although certain IEEPA-based tariffs have been invalidated, the broader trade environment remains uncertain. Tariffs, trade restrictions, retaliatory actions, and related uncertainty have contributed to, and may continue to contribute to, delayed customer purchasing decisions, increased costs, supply chain and logistics disruption, exchange rate volatility, increased shipping and transportation costs, and disputes with customers regarding potential IEEPA tariff refunds.

&nbsp;&nbsp;&nbsp;&nbsp;Tariffs and trade restrictions that remain in effect or are imposed under other legal authorities, including any tariffs targeting X-ray imaging products, or products shipped from the United States could make our products less competitive and negatively impact our business, financial condition and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;We continue to monitor tariff-related actions, investigations, and policy developments, as well as changes in customer procurement decisions resulting from the current trade environment. We also continue to take actions intended to reduce the impact of tariffs and trade-related uncertainty on our business, including working with customers and evaluating operational, supply chain, and pricing measures, as well as pursuing commonly utilized mitigation practices and localizing more in region manufacturing. At this time, however, we do not anticipate these efforts will allow us to fully offset the additional costs or other negative impacts resulting from such tariffs. Furthermore, if international customers' negative perceptions of United States' trade policy or other actions by the United States Administration influence their purchasing decisions, our business and results of operations could be negatively impacted.

&nbsp;&nbsp;&nbsp;&nbsp;As a result of the Supreme Court ruling on IEEPA tariffs, we may be eligible for refunds of tariffs previously paid on imported goods. Because the timing of any such refunds remains uncertain, we have not recognized a receivable or corresponding offset to expense or assets as of April 3, 2026. We continue to evaluate these developments and their potential impact on our results of operations. To the extent we recover amounts previously passed through to customers, we may be required under certain customer

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

arrangements to remit some or all of those recovered amounts to customers to the extent they were initially passed through to our customers.

&nbsp;&nbsp;&nbsp;&nbsp;For additional information on risks related to tariffs and trade policy, supply chain and logistics challenges, cost increases, changes in U.S. and worldwide economic conditions, geopolitical tensions, and other risks that could impact our results, see Item 1A "*Risk Factors.*"

***Operating Segments and Products***

&nbsp;&nbsp;&nbsp;&nbsp;We have two reportable operating segments: Medical and Industrial. The segments align our products and services offerings with customer use in medical and industrial imaging.

***Medical***

&nbsp;&nbsp;&nbsp;&nbsp;In our Medical segment, we design, manufacture, sell and service X-ray imaging components, including X-ray tubes, flat panel and photon counting detectors and accessories, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, automatic exposure control devices, generators, and coolers. These components are used in a range of medical imaging applications including computed tomography ("CT"), mammography, oncology, cardiac, surgery, dental, fluoroscopy, and other diagnostic radiography uses.

&nbsp;&nbsp;&nbsp;&nbsp;Our X-ray imaging components are primarily sold to OEM customers. These OEM customers then design-in our products to their X-ray imaging systems for a variety of medical modalities. A substantial majority of medical X-ray imaging OEMs globally are our customers, and many of these have been our customers for over 35 years. We believe one of the reasons for customer loyalty is that our hardware and software products are tightly integrated with our customers' systems. We work very closely with our customers to create custom built components for their systems based on technology platforms that we have developed. Because our products are often customized for our customers' specific equipment, it can be costly and complex for our customers to switch to another provider. Once our components are designed into our customers' equipment, our customers will typically continue to buy from us for any replacement components and for service and support for that equipment. Some of our products are also included in product registrations for our customers' equipment that require regulatory approval to change. In addition to sales to OEM customers, we sell our products to independent service companies and distributors as well as directly to end-users for replacement purposes.

&nbsp;&nbsp;&nbsp;&nbsp;We are one of the largest independent global manufacturers of X-ray imaging components, and each year, we produce over 27,000 X-ray tubes and 20,000 X-ray detectors. We estimate that our world-wide installed base of products includes more than 170,000 X-ray tubes, 170,000 X-ray detectors, 600,000 connect and control components, and 16,800 software instances. Replacement and service of our existing installed base makes up a significant portion of our revenue. Many of our components need to be replaced regularly, depending upon usage and other factors. For example, CT X-ray tubes generally need to be replaced every 2 to 6 years, in comparison to a general radiography tube which can last up to 10 years, depending on utilization. In China, the replacement cycle for CT X-ray tubes currently can be as frequent as every 10 to 20 months due to high utilization of imaging equipment. Other products such as X-ray detectors have a useful life of as much as 7 years or more but can require more frequent service and repairs during their useful life. In addition, our detector customers often elect to upgrade products to newer technology before the end of a current product's useful life. X-ray imaging software is a relatively small part of our business and includes maintenance revenue for software licenses.

&nbsp;&nbsp;&nbsp;&nbsp;In China, the government has continued its efforts to broaden the availability of healthcare services. In the past 20 years, the number of medical institutions and diagnostic radiology equipment per million of population in China has increased substantially. We are developing CT X-ray tubes and related subsystems for Chinese OEMs as they introduce new systems in China. Over the long term, our objective is to become the partner of choice both for new systems and for replacement components in existing systems as CT systems continue to be more widely adopted throughout China.

***Industrial***

&nbsp;&nbsp;&nbsp;&nbsp;In our Industrial segment, we design, develop, manufacture, sell, and service X-ray imaging products for use in a number of applications, including security applications for cargo screening at ports and borders, baggage screening at airports, and nondestructive testing, irradiation, and inspection applications used in a number of other verticals. We also manufacture and sell our own X-ray imaging systems for industrial applications. Our Industrial products include Linatron® X-ray linear accelerators, non-intrusive cargo inspection systems, X-ray tubes, flat panel and photon counting detectors, computed radiography scanners, high voltage connectors, and coolers. In addition, we license proprietary image-processing and detection software designed to work with other Varex products to provide packaged sub-assembly solutions to our Industrial customers. Our Industrial business benefits from the research and development investment and manufacturing economies of scale on the Medical side of our business, as we continue to find new applications for our technology. Along with more favorable pricing dynamics, this allows us to generally achieve higher gross profit

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

for Industrial products relative to our Medical business. In addition, our Industrial business benefits from our long-term service agreements for our Linatron® products.

&nbsp;&nbsp;&nbsp;&nbsp;Security applications primarily consist of cargo security for the screening of trucks, trains, and cargo containers at ports and borders as well as airport security for checked baggage and palletized cargo. The end customers for border protection systems are typically government agencies, many of which are in oil-based economies and war zones where there can be significant variation in buying patterns. We have expanded our security offerings to include full systems that perform cargo and vehicle inspections. These systems are used for screening cargo at ports and borders.

&nbsp;&nbsp;&nbsp;&nbsp;Non-destructive testing and inspection verticals utilize X-ray imaging to scan items for inspection of manufacturing defects and product integrity in a wide range of industries including aerospace, automotive, electronics, oil and gas, food packaging, metal castings, and additive manufacturing. In addition, new applications for X-ray sources have been developed, such as sterilization of food and its packaging. We provide X-ray sources, digital detectors, high voltage connectors, and image processing software to OEM customers, system integrators, and manufacturers in a variety of these verticals. We believe that non-destructive testing represents a significant growth opportunity for our business, and we are actively pursuing new potential applications for our products.

**Critical Accounting Policies and Estimates**

&nbsp;&nbsp;&nbsp;&nbsp;The preparation of our unaudited Condensed Consolidated Financial Statements and related disclosures in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are based on historical experience and on various other factors that we believe are reasonable under the circumstances. Our critical accounting policies that are affected by accounting estimates require us to use judgments, often as a result of the need to make estimates and assumptions regarding matters that are inherently uncertain, and actual results could differ materially from these estimates.

&nbsp;&nbsp;&nbsp;&nbsp;We periodically review our accounting policies, estimates, and assumptions and make adjustments when facts and circumstances dictate. Refer to our Annual Report on Form 10-K for the fiscal year ended October 3, 2025 filed with the SEC on November 18, 2025 and Note 1, *Summary of Significant Accounting Policies,* of the Notes to the Condensed Consolidated Financial Statements of this report for further details. Our critical accounting policies that are affected by accounting estimates include valuation of inventories, assessment of recoverability of goodwill and intangible assets, and income taxes. Except for the changes in certain policies upon adoption of the accounting standard described in Note 1, *Summary of Significant Accounting Policies* of the Notes to the Condensed Consolidated Financial Statements of this report, there have been no material changes to the Company's significant accounting policies, compared to the accounting policies described in Note 1, *Summary of Significant Accounting Policies*, in the Company's Annual Report on Form 10-K for fiscal year 2025.

***Fiscal Year***

&nbsp;&nbsp;&nbsp;&nbsp;The fiscal years of the Company as reported are the 52 or 53-week periods ending on the Friday nearest September 30. Fiscal year 2026 is the 52-week period ending October 2, 2026. Fiscal year 2025 was the 53-week period that ended on October 3, 2025. The fiscal quarters ended April 3, 2026 and April 4, 2025 were both 13-week periods. The six-month fiscal periods ended April 3, 2026 and April 4, 2025 were a 26-week period and a 27-week period, respectively.

**Discussion of Results of Operations for the Three Months Ended April 3, 2026 Compared to the Three Months Ended April 4, 2025** 

***Revenues, Net***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | | |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |<br>**$ Change** |<br>**% Change** |
| &nbsp;&nbsp;&nbsp;Medical | $156.2 | $153.8 | $2.4 | 1.6% |
| &nbsp;&nbsp;&nbsp;Industrial | 59.8 | 59.1 | 0.7 | 1.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues, net | $216.0 | $212.9 | $3.1 | 1.5% |
| &nbsp;&nbsp;&nbsp;*Medical as a percentage of total revenues, net* | *72.3 %* | *72.2 %* |  |  |
| &nbsp;&nbsp;&nbsp;*Industrial as a percentage of total revenues, net* | *27.7 %* | *27.8 %* |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;Medical revenues increased $2.4 million, primarily due to increased sales of radiography, CT, mammography, and other modalities of $12.0 million, partially offset by decreased sales in fluoroscopic, dental, veterinary, and oncology modalities of $9.6 million.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;Industrial revenues increased $0.7 million, primarily due to increased sales of digital detectors of $4.5 million, partially offset by decreased sales of inspection products and other components of $3.8 million.

***Revenues, Net by Region***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | | |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |<br>**$ Change** |<br>**% Change** |
| &nbsp;&nbsp;&nbsp;Americas | $78.7 | $69.4 | $9.3 | 13.4% |
| &nbsp;&nbsp;&nbsp;EMEA | 59.9 | 71.7 | (11.8) | (16.5)% |
| &nbsp;&nbsp;&nbsp;APAC | 77.4 | 71.8 | 5.6 | 7.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues, net | $216.0 | $212.9 | $3.1 | 1.5% |

---

&nbsp;&nbsp;&nbsp;&nbsp;Overall revenue during the three months ended April 3, 2026 increased as compared to the three months ended April 4, 2025. Americas revenue increased by $9.3 million due to increased sales of security inspection products of $4.4 million, X-ray tubes of $4.0 million, and other product sales of $0.8 million. EMEA revenues decreased $11.8 million due to decreased sales of security inspection products of $8.5 million, digital detectors of $4.4 million, and other products of $0.5 million, partially offset by increased sales of X-ray tubes of $1.6 million. APAC revenues increased $5.6 million primarily due to increased sales of X-ray tubes of $2.8 million, security inspection products of $0.9 million, digital detectors of $0.7 million, and other products of $1.2 million.

&nbsp;&nbsp;&nbsp;&nbsp;See Note 2, *Revenue*, to the accompanying Notes to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country.

***Gross Profit***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | | |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |<br>**$ Change** |<br>**% Change** |
| &nbsp;&nbsp;&nbsp;Medical | $50.6 | $55.9 | $(5.3) | (9.5)% |
| &nbsp;&nbsp;&nbsp;Industrial | 22.0 | 20.8 | 1.2 | 5.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total gross profit | $72.6 | $76.7 | $(4.1) | (5.3)% |
| &nbsp;&nbsp;&nbsp;*Medical gross margin* | *32.4 %* | *36.3 %* |  |  |
| &nbsp;&nbsp;&nbsp;*Industrial gross margin* | *36.8 %* | *35.2 %* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Total gross margin* | *33.6 %* | *36.0 %* |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;The Medical segment gross profit decreased $5.3 million, primarily due to increased material costs of $7.4 million, partially offset by increased sales volume, favorable shift in product sales mix, and increased productivity of $2.1 million.

&nbsp;&nbsp;&nbsp;&nbsp;The Industrial segment gross profit increased $1.2 million, primarily due to both increased sales volume and a favorable shift in product sales mix of $3.2 million, partially offset by increased material costs and decreased productivity of $2.0 million.

***Operating Expenses***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | | |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |<br>**$ Change** |<br>**% Change** |
| &nbsp;&nbsp;&nbsp;Research and development | $22.2 | $22.0 | $0.2 | 0.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*As a percentage of total revenues, net* | *10.3 %* | *10.3 %* |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general, and administrative | $36.0 | $32.6 | $3.4 | 10.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*As a percentage of total revenues, net* | *16.7 %* | *15.3 %* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating expenses | $58.2 | $54.6 | $3.6 | 6.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*As a percentage of total revenues, net* | *26.9 %* | *25.6 %* |  |  |

---

*Research and Development*

&nbsp;&nbsp;&nbsp;&nbsp;We are committed to investing in the business to support long-term growth and believe long-term research and development expenses of approximately 8% to 10% of annual revenues is the appropriate range that will allow us to innovate and bring new

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

products to market for our global OEM customers. Research and development were 10.3% of revenues, in-line with research and development costs in the prior year period.

*Selling, General, and Administrative*

&nbsp;&nbsp;&nbsp;&nbsp;Selling, general, and administrative expenses increased $3.4 million, primarily due to increased legal costs of $2.0 million, other administrative costs of $1.5 million and marketing cost of $1.2 million, partially offset by decreased compensation costs and fixed commitment costs to a supplier of $1.5 million. The remaining variance was attributable to other changes in selling, general, and administrative expenses, each of which was individually insignificant.

***Interest and Other Expense, Net***

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the Company's interest and other expense, net:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | | |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |<br>**$ Change** |<br>**% Change** |
| &nbsp;&nbsp;&nbsp;Interest income | $0.4 | $2.9 | $(2.5) | (86.2)% |
| &nbsp;&nbsp;&nbsp;Interest expense | (17.2) | (10.2) | (7.0) | 68.6% |
| &nbsp;&nbsp;&nbsp;Other expense, net | (4.0) | (4.0) |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other expense, net | $(20.8) | $(11.3) | $(9.5) | 84.1% |

---

&nbsp;&nbsp;&nbsp;&nbsp;Interest income decreased primarily due to a decline of our cash, cash equivalents, and marketable securities balances being held in interest bearing deposit accounts when comparing the second quarter of fiscal year 2026 to the second quarter of fiscal year 2025. This was due to an accumulation of cash in the prior period for the repayment of our convertible notes maturing in June 2025.

&nbsp;&nbsp;&nbsp;&nbsp;Interest expense for the second quarter of fiscal year 2026 increased $7.0 million compared to the second quarter of fiscal year 2025 primarily due to debt extinguishment costs of $9.4 million related to the repayment of our senior secured notes and the closing of our senior secured revolving credit facility, partially offset by reduced interest payments related to a lower debt balance and more favorable rates in fiscal year 2026 compared to fiscal year 2025.

&nbsp;&nbsp;&nbsp;&nbsp;Other expense, net was flat in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025.

***Taxes on (Loss) Income***

&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended April 3, 2026, we recognized income tax expense of $1.6 million on $6.4 million of pre-tax loss. For the three months ended April 4, 2025, we recognized income tax expense of $3.7 million on $10.8 million of pre-tax income. Our tax expense for the three months ended April 3, 2026 was primarily due to increased pre-tax income in profitable jurisdictions.

**Discussion of Results of Operations for the Six Months Ended April 3, 2026 Compared to the Six Months Ended April 4, 2025**

***Revenues, Net***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** | | |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |<br>**$ Change** |<br>**% Change** |
| &nbsp;&nbsp;&nbsp;Medical | $301.0 | $298.4 | $2.6 | 0.9% |
| &nbsp;&nbsp;&nbsp;Industrial | 124.6 | 114.3 | 10.3 | 9.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | $425.6 | $412.7 | $12.9 | 3.1% |
| &nbsp;&nbsp;&nbsp;*Medical as a percentage of total revenues* | *70.7 %* | *72.3 %* |  |  |
| &nbsp;&nbsp;&nbsp;*Industrial as a percentage of total revenues* | *29.3 %* | *27.7 %* |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;Medical revenues increased $2.6 million, primarily due to increased sales of radiography, CT, mammography and other modalities of $15.3 million, partially offset by decreased sales in fluoroscopic, dental, oncology, and veterinary modalities of $12.7 million.

&nbsp;&nbsp;&nbsp;&nbsp;Industrial revenues increased $10.3 million, primarily due to increased digital detectors, sales of security inspection products, and other components of $11.9 million, partially offset by decreased sales of X-ray tubes of $1.6 million.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***Revenues, Net by Region***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** | | |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |<br>**$ Change** |<br>**% Change** |
| &nbsp;&nbsp;&nbsp;Americas | $154.0 | $133.8 | $20.2 | 15.1% |
| &nbsp;&nbsp;&nbsp;EMEA | 124.3 | 132.1 | (7.8) | (5.9)% |
| &nbsp;&nbsp;&nbsp;APAC | 147.3 | 146.8 | 0.5 | 0.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues, net | $425.6 | $412.7 | $12.9 | 3.1% |

---

&nbsp;&nbsp;&nbsp;&nbsp;Overall revenue during the six months ended April 3, 2026 increased as compared to the six months ended April 4, 2025. During the six months ended April 3, 2026, Americas revenues increased $20.2 million due to increased security inspection products sales of $12.9 million, increased X-ray tubes sales of $5.0 million, and increased digital detectors sales of $2.3 million. EMEA revenues decreased $7.8 million primarily due to decreased inspection product sales of $7.4 million, digital detectors sales of $4.4 million, partially offset by increased X-ray tubes sales of $4.0 million. APAC revenues increased $0.5 million primarily due to increased other product sales.

&nbsp;&nbsp;&nbsp;&nbsp;See Note 2, *Revenue*, of the accompanying Notes to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country.

***Gross Profit***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** | | |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |<br>**$ Change** |<br>**% Change** |
| &nbsp;&nbsp;&nbsp;Medical | $96.6 | $105.4 | $(8.8) | (8.3)% |
| &nbsp;&nbsp;&nbsp;Industrial | 45.8 | 39.8 | 6.0 | 15.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total gross profit | $142.4 | $145.2 | $(2.8) | (1.9)% |
| &nbsp;&nbsp;&nbsp;*Medical gross margin %* | *32.1 %* | *35.3 %* |  |  |
| &nbsp;&nbsp;&nbsp;*Industrial gross margin %* | *36.8 %* | *34.8 %* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*Total gross margin %* | *33.5 %* | *35.2 %* |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;Medical segment gross profit decreased $8.8 million, primarily due to increased material costs $14.2 million, partially offset by increased sales volume, favorable product mix, and improved productivity of $5.4 million.

&nbsp;&nbsp;&nbsp;&nbsp;Industrial segment gross profit increased $6.0 million, primarily due to improved sales volume and favorable product mix of $12.3 million, partially offset by decreased productivity and increased material costs of $6.3 million.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***Operating Expenses***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** | | |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |<br>**$ Change** |<br>**% Change** |
| &nbsp;&nbsp;&nbsp;Research and development | $43.9 | $45.5 | $(1.6) | (3.5)% |
| &nbsp;&nbsp;&nbsp;&nbsp;*As a percentage of total revenues* | *10.3 %* | *11.0 %* |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general, and administrative | $68.7 | $66.4 | $2.3 | 3.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;*As a percentage of total revenues* | *16.1 %* | *16.1 %* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating expenses | $112.6 | $111.9 | $0.7 | 0.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*As a percentage of total revenues* | *26.5 %* | *27.1 %* |  |  |

---

*Research and Development*

&nbsp;&nbsp;&nbsp;&nbsp;Research and development costs decreased to 10.3% of total revenue, primarily due to the final Micro-X technology transfer payment made during the first quarter of fiscal year 2025.

*Selling, General, and Administrative*

&nbsp;&nbsp;&nbsp;&nbsp;Selling, general, and administrative expenses increased $2.3 million, primarily due to increased legal costs of $2.6 million, other administrative costs of $3.4 million and marketing costs of $2.3 million, partially offset by decreased compensation costs and fixed commitment costs to a supplier of $6.0 million.

***Interest and Other Expense, Net***

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the Company's interest and other expense, net:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** | | |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |<br>**$ Change** |<br>**% Change** |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | $1.0 | $5.0 | $(4.0) | (80.0)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (25.1) | (18.2) | (6.9) | 37.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other expense, net | (8.3) | (6.8) | (1.5) | 22.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other expense, net | $(32.4) | $(20.0) | $(12.4) | 62.0% |

---

&nbsp;&nbsp;&nbsp;&nbsp;Interest income for the six months ended April 3, 2026 decreased when compared to the six months ended April 4, 2025 primarily due to a decline of our cash, cash equivalents, and marketable securities balances being held in interest bearing deposit accounts when comparing the second quarter of fiscal year 2026 to the second quarter of fiscal year 2025. This was due to an accumulation of cash in the prior period for the repayment of our convertible notes maturing in June 2025.

&nbsp;&nbsp;&nbsp;&nbsp;Interest expense for the six months ended April 3, 2026 increased when compared to the six months ended April 4, 2025 primarily due to debt extinguishment costs of $9.4 million related to the repayment of our senior secured notes and the closing of our prior senior secured revolving credit facility, partially offset by reduced interest payments related to a lower debt balance and more favorable interest rates in fiscal year 2026 compared to fiscal year 2025.

&nbsp;&nbsp;&nbsp;&nbsp;Other expense, net for the six months ended April 3, 2026 increased $1.5 million when compared to the six months ended April 4, 2025 primarily due to increased losses in certain investments in privately-held companies and equity investments of $2.9 million and other expenses of $0.3 million, partially offset by decreased foreign exchange expense of $1.7 million.

***Taxes on (Loss) Income***

&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended April 3, 2026, we recognized an income tax expense of $3.0 million on $2.6 million of pre-tax loss. For the six months ended April 4, 2025, the Company recognized income tax expense of $6.3 million on $13.3 million of pre-tax income. Our tax expense for the six months ended April 3, 2026, was primarily due to increased pre-tax income in profitable jurisdictions.

***Liquidity and Capital Resources***

&nbsp;&nbsp;&nbsp;&nbsp;We assess our liquidity in terms of our ability to generate cash to fund our operations, including working capital and investing activities. We believe that our operating cash flow, cash on our balance sheet, availability under our Revolving Credit Facility, and our ability to access the credit and capital markets are sufficient to meet our anticipated operating activities and cash

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

commitments for at least the next 12 months and will be sufficient to allow us to continue to invest in our existing businesses, consummate strategic acquisitions, and manage our capital structure on a short-term and long-term basis. We are currently not aware of any trends or demands, commitments, events, or uncertainties that will result in or that are reasonably likely to result in a material change to our liquidity needs during the next 12 months. As of April 3, 2026, the availability under our Revolving Credit Facility was $95.6 million, and we had total debt of $347.6 million, net of deferred issuance costs of $3.5 million.

***Cash and Cash Equivalents and Marketable Debt Securities***

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes our cash and cash equivalents and marketable debt securities:

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **April 3, 2026** | **October 3, 2025** | **$ Change** |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $85.3 | $145.0 | $(59.7) |
| &nbsp;&nbsp;&nbsp;Marketable debt securities not included in cash and cash equivalents | 3.0 | 10.1 | (7.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $88.3 | $155.1 | $(66.8) |

---

***Borrowings***

&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the changes in our debt outstanding:

---

| | | | |
|:---|:---|:---|:---|
| | **April 3, 2026** | **October 3, 2025** | |
| **(In millions)** | **Amount** | **Amount** | **$ Change** |
| **Current maturities of long-term debt:** | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;Term Loan Facility | $17.5 | $— | $17.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt | 1.1 | 1.5 | (0.4) |
| **Total current maturities of long-term debt** | $18.6 | $1.5 | $17.1 |
| **Non-current maturities of long-term debt:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Revolving Credit Facility | $4.4 | $— | $4.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Term Loan Facility | 328.1 |  | 328.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Senior Secured Notes |  | 368.0 | (368.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt |  | 0.4 | (0.4) |
| **Total non-current maturities of long-term debt** | $332.5 | $368.4 | $(35.9) |
| **Unamortized issuance costs and debt premiums:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unamortized issuance costs - Term Loan Facility | $(3.5) | $— | $(3.5) |
| &nbsp;&nbsp;&nbsp;&nbsp;Unamortized issuance costs, net of debt premium - Senior Secured Notes |  | (2.4) | 2.4 |
| **Total unamortized issuance costs and debt premiums** | (3.5) | (2.4) | (1.1) |
| **Total debt outstanding, net** | $347.6 | $367.5 | $(19.9) |

---

***Cash Flows***

---

| | | |
|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** |
| **(In millions)** | **April 3, 2026** | **April 4, 2025** |
| &nbsp;&nbsp;&nbsp;Net cash flow (used in) provided by: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating activities | $(17.6) | $26.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investing activities | (10.8) | 11.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing activities | (30.9) | 124.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effects of exchange rate changes on cash and cash equivalents and restricted cash | (0.1) | (0.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (decrease) increase in cash and cash equivalents and restricted cash | $(59.4) | $161.8 |

---

&nbsp;&nbsp;&nbsp;&nbsp;*Net cash (used in) provided by operating activities.* Cash (used in) provided by operating activities was $(17.6) million and $26.1 million for the six months ended April 3, 2026 and April 4, 2025, respectively. Significant changes in operating assets and liabilities affecting cash flows during these periods included:

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net loss was $5.6 million for the six months ended April 3, 2026 compared to a net income of $7.0 million for the six months ended April 4, 2025. The change from net income to net loss was primarily due to a $9.4 million loss on extinguishment of debt in the six months ended April 3, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cash used for inventories was $30.8 million higher in the six months ended April 3, 2026, compared to the six months ended April 4, 2025, primarily due to an increase in quantity of inventory for anticipated future demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cash provided by accounts payables was $16.7 million higher in the six months ended April 3, 2026, compared to the six months ended April 4, 2025, primarily due to increased balances related to purchases of inventory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cash used in accrued liabilities and other current and long-term liabilities increased by $18.5 million in the six months ended April 3, 2026, compared to the six months ended April 4, 2025, primarily due to payments of accrued interest in excess of current-period accruals of $21.4 million resulting from the refinancing of our senior secured note. This increase was partially offset by $1.0 million in decreased tax accruals. The remaining variance was attributable to other changes in accrued liabilities and other current and long-term liabilities, each of which was individually insignificant.

&nbsp;&nbsp;&nbsp;&nbsp;*Net cash (used in) provided by investing activities.* Cash (used in) provided by investing activities was $(10.8) million and $11.7 million for the six months ended April 3, 2026 and April 4, 2025, respectively. This change was primarily due to net cash decreases related to marketable debt securities and certificates of deposits activity of $16.7 million and an increase in purchases of property, plant, and equipment of $5.9 million in the six months ended April 3, 2026, compared to the six months ended April 4, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;*Net cash (used in) provided by financing activities.* Net cash (used in) provided by financing activities was $(30.9) million and $124.2 million for the six months ended April 3, 2026 and April 4, 2025, respectively. This change was primarily due to the repayment of the senior secured notes and related fees of $375.2 million during the second quarter of fiscal year 2026, partially offset with proceeds from the issuance of the term loan of $345.5 million during the second quarter of fiscal year 2026, compared to the issuance of $126.9 million of the Senior Secured Notes Add On during the first quarter of fiscal year 2025.

**Material Contractual Obligations**

&nbsp;&nbsp;&nbsp;&nbsp;In October 2013, we entered into an amended agreement with dpiX and other parties that, among other things, provides us with the right to 50% of dpiX's total manufacturing capacity produced after January 1, 2014. The amended agreement requires us to pay for 50% of the fixed costs (as defined in the amended agreement), as determined and approved by the dpiX board of directors at the beginning of each calendar year. In January 2026, the Company's fixed cost commitment was determined to be $13.7 million for calendar year 2026. For the remainder of calendar year 2026, we estimate that we have fixed cost commitments of $10.2 million related to this amended agreement. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement).

&nbsp;&nbsp;&nbsp;&nbsp;In August 2015, pursuant to a Domination and Profit and Loss Transfer Agreement (the "DPLTA"), we committed to pay the noncontrolling shareholders of MeVis Medical an annual recurring net compensation of €0.95 per MeVis Medical share. The annual net payment will continue for the life of the DPLTA, which we anticipate will continue for as long as we remain as the controlling shareholder of MeVis Medical. As of April 3, 2026, noncontrolling shareholders together held approximately 0.5 million shares of MeVis Medical, representing 26.3% of the outstanding shares.

&nbsp;&nbsp;&nbsp;&nbsp;The Company enters into purchase agreements with its suppliers in the ordinary course of its business for the purchase of goods and services. Some of these purchase agreements are non-cancellable and thus contractually obligate the Company to future cash payments. As of April 3, 2026, our non-cancellable supplier purchase obligations totaled $2.7 million.

***Contingencies***

&nbsp;&nbsp;&nbsp;&nbsp;From time to time, we are a party to or otherwise involved in legal proceedings, government inspections, investigations, customs and duty audits, and other claims and contingency matters, both inside and outside the United States, arising in the ordinary course of our business or otherwise. We accrue amounts for probable losses, to the extent they can be reasonably estimated, that we believe are adequate to address any liabilities related to legal proceedings as well as other loss contingencies that we believe will result in a probable loss (including, among other things, probable settlement value). A loss or a range of loss is disclosed when it is reasonably possible that a material loss will be incurred and can be estimated or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision. We did not have any material contingent liabilities as of April 3, 2026 and October 3, 2025. Legal expenses are expensed as incurred.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***Days Sales Outstanding***

&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts receivable days sales outstanding ("DSO") was 62 days at April 3, 2026 and October 3, 2025. Our accounts receivable and DSO are impacted by a number of factors, including the timing of product shipments, collections performance, payment terms, the mix of revenues from different regions and the effects of economic instability.

***Letters of Credit***

&nbsp;&nbsp;&nbsp;&nbsp;The Company uses standby letters of credit as a form of credit support in the ordinary course of business. Outstanding standby letters of credit reduce the borrowing capacity available under the Company's Revolving Credit Facility and therefore impact available liquidity; however, they do not represent current cash obligations. Management does not expect these standby letters of credit to be drawn. As of April 3, 2026, $2.3 million of standby letters of credit were outstanding.

***Recent Accounting Standards or Updates Not Yet Effective***

&nbsp;&nbsp;&nbsp;&nbsp;See Note 1, *Summary of Significant Accounting Policies*, of the accompanying Notes to the Condensed Consolidated Financial Statements for a description of recent accounting standards, including the expected dates of adoption and the estimated effects on our Condensed Consolidated Financial Statements.

***Backlog***

&nbsp;&nbsp;&nbsp;&nbsp;Backlog is the accumulation of all orders for which revenues have not been recognized and are still considered valid. Backlog also includes a small portion of billed service contracts that are included in deferred revenue. Our estimated total backlog at April 3, 2026 was approximately $266 million.

&nbsp;&nbsp;&nbsp;&nbsp;Orders may be revised or canceled, either according to their terms or as customers' needs change. Consequently, it is difficult to predict with certainty the amount of backlog that will result in revenues. We perform a quarterly review to verify that outstanding orders in the backlog remain valid. Aged orders that are not expected to be converted to revenues are deemed dormant and are reflected as a reduction in the backlog amounts in the period identified.

&nbsp;&nbsp;&nbsp;&nbsp;In addition to orders for which revenues have not been recognized and are still considered valid, we have pricing agreements with many of our established customers that span multi-year periods. These pricing agreements include volume ranges under which orders are placed.

**Item 3. Quantitative and Qualitative Disclosures about Market Risk**

&nbsp;&nbsp;&nbsp;&nbsp;We are exposed to four primary types of market risks: foreign currency exchange rate risk, credit and counterparty risk, interest rate risk, and commodity price risk.

***Foreign Currency Exchange Rate Risk***

&nbsp;&nbsp;&nbsp;&nbsp;A significant portion of our customers are outside the United States, while our financial statements are denominated, and our products are generally priced in U.S. Dollars. A strong U.S. Dollar may result in pricing pressure for our customers that are located outside the United States and that conduct their businesses in currencies other than the U.S. Dollar. Such pricing pressure has caused, and could continue to cause, some of our customers to ask for discounted prices, delay purchasing decisions, or consider moving to in-sourcing supply of components or migrating to lower cost alternatives. In addition, because our business is global and some payments may be made in local currency, fluctuations in foreign currency exchange rates can impact our revenues and expenses and/or the profitability in U.S. Dollars of products and services that we provide or purchase in foreign markets.

&nbsp;&nbsp;&nbsp;&nbsp;We may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, net investments in foreign subsidiaries, and forecast purchases denominated in foreign currencies. We may hedge portions of forecasted foreign currency exposure, typically for one to three months. In addition, we hold cross-currency swaps between the Euro and U.S. Dollar as a net investment hedge of our acquisition of Direct Conversion. Depending on the spot rate between the Euro and U.S. Dollar at the time of settlement and whether we have sufficient Euros available, we may have to borrow incrementally in U.S. Dollars to settle this obligation. Additionally, we may choose not to hedge certain foreign exchange exposures for a variety of reasons including, but not limited to, accounting considerations, the prohibitive economic cost of hedging particular exposures, or due to natural offsets among the different exposures. See Note 9, *Financial Derivatives and Hedging Activities,* of the accompanying Notes to the Condensed Consolidated Financial Statements for further information.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***Credit and Counterparty Risk***

&nbsp;&nbsp;&nbsp;&nbsp;We use a centralized approach to manage substantially all of our cash and to finance our operations. Our cash and cash equivalents and marketable securities may be exposed to a concentration of credit risk, and our credit facility exposes us to credit risk and interest rate risk.

&nbsp;&nbsp;&nbsp;&nbsp;We perform ongoing credit evaluations of our customers, and we maintain what we believe to be strong credit controls in evaluating and granting customer credit, including performing ongoing evaluations of our customers' financial condition and creditworthiness and often using letters of credit or requiring certain customers to provide a down payment.

***Interest Rate Risk***

&nbsp;&nbsp;&nbsp;&nbsp;Borrowings under our Initial Term Loan, Revolving Credit Facility, and Delayed Draw Term Loan bear interest at floating interest rates. As of April 3, 2026, we had $350 million in borrowings subject to floating interest rates. See Note 6, *Borrowings,* of the accompanying Notes to the Condensed Consolidated Financial Statements for further information.

&nbsp;&nbsp;&nbsp;&nbsp;We have entered into interest rate derivative contracts with financial institutions to manage exposure to changes in interest rates associated with a portion of our variable-rate borrowings. These arrangements include interest rate swaps that are intended to synthetically convert a portion of our variable-rate debt to a fixed rate. Under such arrangements, we generally pay a fixed interest rate and receive a variable interest rate based on a benchmark rate, such as SOFR, thereby reducing exposure to fluctuations in market interest rates over the applicable term. These derivatives are intended to reduce the variability of cash flows attributable to changes in interest rates; however, they would not eliminate all interest rate risk. We may choose not to hedge certain interest rate exposures for a variety of reasons, including, but not limited to, accounting considerations, the economic cost of hedging, or changes in anticipated debt levels. See Note 6, *Borrowings,* and Note 9. *Financial Derivatives and Hedging Activities* of the accompanying Notes to the Condensed Consolidated Financial Statements for further information.

&nbsp;&nbsp;&nbsp;&nbsp;Our exposure to interest rate risk also relates to our interest-bearing assets, primarily our cash and cash equivalents and marketable securities. Fixed rate securities may have their market value adversely affected due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fluctuate due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates.

***Commodity Price Risk***

&nbsp;&nbsp;&nbsp;&nbsp;We are exposed to market risks related to volatility in the prices of raw materials used in our products. The prices of these raw materials fluctuate in response to changes in supply and demand fundamentals and our product margins and level of profitability tend to fluctuate with changes in these raw materials prices. We try to protect against such volatility through various business strategies. During the three months ended April 3, 2026, we did not have any commodity derivative instruments in place to manage our exposure to price changes.

**Sensitivity Analysis**

&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the potential loss in future earnings, fair value, or cash flows resulting from hypothetical changes in relevant market rates or prices as of April 3, 2026. The actual impact of the respective underlying rates and price changes on the financial instruments may differ significantly from those shown in the sensitivity analysis.

---

| | | | |
|:---|:---|:---|:---|
| **Market Risk Category** | **Hypothetical Change** | **Estimated Annual Impact<br>(In millions)** | **Impact Category** |
| Foreign Currency - Revenue | 10% decrease in foreign exchange rates | $15.3 | Earnings |
| Interest Rate - Marketable Securities | 100 basis point decrease in interest rate of underlying investments | 0.3 | Earnings |
| Commodity Price | 10% increase in commodity prices | $3.5 | Earnings |

---

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**Item 4. Controls and Procedures**

***Disclosure Controls and Procedures***

&nbsp;&nbsp;&nbsp;&nbsp;Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Under the supervision and with the participation of our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the end of the period covered by this report. Based on this evaluation, our CEO and our CFO have concluded that our disclosure controls and procedures were effective as of April 3, 2026.

***Changes in Internal Control Over Financial Reporting***

&nbsp;&nbsp;&nbsp;&nbsp;There were no changes in our internal control over financial reporting during the quarter ended April 3, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**PART II**

**OTHER INFORMATION**

**Item 1. Legal Proceedings**

&nbsp;&nbsp;&nbsp;&nbsp;We are subject to various claims, complaints, and legal actions in the normal course of business from time to time. The resolution of such claims, complaints, and legal actions is subject to significant uncertainty and may be expensive, time consuming and disruptive to our operations. At the present time, we do not believe we have any current or pending litigation for which the outcome could have a material adverse effect on our operations or financial position.

**Item 1A. Risk Factors**

&nbsp;&nbsp;&nbsp;&nbsp;Investing in Varex Imaging Corporation common stock involves risks, and the following risk factors and other information included in this Quarterly Report on Form 10-Q (this "Quarterly Report") under Part I, Item 2 "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and Part I, Item 3 "*Quantitative and Qualitative Disclosures about Market Risk*" should be carefully considered. Although the risk factors described below are the ones management deems significant, additional risks and uncertainties not presently known to us or that are presently known to us that we presently deem not material may also adversely affect our business operations.

**Risks Relating to Our Business**

***Our business has in the past been, is currently being, and in the future may be, negatively impacted by changes in import/export regulatory regimes, tariffs, trade wars, and national policies, including exemptions thereto.***

&nbsp;&nbsp;&nbsp;&nbsp;We are both a global importer of raw materials that are used in our finished products and an exporter of finished goods to our customers worldwide. Our products are integrated into the systems and products of our OEM customers, as well as into our own industrial systems. Tariffs, trade wars, import/export restrictions, boycotts, embargoes, government investigations, trade policies and compliance matters have in the past limited, are currently limiting, and in the future could limit our ability and our customers' ability to compete, which could cause our long-term prospects in such countries to suffer. Tariffs on imported materials have increased our costs and prices and lowered gross margins on some of our products, thereby having a direct adverse impact on our business and results of operations. Retaliatory tariffs have increased our customers' costs for products exported from the United States, which has caused us to make, and may in the future require us to make, price and other concessions on some products and has caused, and may in the future cause, some customers to stop purchasing our products.

&nbsp;&nbsp;&nbsp;&nbsp;For example, changes to tariff policies in 2025 by the United States and other countries, particularly bilateral United States and Chinese tariffs, impacted our results of operations and profitability in fiscal year 2025 and in the first half of fiscal year 2026. Absent a de-escalation of the current trade environment, tariffs are expected to continue to negatively impact our business, results of operation, and financial condition, including by increasing our costs and prices, lowering gross margins, adversely impacting revenue, and making our products less competitive with similar products not imported from the United States. Additional new, or increases to existing tariffs, trade restrictions or other retaliatory actions aimed at specific industries, such as X-ray imaging products, could also materially impact our business.

&nbsp;&nbsp;&nbsp;&nbsp;In the past, both the governments of the United States and China have granted tariff exclusions that temporarily eliminate certain duties payable for specific commodities, providing partial relief from such tariffs, but with certain exceptions, they must be solicited and approved. There is no guarantee that exclusions will be granted or that existing exclusions will be extended by either government. In addition, we cannot provide any guarantee that we will be able to effectively implement other tariff mitigation measures, such as free trade zones, bonded mechanisms, or drawback programs.

&nbsp;&nbsp;&nbsp;&nbsp;In addition to tariffs, China's stated policy of reducing its dependence on foreign manufacturers and technology companies may result in reduced demand for our products and our customers' products in China, which could have a material adverse impact on our business, results of operations and financial position. There are risks that the Chinese government may, among other things, require the use of local suppliers, compel companies that do business in China to partner with local companies to conduct business, or provide incentives to government-backed local customers to buy from local suppliers rather than companies like ours, all of which could adversely impact our business, results of operations and financial position. As an example, in April 2025 the China Ministry of Commerce ("MOFCOM") initiated two investigations related to medical products imported into China (the "MOFCOM Investigations"). One investigation related to the impact of imports of X-ray tubes on the domestic industry and its competitiveness, and another related to imports into China of certain medical CT X-ray tubes and tube inserts for CT devices (collectively "CT Tubes and Inserts") originating from the United States and India. We produce CT Tubes and Inserts in the United States and export them to

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

China, but do not produce CT Tubes and Inserts in India. Total sales of medical X-ray tubes we imported into China represented approximately 11% of our total revenue during the first six months of fiscal year 2026.

&nbsp;&nbsp;&nbsp;&nbsp;MOFCOM temporarily suspended both of the MOFCOM Investigations in May 2025 and again in August 2025. In November 2025, the MOFCOM Investigations were suspended indefinitely. If recommenced, we anticipate that the MOFCOM Investigations may take approximately one year from recommencement to resolve. If, as a result of the outcome of the MOFCOM Investigations, we are required to increase our prices or tariffs are imposed on the CT Tubes and Inserts we export to China, our prices may not be competitive with local and other manufacturers, which could negatively impact our ability to compete in China and negatively impact our business, results of operations and financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;Any of the foregoing factors could require us to reconsider our current operating model, including whether we can continue to operate in specifically impacted locations, or if we need to relocate or otherwise restructure existing operations. Such changes may require us to invest significant additional capital we had anticipated using for other purposes such as expanding existing operations, entering new markets, or paying down debt. Diversion of these funds from their anticipated uses could adversely impact our business, results of operations, financial position, and our ability to pay down or restructure our existing debt.

&nbsp;&nbsp;&nbsp;&nbsp;Increasing tensions between countries, such as China and Taiwan, and other conflicts including the Ukraine-Russia war, the United States and Israel conflict with Iran, as well as other Middle East conflicts, may lead the United States and/or other countries to impose new tariffs and sanctions or expand existing tariffs and sanctions, enact boycotts and embargoes, and otherwise seek to limit or stop the flow of goods to or from involved countries. Such conflicts have caused, are causing, and could in the future cause, significant disruptions in the regions and industries we serve and in our supply chain, as well as decrease demand from customers for the ultimate products using our solutions. The current conflict in Iran, for example, has and may continue to cause increases in cost of goods and raw materials, transportation, and other costs. Tensions and conflicts between countries, including those discussed in this risk factor, have in the past, are currently, and may in the future continue to, adversely impact our costs, margins, supply chain, and ability to timely deliver products to our customers, and these risks could continue to harm our business, financial condition, and results of operations.

***We sell our products and services to a limited number of OEM customers, many of which are also our competitors, and a delay in an order to a future period, as well as a reduction in or loss of business of one or more of these customers has in the past and may in the future materially reduce our sales.***

&nbsp;&nbsp;&nbsp;&nbsp;We had one customer during the three months ended April 3, 2026 that accounted for 19% of our revenue, all of which was in our Medical segment. Our ten largest customers as a group accounted for approximately 52% and 55% of our revenue for the three months ended April 3, 2026 and April 4, 2025, respectively. Our ten largest customers as a group accounted for approximately 52% and 54% of our revenue for the six months ended April 3, 2026 and April 4, 2025, respectively. Because we often take significant time to replace lost business, in the past our operating results have been, and in the future our operating results could be, materially and adversely affected if one or more of our major OEM customers were to cancel, or significantly delay or reduce orders.

&nbsp;&nbsp;&nbsp;&nbsp;Furthermore, we generate significant accounts receivables from the sale of our products and the provision of services directly to these customers. One customer accounted for 13% of our accounts receivables as of April 3, 2026. If one or more of these customers were to cancel a significant product order or service contract, become insolvent, or otherwise be unable or fail to pay for our products and/or services in a timely manner, our operating results and financial condition could be materially and adversely affected.

***Customer-driven changes in order forecasts is a frequent occurrence that has created and continues to create challenges for us in accurately predicting the demand or delivery schedules for our products.***

&nbsp;&nbsp;&nbsp;&nbsp;End-user product demand, economic uncertainties, the impact of pandemic diseases, natural disasters, armed conflicts, geopolitical tensions, legislative, tariff, and trade policy reforms, and government investigations including, for example, those described in the risk factor *"Our business has in the past been, is currently being, and in the future may be, negatively impacted by changes in import/export regulatory regimes, tariffs, trade wars, and national policies, including exemptions thereto"*, and other matters beyond our control, make it difficult for our customers to accurately forecast and plan future business activities, which makes it difficult for us to accurately predict demand or delivery schedules for our products. Because the manufacture of our products requires some lead-time, changes in customer purchasing forecasts have previously resulted in excess inventory and slowdowns in sales, which are likely to occur again in the future. Changes to customer forecasts can occur on short notice, as our customers face inherent competitive issues, new product introduction delays, and regulatory risks. Our agreements for imaging components contain purchasing estimates that are typically based on our customers' forward-looking forecasts rather than firm commitments, and actual purchasing volumes under the agreements may vary significantly from these estimates. The variation from forecasted purchasing volume may be due, in part, to the increasing life of X-ray tubes, which can result in reduced demand for replacement X-ray tubes in ways we may not be able to accurately forecast. Reductions in purchasing patterns have in the past, and may in the future, materially and adversely affect our operating results.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***We compete in highly competitive industries and are subject to pricing pressures and other factors that have in the past and may in the future result in margin erosion and loss of customers.***

&nbsp;&nbsp;&nbsp;&nbsp;We compete in industries characterized by rapidly evolving technology, intense competition and pricing pressure. We often compete with companies that have greater financial, marketing and other resources than us. Some of the major diagnostic imaging systems companies, which are the primary OEM customers for our X-ray imaging components, also manufacture X-ray imaging components, including X-ray tubes and flat panel detectors, for use in their own imaging systems products. We have experienced, and may in the future experience, decreased sales of our products to these customers if they manufacture a greater percentage of their components in-house or purchase components from external sources other than us, which has had and may in the future have an adverse effect on our business and results of operations. We have in the past made price and other concessions to maintain existing customers and attract new customers, and may have to make additional price and other concessions in the future.

&nbsp;&nbsp;&nbsp;&nbsp;In addition, we compete against other stand-alone, independent X-ray tube manufacturers for both the OEM business of major diagnostic imaging equipment manufacturers and the independent servicing business for X-ray tubes. The flat panel detectors industry is also very competitive, and we face intense competition from over a dozen smaller competitors. In our Industrial business, we also compete with other OEM suppliers primarily outside of the United States. Some of our competitors outside of the United States may have resources and support from their governments that we do not, such as preferences for local manufacturers, and they may not be subject to the same tariffs, trade policies, trade compliance regulations and government investigations as us.

&nbsp;&nbsp;&nbsp;&nbsp;Our competitors may not all be subject to the same standards, regulatory and/or other legal requirements to which we are subject and, therefore, they could have a competitive advantage in developing, manufacturing, and marketing products and services. Any inability to develop, gain regulatory approval for, and supply commercial quantities of competitive products to existing and potential customers as quickly and effectively as our competitors could limit acceptance of our products and negatively and materially affect our pricing, sales, revenues, position in the market, and gross margins and our ability to maintain or increase our operating margins.

***Our success depends on meeting our customers' needs and demands.***

&nbsp;&nbsp;&nbsp;&nbsp;To be successful, we must anticipate our customers' needs and demands, as well as potential shifts in preferences. If we are unable to anticipate these needs and demands, or the mix of products requested by our customers changes from what we expect, our revenue, margins, and financial results could be adversely affected. When the U.S. Dollar is strong compared to the operating currencies of our international customers, our ability to meet such customers' pricing expectations is particularly challenging and may result in erosion of revenues, product margin, and/or position in the market or other concessions on business terms.

&nbsp;&nbsp;&nbsp;&nbsp;In addition, certain costs, including installation and warranty costs, associated with new products have been, and may in the future be proportionately greater than the costs associated with existing products and have or may therefore disproportionately, materially, and adversely affect our gross and operating margins. We may also experience lower margins due to increased commodities prices, higher tariffs, and inadequate transfer pricing favoring sales to third parties over internal sales. If we are unable to lower these costs over time, our operating results could be materially and adversely affected. Some of the electronic components and integrated circuits used in our flat panel detectors are susceptible to discontinuance and obsolescence risks, which may force us to incorporate newer generations of these components, resulting in unplanned additional R&D expenses, delays in the launch of new products, supply disruptions, and/or inventory write-downs. Further, using aging production equipment might hamper our capacity to innovate to meet customers' needs and demands and stay competitive. Failure to develop and adopt artificial intelligence ("AI") technology or to properly manage its uses and applications could also hinder product development, our competitiveness, and growth potential. We may also experience challenges in developing and implementing effective product and sales strategies, leading to missed opportunities and customer dissatisfaction.

***Our success depends on the successful development, introduction, and commercialization of new generations of products and enhancements to or simplifications of existing product lines.***

&nbsp;&nbsp;&nbsp;&nbsp;We operate in business segments characterized by rapid change and technological innovation. Our customers use our products in their medical diagnostic, security, and industrial imaging systems, and we must continually introduce new products at competitive prices while also improving existing products with higher quality, lower costs, and increased features. We and our joint ventures have in the past spent, and in the future may need to spend, more time and money than we expect to develop, market, and introduce new products, product enhancements, and technologies. Even if we succeed in introducing new products, enhancements, or technologies as quickly as expected, potential customers may not accept or purchase these new products, enhancements, or technologies, and we may not be able to recover all or a meaningful part of our investment. Once introduced, new products may materially and adversely impact sales of our existing products or make them less desirable or even obsolete, which could materially and adversely impact our revenues and operating results.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;Furthermore, we may not be able to successfully develop, manufacture, or introduce new products or enhancements to existing products, the roll-out of which involves compliance with complex quality assurance processes, including the Quality System Regulation ("QSR") of the U.S. Food and Drug Administration ("FDA"). Failure to complete these processes timely and efficiently could result in delays that could affect our ability to attract and retain customers or cause customers to delay or cancel orders, which would materially and adversely affect our revenues and operating results.

***More than half of our revenue is currently generated from customers located outside the United States, and is subject to global, regional, and country-specific economic instability, shifting political environments, changing tax treatment, tariffs, trade wars, and other risks associated with international manufacturing, operations, and sales.***

&nbsp;&nbsp;&nbsp;&nbsp;Revenues generated from customers located outside the United States accounted for approximately 67% and 70% of our total revenues for the three months ended April 3, 2026 and April 4, 2025, respectively and approximately 68% and 69% of our total revenues for the six months ended April 3, 2026 and April 4, 2025, respectively. We intend to continue to expand our presence internationally and expect to expend significant resources in doing so. Our results have in the past, are currently, and could in the future be impacted by a variety of factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• events and actions described in the risk factors "*Our business has in the past been, is currently being, and in the future may be, negatively impacted by changes in import/export regulatory regimes, tariffs, trade wars, and national policies, including exemptions thereto"* and *"Customer-driven changes in order forecasts is a frequent occurrence that has created and continues to create challenges for us in accurately predicting the demand or delivery schedules for our products*";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• currency fluctuations, and in particular the relative strength of the U.S. Dollar, which is our functional and reporting currency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in staffing and managing employee relations in foreign operations, including in foreign joint ventures, particularly in attracting and retaining personnel qualified to design, test, sell, and support our products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in coordinating our operations globally and in maintaining uniform standards, controls, procedures, and policies across our operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the longer payment cycles associated with many customers located outside the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in interpreting or enforcing agreements and collecting receivables through many foreign countries' legal systems; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• imposition of burdensome governmental regulations, including changing data privacy laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;Some of our locations expose us to higher security risks, which could result in both harm to our employees and contractors or substantial costs. Some of our services are performed in or adjacent to high-risk locations where the country or location and surrounding area experience political, social, or economic turmoil, war or civil unrest, or high levels of criminal or terrorist activities. In those locations where we have employees or operations, we may incur substantial costs to maintain the safety of our personnel, and we may suffer the loss of employees and contractors, which could harm our business, reputation, and operating results.

***We may be unable to complete future acquisitions or joint ventures or realize expected benefits from acquisitions of or investments in new businesses and joint ventures, products, or technologies, which could harm our business.***

&nbsp;&nbsp;&nbsp;&nbsp;Our ability to identify and take advantage of attractive acquisitions or other business development opportunities (including through joint ventures) is an important component in implementing our overall business strategy. Such transactions involve a number of risks, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may not be able to identify suitable candidates or successfully complete or finance identified acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may incur substantial costs, including advisory fees and diversion of management attention, in evaluating a potential transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may be unable to achieve the anticipated benefits from the transaction, including a return on our investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may have difficulty integrating organizations, products, technologies, or employees of an acquired business into our operations and may have difficulty retaining the key personnel of the acquired business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acquisitions, investments, and joint ventures could result in increased risks, including from potential litigation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may find that we need to restructure or divest acquired businesses or assets of the acquired business; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if we fail to achieve the anticipated growth from an acquisition or joint venture, or if we decide to sell assets or a business, we may be required to dispose of a business at a lower price or on less advantageous terms, or to recognize an impairment loss on the write-down of our assets and goodwill.

&nbsp;&nbsp;&nbsp;&nbsp;We participate in joint ventures and other investments in privately held and publicly traded companies. For example, we hold a 40% ownership interest in dpiX Holding Company LLC, the parent company of the major supplier of our amorphous silicon-based thin film transistor arrays for flat panels used in our digital image detectors, a 50% interest in VEC Imaging GmbH & Co. KG ("VEC"), a joint venture formed to develop technology for use in X-ray imaging components, a 75% interest in Varex Imaging Arabia

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

LLC, a joint venture in Saudi Arabia and a minority interest in another X-ray imaging components technology company. These and other investments are subject to risk of loss of investment capital as well as losses associated with contributed or jointly developed intellectual property, or intellectual property developed at or about the same time as these investments. These types of investments are inherently risky, in some instances because customer demand and sales for the technologies or products under development may never materialize, may develop more slowly than expected, or may underperform relative to our expectations. If these companies do not succeed, we could lose or be required to write down some or all of our investment in these companies, we may experience significant and unpredictable losses or charges as a result of decisions made by joint ventures that we do not control but whose financial results proportionally affect our reported financial results. As discussed in the risk factor "*Legal proceedings may materially and adversely affect our business, results of operations, or cash flows,"* we may incur significant time, management resources, and costs to enforce our rights, protect our intellectual property and other assets, address disputes or legal claims that have arisen, are ongoing, or may arise in the future, and/or unwind, dispose of or terminate our arrangements with respect to these joint ventures and/or investments. There is no guarantee that the time and money invested by us in developing these projects, intellectual property, or product or product enhancements, will yield the expected returns on the anticipated timeline or at all.

***Legal proceedings may materially and adversely affect our business, results of operations, or cash flows.***

&nbsp;&nbsp;&nbsp;&nbsp;From time to time, we are a party to or otherwise involved in legal proceedings, claims, government inspections, audits or investigations, and other legal matters, both inside and outside the United States, arising in the ordinary course of our business or otherwise. Such proceedings are often lengthy, subject to significant uncertainty and may be expensive, time consuming, and disruptive to our operations. For these and other reasons, we may choose to settle legal proceedings and claims, regardless of their actual merit. If a legal proceeding were to be ultimately resolved against us, we may be required to pay damages or fines, some of which may be in excess of our insurance coverage, or may require us to change our business practices, which could materially and adversely impact our business, results of operations, or cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;Our subsidiary Varex Imaging Deutschland AG ("Varex Germany") holds a 50% interest in VEC. Since August 2023, the partners to the VEC joint venture have been engaged in judicial proceedings in Germany against one another disputing the validity of certain shareholder resolutions seeking to exclude the other party from the joint venture. If either party is successful, the prevailing party would be required to purchase the non-prevailing party's interest in the joint venture for an amount equal to 75% of the fair market value thereof, which amount is in dispute. In addition, in June 2024, Varex Germany filed an action in Germany for a negative declaratory judgment and an injunction against business damaging statements made by certain third parties, and Varex Germany and Varex Imaging Corporation have filed additional lawsuits in Germany and the United States relating to intellectual property matters, breach of contracts and other matters. These disputes, including any determinations not in Varex Germany's favor, have diverted, are diverting, and could in the future divert management's attention, increase our costs, and otherwise adversely impact our business, results of operations, or cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;Our subsidiary Varex Imaging International AG holds a 75% interest in Varex Imaging Arabia LLC. We currently have ongoing disputes with our joint venture partner relative to the operation of the joint venture. These disputes have in the past, are currently and could in the future divert management's time and attention, increase our costs, and otherwise adversely impact our business, results of operations, or cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;As discussed in the risk factor "*Our business has in the past been, is currently being, and in the future may be, negatively impacted by changes in import/export regulatory regimes, tariffs, trade wars, and national policies, including exemptions thereto,*" if the MOFCOM Investigations are recommenced in the future, the outcome of these investigations has the potential to negatively impact our business, results of operations and financial condition.

***Product defects or misuse may result in material product or other liability or professional errors and omissions claims, litigation, investigation by regulatory authorities, or product recalls.***

&nbsp;&nbsp;&nbsp;&nbsp;Our business exposes us to potential product and other liability claims that are inherent in the manufacture, sale, installation, servicing, and support of components that are used in medical devices and other devices that deliver radiation. Because our products are involved in the intentional delivery of radiation to the human body and other situations where people may come into contact with radiation, the possibility for significant personal injury or loss of life exists. Furthermore, if our X-ray inspection systems fail to detect the presence of bombs, explosives, weapons, contraband, or other threats to personal safety, this may lead to personal injury, loss of life, and extensive property damage. We may also be subject to warranty and damage claims for property damage, personal injury, or economic loss related to or resulting from any errors or defects in our products or the installation, servicing, or support of our products. Any accident or mistreatment could subject us to legal costs, litigation, adverse publicity, and damage to our reputation, whether or not our products or services were a factor. From time to time, we may be a party to certain product liability litigation which, if adversely determined, could have an adverse material impact on our financial results. If a product we design or manufacture were defective, we may be required to correct or recall the product and notify regulatory authorities.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;We may choose to settle product liability claims against us regardless of their actual merit. A product liability action determined against us could result in adverse publicity or significant damages, including the possibility of punitive damages, and our financial position, results of operations, or cash flows could be materially and adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;We maintain limited product liability insurance coverage. Our product liability insurance policies are expensive and have high deductible amounts and self-insured retentions. Our insurance coverage may prove to be inadequate, and future policies may not be available on acceptable terms or in sufficient amounts, if at all. If a material claim is not insured or is in excess of our insurance coverage, we may have to pay substantial damages, which could have a material and adverse effect on our financial position and/or results of operations.

**Risks Relating to the Manufacture of our Products**

***Inflation and supply chain disruptions, including the loss of a key supplier, and any inability to obtain raw materials or supplies of important components, trade restrictions, and other constraints, have impacted our ability to manufacture products, have caused delays in our ability to deliver products, and have increased our costs and may continue to do so.***

&nbsp;&nbsp;&nbsp;&nbsp;Inflation and supply chain disruptions have had, and could in the future have, an impact on our ability to manufacture certain products. Any rise in future inflation has the potential to increase our overall cost structure, and sustained inflation has resulted in, and may continue to result in, higher interest rates and capital costs, increased shipping costs, supply shortages, increased costs of labor, weakening exchange rates, higher pricing that reduces demand for our products, and other similar effects.

&nbsp;&nbsp;&nbsp;&nbsp;Material shortages and delays due to inflation, trade restrictions, geopolitical tensions, armed conflicts, and other constraints have caused, and could in the future cause, us to temporarily stop production of certain products or miss opportunities to pursue additional sales of some products. We require certain raw materials, such as copper, nickel, silver, gold, lead, tungsten, iridium, rhenium, molybdenum, rhodium, niobium, zirconium, beryllium, gadolinium, and various high grades of steel alloy for X-ray tubes and industrial products. Worldwide demand, availability, and pricing of these raw materials is volatile. Additionally, the availability of certain raw materials could be affected if suppliers choose to limit their exposure to certain markets in response to unfavorable trade policies or otherwise. If we are unable to obtain the materials necessary to make certain products without unreasonable cost or delay, our customers may seek alternative suppliers, or decide to in-source certain products or if we must pay more for certain materials, it could reduce our profit margin and/or sales, it could make it uneconomical for us to produce certain products, or otherwise have a material adverse effect on our business and financial results. Further, our competitors with greater financial resources may be better able to restructure their manufacturing and supply chains in response to geopolitical and economic trends and thereby have a competitive advantage over us.

&nbsp;&nbsp;&nbsp;&nbsp;We obtain some of the components included in our products, such as transistor arrays, cesium iodide coatings and specialized integrated circuits for flat panel detectors, X-ray tube targets and windows, housings, glass frames, high-voltage cable, bearings, and various other components, from a limited group of suppliers, or from sole-source suppliers. If our suppliers cease producing these or other components, prioritize other customers, fail to provide products on our delivery timelines, are in countries subject to significant tariffs, or become unable to continue operations, we may be unable to obtain the components from other suppliers on reasonable terms or at all.

&nbsp;&nbsp;&nbsp;&nbsp;Furthermore, we may be required to obtain and qualify one or more replacement suppliers or to manufacture the components internally. Such an event could (1) require us to redesign or modify our products to incorporate new parts and/or further require us to obtain clearance, qualification, or certification of these products, including by the FDA, or obtain other applicable regulatory approvals in other countries, (2) significantly increase costs for the affected products, (3) cause material delays in the delivery of affected and other related products, or (4) prevent us from meeting our delivery obligations to our customers. Any of the foregoing, could materially and adversely affect our business and financial results.

***Our operations are vulnerable to interruption or loss due to natural or other disasters, climate related-events, power loss, strikes, and other events beyond our control.***

&nbsp;&nbsp;&nbsp;&nbsp;We conduct some of our activities, including manufacturing, research and development, administration, and data processing at facilities located in areas that have in the past experienced or may in the future experience natural disasters. Natural disasters (such as a major fire, hurricane, earthquake, flood, tsunami, or volcanic eruption), severe weather conditions, adverse climate-related events, war or terrorism, and disruption in utilities and other services affecting our facilities, or those of our suppliers, could significantly disrupt our operations and delay or prevent product manufacture and shipment during the time required to repair, rebuild, or replace our or our suppliers' damaged manufacturing facilities. These delays could be lengthy and costly. If any of our customers' facilities are adversely affected by such a disaster or event, shipments of our products could be delayed. Additionally, customers may delay purchases of our products until our or their operations return to normal. Even if our suppliers or customers are able to quickly respond to such a disaster or event, the ongoing effects could create some uncertainty in the operations of our business. Concerns about

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

terrorism, the effects of a terrorist attack, political turmoil, or an outbreak of epidemic diseases have in the past also had, and could in the future have, a negative effect on our business operations, those of our suppliers and customers, and the ability to travel, resulting in adverse consequences on our revenues and financial performance.

***If we are not able to match our manufacturing capacity with demand for our products, our financial results may suffer.***

&nbsp;&nbsp;&nbsp;&nbsp;Many of our products have a long production cycle, and we must anticipate demand for our products to ensure adequate manufacturing and testing capacity. If we are unable to anticipate demand, and our manufacturing or testing capacity does not keep pace with product demand, we will be unable to fulfill orders in a timely manner, which may negatively impact our financial results and overall business. Conversely, if demand for our products decreases, the fixed costs associated with excess manufacturing capacity may harm our financial results, including by decreasing gross margins and increasing research and development costs as a percentage of revenue.

***Demand for our security, industrial, and inspection products tends to be unpredictable, leading to volatility in our revenues and earnings.***

&nbsp;&nbsp;&nbsp;&nbsp;The demand for our security and inspection products is heavily influenced by United States and foreign governmental policies on national and homeland security, border protection, and customs activities, which depend upon levels of government employment, government debt, and government budgets and appropriations that are subject to economic conditions, political changes, and oil prices. Even when government budgets and appropriations levels, economic and political conditions, and oil prices are favorable it is difficult to predict when governments may issue requests for bids, complete their bid process and award tenders, which tends to lead to volatility in our revenues and earnings.

**Risks Relating to our Information Systems and Intellectual Property**

***Disruption of critical information systems or material breaches in the security of our systems may materially and adversely affect our business and customer relations.***

&nbsp;&nbsp;&nbsp;&nbsp;Information technology (including technology from third-party providers) helps us operate efficiently, interface with and support our customers, maintain financial accuracy and efficiency, and produce our financial statements. In the ordinary course of our business, we collect, process, and store sensitive data, including intellectual property, proprietary business information, and information of customers, suppliers, business partners, and third parties accessing our website, patient data, and personally identifiable information of customers and employees, in our data centers and on our networks, as well as in third-party off-site data centers. We have been, and expect to be, subject to cyberattacks, and may be subject to ransomware and distributed denial-of-service attacks, spearfishing attacks and other attempted intrusions on our networks and systems by a wide range of actors. We expect our third-party vendors to be subject to similar cyberattacks and other attempted intrusions. Despite security measures, there is an increasing threat of information security breaches and attacks, including from computer viruses or other malicious codes, unauthorized access attempts, employee misuse (including misuse or failure to effectively manage our use of AI and machine learning technologies), human error, and cyber-attacks that pose risks to companies, including us. Because the techniques used to obtain unauthorized access, or to sabotage systems, change frequently, have become increasingly sophisticated, and generally are not recognized until launched against a target, we may be unable to anticipate or immediately detect these techniques, or the vulnerabilities they have caused or other potential vulnerabilities or security defects, or to implement adequate preventative measures, which could result in data leaks or otherwise compromise our confidential or proprietary information and materially disrupt our operations. Such security breaches could expose us to a risk of disclosure, misuse, or loss of confidential information, trade secrets, personal information, proprietary data, or other competitively sensitive information; litigation; and possible liability to employees, customers, shareholders, and/or regulatory authorities. If our data management or other systems do not effectively collect, secure, store, process, or report relevant data for the operation of our business, whether due to equipment malfunction or constraints, service interruptions, software deficiencies, misuse, or human error, our ability to effectively plan, forecast, and execute our business plan and comply with applicable laws and regulations will be impaired, perhaps materially.

&nbsp;&nbsp;&nbsp;&nbsp;We also use certain cloud-based software. A security breach, whether of our products, of our customers' network security and systems, or of third-party hosting services could disrupt access to our customers' stored information and could lead to the loss of, damage to, or public disclosure of our customers' stored information, including patient health information.

&nbsp;&nbsp;&nbsp;&nbsp;Disruptions of our critical information systems or material impairment or breaches in the security of our systems could have serious negative consequences, including possible patient injury, inability to timely report our operating results, regulatory action, fines, penalties and damages, reduced demand for our solutions, an unwillingness of our customers to use our solutions, harm to our reputation and brand, and time-consuming and expensive litigation, any of which could have a material and adverse effect on our financial results.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***Our competitive position would be harmed if we are not able to maintain or defend our intellectual property rights, and protecting our intellectual property and defending against infringement claims can be costly.***

&nbsp;&nbsp;&nbsp;&nbsp;We file applications as appropriate for patents covering new products and manufacturing processes. We cannot provide assurance, however, that patents will be issued from any of our pending or future patent applications or that our current patents, the claims allowed under our current patents, or patents for technologies licensed to us will be sufficiently broad to protect our technology position against competitors. We also jointly develop intellectual property with third parties and seek to protect our rights to such intellectual property through licenses and other contractual arrangements.

&nbsp;&nbsp;&nbsp;&nbsp;We rely on a combination of copyright, trade secret, and other laws, and contractual restrictions on disclosure, copying and transferring title (including confidentiality agreements with vendors, strategic partners, co-developers, employees, consultants, and other third parties), to protect our proprietary, and other confidential rights. Our trade secrets may become known to or be independently developed by others, including as a result of misappropriation by unauthorized access to our technology systems, and our business and financial results could be materially and adversely impacted. We have trademarks, both registered and unregistered, that are maintained and enforced to provide customer recognition for our products in the marketplace, but unauthorized parties may still use them. We also license certain patented or proprietary technologies from others. In some cases, products with substantial revenues may depend on these license rights. If we were to lose the rights to license these technologies, or our costs to license these technologies were to materially increase, our business would suffer.

&nbsp;&nbsp;&nbsp;&nbsp;There is a substantial amount of litigation over patent and other intellectual property rights in the industries in which we compete. Our competitors, like companies in many high technology businesses, continually review other companies' activities for possible conflicts with their own intellectual property rights. In addition, non-practicing entities may review our activities for conflicts with their patent rights. From time to time, we have received notices from parties asserting infringement, and we have been subject to lawsuits alleging infringement of patent or other intellectual property rights. In addition, from time to time we have entered, and in the future we may enter, into agreements that require us to indemnify our customers for intellectual property infringement, which agreements could subject us to liability. Legal disputes relating to intellectual property have occurred, are occurring, and may occur in the future. Any dispute regarding patents or other intellectual property, including with respect to breaches of licensing agreements or other contractual arrangements, could be costly and time consuming and could divert our management and key personnel from our business operations. We may not prevail in a dispute. We do not maintain insurance for intellectual property infringement, so costs of defense, whether or not we are successful in defending an infringement claim, will be borne by us and could be significant. If we are unsuccessful in defending or appealing an infringement claim or claims alleging other contractual breaches, we may be subject to significant damages, and our combined financial position, results of operations, or cash flows could be materially and adversely affected. We may also be subject to injunctions against development and sale of our products, the effect of which could be a material reduction of our revenues. Additionally, as we expand our manufacturing capabilities outside of the United States, more of our intellectual property may be held in jurisdictions that lack robust intellectual property protections, which may make it harder for us to adequately protect our intellectual property.

**Risks Relating to Our Legal and Regulatory Environment**

***Compliance with United States laws and regulations applicable to the marketing, manufacturing, and distribution of our products may be costly, and failure or delays in obtaining regulatory clearances or approvals, or failure to comply with applicable laws and regulations could harm our business.***

&nbsp;&nbsp;&nbsp;&nbsp;If we or any of our suppliers, distributors, agents, or customers fail to comply with FDA, Federal Trade Commission, or other applicable United States regulatory requirements or are perceived to have failed to comply with regulations, we may face:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse publicity affecting both us and our customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased pressures from competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• investigations by governmental authorities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fines, injunctions, civil penalties, and criminal prosecution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• partial suspension or total shutdown of production facilities or the imposition of operating restrictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased difficulty in obtaining required clearances or approvals or losses of clearances or approvals already granted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• seizures or recalls of our products or those of our customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delays in purchasing decisions by customers or cancellation of existing orders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the inability to sell our products; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulty in obtaining product liability or operating insurance at a reasonable cost, or at all.

&nbsp;&nbsp;&nbsp;&nbsp;Generally, our manufacturing operations for medical devices, and those of our third-party manufacturers, are required to comply with the QSR of the FDA, as well as other federal and state regulations for medical devices and radiation-emitting products. Failure to respond in a timely manner to a warning letter or any other notice of noncompliance with applicable regulations and/or

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

procedures and to promptly come into compliance could result in the FDA bringing an enforcement action, which could include the total shutdown of our production facilities, denial of importation rights to the United States for products manufactured in overseas locations, adverse publicity, and criminal and civil fines. The expense and costs of any corrective actions that we may take, which may include product recalls, product correction, removal of products from customer sites, or changes to our product manufacturing and quality systems, could materially and adversely impact our financial results and may also divert management resources, attention, and time. Additionally, if a warning letter were issued, customers could delay purchasing decisions or cancel orders, and we could face increased pressure from our competitors, who could use the warning letter against us in competitive sales situations, either of which could materially and adversely affect our reputation, business, and stock price.

&nbsp;&nbsp;&nbsp;&nbsp;We produce some products that are classified as "Class II" devices subject to 510(k) pre-market notification clearance. A new medical device or a new indication for use of, or other significant change in, any such products, or the development of a new Class II device would require us to obtain a new 510(k) clearance before we could market or sell those products in the United States. We cannot ensure that the FDA will agree with our decisions not to seek additional approvals or clearances for particular modifications to our products or that we will be successful in obtaining new 510(k) clearances for new products or for modifications to existing products. Obtaining clearances or approvals is time consuming, expensive, and uncertain. Furthermore, even if we are granted regulatory clearances or approvals, they may include significant limitations on the indicated uses of the product, which may limit the potential customers for the product. If we are unable to obtain required FDA clearance or approval for a product or are unduly delayed in doing so, or the uses of that product were limited, our business could suffer.

&nbsp;&nbsp;&nbsp;&nbsp;We are required to timely file various reports with the FDA, including reports required by the medical device reporting regulations ("MDRs"), that require we report to regulatory authorities if our devices may have caused or contributed to a death or serious injury, or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur. If we initiate a correction or removal of a device to reduce a risk to health posed by the device, we would be required to submit a publicly available correction and removal report to the FDA and, in many cases, similar reports to other regulatory agencies. This report could be classified by the FDA as a device recall, which could lead to increased scrutiny by the FDA, other international regulatory agencies, and our customers regarding the quality and safety of our devices. If these MDRs or correction and removal reports are not filed on a timely basis, regulators may impose sanctions, sales of our products may suffer, and we may be subject to product liability or regulatory enforcement actions, all of which could harm our business.

&nbsp;&nbsp;&nbsp;&nbsp;Government regulation may also cause significant delays or prevent the marketing and full commercialization of future products or services that we may develop and/or may impose costly requirements on our business. As we enter new businesses or pursue new business opportunities, we will become subject to additional laws, rules, and regulations, including FDA and foreign rules and regulations and compliance can be costly. Failure to comply with these laws, rules and regulations could delay the introduction of new products and could materially and adversely affect our business.

&nbsp;&nbsp;&nbsp;&nbsp;We are also subject to federal and state laws and regulations of general applicability relating to matters such as environmental protection, safe working conditions, manufacturing practices, data privacy and other matters. Insurance coverage is not commercially available for violations of law, including the fines, penalties, or investigatory costs that we may incur as the consequence of regulatory violations. Consequently, we do not have insurance that would cover this type of liability.

***Compliance with foreign laws and regulations applicable to the marketing, manufacturing, and distribution of our products may be costly, and failure to comply may result in unfavorable legal proceedings, in significant penalties and other harm to our business.***

&nbsp;&nbsp;&nbsp;&nbsp;Outside the United States, some of our products are regulated as medical devices by foreign governmental agencies similar to the FDA. For us to market our products internationally, we must obtain clearances or approvals for products and product modifications, which can be time consuming, expensive, uncertain, and which can delay our ability to market products. Delays in the receipt of or failure to receive regulatory approvals, the inclusion of significant limitations on the indicated uses of a product, the loss of previously obtained approvals or failure to comply with existing or future regulatory requirements could restrict or prevent us from doing business in a country or subject us to a variety of enforcement actions and civil or criminal penalties, which would materially and adversely affect our business. In addition, compliance with changing regulatory schemes may add additional complexity, cost, and delays in marketing, or selling our products.

&nbsp;&nbsp;&nbsp;&nbsp;Within the European Union ("EU") and the European Economic Area ("EEA"), we must obtain, and in turn affix, a CE mark certification, that indicates that a product meets the essential requirements of the EU's Medical Device Directive ("MDD") and the EU Medical Device Regulations. By affixing the CE mark to our product, we are certifying that our product complies with the laws and regulations required by the EU/EEA countries, thereby allowing the free movement of the product within these countries and others that accept CE mark standards. If we cannot support our performance claims and demonstrate compliance with the applicable European laws and the MDD, we would lose our right to affix the CE mark to our products, which would prevent us from selling our products within the EU/EEA/Switzerland territory and in other countries that recognize the CE mark.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;We are subject to international laws and regulations of general applicability relating to matters such as environmental protection, safe working conditions, data privacy, and manufacturing practices, as well as others. These are often comparable to, or more stringent than, equivalent regulations in the United States. Sales overseas are also affected by regulation of matters such as product standards, packaging, labeling, environmental and product recycling requirements, import and export restrictions, tariffs, duties, and taxes.

&nbsp;&nbsp;&nbsp;&nbsp;In addition, we are required to timely file various reports with international regulatory authorities similar to the reports we are required to timely file with United States regulatory authorities, including reports required by international adverse event reporting regulations. If these reports are not timely filed, regulators may impose sanctions, including temporarily suspending our market authorizations or CE mark, and sales of our products may suffer as a result.

&nbsp;&nbsp;&nbsp;&nbsp;As we enter new businesses or pursue new business opportunities internationally, or as regulatory schemes change, we may become subject to additional laws, rules, and regulations, and compliance can be costly. The failure by us or our agents to comply with these laws, rules, and regulations could delay the introduction of new products, cause reputational harm, or result in investigations, fines, injunctions, civil penalties, criminal prosecution, or an inability to sell our products in or to import our products into certain countries, which could materially and adversely affect our business.

***We are subject to federal, state, and foreign laws governing our business practices which, if violated, could result in substantial penalties. Additionally, challenges to or investigations into our practices could cause adverse publicity and be costly to respond to and thus could harm our business.***

&nbsp;&nbsp;&nbsp;&nbsp;*Anti-corruption laws and regulations*. We are subject to the U.S. Foreign Corrupt Practices Act and anti-corruption laws, and similar laws in foreign countries, such as the U.K. Bribery Act. Any violation of these laws by us or our agents or distributors could create substantial liability for us, subject our officers and directors to personal liability, and cause a loss of reputation. We operate in many countries, including India and China, where the public sector is perceived as being corrupt. Our strategic business plans include expanding our business in regions and countries that are rated as higher risk for corruption activity by Transparency International e.V., an international non-profit that publishes an annual corruption perception index, which could subject us and our officers and directors to increased scrutiny and increased liability from our business operations. Becoming familiar with and implementing the infrastructure necessary to comply with laws, rules, and regulations applicable to new business activities and mitigating and protecting against corruption risks could be costly. Failure by us or our agents or distributors to comply with these laws, rules, and regulations could delay our expansion into high-growth areas and materially and adversely affect our business.

&nbsp;&nbsp;&nbsp;&nbsp;*Competition and trade compliance laws*. We are subject to various competition and trade compliance laws in the jurisdictions where we operate throughout the world. Regulatory authorities in those jurisdictions may have the power to subject us to sanctions, tariffs, and duties and may impose changes or conditions in the way we conduct our business. An increasing number of jurisdictions provide private rights of action for competitors or consumers to assert claims of anti-competitive conduct and seek damages. Increased government scrutiny of our actions or enforcement or private rights of action could materially and adversely affect our business or damage our reputation. We may be required to conduct internal investigations or face audits or investigations by one or more domestic or foreign government agencies, which could be costly and time consuming and could divert our management and key personnel from our business operations. An adverse outcome under any such investigation or audit could subject us to fines and criminal or other penalties, which could materially and adversely affect our business and financial results. The currently indefinitely suspended MOFCOM Investigations are an example of the type of investigations or audits we have faced, and could in the future, face. Furthermore, competition laws may prohibit or increase the cost of future acquisitions that we may desire to undertake.

&nbsp;&nbsp;&nbsp;&nbsp;*Laws and ethical rules governing interactions with healthcare providers*. We may occasionally sell our products to healthcare providers through distributors or otherwise engage healthcare providers to provide services. The U.S. Medicare and Medicaid "anti-kickback" laws, and similar state laws, prohibit payments or other remuneration that is intended to induce hospitals, physicians, or others either to refer patients or to purchase, lease, or order, or to arrange for or recommend the purchase, lease, or order of healthcare products or services for which payment may be made under federal and state healthcare programs, such as Medicare and Medicaid. These laws affect our sales, marketing, and other promotional activities by limiting the kinds of financial arrangements we may have with hospitals, physicians, or other potential purchasers of our products. They particularly impact how we structure our sales offerings, including discount practices, customer support, education and training programs, physician consulting, research grants, and other fee-for-service arrangements. These laws are broadly written, and it is often difficult to determine precisely how these laws will be applied to specific circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;Federal and state "false claims" laws generally prohibit knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other government payors that are false or fraudulent, or for items or services that were not provided as claimed. Although we do not submit claims directly to payors, manufacturers can be, and have been, held liable under these laws if they are deemed to "cause" the submission of false or fraudulent claims by providing inaccurate billing or coding information to customers or through certain other activities, including promoting products for uses not approved or cleared by the FDA, which is

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

called off-label promotion. Violating "anti-kickback" and "false claims" laws can result in civil and criminal penalties, which can be substantial, as well as potential mandatory or discretionary exclusion from healthcare programs for noncompliance. Even an unsuccessful challenge or investigation into our practices could cause adverse publicity and be costly to defend and thus could harm our business and results of operations. Additionally, state and federal laws, including laws in Massachusetts and Vermont, and the federal Physician Payment Sunshine Act, require, among other things, extensive tracking and maintenance of databases regarding the disclosure of equity ownership and payments to physicians, healthcare providers, and hospitals. These laws may require us to implement the necessary and costly infrastructure to track and report certain payments to healthcare providers. Failure to comply with these tracking and reporting laws could subject us to significant civil monetary penalties.

&nbsp;&nbsp;&nbsp;&nbsp;*Other laws.* We are subject to other laws in foreign countries where we conduct business. For example, within the EU, the control of unlawful marketing activities is a matter of national law in each of the member states. The member states of the EU closely monitor perceived unlawful marketing activities. We could face civil, criminal, and administrative sanctions if any member state determines that we have breached such state's national laws. Industry associations also closely monitor the activities of member companies. If these organizations or authorities name us as having breached our obligations under their regulations, rules, or standards, our reputation would suffer, and our business and financial condition could be materially and adversely affected.

***A change in the percentage of our total earnings from international sales, changes in our international activities, or additional changes in tax laws could increase our effective tax rate.***

&nbsp;&nbsp;&nbsp;&nbsp;Earnings from our international subsidiaries are generally taxed at rates that differ from United States rates. A change in the percentage of our total earnings from our international subsidiaries, a change in the mix of particular tax jurisdictions between our international subsidiaries, a change in currency exchange rates, or a shift in where we perform manufacturing, research and development, and other activities internally could cause our effective tax rate to increase. Furthermore, while United States tax reform imposed a current tax on cumulative undistributed earnings, these earnings could also become subject to incremental foreign withholding or state taxes in the United States should they actually be remitted to the United States, in which case our financial results could be materially and adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;Changes in the valuation of our deferred tax assets or liabilities, changes in tax laws or rates, changes in the interpretation of tax laws in other jurisdictions, or other changes beyond our control could materially and adversely affect our financial position and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;We have entities in certain jurisdictions with cumulative net operating losses for which no income tax benefit can be recorded due to full valuation allowance positions. There could be additional future losses in these and other jurisdictions that would negatively impact our effective tax rate.

***We sell certain X-ray tube products as replacements which are subject to medical device certification and product registration laws and regulations that vary by country and are subject to change, and we may be unable to receive registration approval or renewal of existing registrations.***

&nbsp;&nbsp;&nbsp;&nbsp;We market and distribute certain X-ray tubes through distributors and third-party/multi-vendor service organizations that are used as equivalent replacements for specific OEM tubes. We are subject to medical device certification and product registration laws that vary by country and are subject to periodic reviews and changes by regulatory authorities in those countries. Certain of these local laws and regulations have the effect of serving as a barrier to trade and can be difficult to navigate predictably. In addition, certain countries where we sell our products require products to undergo re-registration if the product is altered in any significant way. These registration processes can be costly and time consuming, and customers may decide to purchase products from our competitors that do not have to be involved in a re-registration process. In addition, our inability to receive or renew product registrations may prevent us from marketing and/or distributing those particular products for replacement applications in the specific country.

***Existing and future healthcare reforms and changes to reimbursement rates may indirectly have a material adverse effect on our business and results of operations.***

&nbsp;&nbsp;&nbsp;&nbsp;Sales of our products to OEMs in the medical sector indirectly depend on whether adequate reimbursement is available for our customers' products from a variety of sources, such as government healthcare insurance programs, including U.S. Medicare and Medicaid programs, foreign government programs, private insurance plans, health maintenance organizations, and preferred provider organizations. Without adequate reimbursement, the demand for our customers' products, and therefore indirectly our products, may be limited, which could harm our business, results of operations, financial condition, and prospects.

&nbsp;&nbsp;&nbsp;&nbsp;Healthcare reform proposals and medical cost containment measures in the United States and in many foreign countries could limit the use of both ours and our customers' products, reduce reimbursement available for such use, further tax the sale or use of our products, and further increase the administrative and financial burden of compliance. Any changes that lower reimbursements for our or our customers' products and/or procedures using these products, including, for example, existing reimbursement incentives to

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

convert from analog to digital X-ray systems, or changes that reduce medical procedure volumes or increase cost containment pressures on us or others in the healthcare sector could materially and adversely affect our business and results of operations.

***Certain of our products are subject to regulations relating to use of radioactive material, compliance with which may be costly, and a failure to comply with these regulations may materially and adversely affect our business.***

&nbsp;&nbsp;&nbsp;&nbsp;As a manufacturer and seller of medical devices and devices emitting radiation or utilizing radioactive by-product material, we and some of our suppliers and distributors are subject to extensive regulation by United States governmental authorities, such as the FDA, the Nuclear Regulatory Commission ("NRC"), and state and local regulatory agencies, which is intended to ensure the devices are safe and effective and comply with laws governing products which emit, produce, or control radiation. These regulations govern, among other things, the design, development, testing, manufacturing, packaging, labeling, distribution, import/export, sale, marketing, and disposal of our products. We are also subject to international laws and regulations that apply to manufacturers of radiation-emitting devices and products utilizing radioactive materials. These are often comparable to, if not more stringent than, the equivalent regulations in the United States.

&nbsp;&nbsp;&nbsp;&nbsp;Our industrial and medical devices utilizing radioactive material are subject to NRC clearance and approval requirements, and the manufacture and sale of these products are subject to extensive federal and state regulation that varies from state to state and among regions. Our manufacture, distribution, installation, service, and removal of industrial devices utilizing radioactive material or emitting radiation also requires us to obtain a number of licenses and certifications for these devices and materials. Service of these products must also be performed in accordance with specific radioactive materials licenses. Obtaining licenses and certifications may be time consuming, expensive, and uncertain.

&nbsp;&nbsp;&nbsp;&nbsp;The handling and disposal of radioactive materials resulting from the manufacture, use, or disposal of our products may impose significant costs and requirements. Disposal sites for the lawful disposal of materials generated by the manufacture, use, or decommissioning of our products may no longer accept these substances in the future or may accept them on unfavorable terms.

***Environmental laws impose compliance costs on our business and may also result in liability.***

&nbsp;&nbsp;&nbsp;&nbsp;Environmental laws regulate many aspects of our operations, including our handling, storage, transport, and disposal of hazardous substances, such as the chemicals and materials that we use in the course of our manufacturing operations. For example, pursuant to a remediation plan related to certain hazardous volatile organic compounds present at our Salt Lake City property, we and Varian Medical Systems, Inc. ("Varian") entered into an environmental covenant with the Director of the Utah Division of Waste Management and Radiation Control on behalf of the Utah Department of Environmental Quality requiring certain remediation measures and imposing certain limitations relating to the property and the groundwater in the aquifer underlying the property, including use of the property for commercial and industrial uses only and not allowing groundwater to be used for culinary and other domestic purposes, among other limitations. Our compliance with environmental laws can also impose cleanup liabilities, including with respect to discontinued operations. Like other businesses, we may mishandle or inadequately manage hazardous substances used in our manufacturing operations and can never completely eliminate the risk of contamination or injury from certain materials that we use in our business and, therefore, we cannot completely eliminate the prospect of resulting claims and damage payments. We may also be assessed fines and/or other penalties for failure to comply with environmental laws and regulations. Insurance has provided coverage for portions of cleanup costs resulting from historical occurrences, but we do not expect to maintain insurance coverage for costs or claims that might result from any future contamination.

&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Separation and Distribution Agreement we entered into with Varian when we spun off from Varian, we are obligated to indemnify Varian for 20% of the cleanup liabilities related to prior corporate restructuring activities undertaken while we were a division of Varian. This includes facilities sold as part of Varian's electron devices business in 1995 and thin film systems business in 1997. The U.S. Environmental Protection Agency ("EPA") or third parties have named Varian as a potentially responsible party under the amended Comprehensive Environmental Response Compensation and Liability Act of 1980 ("CERCLA"), at sites to which Varian or the facilities of the businesses sold in 1995 and 1997 were alleged to have shipped waste for recycling or disposal (the "CERCLA sites"). We anticipate that we will be obligated to reimburse Varian for 20% of the liabilities of Varian related to these CERCLA sites (after adjusting for any insurance proceeds or tax benefits received by Varian). We assess this indemnification obligation quarterly with Varian and make accruals accordingly. These accruals have historically been small, but can sometimes fluctuate significantly from period to period.

&nbsp;&nbsp;&nbsp;&nbsp;Future changes in environmental laws could also increase our costs of doing business, perhaps significantly. Several countries, including some in the EU, now require medical equipment manufacturers to bear certain disposal costs of products at the end of the product's useful life, thereby increasing its costs. The EU has also adopted directives that may lead to restrictions on the use of certain hazardous substances or other regulated substances in some of our products sold there. These directives, along with another that requires substance information to be provided upon request, could increase our operating costs by increasing the cost of

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

maintaining our access to certain customers. All of these costs, and any future violations or liabilities under environmental laws or regulations, could have a material adverse effect on our business.

**Risks Relating to Our Indebtedness**

***The Credit and Guaranty Agreement governing our Credit Facility imposes significant operating and financial restrictions that may limit our operating flexibility and ability to respond to changes in economic or industry conditions, which could harm our long-term interests, and our variable rate borrowings under the Credit and Guaranty Agreement subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.***

&nbsp;&nbsp;&nbsp;&nbsp;As of April 3, 2026, our total indebtedness was approximately $351.1 million of principal, which consisted primarily of borrowings under our Term Loan Facility together with $4.4 million outstanding under our Revolving Credit Facility. Our borrowings under the Credit and Guaranty Agreement bear interest at variable rates, including rates based on Term SOFR, which could affect the amount of interest payable on our debt. The Credit and Guaranty Agreement includes a mandatory hedging covenant that requires us to hedge at least 50% of the borrowings under the Term Loan Facility through the fourth anniversary of the Credit and Guaranty Agreement. In connection with the closing of the Credit Facility, we entered into an interest rate swap agreement to hedge $350 million of our variable-rate interest exposure by effectively converting it to a fixed rate through March 2030. Although we have entered into the interest rate swap hedge to hedge a substantial portion of our variable-rate interest exposure, we remain subject to interest rate risk to the extent our borrowings exceed the hedged notional amount or if the swap counterparty fails to perform. The swap matures prior to the maturity of the Credit Facility, and the notional amount of the swap amortizes over time, which may result in increasing portions of our variable-rate borrowings becoming unhedged. In addition, the effectiveness of the swap depends on the creditworthiness of the counterparty and the continued qualification of the swap for hedge accounting treatment. If interest rates increase and our hedging arrangements are insufficient or unavailable, our interest expense could increase materially, reducing cash flow available for operations, capital expenditures, and other corporate purposes. For more information regarding our borrowings and hedging, see Note 6, *Borrowings* and Note 9, *Financial Derivatives and Hedging Activities* of the accompanying Notes to the Condensed Consolidated Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;The Credit and Guaranty Agreement imposes significant operational and financial restrictions on us that include, but are not limited to, our ability to:

&nbsp;&nbsp;&nbsp;&nbsp;• incur, assume, or permit to exist additional indebtedness (including guarantees thereof);

&nbsp;&nbsp;&nbsp;&nbsp;• pay dividends or certain other distributions on our capital stock or repurchase our capital stock or prepay subordinated indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;• prepay, redeem, or repurchase certain debt;

&nbsp;&nbsp;&nbsp;&nbsp;• issue certain preferred stock or similar equity securities;

&nbsp;&nbsp;&nbsp;&nbsp;• incur liens on assets;

&nbsp;&nbsp;&nbsp;&nbsp;• make certain loans, investments, or other restricted payments;

&nbsp;&nbsp;&nbsp;&nbsp;• allow to exist certain restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us;

&nbsp;&nbsp;&nbsp;&nbsp;• engage in transactions with affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;• alter the business that we conduct; and

&nbsp;&nbsp;&nbsp;&nbsp;• sell certain assets or merge or consolidate with or into other companies.

&nbsp;&nbsp;&nbsp;&nbsp;As a result of these restrictions, we may be:

&nbsp;&nbsp;&nbsp;&nbsp;• limited in how we conduct our business;

&nbsp;&nbsp;&nbsp;&nbsp;• unable to raise additional debt or equity financing on acceptable terms or at all, to operate during general economic or business downturns;

&nbsp;&nbsp;&nbsp;&nbsp;• limited in our ability to borrow additional funds as needed or the cost of such borrowing may be higher;

&nbsp;&nbsp;&nbsp;&nbsp;• challenged in satisfying our obligations, including our debt obligations;

&nbsp;&nbsp;&nbsp;&nbsp;• vulnerable to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings are and will continue to be at variable rates of interest;

&nbsp;&nbsp;&nbsp;&nbsp;• required to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures, or other general corporate purposes;

&nbsp;&nbsp;&nbsp;&nbsp;• disadvantaged compared to competitors that may have proportionately less debt; or

&nbsp;&nbsp;&nbsp;&nbsp;• unable to compete effectively or to take advantage of new business opportunities.

&nbsp;&nbsp;&nbsp;&nbsp;A breach of the covenants under the Credit and Guaranty Agreement could result in an event of default under our indebtedness. Such a default, if not cured or waived, may allow our lenders to accelerate the related debt, and may result in the acceleration of any other debt that is subject to an applicable cross-acceleration or cross-default provision. Furthermore, if we were unable to repay the amounts due and payable under the Credit Facility, the lenders could proceed against the collateral securing such

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

indebtedness, which includes substantially all the assets of the Company and certain of its subsidiaries. In the event our lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;If our cash requirements in the future are greater than expected or our cash flow from operations is less than expected, our cash flow from operations may not be sufficient to repay all of the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets, or otherwise raise funds on acceptable terms, or at all, to refinance our debt. Any future refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants which could further restrict our business operations. Additionally, the Credit and Guaranty Agreement requires mandatory prepayments upon the occurrence of certain events, including from the proceeds of certain asset dispositions, which may limit our ability to use those proceeds for other corporate purposes.

***Our liquidity and ability to operate our business could be adversely impacted by, among other factors, declines in customer spending or operating performance that impair our ability to comply with the consolidated fixed charge coverage ratio or the consolidated total net leverage ratio contained in our Credit and Guaranty Agreement.***

&nbsp;&nbsp;&nbsp;&nbsp;Our historical sources of liquidity to fund ongoing cash requirements include cash flows from operations, cash and cash equivalents, and borrowings through credit facilities. The sufficiency and availability of credit may be adversely affected by a variety of factors, including, without limitation, the tightening of the credit markets, including lending by financial institutions who are sources of credit for our borrowing and liquidity; an increase in the cost of capital; the reduced availability of credit; our ability to execute our strategy; the level of our cash flows, which will be impacted by customer demand for our products; compliance with the consolidated fixed charge coverage ratio and consolidated total net leverage ratio that are included in our Credit and Guaranty Agreement; and interest rate fluctuations. We cannot predict the future level of interest rates or the effect of any change in interest rates on the availability or aggregate cost of our borrowings. We cannot be certain that any additional required financing, whether debt or equity, will be available in amounts needed or on terms acceptable to us, if at all.

&nbsp;&nbsp;&nbsp;&nbsp;The Credit and Guaranty Agreement governing our Credit Facility contains a minimum consolidated fixed charge coverage ratio of 1.20 to 1.00 and a maximum consolidated total net leverage ratio (the "CTNL Ratio"). Through September 2027, the CTNL Ratio may not exceed 4.25:1.00; for the period from December 2027 through September 2028, the CTNL Ratio may not exceed 4.00:1.00; and from December 2028 and thereafter, the CTNL Ratio may not exceed 3.75:1.00. In addition, in any fiscal quarter in which a qualifying acquisition for which total consideration is $125.0 million or more is consummated, the applicable maximum CTNL Ratio for that fiscal quarter and the immediately succeeding three fiscal quarters is increased by 0.50:1.00, but may not exceed 4.50:1.00. Each ratio is tested on the last day of each fiscal quarter. Adverse developments in the economy in the past have led and in the future could lead to reduced spending by our customers and end-users which could adversely impact our net sales and cash flow and our ability to comply with one or both of these ratios.

**General Risks**

***Failure to maintain effective internal controls and procedures and changes in accounting standards and subjective assumptions, estimates, and judgments by management related to complex accounting matters, could negatively impact us.***

&nbsp;&nbsp;&nbsp;&nbsp;In the past, we have not always been successful in maintaining effective internal controls and procedures. Internal control over financial reporting is complex and may be revised over time to adapt to changes in our business or changes in applicable accounting rules. We cannot assure that our internal control over financial reporting will be effective in the future or that material weaknesses will not be discovered with respect to a prior period for which we had previously believed that internal controls were effective. If our internal controls and procedures are not effective, our financial statements may not accurately reflect the results of our business and operations. In addition, there could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements, which could affect our stock price.

&nbsp;&nbsp;&nbsp;&nbsp;GAAP and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, such as revenue recognition, impairment of intangible assets, fair value determinations, lease obligations, vendor allowances, tax matters, litigation, and other matters, are complex and involve many subjective assumptions, estimates and judgments by our management. Changes in accounting standards or their interpretation or changes in underlying assumptions, estimates, or judgments by our management can also change our reported or expected financial performance or financial condition or have an impact on our Condensed Consolidated Financial Statements. As described in Note 1 to our Consolidated Financial Statements included in our Annual Report on Form 10-K under "*Revision of Prior Period Financial Statements"* during the three months ended July 4, 2025, we identified an error related to deferred tax assets and liabilities and income tax expense in prior periods. The effect of the error was not material, individually or in aggregate in prior periods, but correcting the effect of the error as an out-of-period adjustment for the quarter ended July 4, 2025 would have been material.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

***We have incurred, and may in the future incur, impairment charges related to our goodwill, which could have an adverse effect on our financial condition and results of operations.***

&nbsp;&nbsp;&nbsp;&nbsp;As of April 3, 2026, our goodwill was $197.8 million. We are required to test intangible assets with indefinite lives, including goodwill, annually or, in certain instances, more frequently, and may be required to record impairment charges, which would reduce any earnings or increase any loss for the period in which the impairment was determined to have occurred. For example, during the three months ended July 4, 2025, changes in facts and circumstances related to sustained decreases in our stock price, a decrease in our market capitalization, and downward revisions in our longer-term forecast received during the quarter, which included the impact of tariffs and the MOFCOM Investigations announcements, resulted in our determination that the carrying amount of our Medical reporting unit exceeded its fair value. Accordingly, we recorded a $93.9 million goodwill impairment charge to our Medical reporting unit. Our goodwill impairment analysis is sensitive to changes in key assumptions used in our analysis. If the assumptions used in our analysis are not realized, it is possible that a further impairment charge may need to be recorded in the future. We cannot accurately predict the amount and timing of any impairment of goodwill or other intangible assets. However, any such impairment could have an adverse effect on our results of operations.

***If we are unable to retain, attract, expand, integrate, and train our management team and other key personnel, we may not be able to maintain or expand our business.***

&nbsp;&nbsp;&nbsp;&nbsp;Our future success depends on our ability to retain, attract, expand, integrate, and train our management team and other key personnel, such as qualified engineering, service, sales, marketing, manufacturing, and other staff. We compete for key personnel with other medical equipment and software manufacturers and technology companies, as well as universities and research institutions. We have observed a competitive labor market over the past several years. As a result, compensation-related costs have increased and could continue to increase. Additionally, our United States-based employees, including our senior management team, work for us on an at-will basis, and there is no assurance that any such employees will remain with us. Replacing key employees may take an extended period of time, and to the extent we hire employees from competitors, we also may be subject to allegations that they have been improperly solicited or divulged proprietary or other confidential information. Freezing new positions or terminating existing ones could hinder our ability to execute our strategic plan and achieve growth targets, resulting in long-term sacrifices for short-term gains. If we are unable to retain or hire and train qualified personnel, we may not be able to maintain or expand our business. Similarly, if we fail to adequately invest in leadership training and career development resources this could limit employee growth, lead to shortages of skilled personnel, hinder effective management and decision making, and hamper overall organizational success.

***Our business is subject to evolving matters relating to environmental, social and governance and/or our reporting of such matters that could expose us to numerous risks.***

&nbsp;&nbsp;&nbsp;&nbsp;We are subject to evolving, and sometimes conflicting, laws, regulations, policies, and investor and other stakeholder expectations concerning environmental, social, and governance matters, such as environmental sustainability and climate change, both in the United States and internationally. Any initiatives, goals, or commitments we disclose in this regard involve risks and uncertainties and could be difficult to achieve and costly to implement. In addition, in a climate where there are changing and increasingly divergent views on where our focus should be on these matters, our initiatives, goals, or commitments, or any revisions to them, may be criticized and the accuracy, adequacy, or completeness of such disclosures challenged. Our actual or perceived failure to achieve our initiatives, goals, or commitments, or otherwise successfully manage investor or other stakeholder expectations on these matters, could negatively impact our reputation or otherwise harm our business.

&nbsp;&nbsp;&nbsp;&nbsp;In addition, a number of our customers, particularly those outside the United States, have adopted, and may continue to adopt, procurement policies that require us to comply with social and environmental provisions. An increasing number of investors have adopted, and may continue to adopt, environmental, social, and governance policies for their portfolio companies, and various voluntary sustainability initiatives and organizations have promulgated different social and environmental and sustainability guidelines. These practices, policies, provisions, and initiatives are under active development, subject to change, can be unpredictable and conflicting, and may prove difficult and expensive for us to comply with and could negatively affect our reputation, business, or financial condition.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

None.

**Item 3. Defaults Upon Senior Securities**

None.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

***Insider Trading Arrangements***

&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal quarter ended April 3, 2026, none of our directors or officers informed us of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as those terms are defined in Regulation S-K, Item 408.

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**Item 6. Exhibits**

**(a)** Exhibits required to be filed by Item 601 of Regulation S-K:

---

| | |
|:---|:---|
| Exhibit<br>No. | Description |
| 3.1 | <u>[Amended and Restated Certificate of Incorporation, dated January 27, 2017 (as corrected December 11, 2017) (incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K filed November 27, 2018).](https://www.sec.gov/Archives/edgar/data/1681622/000168162217000023/exhibit31-10xk.htm)</u> |
| 3.2 | <u>[Amended and Restated Bylaws of the Company, as amended February 11, 2021 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed February 16, 2021).](https://www.sec.gov/Archives/edgar/data/0001681622/000168162221000031/exhibit31-amendedandrestat.htm)</u> |
| 3.3 | <u>[Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Varex Imaging Corporation, effective as of February 13, 2025 (incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K filed on February 14, 2025).](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001681622/000168162225000018/vrex-20250213.htm)</u> |
| 10.1 | <u>[Credit and Guaranty Agreement, dated as of March 13, 2026, by and among, among others, Varex Imaging Corporation, as the parent borrower, certain subsidiaries of Varex Imaging Corporation as borrowers and guarantors, the lenders from time to time party thereto, the issuing banks from time to time party thereto, and Zions Bancorporation, N.A. dba Zions First National Bank, as administrative agent and collateral agent. (incorporated by reference to exhibit 10.1 of the Company's Current Report on Form 8-K filed on March 16, 2026).](https://www.sec.gov/Archives/edgar/data/1681622/000168162226000035/exhibit101-creditandguaran.htm)</u> |
| 31.1\* | <u>[Chief Executive Officer Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act](varexq226exhibit311.htm)</u> |
| 31.2\* | <u>[Chief Financial Officer Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act](varexq226exhibit312.htm)</u> |
| 32.1\*\* | <u>[Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](varexq226exhibit321.htm)</u> |
| 32.2\*\* | <u>[Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](varexq226exhibit322.htm)</u> |
| 101.INS\* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
| 101.SCS\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104\* | Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101) |
| \* | Filed herewith. |
| \*\* | Furnished herewith. |

---

------

<u>[**Table of Contents**](#ia7d21d8b68b849839e40c0843b044805_10)</u>

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| | | | **VAREX IMAGING CORPORATION** |
| Date: | May 7, 2026 | By: | /s/ SHUBHAM MAHESHWARI |
|  |  |  | **Shubham Maheshwari** |
|  |  |  | **Chief Financial Officer** |
|  |  |  | ***(Duly Authorized Officer and Principal Financial Officer)*** |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)**

**AS ADOPTED PURSUANT TO SECTION 302**

**OF THE SARBANES-OXLEY ACT OF 2002**

I, Sunny S. Sanyal, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Quarterly Report on Form 10-Q of Varex Imaging Corporation (the "registrant");

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;&nbsp;&nbsp;&nbsp;&nbsp;

4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| Dated: | May 7, 2026 | By: | /s/ Sunny S. Sanyal |
|  |  |  | **Sunny S. Sanyal** |
|  |  |  | **President, Chief Executive Officer** |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)**

**AS ADOPTED PURSUANT TO SECTION 302**

**OF THE SARBANES-OXLEY ACT OF 2002**

I, Shubham Maheshwari, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Quarterly Report on Form 10-Q of Varex Imaging Corporation (the "registrant");

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;&nbsp;&nbsp;&nbsp;&nbsp;

4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| Dated: | May 7, 2026 | By: | /s/ Shubham Maheshwari |
|  |  |  | **Shubham Maheshwari** |
|  |  |  | **Chief Financial Officer** |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION**

**PURSUANT TO 18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the accompanying Quarterly Report of Varex Imaging Corporation (the "Company") on Form 10-Q for the quarter ended April 3, 2026 (the "Report"), I, Sunny S. Sanyal, President and Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | | |
|:---|:---|:---|:---|
| Dated: | May 7, 2026 | By: | /s/ Sunny S. Sanyal |
|  |  |  | **Sunny S. Sanyal** |
|  |  |  | **President, Chief Executive Officer** |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION**

**PURSUANT TO 18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the accompanying Quarterly Report of Varex Imaging Corporation (the "Company") on Form 10-Q for the quarter ended April 3, 2026 (the "Report"), I, Shubham Maheshwari, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | | |
|:---|:---|:---|:---|
| Dated: | May 7, 2026 | By: | /s/ Shubham Maheshwari |
|  |  |  | **Shubham Maheshwari** |
|  |  |  | **Chief Financial Officer** |

---

<br>