Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 28, 2018 | Nov. 19, 2018 | Mar. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 28, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | VREX | ||
Entity Registrant Name | Varex Imaging Corporation | ||
Entity Central Index Key | 1,681,622 | ||
Current Fiscal Year End Date | --09-28 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Smaller Reporting Company | false | ||
Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity common stock, shares outstanding (in shares) | 38,118,697 | ||
Entity Public Float | $ 1,037,187,420 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | |||
Revenues | $ 773.4 | $ 698.1 | $ 620.1 |
Cost of revenues | 519.5 | 444.6 | 371.7 |
Gross margin | 253.9 | 253.5 | 248.4 |
Operating expenses: | |||
Research and development | 83 | 67.3 | 53.5 |
Selling, general and administrative | 126.4 | 102.5 | 85.8 |
Total operating expenses | 209.4 | 169.8 | 139.3 |
Operating earnings | 44.5 | 83.7 | 109.1 |
Interest income | 0.2 | 0.2 | 0.3 |
Interest expense | (21.7) | (12.3) | (1.9) |
Other income (expense), net | 2.7 | 3.2 | (2.5) |
Interest and other expenses, net | (18.8) | (8.9) | (4.1) |
Earnings before taxes | 25.7 | 74.8 | 105 |
Taxes on earnings (benefit) | (2.6) | 22.8 | 36 |
Net earnings | 28.3 | 52 | 69 |
Less: Net earnings attributable to noncontrolling interests | 0.8 | 0.4 | 0.5 |
Net earnings attributable to Varex | $ 27.5 | $ 51.6 | $ 68.5 |
Net earnings per common share attributable to Varex | |||
Basic (in USD per share) | $ 0.73 | $ 1.37 | $ 1.83 |
Diluted (in USD per share) | $ 0.72 | $ 1.36 | $ 1.82 |
Weighted average common shares outstanding | |||
Basic (in shares) | 37.9 | 37.6 | 37.4 |
Diluted (in shares) | 38.4 | 38 | 37.7 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 28.3 | $ 52 | $ 69 |
Other comprehensive earnings (loss), net of tax: | |||
Unrealized gain on interest rate swap contracts | 5.2 | 0.6 | 0 |
Unrealized gain (loss) on defined benefit obligations | (0.2) | 0.2 | 0 |
Available-for-sale securities, net of tax: | |||
Change in unrealized loss | 0 | 0 | (0.3) |
Reclassification adjustments | 0 | 0 | 0.4 |
Other comprehensive earnings, net of tax | 5 | 0.8 | 0.1 |
Comprehensive earnings | 33.3 | 52.8 | 69.1 |
Less: Comprehensive earnings attributable to noncontrolling interests | 0.8 | 0.4 | 0.5 |
Comprehensive earnings attributable to Varex | $ 32.5 | $ 52.4 | $ 68.6 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 28, 2018 | Sep. 29, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 51.9 | $ 83.3 |
Accounts receivable, net of allowance for doubtful accounts of $0.6 and $0.4 at September 28, 2018 and September 29, 2017, respectively | 154 | 163.6 |
Inventories, net | 235.1 | 234.5 |
Prepaid expenses and other current assets | 17.1 | 13.9 |
Total current assets | 458.1 | 495.3 |
Property, plant and equipment, net | 144.9 | 148.3 |
Goodwill | 243.6 | 241.9 |
Intangibles assets | 73.8 | 91.3 |
Investments in privately-held companies | 51 | 52.3 |
Other assets | 16.5 | 11 |
Total assets | 987.9 | 1,040.1 |
Current liabilities: | ||
Accounts payable | 66.3 | 58.9 |
Accrued liabilities | 47.5 | 62.4 |
Current maturities of long-term debt | 25 | 20 |
Deferred revenues | 13.2 | 10.5 |
Total current liabilities | 152 | 151.8 |
Long-term debt | 364.8 | 463.9 |
Deferred tax liabilities | 23.2 | 29.5 |
Other long-term liabilities | 8.5 | 4.7 |
Total liabilities | 548.5 | 649.9 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 11.1 | 11.2 |
Equity: | ||
Preferred stock, $.01 par value: 20,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $.01 par value: 150,000,000 shares authorized, 38,026,597 issued and outstanding as of September 28 2018; 37,633,747 issued and outstanding as of September 29, 2017 | 0.4 | 0.4 |
Additional paid-in capital | 357.6 | 342.7 |
Accumulated other comprehensive loss | 5.8 | 0.8 |
Retained earnings | 62.4 | 35.1 |
Total Varex stockholders' equity | 426.2 | 379 |
Noncontrolling interests | 2.1 | 0 |
Total stockholders' equity | 428.3 | 379 |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ 987.9 | $ 1,040.1 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Sep. 28, 2018 | Sep. 29, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 0.6 | $ 0.4 |
Preferred stock, par value per share (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value per share (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares, issued (in shares) | 38,026,597 | 37,633,747 |
Common stock, shares, outstanding (in shares) | 38,026,597 | 37,633,747 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | |||
Net earnings | $ 28,300,000 | $ 52,000,000 | $ 69,000,000 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Share-based compensation expense | 10,000,000 | 8,400,000 | 9,500,000 |
Excess tax benefits from share-based compensation | 0 | 0 | 100,000 |
Depreciation | 26,000,000 | 16,900,000 | 9,800,000 |
Amortization of intangible assets | 16,200,000 | 10,500,000 | 5,500,000 |
Impairment of intangible assets | 3,000,000 | 0 | 0 |
Other assets impairment charges | 1,300,000 | 0 | 0 |
Inventory write-down | 3,100,000 | 0 | 0 |
Deferred taxes | (7,700,000) | (8,900,000) | 4,200,000 |
Amortization of deferred loan costs | 2,300,000 | 1,800,000 | 0 |
(Gain) loss from equity method investments | (3,900,000) | (1,300,000) | 1,600,000 |
Other, net | 700,000 | 1,800,000 | 700,000 |
Changes in assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable | 9,000,000 | (23,100,000) | (4,600,000) |
Inventories | (2,400,000) | (4,200,000) | (23,500,000) |
Prepaid expenses and other assets | 2,000,000 | (10,700,000) | (900,000) |
Accounts payable | 5,200,000 | 4,900,000 | (1,900,000) |
Accrued operating liabilities and other long-term operating liabilities | (10,200,000) | 28,100,000 | 2,800,000 |
Deferred revenues | 2,400,000 | (1,600,000) | 1,900,000 |
Net cash provided by operating activities | 85,300,000 | 74,600,000 | 74,200,000 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (20,400,000) | (20,200,000) | (28,900,000) |
Sale of available-for-sale securities | 0 | 0 | 8,600,000 |
Acquisitions of businesses, net of cash acquired | (4,800,000) | (271,800,000) | (1,200,000) |
Increase in restricted cash | (600,000) | 0 | 0 |
Other | 0 | 0 | (100,000) |
Net cash used in investing activities | (25,800,000) | (292,000,000) | (21,600,000) |
Cash flows from financing activities: | |||
Net transfers from (to) parent | 0 | 5,000,000 | (36,700,000) |
Distributions to Varian Medical Systems, Inc. | 0 | (227,100,000) | 0 |
Taxes related to net share settlement of equity awards | (2,300,000) | (1,900,000) | 0 |
Borrowings under credit agreements | 10,000,000 | 749,000,000 | 0 |
Repayments of borrowing under credit agreements | (106,000,000) | (255,000,000) | 0 |
Proceeds from exercise of stock options | 3,800,000 | 2,800,000 | 0 |
Proceeds from shares issued under employee stock purchase plan | 3,300,000 | 0 | 0 |
Excess tax benefits from share-based compensation | 0 | 2,400,000 | (100,000) |
Payment of debt issuance costs | (400,000) | (11,900,000) | 0 |
Contributions from noncontrolling partner | 1,800,000 | 0 | 0 |
Dividends paid to redeemable noncontrolling interest | (600,000) | 0 | 0 |
Net cash (used in) provided by financing activities | (90,400,000) | 263,300,000 | (36,800,000) |
Effects of exchange rate changes on cash and cash equivalents | (500,000) | 900,000 | 100,000 |
Net (decrease) increase in cash and cash equivalents | (31,400,000) | 46,800,000 | 15,900,000 |
Cash and cash equivalents | 51,900,000 | 83,300,000 | 36,500,000 |
Supplemental cash flow information: | |||
Cash paid for interest | 19,300,000 | 9,800,000 | 0 |
Cash paid for income tax | 13,800,000 | 6,000,000 | 0 |
Supplemental non-cash activities: | |||
Purchases of property, plant and equipment financed through accounts payable | 2,000,000 | 4,000,000 | 3,100,000 |
Transfers of property, plant and equipment from Varian Medical Systems, Inc. | 0 | 15,000,000 | 0 |
Other non-cash transfers to Varian Medical Systems, Inc. | $ 0 | $ 1,600,000 | $ 0 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Net Parent Investment | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Varex Equity | Noncontrolling Interests |
Shares outstanding, beginning of period (in shares) at Oct. 02, 2015 | 0 | |||||||
Balance at September 29, 2017 at Oct. 02, 2015 | $ 495.6 | $ 484.7 | $ (0.1) | $ 484.6 | $ 11 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | 68.5 | 68.5 | 68.5 | |||||
Net transfers from parent | (27.1) | (27.2) | 0.1 | (27.1) | ||||
Reclassification of noncontrolling interests in MeVis Medical Solutions AG to redeemable non-controlling interests | (10.4) | (10.4) | ||||||
Other | (0.6) | (0.6) | ||||||
Unrealized gain on interest rate swap contracts, net of tax | 0 | |||||||
Unrealized gain (loss) on defined benefit obligations | 0 | |||||||
Shares outstanding, end of period (in shares) at Sep. 30, 2016 | 0 | |||||||
Balance at September 28, 2018 at Sep. 30, 2016 | 526 | 526 | 526 | 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | 51.6 | 16.5 | $ 35.1 | 51.6 | ||||
Net transfers from parent | 18.4 | 18.4 | 18.4 | |||||
Other | (0.2) | $ (0.2) | (0.2) | |||||
Distribution to Varian Medical Systems | (227.1) | (227.1) | (227.1) | |||||
Conversion of net parent investment into common stock (in shares) | 37,400,000 | |||||||
Conversion of net parent investment into common stock | 0 | $ 0.4 | 333.4 | $ (333.8) | ||||
Exercise of stock options (in shares) | 100,000 | |||||||
Exercise of stock options | 2.8 | 2.8 | 2.8 | |||||
Common stock issued upon vesting of restricted shares (in shares) | 200,000 | |||||||
Shares withheld on vesting of restricted stock (in shares) | (100,000) | |||||||
Shares withheld on vesting of restricted stock | (1.9) | (1.9) | (1.9) | |||||
Share-based compensation | 6.2 | 6.2 | 6.2 | |||||
Unrealized gain on interest rate swap contracts, net of tax | 0.6 | 0.6 | 0.6 | |||||
Unrealized gain (loss) on defined benefit obligations | 0.2 | 0.2 | 0.2 | |||||
Tax impacts to APIC related to share-based award activity | $ 2.4 | 2.4 | 2.4 | |||||
Shares outstanding, end of period (in shares) at Sep. 29, 2017 | 37,633,747 | 37,600,000 | ||||||
Balance at September 28, 2018 at Sep. 29, 2017 | $ 379 | $ 0.4 | 342.7 | 0.8 | 35.1 | 379 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | 27.8 | 27.5 | 27.5 | 0.3 | ||||
Other | $ (0.2) | (0.2) | (0.2) | |||||
Exercise of stock options (in shares) | 150,000 | 200,000 | ||||||
Exercise of stock options | $ 3.8 | 3.8 | 3.8 | |||||
Common stock issued upon vesting of restricted shares (in shares) | 200,000 | |||||||
Shares withheld on vesting of restricted stock (in shares) | (100,000) | |||||||
Shares withheld on vesting of restricted stock | (2.2) | (2.2) | (2.2) | |||||
Share-based compensation | 10 | 10 | 10 | |||||
Unrealized gain on interest rate swap contracts, net of tax | 5.2 | 5.2 | 5.2 | |||||
Unrealized gain (loss) on defined benefit obligations | (0.2) | (0.2) | (0.2) | |||||
Common stock issued under employee stock purchase plan (in shares) | 100,000 | |||||||
Common stock issued under employee stock purchase plan | 3.3 | 3.3 | 3.3 | |||||
Capital contribution by noncontrolling interest | $ 1.8 | 1.8 | ||||||
Shares outstanding, end of period (in shares) at Sep. 28, 2018 | 38,026,597 | 38,000,000 | ||||||
Balance at September 28, 2018 at Sep. 28, 2018 | $ 428.3 | $ 0.4 | $ 357.6 | $ 5.8 | $ 62.4 | $ 426.2 | $ 2.1 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 28, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Varex Imaging Corporation (the “Company,” “Varex” or “Varex Imaging”) designs, manufactures, sells and services a broad range of X-ray imaging components, including X-ray tubes, digital detectors and accessories, high voltage connectors, high-energy inspection accelerators, image processing software and workstations, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, ionization chambers and buckys, for use in a range of applications, including radiographic or fluoroscopic imaging, mammography, computed tomography, oncology and computer-aided detection. The Company sells its products to imaging system original equipment manufacturer (“OEM”) customers for incorporation into new medical diagnostic, radiation therapy, dental, veterinary and industrial imaging systems, to independent service companies, distributors and directly to end-users for replacement purposes. The Company also designs, manufacturers, sells and services industrial products, which include Linatron ® X-ray accelerators, 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 systems. The Company conducts an active research and development program to focus on new technology and applications in both the medical and industrial X-ray imaging markets. Varex Imaging Corporation was incorporated in Delaware on July 18, 2016 for the purpose of holding the assets and liabilities associated with the Company's business and separated from Varian Medical Systems, Inc. (“Varian”) on January 28, 2017, upon which Varian completed the distribution of 100% of the outstanding common stock of Varex to Varian stockholders. Each Varian stockholder received 0.4 of a share of Varex common stock for every one share of Varian common stock held on the close of business on January 20, 2017 (the “Record date”). Following the separation and distribution, Varex became an independent publicly-traded company and is listed on the NASDAQ Global Select Market under the ticker “VREX.” Basis of Presentation and Principle of Consolidation The accompanying consolidated financial statements are audited and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Prior to the date of separation and distribution, the financial statements were prepared on a stand-alone basis and are derived from Varian’s consolidated financial statements and records as it operated as part of Varian prior to the distribution, in conformity with GAAP. The consolidated financial statements include the accounts of the Company and certain other assets and liabilities that were historically held at the Varian corporate level but are specifically identifiable and attributable to the Company. Prior to the separation and distribution, the consolidated financial statements included allocations of certain Varian corporate expenses, including costs of information technology, human resources, accounting, legal, facilities, insurance, treasury and other corporate and infrastructure services. In addition, allocated costs included research and development expenses from Varian’s scientific research facility. Prior to the separation, these costs were allocated to the Company on the basis of direct usage when identifiable or other systematic measures that reflect utilization of services provided to or benefits received by the Company. The Company considers the expense allocation methodology and results to be reasonable for periods prior to separation from Varian. All transactions between the Company and Varian prior to the separation have been included in the accompanying consolidated financial statements. All intercompany transactions while the Company operated as part of Varian were considered to be effectively settled for cash and are reflected as a component of financing activities as net transfers from (to) Varian in the consolidated statements of cash flows at the time the transactions were recorded. Prior to the separation, the Company was dependent upon Varian for its working capital and financing requirements, as Varian uses a centralized approach to cash management and financing of its operations. Financial transactions relating to the Company were accounted for through the net parent investment account. Cash and cash equivalents held by Varian were not allocated to the Company. Net parent investment in the consolidated balance sheets and statements of equity represents Varian’s historical investment in the Company, the net effect of transactions with and allocations from Varian and the Company’s accumulated earnings. Segment Reporting The Company has two reportable operating segments; (i) Medical and (ii) Industrial, which align with how our CEO who is identified as the CODM, who is responsible for reviewing Company’s performance. In fiscal year 2016, we re-segmented the Company's operating segments and reclassified the segment data for the prior years to conform to the current year presentation. See Note 15 , “Segment Information” for further information on the Company’s segments. Fiscal Year The fiscal years of the Company as reported are the 52 or 53-week period ending on the Friday nearest September 30. Fiscal year 2018 is the 52-week period that ended on September 28, 2018. Fiscal year 2017 was the 52-week period that ended on September 29, 2017. Fiscal year 2016 was the 52-week period that ended on September 30, 2016. Variable Interest Entities For entities in which the Company has variable interests, the Company focuses on identifying which entity has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. If the Company is the primary beneficiary of a variable interest entity, the assets, liabilities and results of operations of the variable interest entity will be included in the Company’s consolidated financial statement. As of September 28, 2018 , the Company had two variable interest entities, only one of which was consolidated, because it was determined that the Company was the primary beneficiary. As of September 28, 2018 , total assets and liabilities for the consolidated variable interest entity was $22.3 million and $8.6 million , respectively. Use of Estimates 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers 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. Fair Value Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There is a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or, other inputs that are observable or can be corroborated by observable market data. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Derivative instruments and hedging activities The Company records all derivatives on the balance sheet at fair value. For a derivative, such as an interest rate swap that is designated as a cash flow hedge, the effective portion of changes in the fair value of the derivative is initially reported in accumulated other comprehensive income (loss) on the consolidated balance sheet and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. To the extent the effective portion of a hedge subsequently becomes ineffective, the corresponding amount of the change in fair value of the derivative initially reported in accumulated other comprehensive income (loss) is reclassified and is recognized directly in earnings. Accordingly, on a quarterly basis, the Company assesses the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative hedging instrument with the changes in fair value or cash flows of a hypothetical designated perfect hedged item or transaction. If the change in the actual swap is greater than the change in the hypothetical perfect swap, the difference is referred to as “ineffectiveness” and is recognized in earnings in the current period. Concentration of Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash, cash equivalents and trade accounts receivable. Cash held with financial institutions may exceed the Federal Deposit Insurance Corporation insurance limits or similar limits in foreign jurisdictions. The Company has not experienced 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 doubtful accounts 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. The Company has neither experienced nor expects any significant disruptions to its operations due to supplier concentration. During the periods presented, one customer accounted for a significant portion of revenues, which is as follows: Fiscal Year 2018 2017 2016 Canon Medical Systems Corporation (formerly Toshiba Medical Systems) 18.1 % 19.3 % 23.0 % Canon Medical Systems Corporation (formerly Toshiba Medical Systems) accounted for 9.8% and 9.0% of the Company’s accounts receivable as of September 28, 2018 and September 29, 2017 , respectively. Inventories, net Inventories, net are valued at net realizable value of lower of cost or market. Costs include materials, labor and manufacturing overhead and is computed using standard cost (which approximates actual cost) on a first-in-first-out basis. We evaluate the carrying value of our inventories taking into consideration such factors as historical and anticipated future sales compared to quantities hand and the prices we expect to obtain for our products in our respective markets. We adjust excess and obsolete inventories to net realizable value and write-downs of excess and obsolete inventories are recorded as a component of cost of revenues. The following table summarizes the Company’s inventories, net: (In millions) September 28, 2018 September 29, 2017 Raw materials and parts $ 149.9 $ 164.5 Work-in-process 25.4 20.3 Finished goods 59.8 49.7 Total inventories, net $ 235.1 $ 234.5 Property, Plant and Equipment, net Property, plant and equipment are stated at cost, net of accumulated depreciation. Major improvements are capitalized, while repairs and maintenance are expensed as incurred. Depreciation are computed using the straight-line method over the estimated useful lives of the assets. Land is not subject to depreciation, but land improvements are depreciated over fifteen years. Land leasehold rights and leasehold improvements are depreciated over the lesser of their estimated useful lives or remaining lease terms. Buildings are depreciated over twenty years. Machinery and equipment are depreciated over their estimated useful lives, which range from three to seven years. Assets subject to lease are depreciated over the lesser of their estimated useful lives or remaining lease terms. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted, and an impairment assessment may be performed on the recoverability of the carrying amounts. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are removed from the accounts. The following table summarizes the Company’s property, plant and equipment, net: (In millions) September 28, 2018 September 29, 2017 Land $ 8.3 $ 5.1 Land improvements 16.3 9.0 Buildings and leasehold improvements 121.8 123.2 Machinery 166.1 153.9 Construction in progress 23.1 24.3 $ 335.6 $ 315.5 Accumulated depreciation and amortization (190.7 ) (167.2 ) Property, plant, and equipment, net $ 144.9 $ 148.3 The Company recorded depreciation expense of $26.0 million , $16.9 million and $9.8 million , in fiscal years 2018 , 2017 and 2016 , respectively. During fiscal year 2018 the company recorded accelerated depreciation of $4.2 million on the machinery and equipment used in the fabrication of amorphous silicon glass at its facility in Santa Clara, CA. See restructuring note for further information. Investments 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 these investments. The Company monitors these equity investments for impairment and makes appropriate reductions in carrying values if the Company determines that impairment charges are required based primarily on the financial condition and near-term prospects of these companies. Goodwill and Intangible Assets 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 in the Company's 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. Impairment of Long-lived Assets, Intangible Assets and Goodwill 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. The Company evaluates goodwill and indefinite lived intangible assets qualitatively for impairment at least annually in 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. If the Company determines that a quantitative analysis is necessary, the impairment test for goodwill is currently a two-step process. Step one consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit. The Company determines the fair value of its reporting units based on a combination of income and market approaches. The income approach is based on the present value of estimated future cash flows of the reporting units, and the market approach is based on a market multiple calculated for each reporting unit based on market data of other companies engaged in similar business. If the carrying amount of the reporting unit is in excess of its fair value, step two requires the comparison of the implied fair value of the reporting unit’s goodwill against the carrying amount of the reporting unit’s goodwill. Any excess of the carrying value of the reporting unit’s goodwill over the implied fair value of the reporting unit’s goodwill is recorded as an impairment loss. The impairment test for intangible assets with indefinite useful lives, if any, consists of a comparison of fair value to carrying value, with any excess of carrying value over fair value being recorded as an impairment loss. During the fiscal year ended September 28, 2018 , the Company recognized $3.0 million of impairments of long-lived assets related to the discontinuation of the amorphous silicon glass fabrication at the Company's Santa Clara facility and moving of the sourcing of this product to an outside supplier, dpiX LLC (See Note 4 ). No goodwill impairment charges were recognized for any of the prior periods presented. No impairment charges were recognized in fiscal year 2017 and 2016 . Loss Contingencies From time to time, the Company is a party to or otherwise involved in legal proceedings, claims and government inspections or investigations and other legal matters, both inside and outside the United States, arising in the ordinary course of its business or otherwise. The Company accrues amounts, 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 it believes will result in a probable loss. Product Warranty The Company warrants most of its products for a specific period of time, usually 12 to 24 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. The amount of the accrued estimated warranty costs obligation for established products is primarily based on historical experience as to 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. The following table reflects the changes in the Company’s accrued product warranty: Fiscal Years (In millions) 2018 2017 Accrued product warranty, at beginning of period $ 7.0 $ 6.9 Product warranty for acquisitions during period — 1.3 Charged to cost of revenues 11.6 10.7 Actual product warranty expenditures (11.3 ) (11.9 ) Accrued product warranty, at end of period $ 7.3 $ 7.0 Revenue Recognition The Company’s revenues are derived primarily from the sale of hardware and software products and services. The Company recognizes its revenues net of any value added or sales tax and net of sales discounts. The Company sells a high proportion of its X-ray products to a limited number of OEM customers. 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 accelerators together with its imaging processing software and image detection products to OEM customers that incorporate them into their inspection systems. Service contracts are often sold with certain security and inspection products and computer-aided detection products. Revenues related to service contracts usually start after the expiration of the warranty period for non-software products or upon delivery of software products. For a multiple-element arrangement that includes software and non-software deliverables which includes service contracts, the Company first allocates revenues among the software and non-software deliverables on a relative selling price basis. The amounts allocated to the non-software products and software are accounted for as follows: Non-Software Products Non-software products include hardware products, software components that function together with the hardware components to deliver the product’s essential functionality, as well as service contracts. Except as described below under “Service,” the Company recognizes revenues for non-software products when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. For multiple-element revenue arrangements that involve non-software products, a delivered non-software element is considered as a separate unit of accounting when it has stand-alone value and there is no customer-negotiated refund or return rights for the delivered element. The allocation of revenue to all deliverables based on their relative selling prices is determined at the inception of the arrangement. The selling price for each deliverable is determined using vendor-specific objective evidence (“VSOE”) of selling price, if it exists; otherwise, third-party evidence of selling price (“TPE”) is used. If the Company is not able to establish VSOE or TPE of selling prices for its non-software products, the Company uses the deliverable's estimated selling price (“ESP”). The Company estimates selling prices following an established process that considers market conditions, including the product offerings and pricing strategies of competitors, as well as internal factors such as historical pricing practices and margin objectives. The establishment of product and service ESPs is controlled and reviewed by the appropriate level of management in all of the Company’s businesses. The Company recognizes revenues upon the transfer of risk of loss, which is either at the time of shipment or delivery, depending upon the terms of the contract, provided that all other revenue recognition criteria have been met. Software Products The Company recognizes revenues for software products in accordance with the software revenue recognition guidance. The Company recognizes license revenues when all of the following criteria have been met: persuasive evidence of an arrangement exists, the vendor’s fee is fixed or determinable, collection of the related receivable is probable and delivery of the product has occurred. Revenues earned on software arrangements involving multiple elements are allocated to each element based on VSOE of fair value, which is based on the price charged when the same element is sold separately. In instances when evidence of VSOE of fair value of all undelivered elements exists, but evidence does not exist for one or more delivered elements, revenues are recognized using the residual method. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue. For those software products that are not sold stand-alone or for which VSOE cannot be established or maintained, all software revenue under the contract will be deferred until the software product(s) that lack VSOE are all delivered. If the only undelivered software element that lacks VSOE is maintenance and support, then the software revenue would be recognized ratably over the term of the maintenance and support arrangement. The Company recognizes revenues upon the transfer of risk of loss, which is either at the time of shipment or delivery, depending upon the shipping terms of the contract, provided that all other criteria for revenue recognition have been met. Service Service revenues include revenues from hardware and software service contracts, including maintenance and support, bundled support arrangements, paid services and trainings and parts that are sold by the service department. Revenues allocated to service contracts are recognized ratably over the period of performance of the related contracts. Revenues related to services performed on a time-and-materials basis are recognized when they are earned and billable. Deferred Revenues Deferred revenue primarily represents (i) the amount billed, billable or received applicable to non-software products for which parts and services have not been delivered, (ii) the amount billed, billable or received applicable to software products for which the Company’s obligations under the maintenance contracts have not been fulfilled and (iii) the amount billed, billable or received for service contracts for which the services have not been rendered. Except for government tenders, group purchases and orders with letters of credit, the Company's security and inspection customers often provide a down payment prior to transfer of risk of loss of ordered products. These payments are also included in deferred revenue on the consolidated balance sheets. Allowance for Doubtful Accounts The Company evaluates the creditworthiness of customers prior to authorizing shipment for all major sale transactions. On a quarterly basis, the Company evaluates aged items in the accounts receivable aging report and provide an allowance in an amount deemed adequate for doubtful accounts. If the evaluation of customers’ financial conditions does not reflect a future ability to collect outstanding receivables, additional provisions may be needed. We had an allowance for doubtful accounts of $0.6 million and $0.4 million as of September 28, 2018 and September 29, 2017 , respectively. Share-Based Compensation Expense The Company has an equity-based incentive plan that provides for the grant of nonqualified stock options and restricted stock units to directors, officers and other employees. The Company also permits employees to purchase shares under the Varex employee stock purchase plan. Prior to the separation, the Company’s employees historically participated in Varian’s equity-based incentive plans. Share-based compensation expense through the date of separation included allocations to the Company based on the awards and terms previously granted to its employees as well as an allocation of Varian’s corporate and shared functional employee expenses. The Company values stock options granted and the option component of the shares of common stock purchased under the equity-based incentive plans and stock purchased under the employee stock purchase plan using the Black-Scholes option-pricing model. Share-based compensation expense for restricted stock units is measured using the fair value of the Company’s stock on the date of grant and is amortized over the award’s respective service period. The Black-Scholes option-pricing model requires the input of certain assumptions, and changes in the assumptions can materially affect the fair value estimates of share-based payment awards. The Company measures and recognizes expense for all share-based payment awards based on their fair values. Share-based compensation expense recognized in the consolidated statements of earnings includes compensation expense for the share-based payment awards based on the grant date fair value estimated in accordance with the guidance on share-based compensation. Share-based compensation expense recognized is based on the value of the portion of share-based payment awards that is ultimately expected to vest. The Company attributes the value of share-based compensation to expense using the straight-line method. The Company considers only the direct tax impacts of share-based compensation awards when calculating the amount of tax windfalls or shortfalls. For additional information, see Note 13 Employee Stock Plans, included in this report. Shipping and Handling Costs Shipping and handling costs are included as a component of cost of revenues. Research and Development Research and development costs have been expensed as incurred. These costs primarily include employees’ compensation, consulting fees and material costs. Software Development Costs Costs for the development of new software products and substantial enhancements to existing software products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. No costs associated with the development of software have been capitalized, as the Company believes its current software development process is essentially completed concurrent with the establishment of technological feasibility. Taxes on Earnings Current income tax expense is the amount of income taxes expected to be payable for the current year. Deferred income tax liabilities or assets are established for the expected future tax consequences resulting from the differences in financial reporting and tax bases of assets and liabilities. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. In addition, we provide reserves for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by the authoritative guidance for accounting for income taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. On December 22, 2017, the U.S. Government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (“U. S. Tax Reform”). U.S. Tax Reform significantly revised the U.S. corporate income tax structure including a lower corporate statutory rate and changes to the way foreign earnings are taxed. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law is enacted. In accordance with these rules, we are including the impact of certain provisions of U.S. Tax Reform to the extent they are effective during the current reporting period. Certain other provisions included in U.S. Tax Reform have later effective dates for fiscal year filers and will be included in the period in which they become effective. In response to U.S. Tax Reform, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) that allows for reasonable estimated amounts to be recorded and a measurement period of up to one year from the date of enactment to revise these provisional amounts as new information is obtained and additional guidance is issued. Pursuant to the guidance included in SAB 118, we deem amounts recorded and positions taken to date as provisional estimates to be adjusted and finalized in future periods. Foreign Currency Translation The Company uses the U.S. Dollar as the functional currency of its foreign operations. Gains and losses from remeasurement of foreign currency balances into U.S. Dollars are included in the consolidated statements of earnings. Accounting Standards Recently Adopted In March 2016, the FASB issued ASU 2016-09 which includes an amendment to its accounting guidance related to employee share-based payments. The amendment simplifies several aspects of the accounting for employee share-based payments, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company retrospectively adopted this amendment in the first quarter of fiscal year 2018, res |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Sep. 28, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS Acquisition of Virtual Media Integration On August 31, 2018, the Company completed the acquisition of Virtual Media Integration, Ltd. (“VMI”) from MISTRAS Group, Inc for $4.8 million . VMI is a provider of computed and digital radiography and X-ray film digitizer systems for industrial non-destructive testing. The acquired assets and liabilities of the VMI business were allocated to the Industrial reporting segment. The acquisition related costs were included in the consolidated statements of earnings under selling, general and administrative expenses. The following table summarizes the preliminary purchase price allocation: (In millions) Fair Value Allocation of the purchase consideration: Accounts Receivable $ 0.2 Inventories 1.0 Other assets 0.2 Intangibles 1.6 Goodwill 1.5 Other liabilities (0.2 ) Net assets acquired 4.3 Post-closing adjustments 0.5 Total cash consideration $ 4.8 Acquisition of PerkinElmer’s Medical Imaging Business On May 1, 2017, the Company completed the acquisition of the medical imaging business (“Acquired Detector Business”) of PerkinElmer, Inc. (“PKI”) for $277.4 million , or $273.2 million after post-closing working capital adjustments. The acquisition consisted of PerkinElmer Medical Holdings, Inc. and Dexela Limited, together with certain assets of PKI and its direct and indirect subsidiaries relating to digital flat panel X-ray detectors that serve as components for industrial, medical, dental and veterinary X-ray imaging systems. The Acquired Detector Business included about 280 employees, with operations in Santa Clara, California as well as operations in Germany, the Netherlands, China and the United Kingdom. The acquisition of the Acquired Detector Business was pursuant to the Master Purchase and Sale Agreement, dated December 21, 2016 (the “Purchase Agreement”), by and between PKI and Varian and the subsequent Assignment and Assumption Agreement, dated January 27, 2017, by and between Varian and Varex, pursuant to which Varian assigned and conveyed all of its rights, obligations, title and interest in the Purchase Agreement to Varex. The following amounts represent the determination of the fair value of identifiable assets acquired and liabilities for the Acquired Detector Business: (In millions) Fair Value Total cash consideration $ 273.2 Allocation of the purchase consideration: Cash 1.4 Accounts Receivable 18.7 Inventory 34.7 Prepaids and other current assets 0.6 Property, plant, and equipment 21.4 Other assets, non-current 2.0 Intangibles 81.1 Goodwill 167.3 Total assets acquired $ 327.2 Current liabilities $ (17.2 ) Other liabilities, non-current (36.8 ) Total liabilities assumed (54.0 ) Net assets acquired $ 273.2 The fair value assigned to goodwill is attributable to expected cost synergy opportunities. Included in the goodwill recorded for the Acquired Detector Business is approximately $35 million that will be deductible for income tax purposes in Germany, China and the Netherlands. The remaining goodwill related to the stock acquisition in the United States is not tax deductible. Also, as a result of the acquisition, non-current deferred income tax liability increased by approximately $31 million related to basis differences for both tangible and intangible assets acquired as part of the stock purchases in the United States and the United Kingdom, and asset purchases in Germany, the Netherlands and China. The following amounts represent the determination of the fair value of identifiable intangible assets for the Acquired Detector Business, which are amortized straight-line: (In millions) Fair Value Estimated Favorable leasehold interests $ 3.8 16 Backlog 1.2 1 Trade names 1.4 5 Developed technology 37.7 7 In-process research and development 4.0 indefinite Customer relationships 33.0 7 Total intangible assets acquired $ 81.1 The following amounts represent revenues by reporting segment from the Acquired Detector Business from the acquisition date of May 1, 2017 through September 29, 2017: (In millions) May 1, 2017 through September 29, 2017 Acquired Detector Business Medical $ 41.1 Industrial 20.2 Total Acquired Detector Business revenues $ 61.3 Unaudited Pro Forma Information The unaudited pro-forma amounts presented below for the fiscal year 2017 is presented for informational purposes only. In addition to the Company's results for the periods presented, the amounts below also include effects of the Acquired Detector Business as if it had been consummated on October 3, 2015. Audited results for the Acquired Detector Business for the fiscal years ended 2016 and 2015, are noted in the Company’s Form 8-K/A filed with the SEC on July 7, 2017. These unaudited pro-forma results include effects that are directly attributable to the acquisition which include the amortization of intangible assets, interest expense, and other adjustments, including estimated tax effects. The unaudited pro-forma results do not reflect any operating efficiencies or potential cost savings which may result from the consolidation of the Acquired Detector Business and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented nor are they indicative of future results of operations or results that might have been achieved had the acquisition been consummated as of October 3, 2015. Fiscal Year (In millions) 2017 Revenue $ 777.8 Operating earnings $ 84.7 Net earnings $ 43.1 Net earnings per share, basic $ 1.15 Net earnings per share, diluted $ 1.13 |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Sep. 28, 2018 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS Investment in Privately-Held Companies The Company has a 40% ownership interest in dpiX Holding LLC (“dpiX Holding”), a four -member consortium that has a 100% ownership interest in dpiX LLC (“dpiX”), a supplier of amorphous silicon based thin film transistor arrays for digital flat panel image detectors. In accordance with the dpiX Holding Agreement, net profits or losses are allocated to the members, in accordance with their ownership interests. The equity 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 until realized by the Company. In fiscal years 2018, 2017 and 2016, the Company recorded income and (loss) on the equity investment in dpiX Holding of $3.4 million , $0.8 million and $(1.5) million , respectively. Income and loss on the equity investment in dpiX Holding is included in other income (expense), net in the consolidated statements of earnings. The carrying value of the equity investment in dpiX Holding, which was included in investments in privately-held companies on the consolidated balance sheets, was $48.9 million and $50.0 million at September 28, 2018 and September 29, 2017 , respectively. In fiscal years 2018, 2017 and 2016, the Company purchased glass transistor arrays from dpiX totaling $19.3 million , $24.7 million and $23.4 million , respectively. These purchases of glass transistor arrays are included as a component of inventories on the consolidated balance sheets or cost of revenues in the consolidated statements of earnings for these fiscal years. As of September 28, 2018 and September 29, 2017 , the Company had accounts payable to dpiX totaling $3.7 million and $3.4 million , respectively. In October 2013, the Company entered into an amended agreement with dpiX and other parties that, among other things, provides the Company with the right to 50% of dpiX’s total manufacturing capacity produced after January 1, 2014. The amended agreement requires the Company to pay for 50% of the fixed costs (as defined in the amended agreement), as determined at the beginning of each calendar year. As of September 28, 2018 , the Company estimated it has fixed cost commitments of $4.1 million related to this amended agreement through the remainder of calendar year 2018. The fixed cost commitment for future periods will be determined and approved by the dpiX board of directors at the beginning of each calendar year. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement). The Company has determined that dpiX is a variable interest entity because 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 direct the activities of dpiX and therefore is not the primary beneficiary of dpiX. The Company’s exposure to loss as a result of its involvement with dpiX is limited to the carrying value of the Company’s investment of $48.9 million and fixed cost commitments of $4.1 million . |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Sep. 28, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING Following the acquisition of the medical imaging business from PKI, management began a multiyear program to consolidate the acquired operations, reduce costs, improve productivity and realize synergies. In March 2018, the company made the decision to transfer the complementary metal oxide semiconductor (“CMOS”) research and development capability from the U.K. to the U.S. and to permanently close the operation of the acquired detector business in London. The company will continue to develop the CMOS technology in the U.S. due to its competitive advantages, product differentiation and future economic benefit. We expect to complete the closure of the London facility in fiscal year 2019. In connection with this initiative, we recorded $1.7 million in restructuring charges during fiscal year 2018. In July 2018, the Company started the relocation of the production of amorphous silicon glass for digital detectors, from its Santa Clara facility, to the jointly owned dpiX fabrication facility in Colorado. The relocation of the glass production activities to a larger facility with available capacity is expected to generate costs savings of approximately $62.7 million over the next 5 years . Other digital detector manufacturing processes, such as X-ray scintillator production and detector assembly, will remain at the Santa Clara facility. We recorded $14.2 million of restructuring and impairment charges during fiscal year 2018, and expect to incur an additional $4.0 to $6.0 million of restructuring charges during fiscal year 2019, in connection with this initiative. During fiscal year 2018, the Company also incurred approximately $0.8 million of other unrelated restructuring expenses. Cash outflows associated with these restructuring charges are limited to employee termination expenses, facility closures and equipment sales and disposals. Below is a detail of restructuring charges incurred during fiscal year 2018: (In millions) September 28, 2018 Other assets impairment charges $ 1.3 Inventory write downs 3.1 Long-lived asset impairment charges 3.0 Accelerated depreciation 4.2 Severance costs 4.3 Facility closures 0.8 Total restructuring charges $ 16.7 |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 12 Months Ended |
Sep. 28, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER FINANCIAL INFORMATION | OTHER FINANCIAL INFORMATION The following table summarizes the Company’s accrued liabilities: (In millions) September 28, 2018 September 29, 2017 Accrued compensation and benefits $ 27.0 $ 26.0 Product warranty 7.3 7.0 Income taxes payable 1.4 13.2 Payable to Varian Medical Systems 2.3 7.9 Other 9.5 8.3 Total accrued liabilities $ 47.5 $ 62.4 The following table summarizes the Company’s other long-term liabilities: (In millions) September 28, 2018 September 29, 2017 Long-term income tax payable $ 3.5 $ — Environment liabilities 1.3 1.3 Defined benefit obligation liability 3.3 3.2 Other 0.4 0.2 Total other long-term liabilities $ 8.5 $ 4.7 The following table summarizes the Company’s other income (expense), net: Fiscal Years (In millions) 2018 2017 2016 Income (loss) from equity method investments $ 3.9 $ 1.3 $ (1.6 ) Realized income (loss) on foreign currencies (1.2 ) 1.9 (0.9 ) Total other income (expense), net $ 2.7 $ 3.2 $ (2.5 ) |
NET EARNINGS PER SHARE
NET EARNINGS PER SHARE | 12 Months Ended |
Sep. 28, 2018 | |
Earnings Per Share [Abstract] | |
NET EARNINGS PER SHARE | NET EARNINGS PER SHARE Basic net earnings per common share is computed by dividing the net earnings for the period by the weighted average number of shares of common stock outstanding during the reporting period. Diluted net earnings per common share reflects the effects of potentially dilutive securities, which is computed by dividing net earnings by the sum of the weighted average number of common shares outstanding and dilutive common shares, which consists of stock options and unvested restricted stock. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per common share is as follows: Fiscal Year (In millions, except per share amounts) 2018 2017 2016 (1) Net earnings attributable to Varex $ 27.5 $ 51.6 $ 68.5 Weighted average shares outstanding - basic 37.9 37.6 37.4 Dilutive effect of potential common shares 0.5 0.4 0.3 Weighted average shares outstanding - diluted 38.4 38.0 37.7 Net earnings per share attributable to Varex - basic $ 0.73 $ 1.37 $ 1.83 Net earnings per share attributable to Varex - diluted $ 0.72 $ 1.36 $ 1.82 Anti-dilutive employee shared based awards, excluded 1.2 1.0 0.7 (1) Basic and diluted net earnings for fiscal years 2016 is calculated using the number of common shares distributed on January 28, 2017. The Company excludes potentially dilutive common shares (consisting of shares underlying stock options and the employee stock purchase plan) from the computation of diluted weighted average shares outstanding if the inclusion of the shares underlying these stock awards would be anti-dilutive to earnings per share. |
FINANCIAL DERIVATIVES AND HEDGI
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES | 12 Months Ended |
Sep. 28, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES | FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES As part of the Company’s overall risk management practices, the Company enters into financial derivatives, which include interest rate swaps designed as cash flow hedges to hedge the LIBOR-based, floating interest rate on its debt. The Company records all derivatives on the 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. The effective portion of the gain or loss on derivative instruments designated and qualifying for cash flow hedge accounting is deferred in other comprehensive income. Any ineffectiveness in these designated hedging relationships is recognized in current period earnings. The changes in fair value for all trades that are not designated for hedge accounting are recognized in current period earnings. Deferred gains or losses from designated cash flow hedges are reclassified into earnings in the period that the hedged interest expense effect earnings. The effectiveness of cash flow hedges is assessed at inception and quarterly thereafter. If the instrument were to no longer qualify for hedge accounting due to it becoming probable that the originally-forecasted hedged transactions will not occur, then hedge accounting would cease and the related change in fair value of the ineffective portion of the derivative instrument would be reclassified from accumulated other comprehensive income (loss) and recognized in earnings. The Company does not offset fair value amounts recognized for derivative instruments in its consolidated balance sheets for presentation purposes. Credit risk related to derivative transactions reflects 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 which meet certain minimum credit ratings to help mitigate counterparty credit risk. Derivatives Designated as Hedging Instruments - Cash Flow Hedges The Company uses interest rate swap contracts as cash flow hedges to manage its exposure to fluctuations in LIBOR interest rates. Interest rate swap contracts hedging variable rate debt effectively fix the LIBOR component of its interest rate for a specific period of time. The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is deferred as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets and is subsequently reclassified into earnings in the period that the hedged interest expense affects earnings. The ineffective portion of the changes in fair value of derivatives designated as cash flow hedges are recognized directly to earnings and reflected in the accompanying consolidated statements of earnings. No ineffectiveness was reported in earnings for fiscal year 2018. As of September 28, 2018, the Company had the following outstanding derivatives designated as hedging instruments: (In millions, except for number of instruments) Number of Instruments Notional Value Interest Rate Swap Contracts 6 $ 277.5 These contracts have maturities of four years or less. The following table summarizes the amount of income recognized from derivative instruments for the periods indicated and the line items in the accompanying statements of operations where the results are recorded for cash flow hedges: Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) (In millions) 2018 2017 2016 2018 2017 2016 2018 2017 2016 Interest Rate Swap Contracts $ 6.9 $ 0.6 $ — Interest expense $ 0.1 $ (0.3 ) $ — Interest expense $ — $ — $ — The Company expects that approximately $2.2 million recorded as a component of accumulated other comprehensive income (loss) will be realized in the statements of comprehensive earnings over the next 12 months and the amount will vary depending on interest rates. These derivative instruments are subject to master netting agreements giving effect to rights of offset with each counterparty. The following table summarizes the fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded: Derivative Assets Derivative Liabilities (In millions) September 28, 2018 September 29, 2017 September 28, 2018 September 29, 2017 Derivatives designated as cash flow hedges Balance sheet location Balance sheet location Interest rate swap contracts Other current assets $ 2.2 $ — Other current liabilities $ — $ (0.6 ) Interest rate swap contracts Other non-current assets 5.5 1.6 Other non-current liabilities — — $ 7.7 $ 1.6 $ — $ (0.6 ) Balance Sheet Hedges The Company also enters into foreign currency forward contracts to hedge fluctuations associated with foreign currency denominated monetary assets and liabilities, primarily cash, third-party accounts receivable, accounts payable, and intercompany receivables and payables. These forward contracts expire within 30 days. 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 income (expense) and offsets the change in fair value of the foreign currency denominated assets and liabilities, which are also recorded in other income (expense). The effect of derivative instruments not designated as cash flow hedges for fiscal year 2018 was a loss of $0.3 million . The Company does not, and does not intend to use derivative financial instruments for speculative or trading purposes. The following table shows the notional amounts of outstanding foreign currency contracts entered into under its balance sheet hedge program as of September 28, 2018 : Notional Value of Derivatives not Designated as Hedging Instruments: In millions Buy contracts Sell contract Japanese yen $ 1.3 $ — British pound sterling — 1.6 Swiss franc — 1.6 Chinese renminbi 3.6 — Euro — 3.5 $ 4.9 $ 6.7 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Sep. 28, 2018 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS The following table summarizes the Company's short-term and long-term debt: September 28, 2018 September 29, 2017 (In millions, except for percentages) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Short-term debt Term Facility $ 25.0 4.2 % $ 20.0 3.3 % Long-term debt: Revolving Credit Facility $ 28.0 4.2 % $ 104.0 3.6 % Term Facility 345.0 4.2 % 370.0 3.3 % Debt issuance costs (8.2 ) (10.1 ) Total long-term debt $ 364.8 $ 463.9 Previous Credit Facility On January 25, 2017, the Company entered into a revolving credit facility (the “Previous Revolving Credit Facility”), which matured in five years , and a term facility (the “Previous Term Facility”), which was to be repaid over five years, with 7.5% payable in quarterly installments during the first two years, 10% payable in quarterly installments during the third and fourth years and 15% payable in quarterly installments in the fifth year. The credit agreement relating to the Previous Revolving Credit Facility and the Previous Term Facility (the “Previous Credit Agreement”) contained various customary restrictive covenants that limited, among other things, the incurrence of indebtedness by Varex and its subsidiaries, the grant or incurrence of liens by Varex and its subsidiaries, the entry into sale and leaseback transactions by Varex and its subsidiaries, and the entry into certain fundamental change transactions by Varex and its subsidiaries. It also contained customary events of default and certain financial covenants, including the requirement to maintain certain financial ratios. The Previous Credit Agreement was secured by the stock and assets of certain Varex subsidiaries. The Previous Credit Agreement had several borrowing and interest rate options including the following indices: (i) the LIBOR rate, or (ii) the base rate (equal to the greater of the prime rate, the federal funds rate plus 0.50% or the LIBOR rate for a one-month period plus 1.00% ). Loans under the Previous Credit Agreement bore interest at a rate per annum using the applicable indices plus a varying interest rate margin of between 1.125% and 2.125% . The Previous Credit Agreement also provided for fees applicable to amounts available to be drawn under outstanding letters of credit of 0.125% and a fee on unused commitments which ranges from 0.20% to 0.40% . On January 25, 2017, Varex borrowed $203.0 million under Previous Term Facility and transferred $200.0 million to Varian. On May 1, 2017, Varex repaid the Previous Term Agreement and Previous Credit Agreement and terminated both agreements. Existing Credit Facility On May 1, 2017 and in connection with the Acquired Detector Business, the Company entered into a new secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $200 million with a five -year term, and a secured term facility (the “Term Facility” and together with the Revolving Credit Facility, the “Credit Agreement”) in an aggregate principal amount of $400.0 million . The Term Facility will be repaid over five years, with 5.0% payable in quarterly installments during each of the first two years of the term thereof, 7.5% payable in quarterly installments during the third and fourth years of the term thereof, and 10% payable in quarterly installments in the fifth year of the term thereof, with the remaining amount due at maturity. Varex used the net proceeds from the Term Facility, and the net proceeds from approximately $97.0 million drawn on the Revolving Credit Facility, to pay the approximately $276.0 million purchase price for the Acquired Detector Business, plus related credit facility fees, and to repay all of Varex’s obligations under the Previous Credit Agreement. Both the Term Facility and Revolving Credit Facility expire on May 1, 2022. The Credit Agreement contains various customary restrictive covenants that limits, among other things, the incurrence of indebtedness by Varex and its subsidiaries, the grant or incurrence of liens by Varex and its subsidiaries, the entry into sale and leaseback transactions by Varex and its subsidiaries, and the entry into certain fundamental change transactions by Varex and its subsidiaries. It also contains customary events of default and certain financial covenants, including the requirement to maintain certain financial ratios. The Company was in compliance with all financial covenants under the Credit Agreement as of September 28, 2018 . The Credit Agreement is secured by the stock and assets of Varex’s material subsidiaries. The Credit Agreement has several borrowing and interest rate options including the following indices: (a) LIBOR rate, or (b) the base rate (equal to the greater of the prime rate, the federal funds rate plus 0.50% or the LIBOR rate for a one-month period plus 1.00% ). Loans under the Credit Agreement bear interest at a rate per annum using the applicable indices plus a varying interest rate margin of between 1.75% and 2.75% (for LIBOR rate loans) and 0.75% - 1.75% (for base rate loans). The Credit Agreement also provides for fees applicable to amounts available to be drawn under outstanding letters of credit of 0.125% , and a fee on unused commitments which ranges from 0.25% to 0.40% . On September 28, 2018 , the Company, as borrower, entered into an amendment (the “Amendment”) to its Credit Agreement, dated as of May 1, 2017, with Bank of America, N.A. as administrative agent, and the other lenders party thereto (the “Credit Agreement”). The Amendment increases the consolidated senior secured leverage ratio from the date of Amendment until the fiscal quarter ended September 27, 2019. In addition, the Amendment clarifies certain definitions, including the definition of “Consolidated EBITDA” to expressly exclude non-cash restructuring charges, increases the basket related to permitted liens from $5.0 million to $15.0 million and updates provisions related to the Employee Retirement Income Security Act of 1974. At September 28, 2018 , the Company had $364.8 million in long-term debt outstanding, net of deferred debt issuance costs of $8.2 million , and $25.0 million of current maturities of long-term debt outstanding. Future principal payments of the term facility debt outstanding as of September 28, 2018 are as follows: (In millions) Fiscal years: 2019 $ 25.0 2020 30.0 2021 35.0 2022 280.0 Total debt outstanding 370.0 Less: current maturities of long-term debt (25.0 ) Non-current portion of long -term debt $ 345.0 |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Sep. 29, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Assets/Liabilities Measured at Fair Value on a Recurring Basis 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. (In millions) Fair Value Measurements at September 28, 2018 Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Significant Unobservable Inputs Total Assets: Cash equivalents - money market funds $ — $ 18.4 $ — $ 18.4 Interest rate swap contracts — 7.7 — 7.7 Total assets measured at fair value $ — $ 26.1 $ — $ 26.1 Liabilities: Interest rate swap contracts $ — $ 0.0 $ — $ — As of September 28, 2018, the total outstanding borrowings under the Company's credit agreement were $389.8 million , net of deferred loan costs, which approximated its fair value because it is carried at a market observable interest rate that resets periodically and is categorized as Level 2 in the fair value hierarchy. The fair values of certain of the Company’s financial instruments, including bank deposits included in cash and cash equivalents, accounts receivable and accounts payable, also approximate their fair values due to their short maturities. There were no financial assets or liabilities measured on a recurring basis using significant unobservable inputs (Level 3) and there were no transfers in or out of Level 1, 2 or 3 during fiscal year 2018. At September 29, 2017 , the Company determined the following levels of inputs for the following assets or liabilities: (In millions) Fair Value Measurements at September 29, 2017 Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Significant Unobservable Inputs Total Assets: Cash equivalents - Money market funds $ — $ 11.4 $ — $ 11.4 Interest rate swap contracts — 1.6 — 1.6 Total assets measured at fair value $ — $ 13.0 $ — $ 13.0 Liabilities: Interest rate swap contracts $ — $ 0.6 $ — $ 0.6 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Sep. 28, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The following table reflects goodwill by reportable operating segment: (In millions) Medical Industrial Total Balance at September 29, 2017 $ 146.9 $ 95.0 $ 241.9 Business combination — 1.5 1.5 Settlement of post-close working capital adjustment 0.1 0.1 0.2 Balance at September 28, 2018 $ 147.0 $ 96.6 $ 243.6 The following table reflects the gross carrying amount and accumulated amortization of the Company’s finite-lived intangible assets included in other assets in the consolidated balance sheets: (In millions) September 28, 2018 September 29, 2017 Acquired existing technology $ 57.9 $ 57.0 Patents, licenses and other 9.9 19.4 Customer contracts and supplier relationship 42.6 42.1 Accumulated amortization (40.6 ) (31.2 ) Total intangible assets with finite lives 69.8 87.3 In-process research and development with indefinite lives 4.0 4.0 Total intangible assets $ 73.8 $ 91.3 Amortization expense for intangible assets was $16.2 million , $10.5 million and $5.5 million in fiscal years 2018, 2017 and 2016, respectively. As of September 28, 2018, the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal years: 2019 $ 14.6 2020 14.2 2021 13.0 2022 11.4 2023 10.3 Thereafter 6.3 Total $ 69.8 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 28, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments At September 28, 2018, the Company was committed to minimum rentals under non-cancelable operating leases (including rent escalation clauses) for fiscal years 2019 through 2023 and thereafter, as follows: $5.5 million , $5.0 million , $4.4 million , $3.7 million , $1.3 million , and $0.3 million , respectively. Rental expenses were $5.3 million , $4.0 million , and $2.8 million for fiscal years 2018, 2017 and 2016, respectively. Other Commitments See Note 3, “Related Party Transactions” for additional information about the Company’s commitments to dpiX. See Note 12, “Redeemable Noncontrolling Interests & Noncontrolling Interests” for additional information about the Company’s commitment to the noncontrolling shareholders of MeVis. The Company has an environmental liability of approximately $1.3 million as of September 28, 2018 . Contingencies From time to time, the Company is a party to or otherwise involved in legal proceedings, claims and government inspections or investigations and other legal matters, both inside and outside the United States, arising in the ordinary course of its business or otherwise. The Company accrues amounts, 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. The Company did not have any contingent liabilities as of September 28, 2018 and September 29, 2017 . Legal expenses are expensed as incurred. |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS | 12 Months Ended |
Sep. 28, 2018 | |
Noncontrolling Interest [Abstract] | |
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS | REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS In September 2018, the Company entered into a partnership in Saudi Arabia. We have majority voting rights with an approximate 75% interest. Accordingly, we have consolidated its operations in our consolidated financial statements and recorded the noncontrolling interests. The noncontrolling interest related to the partner’s 25% interest in the joint venture is included in noncontrolling interest in the equity section of the Company’s consolidated balance sheet. Earnings representing the noncontrolling partner's share of income from operations is included in the Company's consolidated statements of earnings. In April 2015, the Company completed the acquisition of 73.5% of the then outstanding shares of MeVis Medical Solutions AG (“MeVis”), a public 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. In October 2015, the DPLTA became effective upon its registration at the local court of Bremen, Germany. Under the DPLTA, MeVis subordinates its management to the Company and undertakes to transfer all of its annual profits and losses to the Company. In return, the DPLTA grants the noncontrolling shareholders of MeVis: (1) an annual recurring net compensation of €0.95 per MeVis share starting from January 1, 2015 and (2) a put right for their MeVis shares at €19.77 per MeVis share. Upon effectiveness of the DPLTA, the noncontrolling interests in MeVis became redeemable as a result of the put right and were reclassified to temporary equity. As of September 28, 2018, the redemption value of redeemable noncontrolling interests in MeVis was $11.1 million . During fiscal year 2018, an immaterial number of MeVis’ shares were purchased under the put right. As of September 28, 2018, noncontrolling shareholders together held approximately 0.5 million shares of MeVis, representing 26.3% of the outstanding shares. Changes in redeemable noncontrolling interests and noncontrolling interests were as follows: Fiscal Years 2018 2017 (In millions) Redeemable Noncontrolling Redeemable Balance at beginning of period $ 11.2 $ — $ 10.3 Net earnings attributable to noncontrolling interests 0.5 0.3 0.4 Contributions from noncontrolling partner — 1.8 — Dividend distributions (0.6 ) — — Other — — 0.5 Balance at end of period $ 11.1 $ 2.1 $ 11.2 |
EMPLOYEE STOCK PLANS
EMPLOYEE STOCK PLANS | 12 Months Ended |
Sep. 28, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EMPLOYEE STOCK PLANS | EMPLOYEE STOCK PLANS Employee Stock Plans The Company's employees participate in Varex Imaging Corporation 2017 Omnibus Stock Plan (the “2017 Stock Plan“) and Varex Imaging Corporation 2017 Employee Stock Purchase Plan (the “2017 ESPP“) which allows the grants of stock options, restricted stock units and performance shares among other types of awards. Prior to the separation and distribution, the Company’s employees participated in Varian's stock-based compensation plans, which provided for the grants of stock options, restricted stock units and performance shares among other types of awards under Varian’s Third Amended and Restated 2005 Omnibus 2005 Stock Plan. In January 2017, Varex stockholders approved the 2017 ESPP, which provides eligible employees with an opportunity to purchase shares of Varex common stock at 85% of the lower of its fair market value at the start and end of a six months purchase period. The 2017 ESPP provides for the purchase of up to one million shares of Varex common stock. Share-Based Compensation Expense As share-based compensation expense recognized in the consolidated statements of earnings is based on awards ultimately expected to vest. Share-based compensation expense includes expenses related to the Company’s direct employees. Prior to the separation, Varian also charged the Company for the allocated share-based compensation costs of certain employees of Varian who provided selling, general and administrative services on the Company’s behalf. The table below summarizes the effect of recording share-based compensation expense and for the option component of the employee stock purchase plan shares: Fiscal Year (In millions) 2018 2017 2016 Cost of revenues $ 1.3 $ 0.9 $ 1.0 Research and development 1.8 1.5 1.4 Selling, general and administrative (1) 6.9 6.0 7.1 Total share-based compensation expense $ 10.0 $ 8.4 $ 9.5 (1) Includes allocated share-based compensation of $0.0 million , $0.8 million and $3.4 million for fiscal years 2018, 2017 and 2016, respectively, and represents charges by Varian to the Company for certain Varian employees who provided general and administrative services on the Company’s behalf. The unrecognized share-based compensation cost as of September 28, 2018 was $23.2 million , and is expected to be recognized in the next 3 to 4 fiscal years. As of September 28, 2018 , there were approximately 3.0 million and 0.9 million shares of common stock available for future issuances under the 2017 Stock Plan and the 2017 ESPP, respectively. The Company utilized the Black-Scholes valuation model for estimating the fair value of stock options granted and the option component of the 2017 ESPP. The Company calculated the fair value of each option grant and option component of the 2017 ESPP on the respective dates of grant using the following weighted average assumptions: Employee Stock Option Plan Employee Stock Purchase Plans Fiscal Year Fiscal Year 2018 2018 Expected term (in years) 4.8 0.5 Risk-free interest rate 2.6 % 2.0 % Expected volatility 31.8 % 34.1 % Expected dividend 0.0 % 0.0 % Weighted average fair value at grant date $11.57 $8.92 Option valuation methods, including Black-Scholes, require the input of subjective assumptions, which are discussed below. Risk-Free Interest Rate The interest rates used are based on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. Expected Term Options granted generally vest over a period of 36 to 48 months and expire 7 to 10 years from date of grant. Employee stock purchase plan offering periods are 6 months and provides eligible employees with an opportunity to purchase shares of Varex common stock at 85% of the lower of its fair market value at the start and end of a six-month purchase period. Expected Dividend Yield The dividend rate used is zero as the Company has never paid any cash dividends on its common stock and does not anticipate doing so in the foreseeable future. The Company is also restricted from paying dividends on common stock under its credit facility. Expected Volatility Authoritative accounting guidance on stock-based compensation indicates that companies should consider volatility over a period generally commensurate with the expected or contractual term of the stock option. Adequate Company-specific data does not exist for this time period as the Company began trading in January 2017. The volatility variable used is a benchmark of other comparable companies’ volatility rates. Stock Option Activity The following table summarizes the activity for stock options under Varex’s employee incentive plans for the Company’s employees: (In thousands, except per share amounts and the remaining term) Options Outstanding Price range Weighted Average Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) Balance at September 29, 2017 1,926 $19.21 — $34.13 $ 29.11 Granted 262 $31.14 — $37.60 36.43 Canceled, expired or forfeited (27) $25.17 — $31.08 28.74 Exercised (150) $19.21 — $31.08 25.33 Balance at September 28, 2018 2,011 $22.63 — $37.60 $ 30.35 3.8 $ 1,598.4 Exercisable at September 28, 2018 1,056 $22.63 — $34.13 $ 28.52 3.4 $ 1,461.3 (1) 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 $28.66 as of September 28, 2018, the last trading date of the Company's fiscal 2018, and which represents the amount that would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise as of that date. Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units The following table summarizes the activity for restricted stock units, restricted stock awards and deferred stock units under Varex’s employee incentive plans for the Company’s employees: (In thousands, except per share amounts) Number of Shares Weighted Average Balance at September 29, 2017 525 $ 29.54 Granted 352 37.10 Vested (190) 29.46 Canceled or expired (46) 32.55 Balance at September 30, 2018 641 $ 33.60 The total grant-date fair value of shares granted in fiscal year 2018 was $10.1 million . Shares outstanding at September 28, 2018 had an estimated market value of $18.4 million . |
TAXES ON EARNINGS
TAXES ON EARNINGS | 12 Months Ended |
Sep. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
TAXES ON EARNINGS | TAXES ON EARNINGS Income tax expense is based on reported income or loss before income taxes. Deferred income taxes reflect the effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws. Valuation allowances are recognized to reduce deferred tax assets to the amount that is more likely than not to be realized. Taxes on earnings were as follows: Fiscal Years (In millions) 2018 2017 2016 Current provision: Federal $ (2.1 ) $ 24.8 $ 26.4 State and local (0.3 ) 1.6 3.9 Foreign 7.5 5.3 2.0 Total current 5.1 31.7 32.3 Deferred provision (benefit): Federal (7.0 ) (7.0 ) 3.6 State and local 0.7 (1.0 ) — Foreign (1.4 ) (0.9 ) 0.1 Total deferred (7.7 ) (8.9 ) 3.7 Taxes on earnings $ (2.6 ) $ 22.8 $ 36.0 Earnings before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2018 2017 2016 United States $ 3.7 $ 55.5 $ 105.6 Foreign 22.0 19.3 (0.6 ) Earnings before taxes $ 25.7 $ 74.8 $ 105.0 The effective tax rate differs from the U.S. federal statutory tax rate as a result of the following: Fiscal Years 2018 2017 2016 Federal statutory income tax rate 24.5 % 35.0 % 35.0 % State and local taxes, net of federal tax benefit 1.1 % 1.3 % 2.4 % Revaluation of deferred tax liabilities for US statutory change (41.8 )% — % — % Mandatory repatriation tax on foreign earnings 13.0 % 0.0 % 0.0 % Domestic production activities deduction (0.8 )% (2.4 )% (2.2 )% Research and development credit (11.1 )% (2.6 )% (2.2 )% Prior year deferred tax adjustments 1.9 % (4.0 )% — % Change in valuation allowance (1.9 )% 3.8 % — % Other 5.0 % (0.6 )% 1.3 % Effective tax rate (10.1 )% 30.5 % 34.3 % On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (U.S. Tax Reform) was enacted in the U.S. which significantly revised the U.S. corporate income tax structure. Among the revisions impacting our effective tax rate are a lower U.S. corporate statutory rate going from 35% to 21% effective January 1, 2018 and changes to the way foreign earnings are taxed. As a September fiscal year filer, the lower corporate income tax rate has been phased in resulting in a U.S. statutory federal rate of 24.5% for the fiscal year ended September 28, 2018 . During fiscal year 2018, the Company’s effective tax rate varied from the U.S. federal statutory rate of 24.5% primarily because of the favorable impact of changes to the U.S. corporate tax structure resulting from U.S. Tax Reform. The effective tax rate also differs from the U.S. federal statutory rate due to increases resulting from U.S. state income tax expense, losses in certain foreign jurisdictions for which no benefit is recognized, earnings in other foreign jurisdictions that are taxed at higher rates, and limitations on the deductibility of officers' compensation. These are offset by decreases due to U.S. research and development credits, tax windfalls for share-based compensation, and the release of a valuation allowance against loss carryforwards in certain foreign jurisdictions. During fiscal years 2017 and 2016, the Company’s effective tax rate varied from the U.S. federal statutory rate of 35% primarily because of a difference in the mix of earnings by jurisdiction and overall global tax structure for Varex as a standalone company compared to the prior year when it was part of Varian. It was also impacted by the benefit of adjustments to certain deferred tax assets and the release of valuation allowances in jurisdictions where increased earnings allowed for the utilization of net operating loss carryforwards. During the fiscal year, as a result of U.S. Tax Reform, the Company recorded income tax expense of $3.7 million for the tax on the deemed repatriation of deferred foreign earnings offset by a tax benefit of $10.9 million due to the revaluation of net deferred taxes. The changes included in the U.S. Tax Reform Act broad, complex, and subject to interpretation. In addition, the calculation of the impact of certain provisions is dependent on amounts that, while they can be reasonably estimated, will only become final at the end of future accounting periods. On December 22, 2017, the SEC issued SAB 118, allowing registrants to consider the estimated impact of the U.S. legislation as “provisional” when it does not have the information necessary to complete the accounting for the change in tax law. In accordance with SAB 118, the tax on the deemed repatriation of foreign earnings of $3.7 million and the benefit of $10.9 million for the revaluation of net deferred taxes recorded in the year ended September 28, 2018 represent the Company’s best and reasonable estimate based on interpretation of the U.S. legislation, are considered provisional, and will be finalized before December 22, 2018. Certain other provisions included in U.S. Tax Reform have later effective dates for fiscal year filers and may have an impact on the Company’s future effective tax rate. These include, but are not limited to, the repeal of the deduction for domestic production and changes in the taxation of foreign earnings. The Company is in the process of analyzing the effects of these provisions including GILTI (global intangible low-taxed income), BEAT (base-erosion anti-abuse tax), FDII (foreign-derived intangible income), limitations on interest expense deductions (if certain conditions apply), and other components of U.S. Tax Reform. The Company has elected to account for GILTI as a period cost if and when incurred pursuant to the exposure draft issued by the FASB in January 2018. Other future adjustments to tax expense may include the impact of actions the Company may take as a result of U.S. Tax Reform. Significant components of deferred tax assets and liabilities are as follows: (In millions) September 28, 2018 September 29, 2017 Deferred Tax Assets: Inventory adjustments $ 4.2 $ 15.0 Share-based compensation 0.8 1.9 Product warranty 1.4 2.2 Deferred compensation 0.9 1.3 Net operating loss carryforwards 3.3 2.4 Accrued vacation 1.3 2.1 Credit carryforwards 1.8 1.9 Other 4.7 2.2 18.4 29.0 Valuation allowance (4 ) (4.3 ) Total deferred tax assets 14.4 24.7 Deferred Tax Liabilities: Acquired intangibles (15.2 ) (26.4 ) Property, plant and equipment (14.3 ) (19.9 ) Investments in privately held companies (4.1 ) (6.9 ) Other (4.0 ) (1.0 ) Total deferred tax liabilities (37.6 ) (54.2 ) Net deferred tax liabilities $ (23.2 ) $ (29.5 ) Reported As: Deferred tax assets $ 14.4 $ 25.3 Deferred tax liabilities (37.6 ) (54.8 ) Net deferred tax liabilities $ (23.2 ) $ (29.5 ) As a result of the changes to the U.S. taxation of foreign earnings included in U.S. Tax Reform, the Company has re-evaluated its previous indefinite reinvestment assertion with respect to these earnings. The outcome of this evaluation resulted in the Company revoking its assertion for current and future earnings for all countries while maintaining the assertion that historic earnings are indefinitely reinvested outside the U.S. 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 U.S. tax treatment of repatriated foreign earnings, no deferred tax liability is necessary and so has not been recorded related to the potential repatriation. As a number of states are still making legislative changes in response to U.S. Tax Reform, and under the guidance provided by SAB 118, this estimated amount, as well as the assertion itself, are deemed provisional and subject to change until finalized no later than December 22, 2018. The Company has federal net operating loss carryforwards of approximately $3.3 million expiring between 2019 and 2024. Also, the Company has federal research credit carryforwards of $0.6 million expiring in 2038, state research credit carryforwards of $0.8 million expiring through 2032 and $0.4 million in federal AMT credit carryforward, which will be refunded between the years 2019 and 2022. The valuation allowance relates primarily to net operating losses in certain foreign jurisdictions where, based on the weight of available evidence, it is more likely than not that the tax benefit of the net operating losses will not be realized. The valuation allowance decreased by $0.3 million during fiscal year 2018 and by $2.1 million during fiscal year 2017. During fiscal year 2018, the Company paid U.S and foreign taxes of approximately $13.8 million . In fiscal year 2017, the Company paid U.S. and foreign taxes of approximately $6.0 million . The Company accounts for uncertainty in income taxes following a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether the weight of available evidence indicates that it is more likely than not that, based on the technical merits, the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Changes in the Company’s unrecognized tax benefits were as follows: Fiscal Years (In millions) 2018 2017 Unrecognized tax benefits balance–beginning of fiscal year $ 0.5 $ 4.4 Additions based on tax positions related to the current year 0.1 0.5 Transfer to Varian — (4.4 ) Unrecognized tax benefits balance—end of fiscal year $ 0.6 $ 0.5 As of September 28, 2018 and September 29, 2017 , the total amount of gross unrecognized tax benefits was $0.6 million and $0.5 million , respectively, all of which would affect the effective tax rate if recognized. The Company includes interest and penalties related to income taxes within taxes on earnings on the Combined Statements of Earnings. For the year ended September 28, 2018 , the tax returns are not yet due and no interest or penalties have been included in taxes on earnings for this period. For the year ended September 29, 2017 any interest or penalties related to unrecognized tax benefits are minimal and have been included in the balance for that period. The Company files U.S. Federal and state income tax returns and non-U.S. income tax returns in various jurisdictions. All of these returns are subject to examination by their respective taxing jurisdictions from the date of filing through each applicable statute of limitation period. The Company’s significant operations up to the date of separation have historically been included in Varian’s U.S. federal and state income tax returns and non-U.S. jurisdiction tax returns. Material liabilities arising related to the pre-spin operations would be the responsibility of Varian. Other periods for entities acquired are still open and subject to examination. Generally, periods prior to 2008 are no longer subject to examination. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Sep. 28, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION As part of the Company's transition to a stand-alone company, the Company’s Chief Executive Officer, who is also its Chief Operating Decision Maker (“CODM”), re-evaluated the product groupings and how he views and measures the business performance, and, therefore, subsequent to the filing of the preliminary registration statement on Form 10 on August 11, 2016, the Company reorganized its two reportable operating segments into Medical and Industrial. The realigned segments better align the Company’s products and service offerings with customer use in medical and industrial markets and are consistent with how the CODM 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 margin. The new operating and reportable segment structure provides better visibility and clarity into the financial performance of the Company’s products, as well as an alignment between business strategies and operating results. Description of Segments The Medical segment designs, manufactures, sells and services X-ray imaging components for use in a range of applications, including radiographic and fluoroscopic imaging, mammography, computed tomography, radiation therapy and computer-aided detection. The Company provides a broad range of X-ray imaging components for Medical customers including X-ray tubes, digital flat panel detectors, generators, high voltage connectors, image-processing software and workstations, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, ionization chambers and buckys. The Company’s X-ray imaging components are primarily sold to imaging system OEM customers that incorporate them into their medical diagnostic, radiation therapy, dental, veterinary and industrial imaging systems. The Company also sells its X-ray imaging components to independent service companies, distributors and directly to end-users for replacement purposes. The Industrial segment designs, manufactures, sells and services products for use in the security and industrial inspection applications, such as airport security, cargo screening at ports and borders and nondestructive examination in a variety of applications. The products include Linatron X-ray accelerators, X-ray tubes, digital flat panel detectors, high voltage connectors and image processing software that we generally sell to OEM customers that incorporate these products into their inspection systems. 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. Information related to the Company’s segments is as follows: Fiscal Year (In millions) 2018 2017 2016 Revenues Medical $ 602.0 $ 556.9 $ 505.8 Industrial 171.4 141.2 114.3 Total revenues 773.4 698.1 620.1 Gross margin Medical 190.5 193.6 195.8 Industrial 63.4 59.9 52.6 Total gross margin 253.9 253.5 248.4 Total operating expenses 209.4 169.8 139.3 Interest and other expenses, net (18.8 ) (8.9 ) (4.1 ) Earnings before taxes 25.7 74.8 105.0 Taxes on earnings (benefit) (2.6 ) 22.8 36.0 Net earnings 28.3 52.0 69.0 Less: Net earnings attributable to noncontrolling interests 0.8 0.4 0.5 Net earnings attributable to Varex $ 27.5 $ 51.6 $ 68.5 The following table summarizes the Company’s total assets by its reportable segments: (In millions) September 28, 2018 September 29, 2017 Identifiable assets: Medical $ 770.6 $ 832.1 Industrial 217.3 208.0 Total reportable segments $ 987.9 $ 1,040.1 Geographic Information Revenues Property, plant and equipment, net Fiscal Years Fiscal Years (In millions) 2018 2017 2016 2018 2017 United States $ 268.8 $ 231.9 $ 216.5 $ 127.9 $ 132.1 Latin America 7.0 7.9 8.2 — — EMEA 254.5 219.5 179.5 8.7 8.4 APAC 243.1 238.8 215.9 8.3 7.8 Total company $ 773.4 $ 698.1 $ 620.1 $ 144.9 $ 148.3 The Company operates various manufacturing and marketing operations outside the United States. Latin America includes Brazil and Mexico. EMEA includes Europe, Russia, the Middle East, India and Africa. APAC includes Asia and Australia. Revenues by region are based on the known final destination of products sold. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Sep. 28, 2018 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Varex’s 401(k) plan became effective on January 1, 2017. Varex’s 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code and intended for all full-time employees in the United States. This plan allows employees to contribute a portion of their pretax salary up to the maximum dollar limitation prescribed by the Internal Revenue Service. Prior to Varex's 401(k) plan becoming effective, Company employees participated in Varian's 401(k) plan. The Company made matching contributions to the plan totaling $6.5 million , $4.3 million and $3.3 million in fiscal year 2018, 2017 and 2016, respectively. The Company also maintains defined benefit plans for employees located outside the US. The net pension liability is included in non-current liability on the Company's consolidated balance sheets and totaled $3.3 million and $3.2 million as of September 28, 2018 and September 29, 2017 , respectively. |
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Sep. 28, 2018 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE INCOME | OTHER COMPREHENSIVE INCOME The following table presents the changes in the accumulated balances for each component of other comprehensive income (loss): (In millions) Unrealized Gain (Loss) on Derivative Financial Instruments Unrealized Gain on Defined Benefit Obligations Accumulated Other Comprehensive Income Balance at September 29, 2017 $ 0.6 $ 0.2 $ 0.8 Other comprehensive loss before reclassifications 6.8 — 6.8 Income tax benefit (1.6 ) (0.2 ) (1.8 ) Balance at September 28, 2018 $ 5.8 $ 0.0 $ 5.8 No amounts were reclassified out of accumulated other comprehensive income during fiscal years 2018 and 2017. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 28, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On October 3, 2018, the Company, in accordance with the terms of the Credit Agreement, provided notice to the administrative agent that effective as of October 10, 2018, the Company was permanently reducing the revolving credit commitment under the Credit Agreement by $50.0 million such that the revolving credit commitment will be $150.0 million . The reduction in the revolving credit commitment will also reduce the fees paid by the Company in connection with such commitment. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 28, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying consolidated financial statements are audited and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Prior to the date of separation and distribution, the financial statements were prepared on a stand-alone basis and are derived from Varian’s consolidated financial statements and records as it operated as part of Varian prior to the distribution, in conformity with GAAP. |
Consolidation | The consolidated financial statements include the accounts of the Company and certain other assets and liabilities that were historically held at the Varian corporate level but are specifically identifiable and attributable to the Company. Prior to the separation and distribution, the consolidated financial statements included allocations of certain Varian corporate expenses, including costs of information technology, human resources, accounting, legal, facilities, insurance, treasury and other corporate and infrastructure services. In addition, allocated costs included research and development expenses from Varian’s scientific research facility. Prior to the separation, these costs were allocated to the Company on the basis of direct usage when identifiable or other systematic measures that reflect utilization of services provided to or benefits received by the Company. The Company considers the expense allocation methodology and results to be reasonable for periods prior to separation from Varian. All transactions between the Company and Varian prior to the separation have been included in the accompanying consolidated financial statements. All intercompany transactions while the Company operated as part of Varian were considered to be effectively settled for cash and are reflected as a component of financing activities as net transfers from (to) Varian in the consolidated statements of cash flows at the time the transactions were recorded. Prior to the separation, the Company was dependent upon Varian for its working capital and financing requirements, as Varian uses a centralized approach to cash management and financing of its operations. Financial transactions relating to the Company were accounted for through the net parent investment account. Cash and cash equivalents held by Varian were not allocated to the Company. Net parent investment in the consolidated balance sheets and statements of equity represents Varian’s historical investment in the Company, the net effect of transactions with and allocations from Varian and the Company’s accumulated earnings. |
Segment Reporting | Segment Reporting The Company has two reportable operating segments; (i) Medical and (ii) Industrial, which align with how our CEO who is identified as the CODM, who is responsible for reviewing Company’s performance. In fiscal year 2016, we re-segmented the Company's operating segments and reclassified the segment data for the prior years to conform to the current year presentation. |
Fiscal Year | Fiscal Year The fiscal years of the Company as reported are the 52 or 53-week period ending on the Friday nearest September 30. Fiscal year 2018 is the 52-week period that ended on September 28, 2018. Fiscal year 2017 was the 52-week period that ended on September 29, 2017. Fiscal year 2016 was the 52-week period that ended on September 30, 2016. |
Variable Interest Entities | Variable Interest Entities For entities in which the Company has variable interests, the Company focuses on identifying which entity has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. If the Company is the primary beneficiary of a variable interest entity, the assets, liabilities and results of operations of the variable interest entity will be included in the Company’s consolidated financial statement. As of September 28, 2018 , the Company had two variable interest entities, only one of which was consolidated, because it was determined that the Company was the primary beneficiary. |
Use of Estimates | Use of Estimates 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers 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. |
Fair Value | Fair Value Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There is a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or, other inputs that are observable or can be corroborated by observable market data. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Derivative instruments and hedging activities | Derivative instruments and hedging activities The Company records all derivatives on the balance sheet at fair value. For a derivative, such as an interest rate swap that is designated as a cash flow hedge, the effective portion of changes in the fair value of the derivative is initially reported in accumulated other comprehensive income (loss) on the consolidated balance sheet and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. To the extent the effective portion of a hedge subsequently becomes ineffective, the corresponding amount of the change in fair value of the derivative initially reported in accumulated other comprehensive income (loss) is reclassified and is recognized directly in earnings. Accordingly, on a quarterly basis, the Company assesses the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative hedging instrument with the changes in fair value or cash flows of a hypothetical designated perfect hedged item or transaction. If the change in the actual swap is greater than the change in the hypothetical perfect swap, the difference is referred to as “ineffectiveness” and is recognized in earnings in the current period. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash, cash equivalents and trade accounts receivable. Cash held with financial institutions may exceed the Federal Deposit Insurance Corporation insurance limits or similar limits in foreign jurisdictions. The Company has not experienced 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 doubtful accounts 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. |
Inventories, net | Inventories, net Inventories, net are valued at net realizable value of lower of cost or market. Costs include materials, labor and manufacturing overhead and is computed using standard cost (which approximates actual cost) on a first-in-first-out basis. We evaluate the carrying value of our inventories taking into consideration such factors as historical and anticipated future sales compared to quantities hand and the prices we expect to obtain for our products in our respective markets. We adjust excess and obsolete inventories to net realizable value and write-downs of excess and obsolete inventories are recorded as a component of cost of revenues. |
Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment are stated at cost, net of accumulated depreciation. Major improvements are capitalized, while repairs and maintenance are expensed as incurred. Depreciation are computed using the straight-line method over the estimated useful lives of the assets. Land is not subject to depreciation, but land improvements are depreciated over fifteen years. Land leasehold rights and leasehold improvements are depreciated over the lesser of their estimated useful lives or remaining lease terms. Buildings are depreciated over twenty years. Machinery and equipment are depreciated over their estimated useful lives, which range from three to seven years. Assets subject to lease are depreciated over the lesser of their estimated useful lives or remaining lease terms. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted, and an impairment assessment may be performed on the recoverability of the carrying amounts. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are removed from the accounts. |
Investments | Investments 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 these investments. The Company monitors these equity investments for impairment and makes appropriate reductions in carrying values if the Company determines that impairment charges are required based primarily on the financial condition and near-term prospects of these companies. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets 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 in the Company's 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. |
Impairment of Long-lived Assets, Intangible Assets and Goodwill | Impairment of Long-lived Assets, Intangible Assets and Goodwill 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. The Company evaluates goodwill and indefinite lived intangible assets qualitatively for impairment at least annually in 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. If the Company determines that a quantitative analysis is necessary, the impairment test for goodwill is currently a two-step process. Step one consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit. The Company determines the fair value of its reporting units based on a combination of income and market approaches. The income approach is based on the present value of estimated future cash flows of the reporting units, and the market approach is based on a market multiple calculated for each reporting unit based on market data of other companies engaged in similar business. If the carrying amount of the reporting unit is in excess of its fair value, step two requires the comparison of the implied fair value of the reporting unit’s goodwill against the carrying amount of the reporting unit’s goodwill. Any excess of the carrying value of the reporting unit’s goodwill over the implied fair value of the reporting unit’s goodwill is recorded as an impairment loss. The impairment test for intangible assets with indefinite useful lives, if any, consists of a comparison of fair value to carrying value, with any excess of carrying value over fair value being recorded as an impairment loss. |
Loss Contingencies | Loss Contingencies From time to time, the Company is a party to or otherwise involved in legal proceedings, claims and government inspections or investigations and other legal matters, both inside and outside the United States, arising in the ordinary course of its business or otherwise. The Company accrues amounts, 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 it believes will result in a probable loss. |
Product Warranty | Product Warranty The Company warrants most of its products for a specific period of time, usually 12 to 24 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. The amount of the accrued estimated warranty costs obligation for established products is primarily based on historical experience as to 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. |
Revenue Recognition | Revenue Recognition The Company’s revenues are derived primarily from the sale of hardware and software products and services. The Company recognizes its revenues net of any value added or sales tax and net of sales discounts. The Company sells a high proportion of its X-ray products to a limited number of OEM customers. 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 accelerators together with its imaging processing software and image detection products to OEM customers that incorporate them into their inspection systems. Service contracts are often sold with certain security and inspection products and computer-aided detection products. Revenues related to service contracts usually start after the expiration of the warranty period for non-software products or upon delivery of software products. For a multiple-element arrangement that includes software and non-software deliverables which includes service contracts, the Company first allocates revenues among the software and non-software deliverables on a relative selling price basis. |
Non-Software Products | Non-Software Products Non-software products include hardware products, software components that function together with the hardware components to deliver the product’s essential functionality, as well as service contracts. Except as described below under “Service,” the Company recognizes revenues for non-software products when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. For multiple-element revenue arrangements that involve non-software products, a delivered non-software element is considered as a separate unit of accounting when it has stand-alone value and there is no customer-negotiated refund or return rights for the delivered element. The allocation of revenue to all deliverables based on their relative selling prices is determined at the inception of the arrangement. The selling price for each deliverable is determined using vendor-specific objective evidence (“VSOE”) of selling price, if it exists; otherwise, third-party evidence of selling price (“TPE”) is used. If the Company is not able to establish VSOE or TPE of selling prices for its non-software products, the Company uses the deliverable's estimated selling price (“ESP”). The Company estimates selling prices following an established process that considers market conditions, including the product offerings and pricing strategies of competitors, as well as internal factors such as historical pricing practices and margin objectives. The establishment of product and service ESPs is controlled and reviewed by the appropriate level of management in all of the Company’s businesses. The Company recognizes revenues upon the transfer of risk of loss, which is either at the time of shipment or delivery, depending upon the terms of the contract, provided that all other revenue recognition criteria have been met. |
Software Products | Software Products The Company recognizes revenues for software products in accordance with the software revenue recognition guidance. The Company recognizes license revenues when all of the following criteria have been met: persuasive evidence of an arrangement exists, the vendor’s fee is fixed or determinable, collection of the related receivable is probable and delivery of the product has occurred. Revenues earned on software arrangements involving multiple elements are allocated to each element based on VSOE of fair value, which is based on the price charged when the same element is sold separately. In instances when evidence of VSOE of fair value of all undelivered elements exists, but evidence does not exist for one or more delivered elements, revenues are recognized using the residual method. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue. For those software products that are not sold stand-alone or for which VSOE cannot be established or maintained, all software revenue under the contract will be deferred until the software product(s) that lack VSOE are all delivered. If the only undelivered software element that lacks VSOE is maintenance and support, then the software revenue would be recognized ratably over the term of the maintenance and support arrangement. The Company recognizes revenues upon the transfer of risk of loss, which is either at the time of shipment or delivery, depending upon the shipping terms of the contract, provided that all other criteria for revenue recognition have been met. |
Service | Service Service revenues include revenues from hardware and software service contracts, including maintenance and support, bundled support arrangements, paid services and trainings and parts that are sold by the service department. Revenues allocated to service contracts are recognized ratably over the period of performance of the related contracts. Revenues related to services performed on a time-and-materials basis are recognized when they are earned and billable. |
Deferred Revenues | Deferred Revenues Deferred revenue primarily represents (i) the amount billed, billable or received applicable to non-software products for which parts and services have not been delivered, (ii) the amount billed, billable or received applicable to software products for which the Company’s obligations under the maintenance contracts have not been fulfilled and (iii) the amount billed, billable or received for service contracts for which the services have not been rendered. Except for government tenders, group purchases and orders with letters of credit, the Company's security and inspection customers often provide a down payment prior to transfer of risk of loss of ordered products. These payments are also included in deferred revenue on the consolidated balance sheets. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company evaluates the creditworthiness of customers prior to authorizing shipment for all major sale transactions. On a quarterly basis, the Company evaluates aged items in the accounts receivable aging report and provide an allowance in an amount deemed adequate for doubtful accounts. If the evaluation of customers’ financial conditions does not reflect a future ability to collect outstanding receivables, additional provisions may be needed. |
Share-Based Compensation Expense | Share-Based Compensation Expense The Company has an equity-based incentive plan that provides for the grant of nonqualified stock options and restricted stock units to directors, officers and other employees. The Company also permits employees to purchase shares under the Varex employee stock purchase plan. Prior to the separation, the Company’s employees historically participated in Varian’s equity-based incentive plans. Share-based compensation expense through the date of separation included allocations to the Company based on the awards and terms previously granted to its employees as well as an allocation of Varian’s corporate and shared functional employee expenses. The Company values stock options granted and the option component of the shares of common stock purchased under the equity-based incentive plans and stock purchased under the employee stock purchase plan using the Black-Scholes option-pricing model. Share-based compensation expense for restricted stock units is measured using the fair value of the Company’s stock on the date of grant and is amortized over the award’s respective service period. The Black-Scholes option-pricing model requires the input of certain assumptions, and changes in the assumptions can materially affect the fair value estimates of share-based payment awards. The Company measures and recognizes expense for all share-based payment awards based on their fair values. Share-based compensation expense recognized in the consolidated statements of earnings includes compensation expense for the share-based payment awards based on the grant date fair value estimated in accordance with the guidance on share-based compensation. Share-based compensation expense recognized is based on the value of the portion of share-based payment awards that is ultimately expected to vest. The Company attributes the value of share-based compensation to expense using the straight-line method. The Company considers only the direct tax impacts of share-based compensation awards when calculating the amount of tax windfalls or shortfalls. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included as a component of cost of revenues. |
Research and Development | Research and Development Research and development costs have been expensed as incurred. These costs primarily include employees’ compensation, consulting fees and material costs. |
Software Development Costs | Software Development Costs Costs for the development of new software products and substantial enhancements to existing software products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. No costs associated with the development of software have been capitalized, as the Company believes its current software development process is essentially completed concurrent with the establishment of technological feasibility. |
Taxes on Earnings | Taxes on Earnings Current income tax expense is the amount of income taxes expected to be payable for the current year. Deferred income tax liabilities or assets are established for the expected future tax consequences resulting from the differences in financial reporting and tax bases of assets and liabilities. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. In addition, we provide reserves for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by the authoritative guidance for accounting for income taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. On December 22, 2017, the U.S. Government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (“U. S. Tax Reform”). U.S. Tax Reform significantly revised the U.S. corporate income tax structure including a lower corporate statutory rate and changes to the way foreign earnings are taxed. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law is enacted. In accordance with these rules, we are including the impact of certain provisions of U.S. Tax Reform to the extent they are effective during the current reporting period. Certain other provisions included in U.S. Tax Reform have later effective dates for fiscal year filers and will be included in the period in which they become effective. In response to U.S. Tax Reform, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) that allows for reasonable estimated amounts to be recorded and a measurement period of up to one year from the date of enactment to revise these provisional amounts as new information is obtained and additional guidance is issued. Pursuant to the guidance included in SAB 118, we deem amounts recorded and positions taken to date as provisional estimates to be adjusted and finalized in future periods. |
Foreign Currency Translation | Foreign Currency Translation The Company uses the U.S. Dollar as the functional currency of its foreign operations. Gains and losses from remeasurement of foreign currency balances into U.S. Dollars are included in the consolidated statements of earnings. |
Accounting Standards Recently Adopted, Recent Accounting Standards Updates Not Yet Effective | Accounting Standards Recently Adopted In March 2016, the FASB issued ASU 2016-09 which includes an amendment to its accounting guidance related to employee share-based payments. The amendment simplifies several aspects of the accounting for employee share-based payments, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company retrospectively adopted this amendment in the first quarter of fiscal year 2018, resulting in an immaterial change on the Consolidated Balance Sheets. Recent Accounting Standards Updates Not Yet Effective In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from U.S. federal tax legislation commonly referred to as the Tax Cuts and Jobs Act, which was enacted in December 2017 (the “2017 Tax Act”). ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. In August 2017, the FASB issued Accounting Standard Update (“ASU”) 2017-12 which targets improvements to accounting for hedging activities which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09 which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The guidance is effective for the Company beginning in the first quarter of fiscal year 2019. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-07 which amended its guidance on the accounting related to defined benefit plans and other post-retirement benefits. This amendment requires the service cost component of net periodic pension and post-retirement benefit cost be presented in the same line item as other employee compensation costs, while the other components be presented separately as non-operating income (expense). The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019. Early adoption is permitted. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04 which clarified its guidance to simplify the measurement of goodwill by eliminating the Step 2 impairment test. The new guidance requires companies to perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2021. The amendment is required to be adopted prospectively. Early adoption is permitted. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 on accounting for leases. The new standard is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. The new standard will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of earnings. The new standard is required to be adopted using a modified retrospective method to each prior reporting period presented with various optional practical expedients. The new standard will be effective for the Company beginning in its first quarter of fiscal year 2020 with early adoption permitted. The Company is evaluating the impact of adopting this new standard to its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (the “new standard”), which became effective on September 29, 2018 and has now replaced most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard requires an entity to recognize the amount of revenue to which it expects to be entitled upon transfer of promised goods or services to customers. The new standard defines a five-step process in order to achieve this core principle, which requires the use of judgment and estimates, and also requires expanded qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and estimates used. In August 2015, FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date, which defers the effective date of the new standard by one year allowing early adoption as of the original effective date of January 1, 2017. The deferral results in the new revenue standard being effective for the Company as of September 29, 2018. Additional ASUs have been issued to amend or clarify the new standard as follows: • ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients was issued in May 2016. ASU 2016-12 amends the new revenue recognition standard to clarify the guidance on assessing collectability, measuring non-cash consideration, presenting sales taxes and certain transition matters. • ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing was issued in April 2016. ASU 2016-10 addresses implementation issues identified by the FASB-International Accounting Standards Board Joint Transition Resource Group (“TRG”) for Revenue Recognition concerning identifying performance obligations and accounting for licenses of intellectual property. • ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) was issued in March 2016. ASU 2016-08 requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal or agent designation. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The Company will adopt the new standard as of October 1, 2018 using the modified retrospective approach for all contracts open at that date. Prior periods will not be retroactively adjusted. In utilizing the modified retrospective method, we are recognizing the cumulative effect of applying the standard at the date of initial application, and we will disclose the results under both the new and old standards for the first year after adoption, beginning in the first quarter of fiscal 2019. The Company has substantially completed its evaluation of the impact of the new standard on its accounting policies, processes and system requirements. The Company has assigned internal resources in addition to the engagement of third-party service providers to assist in the evaluation and to provide periodic updates to management and the Audit Committee. In evaluating the risks associated with the adoption of the new accounting standard, the Company has identified and scoped the different revenue streams and reviewed contracts in each revenue stream for terms and conditions that could result in different accounting treatment. Furthermore, the Company has made and will continue to make investments in systems to enable timely and accurate reporting under the new standard. In addition, the Company will update certain disclosures, as applicable, included in its filings pursuant to the Securities Exchange Act of 1934, as amended, to meet the requirements of the new standard. During the first quarter of 2019, we will record a cumulative adjustment to accumulated deficit that is primarily composed of the following: • a contract liability and contract asset related to the sale of X-ray tubes that sold with return rights for specific parts of the X‑ray tube • a contract liability related to the deferral of revenue for service type warranties that are provided to certain customers who purchase Linatron ® X-ray accelerators The future impact of Accounting Standards Codification (“ASC”) 606 on our revenues primarily relate to growth in the sales of X-ray tubes and the consistency of related product returns and the growth in the sale of Linatron X-ray accelerators. Given current business trends, we do not expect a material change in total operating revenues. While we have reached conclusions on the key accounting assessments related to adopting this standard, we are continuing to finalize our assessment of the resulting quantitative impacts. Based on currently available information, we estimate that the adjustment to our opening retained earnings balance on October 1, 2018 will be not significant. As part of its evaluation, the Company has also considered the impact of the guidance in ASC 340-40, Other Assets and Deferred Costs; Contracts with Customers, and the interpretations of the FASB TRG for Revenue Recognition from their November 7, 2016 meeting with respect to the capitalization and amortization of incremental costs of obtaining a contract (e.g., sales commissions). For contracts with an expected duration greater than one year, the new standard requires the capitalization of incremental costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained, provided the Company expects to recover the costs. Such capitalized costs are then to be amortized on a systematic basis that is consistent with the transfer to the customer of the services to which such costs relate, and the amortization period may extend beyond the initial contract term if renewal commissions on expected renewals are not commensurate with the commission on the initial contract. The Company does not expect a material change in the financial statements from the adoption of ASC 340-40. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | During the periods presented, one customer accounted for a significant portion of revenues, which is as follows: Fiscal Year 2018 2017 2016 Canon Medical Systems Corporation (formerly Toshiba Medical Systems) 18.1 % 19.3 % 23.0 % |
Schedule of Inventory, Current | The following table summarizes the Company’s inventories, net: (In millions) September 28, 2018 September 29, 2017 Raw materials and parts $ 149.9 $ 164.5 Work-in-process 25.4 20.3 Finished goods 59.8 49.7 Total inventories, net $ 235.1 $ 234.5 |
Property, Plant and Equipment | The following table summarizes the Company’s property, plant and equipment, net: (In millions) September 28, 2018 September 29, 2017 Land $ 8.3 $ 5.1 Land improvements 16.3 9.0 Buildings and leasehold improvements 121.8 123.2 Machinery 166.1 153.9 Construction in progress 23.1 24.3 $ 335.6 $ 315.5 Accumulated depreciation and amortization (190.7 ) (167.2 ) Property, plant, and equipment, net $ 144.9 $ 148.3 |
Schedule of Product Warranty Liability | The following table reflects the changes in the Company’s accrued product warranty: Fiscal Years (In millions) 2018 2017 Accrued product warranty, at beginning of period $ 7.0 $ 6.9 Product warranty for acquisitions during period — 1.3 Charged to cost of revenues 11.6 10.7 Actual product warranty expenditures (11.3 ) (11.9 ) Accrued product warranty, at end of period $ 7.3 $ 7.0 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following amounts represent the determination of the fair value of identifiable assets acquired and liabilities for the Acquired Detector Business: (In millions) Fair Value Total cash consideration $ 273.2 Allocation of the purchase consideration: Cash 1.4 Accounts Receivable 18.7 Inventory 34.7 Prepaids and other current assets 0.6 Property, plant, and equipment 21.4 Other assets, non-current 2.0 Intangibles 81.1 Goodwill 167.3 Total assets acquired $ 327.2 Current liabilities $ (17.2 ) Other liabilities, non-current (36.8 ) Total liabilities assumed (54.0 ) Net assets acquired $ 273.2 The following table summarizes the preliminary purchase price allocation: (In millions) Fair Value Allocation of the purchase consideration: Accounts Receivable $ 0.2 Inventories 1.0 Other assets 0.2 Intangibles 1.6 Goodwill 1.5 Other liabilities (0.2 ) Net assets acquired 4.3 Post-closing adjustments 0.5 Total cash consideration $ 4.8 |
Schedule of Intangible Assets Acquired | The following amounts represent the determination of the fair value of identifiable intangible assets for the Acquired Detector Business, which are amortized straight-line: (In millions) Fair Value Estimated Favorable leasehold interests $ 3.8 16 Backlog 1.2 1 Trade names 1.4 5 Developed technology 37.7 7 In-process research and development 4.0 indefinite Customer relationships 33.0 7 Total intangible assets acquired $ 81.1 |
Schedule of Segment Reporting Information, by Segment | The following amounts represent revenues by reporting segment from the Acquired Detector Business from the acquisition date of May 1, 2017 through September 29, 2017: (In millions) May 1, 2017 through September 29, 2017 Acquired Detector Business Medical $ 41.1 Industrial 20.2 Total Acquired Detector Business revenues $ 61.3 Information related to the Company’s segments is as follows: Fiscal Year (In millions) 2018 2017 2016 Revenues Medical $ 602.0 $ 556.9 $ 505.8 Industrial 171.4 141.2 114.3 Total revenues 773.4 698.1 620.1 Gross margin Medical 190.5 193.6 195.8 Industrial 63.4 59.9 52.6 Total gross margin 253.9 253.5 248.4 Total operating expenses 209.4 169.8 139.3 Interest and other expenses, net (18.8 ) (8.9 ) (4.1 ) Earnings before taxes 25.7 74.8 105.0 Taxes on earnings (benefit) (2.6 ) 22.8 36.0 Net earnings 28.3 52.0 69.0 Less: Net earnings attributable to noncontrolling interests 0.8 0.4 0.5 Net earnings attributable to Varex $ 27.5 $ 51.6 $ 68.5 |
Business Acquisition, Pro Forma Information | The unaudited pro-forma results do not reflect any operating efficiencies or potential cost savings which may result from the consolidation of the Acquired Detector Business and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented nor are they indicative of future results of operations or results that might have been achieved had the acquisition been consummated as of October 3, 2015. Fiscal Year (In millions) 2017 Revenue $ 777.8 Operating earnings $ 84.7 Net earnings $ 43.1 Net earnings per share, basic $ 1.15 Net earnings per share, diluted $ 1.13 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges | Below is a detail of restructuring charges incurred during fiscal year 2018: (In millions) September 28, 2018 Other assets impairment charges $ 1.3 Inventory write downs 3.1 Long-lived asset impairment charges 3.0 Accelerated depreciation 4.2 Severance costs 4.3 Facility closures 0.8 Total restructuring charges $ 16.7 |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accrued Liabilities | The following table summarizes the Company’s accrued liabilities: (In millions) September 28, 2018 September 29, 2017 Accrued compensation and benefits $ 27.0 $ 26.0 Product warranty 7.3 7.0 Income taxes payable 1.4 13.2 Payable to Varian Medical Systems 2.3 7.9 Other 9.5 8.3 Total accrued liabilities $ 47.5 $ 62.4 |
Other Noncurrent Liabilities | The following table summarizes the Company’s other long-term liabilities: (In millions) September 28, 2018 September 29, 2017 Long-term income tax payable $ 3.5 $ — Environment liabilities 1.3 1.3 Defined benefit obligation liability 3.3 3.2 Other 0.4 0.2 Total other long-term liabilities $ 8.5 $ 4.7 |
Schedule of Other Nonoperating Income (Expense) | The following table summarizes the Company’s other income (expense), net: Fiscal Years (In millions) 2018 2017 2016 Income (loss) from equity method investments $ 3.9 $ 1.3 $ (1.6 ) Realized income (loss) on foreign currencies (1.2 ) 1.9 (0.9 ) Total other income (expense), net $ 2.7 $ 3.2 $ (2.5 ) |
NET EARNINGS PER SHARE (Tables)
NET EARNINGS PER SHARE (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per common share is as follows: Fiscal Year (In millions, except per share amounts) 2018 2017 2016 (1) Net earnings attributable to Varex $ 27.5 $ 51.6 $ 68.5 Weighted average shares outstanding - basic 37.9 37.6 37.4 Dilutive effect of potential common shares 0.5 0.4 0.3 Weighted average shares outstanding - diluted 38.4 38.0 37.7 Net earnings per share attributable to Varex - basic $ 0.73 $ 1.37 $ 1.83 Net earnings per share attributable to Varex - diluted $ 0.72 $ 1.36 $ 1.82 Anti-dilutive employee shared based awards, excluded 1.2 1.0 0.7 (1) Basic and diluted net earnings for fiscal years 2016 is calculated using the number of common shares distributed on January 28, 2017. |
FINANCIAL DERIVATIVES AND HED_2
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table shows the notional amounts of outstanding foreign currency contracts entered into under its balance sheet hedge program as of September 28, 2018 : Notional Value of Derivatives not Designated as Hedging Instruments: In millions Buy contracts Sell contract Japanese yen $ 1.3 $ — British pound sterling — 1.6 Swiss franc — 1.6 Chinese renminbi 3.6 — Euro — 3.5 $ 4.9 $ 6.7 As of September 28, 2018, the Company had the following outstanding derivatives designated as hedging instruments: (In millions, except for number of instruments) Number of Instruments Notional Value Interest Rate Swap Contracts 6 $ 277.5 |
Schedule of Interest Rate Derivative Instruments | The following table summarizes the amount of income recognized from derivative instruments for the periods indicated and the line items in the accompanying statements of operations where the results are recorded for cash flow hedges: Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) (In millions) 2018 2017 2016 2018 2017 2016 2018 2017 2016 Interest Rate Swap Contracts $ 6.9 $ 0.6 $ — Interest expense $ 0.1 $ (0.3 ) $ — Interest expense $ — $ — $ — The Company expects that approximately $2.2 million recorded as a component of accumulated other comprehensive income (loss) will be realized in the statements of comprehensive earnings over the next 12 months and the amount will vary depending on interest rates. These derivative instruments are subject to master netting agreements giving effect to rights of offset with each counterparty. The following table summarizes the fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded: Derivative Assets Derivative Liabilities (In millions) September 28, 2018 September 29, 2017 September 28, 2018 September 29, 2017 Derivatives designated as cash flow hedges Balance sheet location Balance sheet location Interest rate swap contracts Other current assets $ 2.2 $ — Other current liabilities $ — $ (0.6 ) Interest rate swap contracts Other non-current assets 5.5 1.6 Other non-current liabilities — — $ 7.7 $ 1.6 $ — $ (0.6 ) |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Short-Term and Long-Term Debt | The following table summarizes the Company's short-term and long-term debt: September 28, 2018 September 29, 2017 (In millions, except for percentages) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Short-term debt Term Facility $ 25.0 4.2 % $ 20.0 3.3 % Long-term debt: Revolving Credit Facility $ 28.0 4.2 % $ 104.0 3.6 % Term Facility 345.0 4.2 % 370.0 3.3 % Debt issuance costs (8.2 ) (10.1 ) Total long-term debt $ 364.8 $ 463.9 |
Schedule of Maturities of Long-term Debt | Future principal payments of the term facility debt outstanding as of September 28, 2018 are as follows: (In millions) Fiscal years: 2019 $ 25.0 2020 30.0 2021 35.0 2022 280.0 Total debt outstanding 370.0 Less: current maturities of long-term debt (25.0 ) Non-current portion of long -term debt $ 345.0 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended | |
Sep. 28, 2018 | Sep. 29, 2017 | |
Fair Value Disclosures [Abstract] | ||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | 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. (In millions) Fair Value Measurements at September 28, 2018 Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Significant Unobservable Inputs Total Assets: Cash equivalents - money market funds $ — $ 18.4 $ — $ 18.4 Interest rate swap contracts — 7.7 — 7.7 Total assets measured at fair value $ — $ 26.1 $ — $ 26.1 Liabilities: Interest rate swap contracts $ — $ 0.0 $ — $ — | At September 29, 2017 , the Company determined the following levels of inputs for the following assets or liabilities: (In millions) Fair Value Measurements at September 29, 2017 Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Significant Unobservable Inputs Total Assets: Cash equivalents - Money market funds $ — $ 11.4 $ — $ 11.4 Interest rate swap contracts — 1.6 — 1.6 Total assets measured at fair value $ — $ 13.0 $ — $ 13.0 Liabilities: Interest rate swap contracts $ — $ 0.6 $ — $ 0.6 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table reflects goodwill by reportable operating segment: (In millions) Medical Industrial Total Balance at September 29, 2017 $ 146.9 $ 95.0 $ 241.9 Business combination — 1.5 1.5 Settlement of post-close working capital adjustment 0.1 0.1 0.2 Balance at September 28, 2018 $ 147.0 $ 96.6 $ 243.6 |
Schedule of Finite-Lived Intangible Assets | The following table reflects the gross carrying amount and accumulated amortization of the Company’s finite-lived intangible assets included in other assets in the consolidated balance sheets: (In millions) September 28, 2018 September 29, 2017 Acquired existing technology $ 57.9 $ 57.0 Patents, licenses and other 9.9 19.4 Customer contracts and supplier relationship 42.6 42.1 Accumulated amortization (40.6 ) (31.2 ) Total intangible assets with finite lives 69.8 87.3 In-process research and development with indefinite lives 4.0 4.0 Total intangible assets $ 73.8 $ 91.3 |
Schedule of Indefinite-Lived Intangible Assets | The following table reflects the gross carrying amount and accumulated amortization of the Company’s finite-lived intangible assets included in other assets in the consolidated balance sheets: (In millions) September 28, 2018 September 29, 2017 Acquired existing technology $ 57.9 $ 57.0 Patents, licenses and other 9.9 19.4 Customer contracts and supplier relationship 42.6 42.1 Accumulated amortization (40.6 ) (31.2 ) Total intangible assets with finite lives 69.8 87.3 In-process research and development with indefinite lives 4.0 4.0 Total intangible assets $ 73.8 $ 91.3 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of September 28, 2018, the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal years: 2019 $ 14.6 2020 14.2 2021 13.0 2022 11.4 2023 10.3 Thereafter 6.3 Total $ 69.8 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Noncontrolling Interest [Abstract] | |
Changes in Redeemable Noncontrolling Interest | Changes in redeemable noncontrolling interests and noncontrolling interests were as follows: Fiscal Years 2018 2017 (In millions) Redeemable Noncontrolling Redeemable Balance at beginning of period $ 11.2 $ — $ 10.3 Net earnings attributable to noncontrolling interests 0.5 0.3 0.4 Contributions from noncontrolling partner — 1.8 — Dividend distributions (0.6 ) — — Other — — 0.5 Balance at end of period $ 11.1 $ 2.1 $ 11.2 |
EMPLOYEE STOCK PLANS (Tables)
EMPLOYEE STOCK PLANS (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The table below summarizes the effect of recording share-based compensation expense and for the option component of the employee stock purchase plan shares: Fiscal Year (In millions) 2018 2017 2016 Cost of revenues $ 1.3 $ 0.9 $ 1.0 Research and development 1.8 1.5 1.4 Selling, general and administrative (1) 6.9 6.0 7.1 Total share-based compensation expense $ 10.0 $ 8.4 $ 9.5 (1) Includes allocated share-based compensation of $0.0 million , $0.8 million and $3.4 million for fiscal years 2018, 2017 and 2016, respectively, and represents charges by Varian to the Company for certain Varian employees who provided general and administrative services on the Company’s behalf. |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | The Company utilized the Black-Scholes valuation model for estimating the fair value of stock options granted and the option component of the 2017 ESPP. The Company calculated the fair value of each option grant and option component of the 2017 ESPP on the respective dates of grant using the following weighted average assumptions: Employee Stock Option Plan Employee Stock Purchase Plans Fiscal Year Fiscal Year 2018 2018 Expected term (in years) 4.8 0.5 Risk-free interest rate 2.6 % 2.0 % Expected volatility 31.8 % 34.1 % Expected dividend 0.0 % 0.0 % Weighted average fair value at grant date $11.57 $8.92 |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes the activity for stock options under Varex’s employee incentive plans for the Company’s employees: (In thousands, except per share amounts and the remaining term) Options Outstanding Price range Weighted Average Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) Balance at September 29, 2017 1,926 $19.21 — $34.13 $ 29.11 Granted 262 $31.14 — $37.60 36.43 Canceled, expired or forfeited (27) $25.17 — $31.08 28.74 Exercised (150) $19.21 — $31.08 25.33 Balance at September 28, 2018 2,011 $22.63 — $37.60 $ 30.35 3.8 $ 1,598.4 Exercisable at September 28, 2018 1,056 $22.63 — $34.13 $ 28.52 3.4 $ 1,461.3 (1) 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 $28.66 as of September 28, 2018, the last trading date of the Company's fiscal 2018, and which represents the amount that would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise as of that date. |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes the activity for restricted stock units, restricted stock awards and deferred stock units under Varex’s employee incentive plans for the Company’s employees: (In thousands, except per share amounts) Number of Shares Weighted Average Balance at September 29, 2017 525 $ 29.54 Granted 352 37.10 Vested (190) 29.46 Canceled or expired (46) 32.55 Balance at September 30, 2018 641 $ 33.60 |
TAXES ON EARNINGS (Tables)
TAXES ON EARNINGS (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Taxes on earnings were as follows: Fiscal Years (In millions) 2018 2017 2016 Current provision: Federal $ (2.1 ) $ 24.8 $ 26.4 State and local (0.3 ) 1.6 3.9 Foreign 7.5 5.3 2.0 Total current 5.1 31.7 32.3 Deferred provision (benefit): Federal (7.0 ) (7.0 ) 3.6 State and local 0.7 (1.0 ) — Foreign (1.4 ) (0.9 ) 0.1 Total deferred (7.7 ) (8.9 ) 3.7 Taxes on earnings $ (2.6 ) $ 22.8 $ 36.0 |
Schedule of Income before Income Tax, Domestic and Foreign | Earnings before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2018 2017 2016 United States $ 3.7 $ 55.5 $ 105.6 Foreign 22.0 19.3 (0.6 ) Earnings before taxes $ 25.7 $ 74.8 $ 105.0 |
Schedule of Effective Income Tax Rate Reconciliation | The effective tax rate differs from the U.S. federal statutory tax rate as a result of the following: Fiscal Years 2018 2017 2016 Federal statutory income tax rate 24.5 % 35.0 % 35.0 % State and local taxes, net of federal tax benefit 1.1 % 1.3 % 2.4 % Revaluation of deferred tax liabilities for US statutory change (41.8 )% — % — % Mandatory repatriation tax on foreign earnings 13.0 % 0.0 % 0.0 % Domestic production activities deduction (0.8 )% (2.4 )% (2.2 )% Research and development credit (11.1 )% (2.6 )% (2.2 )% Prior year deferred tax adjustments 1.9 % (4.0 )% — % Change in valuation allowance (1.9 )% 3.8 % — % Other 5.0 % (0.6 )% 1.3 % Effective tax rate (10.1 )% 30.5 % 34.3 % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of deferred tax assets and liabilities are as follows: (In millions) September 28, 2018 September 29, 2017 Deferred Tax Assets: Inventory adjustments $ 4.2 $ 15.0 Share-based compensation 0.8 1.9 Product warranty 1.4 2.2 Deferred compensation 0.9 1.3 Net operating loss carryforwards 3.3 2.4 Accrued vacation 1.3 2.1 Credit carryforwards 1.8 1.9 Other 4.7 2.2 18.4 29.0 Valuation allowance (4 ) (4.3 ) Total deferred tax assets 14.4 24.7 Deferred Tax Liabilities: Acquired intangibles (15.2 ) (26.4 ) Property, plant and equipment (14.3 ) (19.9 ) Investments in privately held companies (4.1 ) (6.9 ) Other (4.0 ) (1.0 ) Total deferred tax liabilities (37.6 ) (54.2 ) Net deferred tax liabilities $ (23.2 ) $ (29.5 ) Reported As: Deferred tax assets $ 14.4 $ 25.3 Deferred tax liabilities (37.6 ) (54.8 ) Net deferred tax liabilities $ (23.2 ) $ (29.5 ) |
Schedule of Unrecognized Tax Benefits Roll Forward | Changes in the Company’s unrecognized tax benefits were as follows: Fiscal Years (In millions) 2018 2017 Unrecognized tax benefits balance–beginning of fiscal year $ 0.5 $ 4.4 Additions based on tax positions related to the current year 0.1 0.5 Transfer to Varian — (4.4 ) Unrecognized tax benefits balance—end of fiscal year $ 0.6 $ 0.5 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following amounts represent revenues by reporting segment from the Acquired Detector Business from the acquisition date of May 1, 2017 through September 29, 2017: (In millions) May 1, 2017 through September 29, 2017 Acquired Detector Business Medical $ 41.1 Industrial 20.2 Total Acquired Detector Business revenues $ 61.3 Information related to the Company’s segments is as follows: Fiscal Year (In millions) 2018 2017 2016 Revenues Medical $ 602.0 $ 556.9 $ 505.8 Industrial 171.4 141.2 114.3 Total revenues 773.4 698.1 620.1 Gross margin Medical 190.5 193.6 195.8 Industrial 63.4 59.9 52.6 Total gross margin 253.9 253.5 248.4 Total operating expenses 209.4 169.8 139.3 Interest and other expenses, net (18.8 ) (8.9 ) (4.1 ) Earnings before taxes 25.7 74.8 105.0 Taxes on earnings (benefit) (2.6 ) 22.8 36.0 Net earnings 28.3 52.0 69.0 Less: Net earnings attributable to noncontrolling interests 0.8 0.4 0.5 Net earnings attributable to Varex $ 27.5 $ 51.6 $ 68.5 |
Reconciliation of Assets from Segment to Consolidated | The following table summarizes the Company’s total assets by its reportable segments: (In millions) September 28, 2018 September 29, 2017 Identifiable assets: Medical $ 770.6 $ 832.1 Industrial 217.3 208.0 Total reportable segments $ 987.9 $ 1,040.1 |
Revenue from External Customers by Geographic Areas | Geographic Information Revenues Property, plant and equipment, net Fiscal Years Fiscal Years (In millions) 2018 2017 2016 2018 2017 United States $ 268.8 $ 231.9 $ 216.5 $ 127.9 $ 132.1 Latin America 7.0 7.9 8.2 — — EMEA 254.5 219.5 179.5 8.7 8.4 APAC 243.1 238.8 215.9 8.3 7.8 Total company $ 773.4 $ 698.1 $ 620.1 $ 144.9 $ 148.3 |
OTHER COMPREHENSIVE INCOME - (T
OTHER COMPREHENSIVE INCOME - (Tables) | 12 Months Ended |
Sep. 28, 2018 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in the accumulated balances for each component of other comprehensive income (loss): (In millions) Unrealized Gain (Loss) on Derivative Financial Instruments Unrealized Gain on Defined Benefit Obligations Accumulated Other Comprehensive Income Balance at September 29, 2017 $ 0.6 $ 0.2 $ 0.8 Other comprehensive loss before reclassifications 6.8 — 6.8 Income tax benefit (1.6 ) (0.2 ) (1.8 ) Balance at September 28, 2018 $ 5.8 $ 0.0 $ 5.8 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Description of Business (Details) - Varian Medical Systems, Inc. | Jan. 28, 2017 | Jan. 20, 2017 |
Schedule of Pro Rata Distribution [Line Items] | ||
Outstanding common stock, percentage distributed | 1 | |
Stockholders' equity, conversion ratio | 0.4 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | 12 Months Ended |
Sep. 28, 2018segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Variable Interest Entities (Details) $ in Millions | 12 Months Ended |
Sep. 28, 2018USD ($)entity | |
Accounting Policies [Abstract] | |
Number of variable interest entities | entity | 2 |
Number of consolidated variable interest entities | entity | 1 |
Variable interest entity, consolidated, assets | $ | $ 22.3 |
Variable interest entity, consolidated, liabilities | $ | $ 8.6 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Details) - Canon Medical Systems Corporation (formerly Toshiba Medical Systems) - Customer Concentration Risk | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 18.10% | 19.30% | 23.00% |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 9.80% | 9.00% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) - USD ($) $ in Millions | Sep. 28, 2018 | Sep. 29, 2017 |
Accounting Policies [Abstract] | ||
Raw materials and parts | $ 149.9 | $ 164.5 |
Work-in-process | 25.4 | 20.3 |
Finished goods | 59.8 | 49.7 |
Total inventories, net | $ 235.1 | $ 234.5 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 335.6 | $ 315.5 | |
Accumulated depreciation and amortization | (190.7) | (167.2) | |
Property, plant, and equipment, net | 144.9 | 148.3 | |
Depreciation | 26 | 16.9 | $ 9.8 |
Accelerated depreciation | $ 4.2 | ||
Building | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives | 20 years | ||
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 8.3 | 5.1 | |
Land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives | 15 years | ||
Property, plant and equipment, gross | $ 16.3 | 9 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 121.8 | 123.2 | |
Machinery | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 166.1 | 153.9 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 23.1 | $ 24.3 | |
Minimum | Machinery | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives | 3 years | ||
Maximum | Machinery | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Intangible Assets (Details) | 12 Months Ended |
Sep. 28, 2018 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 2 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of Long-Lived Assets, Intangible Assets and Goodwill (Details) - USD ($) | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | |||
Impairment of intangible assets | $ 3,000,000 | $ 0 | $ 0 |
Goodwill, impairment loss | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 28, 2018 | Sep. 29, 2017 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Accrued product warranty, at beginning of period | $ 7 | $ 6.9 |
Product warranty for acquisitions during period | 0 | 1.3 |
Charged to cost of revenues | 11.6 | 10.7 |
Actual product warranty expenditures | (11.3) | (11.9) |
Accrued product warranty, at end of period | $ 7.3 | $ 7 |
Minimum | ||
Product Warranty Liability [Line Items] | ||
Warranty term (in months) | 12 months | |
Maximum | ||
Product Warranty Liability [Line Items] | ||
Warranty term (in months) | 24 months |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | Sep. 28, 2018 | Sep. 29, 2017 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 0.6 | $ 0.4 |
BUSINESS COMBINATIONS - Virtual
BUSINESS COMBINATIONS - Virtual Media Narrative (Details) $ in Millions | Aug. 31, 2018USD ($) |
Virtual Media Integration, Ltd. | |
Business Acquisition [Line Items] | |
Total cash consideration | $ 4.8 |
BUSINESS COMBINATIONS - Fair Va
BUSINESS COMBINATIONS - Fair Value of Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Aug. 31, 2018 | May 01, 2017 | Sep. 28, 2018 | Sep. 29, 2017 |
Allocation of the purchase consideration: | ||||
Goodwill | $ 243.6 | $ 241.9 | ||
Settlement of post-close working capital adjustment | $ 0.2 | |||
Virtual Media Integration, Ltd. | ||||
Business Acquisition [Line Items] | ||||
Total cash consideration | $ 4.8 | |||
Allocation of the purchase consideration: | ||||
Accounts Receivable | 0.2 | |||
Inventory | 1 | |||
Other assets | 0.2 | |||
Intangibles | 1.6 | |||
Goodwill | 1.5 | |||
Other liabilities | 0.2 | |||
Net assets acquired | 4.3 | |||
Settlement of post-close working capital adjustment | $ 0.5 | |||
PerkinElmer, Inc. | ||||
Business Acquisition [Line Items] | ||||
Total cash consideration | $ 273.2 | |||
Allocation of the purchase consideration: | ||||
Cash | 1.4 | |||
Accounts Receivable | 18.7 | |||
Inventory | 34.7 | |||
Prepaids and other current assets | 0.6 | |||
Property, plant, and equipment | 21.4 | |||
Other assets, non-current | 2 | |||
Intangibles | 81.1 | |||
Goodwill | 167.3 | |||
Total assets acquired | 327.2 | |||
Current liabilities | (17.2) | |||
Other liabilities, non-current | (36.8) | |||
Total liabilities assumed | (54) | |||
Net assets acquired | $ 273.2 |
BUSINESS COMBINATIONS - PerkinE
BUSINESS COMBINATIONS - PerkinElmer's Medical Imaging Narrative (Details) - PerkinElmer, Inc. $ in Millions | May 01, 2017USD ($)employee |
Business Acquisition [Line Items] | |
Value of business acquisition | $ 277.4 |
Total cash consideration | $ 273.2 |
Business combination, number of employees | employee | 280 |
Deferred tax liabilities noncurrent | $ 31 |
Foreign Tax Authority | |
Business Acquisition [Line Items] | |
Goodwill expected tax deductible amount | $ 35 |
BUSINESS COMBINATIONS - Perki_2
BUSINESS COMBINATIONS - PerkinElmer's Intangibles Acquired (Details) - PerkinElmer, Inc. $ in Millions | May 01, 2017USD ($) |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangibles | $ 81.1 |
In-process research and development | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangibles | 4 |
Favorable leasehold interests | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangibles | $ 3.8 |
Estimated useful life | 16 years |
Backlog | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangibles | $ 1.2 |
Estimated useful life | 1 year |
Trade names | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangibles | $ 1.4 |
Estimated useful life | 5 years |
Developed technology | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangibles | $ 37.7 |
Estimated useful life | 7 years |
Customer relationships | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangibles | $ 33 |
Estimated useful life | 7 years |
BUSINESS COMBINATIONS - Revenue
BUSINESS COMBINATIONS - Revenues by Segment (Details) - PerkinElmer, Inc. $ in Millions | 5 Months Ended |
Sep. 29, 2017USD ($) | |
Segment Reporting Information [Line Items] | |
Revenues | $ 61.3 |
Medical | |
Segment Reporting Information [Line Items] | |
Revenues | 41.1 |
Industrial | |
Segment Reporting Information [Line Items] | |
Revenues | $ 20.2 |
BUSINESS COMBINATIONS - Pro For
BUSINESS COMBINATIONS - Pro Forma (Details) - PerkinElmer, Inc. $ / shares in Units, $ in Millions | 12 Months Ended |
Sep. 29, 2017USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Revenue | $ 777.8 |
Operating earnings | 84.7 |
Net earnings | $ 43.1 |
Net earnings per share, basic (in USD per share) | $ / shares | $ 1.15 |
Net earnings per share, diluted (in USD per share) | $ / shares | $ 1.13 |
RELATED-PARTY TRANSACTIONS - In
RELATED-PARTY TRANSACTIONS - Investment in Privately Held Companies (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2013 | Dec. 31, 2018USD ($) | Sep. 28, 2018USD ($)member | Sep. 29, 2017USD ($) | Sep. 30, 2016USD ($) | |
Related Party Transaction [Line Items] | |||||
Income (loss) from equity method investments | $ 3.9 | $ 1.3 | $ (1.6) | ||
dpiX Holding | |||||
Related Party Transaction [Line Items] | |||||
Equity method investment, ownership percentage | 40.00% | ||||
Number of consortium members | member | 4 | ||||
Income (loss) from equity method investments | $ 3.4 | 0.8 | (1.5) | ||
Equity method investments | 48.9 | 50 | |||
dpiX Holding | Equity Method Investee | |||||
Related Party Transaction [Line Items] | |||||
Purchases from related party | 19.3 | 24.7 | $ 23.4 | ||
Accounts payable, related parties | $ 3.7 | $ 3.4 | |||
Percentage of manufacturing capacity | 50.00% | ||||
Percentage of fixed costs | 50.00% | ||||
Scenario, Forecast | Fixed Cost Commitments | dpiX Holding | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expected fixed cost | $ 4.1 |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | 61 Months Ended |
Sep. 28, 2018 | Aug. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Other unrelated restructuring costs | $ 0.8 | |
London Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 1.7 | |
Santa Clara Facility Relocation | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and impairment charges | 14.2 | |
Minimum | Santa Clara Facility Relocation | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected costs to be incurred during fiscal year 2019 | 4 | |
Maximum | Santa Clara Facility Relocation | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected costs to be incurred during fiscal year 2019 | $ 6 | |
Scenario, Forecast | Santa Clara Facility Relocation | ||
Restructuring Cost and Reserve [Line Items] | ||
Reduction of costs in future periods | $ 62.7 |
RESTRUCTURING - Restructuring C
RESTRUCTURING - Restructuring Charges Incurred (Details) - USD ($) | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Other assets impairment charges | $ 1,300,000 | $ 0 | $ 0 |
Inventory write-down | 3,100,000 | 0 | 0 |
Long-lived asset impairment charges | 3,000,000 | $ 0 | $ 0 |
Accelerated depreciation | 4,200,000 | ||
Restructuring Charges, 2018 | |||
Restructuring Cost and Reserve [Line Items] | |||
Other assets impairment charges | 1,300,000 | ||
Inventory write-down | 3,100,000 | ||
Long-lived asset impairment charges | 3,000,000 | ||
Accelerated depreciation | 4,200,000 | ||
Severance costs | 4,300,000 | ||
Facility closures | 800,000 | ||
Total restructuring charges | $ 16,700,000 |
OTHER FINANCIAL INFORMATION - (
OTHER FINANCIAL INFORMATION - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accrued compensation and benefits | $ 27 | $ 26 | |
Product warranty | 7.3 | 7 | |
Income taxes payable | 1.4 | 13.2 | |
Payable to Varian Medical Systems | 2.3 | 7.9 | |
Other | 9.5 | 8.3 | |
Total accrued liabilities | 47.5 | 62.4 | |
Long-term income tax payable | 3.5 | 0 | |
Environment liabilities | 1.3 | 1.3 | |
Defined benefit obligation liability | 3.3 | 3.2 | |
Other | 0.4 | 0.2 | |
Total other long-term liabilities | 8.5 | 4.7 | |
Income (loss) from equity method investments | 3.9 | 1.3 | $ (1.6) |
Realized income (loss) on foreign currencies | (1.2) | 1.9 | (0.9) |
Total other income (expense), net | $ 2.7 | $ 3.2 | $ (2.5) |
NET EARNINGS PER SHARE - (Detai
NET EARNINGS PER SHARE - (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Reconciliation of Numerator and Denominator in Calculation of Basic and Diluted Net Income Per Common Share [Line Items] | |||
Net earnings attributable to Varex | $ 27.5 | $ 51.6 | $ 68.5 |
Weighted average shares outstanding - basic (in shares) | 37.9 | 37.6 | 37.4 |
Dilutive effect of potential common shares (in shares) | 0.5 | 0.4 | 0.3 |
Weighted average shares outstanding - diluted (in shares) | 38.4 | 38 | 37.7 |
Net earnings per share attributable to Varex - basic (in USD per share) | $ 0.73 | $ 1.37 | $ 1.83 |
Net earnings per share attributable to Varex - diluted (in USD per share) | $ 0.72 | $ 1.36 | $ 1.82 |
Anti-dilutive employee shared based awards, excluded (in shares) | 1.2 | 1 | 0.7 |
FINANCIAL DERIVATIVES AND HED_3
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Derivative Instruments (Details) - Derivatives designated as cash flow hedges - Designated as Hedging Instrument - Interest Rate Swap Contracts $ in Millions | Sep. 28, 2018USD ($)derivative |
Derivative [Line Items] | |
Number of Instruments | derivative | 6 |
Notional Value | $ | $ 277.5 |
FINANCIAL DERIVATIVES AND HED_4
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Narrative (Details) $ in Millions | 12 Months Ended |
Sep. 28, 2018USD ($) | |
Derivative [Line Items] | |
Loss on derivative instruments not designated as cash flow hedges | $ 0.3 |
Derivatives designated as cash flow hedges | Interest Rate Swap Contracts | |
Derivative [Line Items] | |
Recorded component of accumulated other comprehensive income (loss) that will be reclassified in the statements of comprehensive earnings over the next 12 months | $ 2.2 |
Designated as Hedging Instrument | Derivatives designated as cash flow hedges | Interest Rate Swap Contracts | Maximum | |
Derivative [Line Items] | |
Derivative, remaining maturity (in years) | 4 years |
FINANCIAL DERIVATIVES AND HED_5
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Income Recognized From Derivative Instruments (Details) - Designated as Hedging Instrument - Derivatives designated as cash flow hedges - Interest Rate Swap Contracts - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Derivative [Line Items] | |||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Fiscal Year Ended | $ 6.9 | $ 0.6 | $ 0 |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Fiscal Year Ended | 0.1 | (0.3) | 0 |
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) Fiscal Year Ended | $ 0 | $ 0 | $ 0 |
FINANCIAL DERIVATIVES AND HED_6
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Derivatives at Fair Value (Details) - Derivatives designated as cash flow hedges - Designated as Hedging Instrument - Interest Rate Swap Contracts - USD ($) $ in Millions | Sep. 28, 2018 | Sep. 29, 2017 |
Derivative [Line Items] | ||
Derivative Assets | $ 7.7 | $ 1.6 |
Derivative Liabilities | 0 | (0.6) |
Other current assets | ||
Derivative [Line Items] | ||
Derivative Assets | 2.2 | 0 |
Other non-current assets | ||
Derivative [Line Items] | ||
Derivative Assets | 5.5 | 1.6 |
Other current liabilities | ||
Derivative [Line Items] | ||
Derivative Liabilities | 0 | (0.6) |
Other non-current liabilities | ||
Derivative [Line Items] | ||
Derivative Liabilities | $ 0 | $ 0 |
FINANCIAL DERIVATIVES AND HED_7
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Foreign Currency Contracts (Details) - Foreign Exchange Contract - Designated as Hedging Instrument $ in Millions | Sep. 28, 2018USD ($) |
Buy contracts | |
Derivatives, Fair Value [Line Items] | |
Notional Value | $ 4.9 |
Buy contracts | Japanese yen | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 1.3 |
Buy contracts | British pound sterling | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Buy contracts | Swiss franc | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Buy contracts | Chinese renminbi | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 3.6 |
Buy contracts | Euro | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Sell contract | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 6.7 |
Sell contract | Japanese yen | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Sell contract | British pound sterling | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 1.6 |
Sell contract | Swiss franc | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 1.6 |
Sell contract | Chinese renminbi | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Sell contract | Euro | |
Derivatives, Fair Value [Line Items] | |
Notional Value | $ 3.5 |
BORROWINGS - Schedule of Short-
BORROWINGS - Schedule of Short-Term and Long-Term Debt (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 28, 2018 | Sep. 29, 2017 | |
Schedule Of Short-Term And Long-Term Debt [Line Items] | ||
Current maturities of long-term debt | $ 25 | $ 20 |
Debt issuance costs | (8.2) | (10.1) |
Long-term debt outstanding | 364.8 | 463.9 |
Secured Debt | ||
Schedule Of Short-Term And Long-Term Debt [Line Items] | ||
Current maturities of long-term debt | 25 | 20 |
Long-term debt excluding current maturities, gross | $ 345 | $ 370 |
Weighted-average interest rate, short-term debt | 4.20% | 3.30% |
Weighted-average interest rate, long-term debt | 4.20% | 3.30% |
Revolving Credit Facility | Revolving Credit Facility | ||
Schedule Of Short-Term And Long-Term Debt [Line Items] | ||
Long-term debt excluding current maturities, gross | $ 28 | $ 104 |
Weighted-average interest rate, long-term debt | 4.20% | 3.60% |
BORROWINGS - Narrative (Details
BORROWINGS - Narrative (Details) - USD ($) | May 01, 2017 | Jan. 25, 2017 | Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 |
Line of Credit Facility [Line Items] | |||||
Distributions to Varian Medical Systems, Inc. | $ 0 | $ 227,100,000 | $ 0 | ||
Payments to acquire businesses | 4,800,000 | 271,800,000 | $ 1,200,000 | ||
Long-term debt | 364,800,000 | 463,900,000 | |||
Debt issuance costs | 8,200,000 | 10,100,000 | |||
Current maturities of long-term debt | 25,000,000 | 20,000,000 | |||
Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Distributions to Varian Medical Systems, Inc. | $ 200,000,000 | ||||
Current maturities of long-term debt | 25,000,000 | $ 20,000,000 | |||
Previous Revolving Credit Facility | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, term | 5 years | ||||
Used capacity, commitment fee percentage | 0.125% | ||||
Proceeds from lines of credit | $ 203,000,000 | ||||
Previous Revolving Credit Facility | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, term | 5 years | ||||
Previous Revolving Credit Facility | Federal Funds Effective Swap Rate | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Previous Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Previous Revolving Credit Facility | Minimum | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.125% | ||||
Unused capacity, commitment fee percentage | 0.20% | ||||
Previous Revolving Credit Facility | Maximum | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 2.125% | ||||
Unused capacity, commitment fee percentage | 0.40% | ||||
Previous Revolving Credit Facility | Debt Instrument, Repayment, Period One | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 7.50% | ||||
Previous Revolving Credit Facility | Debt Instrument, Repayment, Period Two | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 7.50% | ||||
Previous Revolving Credit Facility | Debt Instrument, Repayment, Period Three | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 10.00% | ||||
Previous Revolving Credit Facility | Debt Instrument, Repayment, Period Four | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 10.00% | ||||
Previous Revolving Credit Facility | Debt Instrument, Repayment, Period Five | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 15.00% | ||||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 400,000,000 | ||||
Revolving Credit Facility | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, term | 5 years | ||||
Used capacity, commitment fee percentage | 0.125% | ||||
Proceeds from lines of credit | $ 97,000,000 | ||||
Maximum borrowing capacity | $ 200,000,000 | ||||
Revolving Credit Facility | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, term | 5 years | ||||
Revolving Credit Facility | Federal Funds Effective Swap Rate | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Revolving Credit Facility | Minimum | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Unused capacity, commitment fee percentage | 0.25% | ||||
Permitted liens | 5,000,000 | ||||
Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.75% | ||||
Revolving Credit Facility | Minimum | Base Rate | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 0.75% | ||||
Revolving Credit Facility | Maximum | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Unused capacity, commitment fee percentage | 0.40% | ||||
Permitted liens | $ 15,000,000 | ||||
Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 2.75% | ||||
Revolving Credit Facility | Maximum | Base Rate | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.75% | ||||
Revolving Credit Facility | Debt Instrument, Repayment, Period One | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 5.00% | ||||
Revolving Credit Facility | Debt Instrument, Repayment, Period Two | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 5.00% | ||||
Revolving Credit Facility | Debt Instrument, Repayment, Period Three | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 7.50% | ||||
Revolving Credit Facility | Debt Instrument, Repayment, Period Four | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 7.50% | ||||
Revolving Credit Facility | Debt Instrument, Repayment, Period Five | Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 10.00% | ||||
PerkinElmer, Inc. | |||||
Line of Credit Facility [Line Items] | |||||
Payments to acquire businesses | $ 276,000,000 |
BORROWINGS - Schedule of Debt M
BORROWINGS - Schedule of Debt Maturities (Details) - USD ($) $ in Millions | Sep. 28, 2018 | Sep. 29, 2017 |
Debt Instrument [Line Items] | ||
Less: current maturities of long-term debt | $ (25) | $ (20) |
Secured Debt | ||
Debt Instrument [Line Items] | ||
2,019 | 25 | |
2,020 | 30 | |
2,021 | 35 | |
2,022 | 280 | |
Total debt outstanding | 370 | |
Less: current maturities of long-term debt | (25) | (20) |
Non-current portion of long -term debt | $ 345 | $ 370 |
FAIR VALUE - (Details)
FAIR VALUE - (Details) - USD ($) $ in Millions | Sep. 28, 2018 | Sep. 29, 2017 |
Liabilities: | ||
Long-term debt, fair value | $ 389.8 | |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Cash equivalents - money market funds | 18.4 | $ 11.4 |
Interest rate swap contracts | 7.7 | 1.6 |
Total assets measured at fair value | 26.1 | 13 |
Liabilities: | ||
Interest rate swap contracts | 0 | 0.6 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | ||
Assets: | ||
Cash equivalents - money market funds | 0 | 0 |
Interest rate swap contracts | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Interest rate swap contracts | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash equivalents - money market funds | 18.4 | 11.4 |
Interest rate swap contracts | 7.7 | 1.6 |
Total assets measured at fair value | 26.1 | 13 |
Liabilities: | ||
Interest rate swap contracts | 0 | 0.6 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Cash equivalents - money market funds | 0 | 0 |
Interest rate swap contracts | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Interest rate swap contracts | $ 0 | $ 0 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Summary of Goowill (Details) $ in Millions | 12 Months Ended |
Sep. 28, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance at September 29, 2017 | $ 241.9 |
Business combination | 1.5 |
Settlement of post-close working capital adjustment | 0.2 |
Balance at September 28, 2018 | 243.6 |
Medical | |
Goodwill [Roll Forward] | |
Balance at September 29, 2017 | 146.9 |
Business combination | 0 |
Settlement of post-close working capital adjustment | 0.1 |
Balance at September 28, 2018 | 147 |
Industrial | |
Goodwill [Roll Forward] | |
Balance at September 29, 2017 | 95 |
Business combination | 1.5 |
Settlement of post-close working capital adjustment | 0.1 |
Balance at September 28, 2018 | $ 96.6 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated amortization | $ (40.6) | $ (31.2) | |
Total intangible assets with finite lives | 69.8 | 87.3 | |
Total intangible assets | 73.8 | 91.3 | |
Amortization of intangible assets | 16.2 | 10.5 | $ 5.5 |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 57.9 | 57 | |
Patents, licenses and other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 9.9 | 19.4 | |
Customer contracts and supplier relationship | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 42.6 | 42.1 | |
In-process research and development | |||
Finite-Lived Intangible Assets [Line Items] | |||
In-process research and development with indefinite lives | $ 4 | $ 4 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Amortization Schedule (Details) - USD ($) $ in Millions | Sep. 28, 2018 | Sep. 29, 2017 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,018 | $ 14.6 | |
2,019 | 14.2 | |
2,020 | 13 | |
2,021 | 11.4 | |
2,022 | 10.3 | |
Thereafter | 6.3 | |
Total intangible assets with finite lives | $ 69.8 | $ 87.3 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Future minimum payments due, next twelve months | $ 5.5 | ||
Future minimum payments, due in two years | 5 | ||
Future minimum payments, due in three years | 4.4 | ||
Future minimum payments, due in four years | 3.7 | ||
Future minimum payments, due in five years | 1.3 | ||
Future minimum payments, due thereafter | 0.3 | ||
Operating leases, rent expense | 5.3 | $ 4 | $ 2.8 |
Environment liabilities | $ 1.3 | $ 1.3 |
REDEEMABLE NONCONTROLLING INT_3
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS - Narrative (Details) shares in Millions, $ in Millions | 12 Months Ended | ||||
Sep. 28, 2018USD ($)€ / sharesshares | Sep. 28, 2018€ / shares | Sep. 29, 2017USD ($) | Sep. 30, 2016USD ($) | Apr. 30, 2015 | |
Noncontrolling Interest [Line Items] | |||||
Redeemable noncontrolling interest, equity, redemption value | $ | $ 11.1 | $ 11.2 | $ 10.3 | ||
Joint Venture In Saudi Arabia | |||||
Noncontrolling Interest [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 75.00% | ||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 25.00% | ||||
MeVis Medical Solutions AG (MeVis) | |||||
Noncontrolling Interest [Line Items] | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 26.30% | ||||
Percentage of voting interests acquired | 73.50% | ||||
Annual recurring compensation (in euros per share) | € / shares | $ 0.95 | ||||
Temporary equity, redemption price per share (in eur per share) | € / shares | € 19.77 | ||||
Redeemable noncontrolling interest, equity, redemption value | $ | $ 11.1 | ||||
Temporary equity, shares outstanding (in shares) | shares | 0.5 |
REDEEMABLE NONCONTROLLING INT_4
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS - Summary of Changes in Redeemable Noncontrolling Interests & Noncontrolling INterets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance at beginning of period | $ 11.2 | $ 10.3 | |
Net earnings attributable to noncontrolling interests | 0.5 | 0.4 | |
Dividends paid to redeemable noncontrolling interest | (0.6) | 0 | $ 0 |
Other | 0 | 0.5 | |
Temporary equity, ending balance | 11.1 | 11.2 | $ 10.3 |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Balance at beginning of period | 0 | ||
Net earnings attributable to noncontrolling interests | 0.3 | ||
Contributions from noncontrolling partner | 1.8 | ||
Balance at end of period | $ 2.1 | $ 0 |
EMPLOYEE STOCK PLANS - Narrativ
EMPLOYEE STOCK PLANS - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Jan. 31, 2017 | Sep. 28, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options, grants in period, grant date fair value | $ 10.1 | |
Shares outstanding, market value | 18.4 | |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost not yet recognized | $ 23.2 | |
2017 ESPP | Employee Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Purchase price of common stock, percent | 85.00% | |
Stock plan offering period (in months) | 6 months | |
Number of shares authorized (in shares) | 1,000,000 | |
2017 ESPP | Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant (in shares) | 900,000 | |
2017 Omnibus Stock Plan | Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant (in shares) | 3,000,000 | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period (in months) | 36 months | |
Award expiration period (in years) | 7 years | |
Minimum | Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost period for recognition (in years) | 3 years | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period (in months) | 48 months | |
Award expiration period (in years) | 10 years | |
Maximum | Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost period for recognition (in years) | 4 years |
EMPLOYEE STOCK PLANS - Share-ba
EMPLOYEE STOCK PLANS - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated share-based compensation expense | $ 10 | $ 8.4 | $ 9.5 |
Cost of revenues | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated share-based compensation expense | 1.3 | 0.9 | 1 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated share-based compensation expense | 1.8 | 1.5 | 1.4 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated share-based compensation expense | 6.9 | 6 | 7.1 |
Varian | General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated share-based compensation expense | $ 0 | $ 0.8 | $ 3.4 |
EMPLOYEE STOCK PLANS - ESPP Val
EMPLOYEE STOCK PLANS - ESPP Valuation Assumptions (Details) - $ / shares | 12 Months Ended | |
Sep. 28, 2018 | Sep. 29, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected term (in years) | 4 years 9 months 18 days | 6 months |
Risk-free interest rate | 2.60% | 2.00% |
Expected volatility | 31.80% | 34.10% |
Expected dividend | 0.00% | 0.00% |
Weighted average fair value at grant date (in USD per share) | $ 11.57 | $ 8.92 |
EMPLOYEE STOCK PLANS - Stock Op
EMPLOYEE STOCK PLANS - Stock Option Activity (Details) $ / shares in Units, shares in Thousands | 12 Months Ended |
Sep. 28, 2018USD ($)$ / sharesshares | |
Options Outstanding | |
Options, outstanding, beginning balance (in shares) | shares | 1,926 |
Options, grants in period (in shares) | shares | 262 |
Options, forfeitures and expirations in period (in shares) | shares | (27) |
Options, exercises in period, value (in shares) | shares | (150) |
Options, outstanding, ending balance (in shares) | shares | 2,011 |
Options, exercisable (in shares) | shares | 1,056 |
Weighted Average Exercise Price | |
Options, outstanding, weighted average exercise price, beginning (in USD per share) | $ 29.11 |
Options, grants in period, weighted average exercise price (in USD per share) | 36.43 |
Options, forfeitures and expirations in period, weighted average exercise price (in USD per share) | 28.74 |
Options, exercises in period, weighted average exercise price (in USD per share) | 25.33 |
Options, outstanding, weighted average exercise price, ending (in USD per share) | 30.35 |
Options, exercisable, weighted average exercise price (in USD per share) | $ 28.52 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Options, outstanding, weighted average remaining contractual term (in years) | 3 years 10 months 6 days |
Options, exercisable, weighted average remaining contractual term (in years) | 3 years 4 months 10 days |
Options, outstanding, intrinsic value | $ | $ 1,598,400 |
Options, exercisable, intrinsic value | $ | $ 1,461,300 |
Share price (in usd per share) | $ 28.66 |
Minimum | |
Price Range | |
Options, outstanding, price, beginning (in USD per share) | 19.21 |
Options, grants in period, price (in USD per share) | 31.14 |
Options, forfeitures and expirations in period, price (in USD per share) | 25.17 |
Options, exercises in period, price (in USD per share) | 19.21 |
Options, outstanding, price, ending (in USD per share) | 22.63 |
Options, exercisable, price (in USD per share) | 22.63 |
Maximum | |
Price Range | |
Options, outstanding, price, beginning (in USD per share) | 34.13 |
Options, grants in period, price (in USD per share) | 37.60 |
Options, forfeitures and expirations in period, price (in USD per share) | 31.08 |
Options, exercises in period, price (in USD per share) | 31.08 |
Options, outstanding, price, ending (in USD per share) | 37.60 |
Options, exercisable, price (in USD per share) | $ 34.13 |
EMPLOYEE STOCK PLANS - Restrict
EMPLOYEE STOCK PLANS - Restricted Stock and Performance Stock (Details) shares in Thousands | 12 Months Ended |
Sep. 28, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted Stock Units and Performance Stock Units, nonvested, beginning balance (in shares) | shares | 525 |
Restricted Stock Units and Performance Stock Units, grants in period (in shares) | shares | 352 |
Restricted Stock Units and Performance Stock Units, vested in period (in shares) | shares | (190) |
Restricted Stock Units and Performance Stock Units, forfeited in period (in shares) | shares | (46) |
Restricted Stock Units and Performance Stock Units, nonvested, ending balance (in shares) | shares | 641 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Restricted Stock Units and Performance Stock Units, nonvested, beginning of period, weighted average grant date fair value (in USD per share) | $ / shares | $ 29.54 |
Restricted Stock Units and Performance Stock Units, grants in period, weighted average grant date fair value (in USD per share) | $ / shares | 37.10 |
Restricted Stock Units and Performance Stock Units, vested in period, weighted average grant date fair value (in USD per share) | $ / shares | 29.46 |
Restricted Stock Units and Performance Stock Units, forfeitures, weighted average grant date fair value (in USD per share) | $ / shares | 32.55 |
Restricted Stock Units and Performance Stock Units, nonvested, end of period, weighted average grant date fair value (in USD per share) | $ / shares | $ 33.60 |
TAXES ON EARNINGS - Summary of
TAXES ON EARNINGS - Summary of Taxes by Jurisdiction and Classification (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Current provision: | |||
Federal | $ (2.1) | $ 24.8 | $ 26.4 |
State and local | (0.3) | 1.6 | 3.9 |
Foreign | 7.5 | 5.3 | 2 |
Total current | 5.1 | 31.7 | 32.3 |
Deferred provision (benefit): | |||
Federal | (7) | (7) | 3.6 |
State and local | 0.7 | (1) | 0 |
Foreign | (1.4) | (0.9) | 0.1 |
Total deferred | (7.7) | (8.9) | 3.7 |
Taxes on earnings | (2.6) | 22.8 | 36 |
United States | 3.7 | 55.5 | 105.6 |
Foreign | 22 | 19.3 | (0.6) |
Earnings before taxes | $ 25.7 | $ 74.8 | $ 105 |
TAXES ON EARNINGS - Income Tax
TAXES ON EARNINGS - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 24.50% | 35.00% | 35.00% |
State and local taxes, net of federal tax benefit | 1.10% | 1.30% | 2.40% |
Revaluation of deferred tax liabilities for US statutory change | (41.80%) | 0.00% | 0.00% |
Mandatory repatriation tax on foreign earnings | 13.00% | 0.00% | 0.00% |
Domestic production activities deduction | (0.80%) | (2.40%) | (2.20%) |
Research and development credit | (11.10%) | (2.60%) | (2.20%) |
Prior year deferred tax adjustments | 1.90% | (4.00%) | 0.00% |
Change in valuation allowance | (1.90%) | 3.80% | 0.00% |
Other | 5.00% | (0.60%) | 1.30% |
Effective tax rate | (10.10%) | 30.50% | 34.30% |
TAXES ON EARNINGS - Narrative (
TAXES ON EARNINGS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Federal statutory income tax rate | 24.50% | 35.00% | 35.00% |
Taxes on earnings (benefit), US Tax Reform adjustments | $ (2.6) | $ 22.8 | $ 36 |
Operating loss carryforwards, valuation allowance | 0.3 | 2.1 | |
Cash paid for income tax | 13.8 | 6 | 0 |
Unrecognized tax benefits | 0.6 | 0.5 | $ 4.4 |
Unrecognized tax benefits, income tax penalties and interest accrued | 0 | 0 | |
Income tax penalties and interest expense | 0 | $ 0 | |
Domestic Tax Authority | Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 3.3 | ||
Research Tax Credit Carryforward | Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforward, amount | 0.6 | ||
Research Tax Credit Carryforward | State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforward, amount | 0.8 | ||
Federal AMT Credit Carryforward | Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforward, amount | 0.4 | ||
Repatriation of Deferred Foreign Earnings | |||
Operating Loss Carryforwards [Line Items] | |||
Taxes on earnings (benefit), US Tax Reform adjustments | 3.7 | ||
Net Deferred Taxes Revaluation | |||
Operating Loss Carryforwards [Line Items] | |||
Taxes on earnings (benefit), US Tax Reform adjustments | $ (10.9) |
TAXES ON EARNINGS - Deferred Ta
TAXES ON EARNINGS - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 28, 2018 | Sep. 29, 2017 |
Deferred Tax Assets: | ||
Inventory adjustments | $ 4.2 | $ 15 |
Share-based compensation | 0.8 | 1.9 |
Product warranty | 1.4 | 2.2 |
Deferred compensation | 0.9 | 1.3 |
Net operating loss carryforwards | 3.3 | 2.4 |
Accrued vacation | 1.3 | 2.1 |
Credit carryforwards | 1.8 | 1.9 |
Other | 4.7 | 2.2 |
Deferred tax assets, gross | 18.4 | 29 |
Valuation allowance | (4) | (4.3) |
Total deferred tax assets | 14.4 | 24.7 |
Deferred Tax Liabilities: | ||
Acquired intangibles | (15.2) | (26.4) |
Property, plant and equipment | (14.3) | (19.9) |
Investments in privately held companies | (4.1) | (6.9) |
Other | (4) | (1) |
Total deferred tax liabilities | (37.6) | (54.2) |
Net deferred tax liabilities | (23.2) | (29.5) |
Deferred tax assets | 14.4 | 25.3 |
Deferred tax liabilities | $ (37.6) | $ (54.8) |
TAXES ON EARNINGS - Income Ta_2
TAXES ON EARNINGS - Income Tax Contingency (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 28, 2018 | Sep. 29, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits balance–beginning of fiscal year | $ 0.5 | $ 4.4 |
Additions based on tax positions related to the current year | 0.1 | 0.5 |
Transfer to Varian | 0 | (4.4) |
Unrecognized tax benefits balance—end of fiscal year | $ 0.6 | $ 0.5 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 12 Months Ended |
Sep. 28, 2018segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT INFORMATION - Summary o
SEGMENT INFORMATION - Summary of Segment Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 773.4 | $ 698.1 | $ 620.1 |
Gross margin | 253.9 | 253.5 | 248.4 |
Total operating expenses | 209.4 | 169.8 | 139.3 |
Interest and other expenses, net | (18.8) | (8.9) | (4.1) |
Earnings before taxes | 25.7 | 74.8 | 105 |
Taxes on earnings (benefit) | (2.6) | 22.8 | 36 |
Net earnings | 28.3 | 52 | 69 |
Less: Net earnings attributable to noncontrolling interests | 0.8 | 0.4 | 0.5 |
Net earnings attributable to Varex | 27.5 | 51.6 | 68.5 |
Medical | |||
Segment Reporting Information [Line Items] | |||
Revenues | 602 | 556.9 | 505.8 |
Gross margin | 190.5 | 193.6 | 195.8 |
Industrial | |||
Segment Reporting Information [Line Items] | |||
Revenues | 171.4 | 141.2 | 114.3 |
Gross margin | $ 63.4 | $ 59.9 | $ 52.6 |
SEGMENT INFORMATION - Assets (D
SEGMENT INFORMATION - Assets (Details) - USD ($) $ in Millions | Sep. 28, 2018 | Sep. 29, 2017 |
Segment Reporting Information [Line Items] | ||
Assets | $ 987.9 | $ 1,040.1 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 987.9 | 1,040.1 |
Medical | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 770.6 | 832.1 |
Industrial | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 217.3 | $ 208 |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 773.4 | $ 698.1 | $ 620.1 |
Property, plant and equipment, net | 144.9 | 148.3 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 268.8 | 231.9 | 216.5 |
Property, plant and equipment, net | 127.9 | 132.1 | |
Latin America | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 7 | 7.9 | 8.2 |
Property, plant and equipment, net | 0 | 0 | |
EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 254.5 | 219.5 | 179.5 |
Property, plant and equipment, net | 8.7 | 8.4 | |
APAC | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 243.1 | 238.8 | $ 215.9 |
Property, plant and equipment, net | $ 8.3 | $ 7.8 |
EMPLOYEE BENEFIT PLANS - (Detai
EMPLOYEE BENEFIT PLANS - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 | |
Retirement Benefits [Abstract] | |||
Employer discretionary contribution amount | $ 6.5 | $ 4.3 | $ 3.3 |
Defined benefit pension plan liability | $ 3.3 | $ 3.2 |
OTHER COMPREHENSIVE INCOME - (D
OTHER COMPREHENSIVE INCOME - (Details) $ in Millions | 12 Months Ended |
Sep. 28, 2018USD ($) | |
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance at September 29, 2017 | $ 379 |
Other comprehensive loss before reclassifications | 6.8 |
Income tax benefit | (1.8) |
Balance at September 28, 2018 | 428.3 |
Unrealized Gain (Loss) on Derivative Financial Instruments | |
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance at September 29, 2017 | 0.6 |
Other comprehensive loss before reclassifications | 6.8 |
Income tax benefit | (1.6) |
Balance at September 28, 2018 | 5.8 |
Unrealized Gain on Defined Benefit Obligations | |
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance at September 29, 2017 | 0.2 |
Other comprehensive loss before reclassifications | 0 |
Income tax benefit | (0.2) |
Balance at September 28, 2018 | 0 |
Accumulated Other Comprehensive Income | |
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance at September 29, 2017 | 0.8 |
Balance at September 28, 2018 | $ 5.8 |
SUBSEQUENT EVENTS - (Details)
SUBSEQUENT EVENTS - (Details) - Revolving Credit Facility - USD ($) | Oct. 10, 2018 | May 01, 2017 |
Subsequent Event [Line Items] | ||
Revolving credit commitment | $ 400,000,000 | |
Revolving Credit Facility | ||
Subsequent Event [Line Items] | ||
Revolving credit commitment | $ 200,000,000 | |
Revolving Credit Facility | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Permanent reduction in the revolving credit commitment | $ 50,000,000 | |
Revolving credit commitment | $ 150,000,000 |