Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Nov. 18, 2019 | Mar. 29, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 27, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-37860 | ||
Entity Registrant Name | VAREX IMAGING CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-3434516 | ||
Entity Address, Address Line One | 1678 S. Pioneer Road | ||
Entity Address, City or Town | Salt Lake City | ||
Entity Address, State or Province | UT | ||
Entity Address, Postal Zip Code | 84104 | ||
City Area Code | (801) | ||
Local Phone Number | 972-5000 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | VREX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Smaller Reporting Company | false | ||
Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,160.4 | ||
Entity common stock, shares outstanding (in shares) | 38,494,349 | ||
Documents Incorporated by Reference | Documents Incorporated by Reference Portions of registrant’s proxy statement relating to registrant’s 2020 annual meeting of stockholders have been incorporated by reference in Part III of this annual report on Form 10-K. | ||
Entity Central Index Key | 0001681622 | ||
Current Fiscal Year End Date | --09-27 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Income Statement [Abstract] | |||
Revenues, net | $ 780,600,000 | $ 773,400,000 | $ 698,100,000 |
Cost of revenues | 523,900,000 | 519,500,000 | 444,600,000 |
Gross margin | 256,700,000 | 253,900,000 | 253,500,000 |
Operating expenses: | |||
Research and development | 78,100,000 | 83,000,000 | 67,300,000 |
Selling, general and administrative | 128,100,000 | 123,400,000 | 102,500,000 |
Impairment of intangible assets | 4,800,000 | 3,000,000 | 0 |
Total operating expenses | 211,000,000 | 209,400,000 | 169,800,000 |
Operating earnings | 45,700,000 | 44,500,000 | 83,700,000 |
Interest income | 100,000 | 200,000 | 200,000 |
Interest expense | (21,100,000) | (21,700,000) | (12,300,000) |
Other (expense) income, net | (3,200,000) | 2,700,000 | 3,200,000 |
Interest and other expenses, net | (24,200,000) | (18,800,000) | (8,900,000) |
Earnings before taxes | 21,500,000 | 25,700,000 | 74,800,000 |
Taxes (benefit) on earnings | 5,700,000 | (2,600,000) | 22,800,000 |
Net earnings | 15,800,000 | 28,300,000 | 52,000,000 |
Less: Net earnings attributable to noncontrolling interests | 300,000 | 800,000 | 400,000 |
Net earnings attributable to Varex | $ 15,500,000 | $ 27,500,000 | $ 51,600,000 |
Net earnings per common share attributable to Varex | |||
Basic (in USD per share) | $ 0.41 | $ 0.73 | $ 1.37 |
Diluted (in USD per share) | $ 0.40 | $ 0.72 | $ 1.36 |
Weighted average common shares outstanding | |||
Basic (in shares) | 38.2 | 37.9 | 37.6 |
Diluted (in shares) | 38.6 | 38.4 | 38 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 15.8 | $ 28.3 | $ 52 |
Other comprehensive (loss) earnings, net of tax: | |||
Unrealized (loss) gain on interest rate swap contracts | (6.2) | 5.2 | 0.6 |
Unrealized (loss) gain on defined benefit obligations | (1.3) | (0.2) | 0.2 |
Other comprehensive (loss) earnings, net of tax | (7.5) | 5 | 0.8 |
Comprehensive earnings | 8.3 | 33.3 | 52.8 |
Less: Comprehensive earnings attributable to noncontrolling interests | 0.3 | 0.8 | 0.4 |
Comprehensive earnings attributable to Varex | $ 8 | $ 32.5 | $ 52.4 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 28, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 29.9 | $ 51.9 |
Accounts receivable, net of allowance for doubtful accounts of $1.0 and $0.6 at September 27, 2019 and September 28, 2018, respectively | 141 | 154 |
Inventories | 248.2 | 235.1 |
Prepaid expenses and other current assets | 19.3 | 17.1 |
Total current assets | 438.4 | 458.1 |
Property, plant and equipment, net | 142.3 | 144.9 |
Goodwill | 290.8 | 243.6 |
Intangibles assets, net | 86.3 | 73.8 |
Investments in privately-held companies | 53.6 | 51 |
Other assets | 27.5 | 16.5 |
Total assets | 1,038.9 | 987.9 |
Current liabilities: | ||
Accounts payable | 58.2 | 66.3 |
Accrued liabilities | 75.7 | 47.5 |
Current maturities of long-term debt | 30.7 | 25 |
Deferred revenues | 10.5 | 13.2 |
Total current liabilities | 175.1 | 152 |
Long-term debt, net | 364.4 | 364.8 |
Deferred tax liabilities | 8.2 | 23.2 |
Other long-term liabilities | 32.5 | 8.5 |
Total liabilities | 580.2 | 548.5 |
Commitments and contingencies (Note 11) | ||
Redeemable noncontrolling interests | 10.5 | 11.1 |
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, shares issued and outstanding: 38,371,305 and 38,026,597 at September 27, 2019 and September 28, 2018, respectively | 0.4 | 0.4 |
Additional paid-in capital | 371.8 | 357.6 |
Accumulated other comprehensive (loss) income | (1.7) | 5.8 |
Retained earnings | 74.4 | 62.4 |
Total Varex stockholders' equity | 444.9 | 426.2 |
Noncontrolling interests | 3.3 | 2.1 |
Total stockholders' equity | 448.2 | 428.3 |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ 1,038.9 | $ 987.9 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 28, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1 | $ 0.6 |
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) | 38,371,305 | 38,026,597 |
Common stock, shares, outstanding (in shares) | 38,371,305 | 38,026,597 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Cash flows from operating activities: | |||
Net earnings | $ 15,800,000 | $ 28,300,000 | $ 52,000,000 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Share-based compensation expense | 11,700,000 | 10,000,000 | 8,400,000 |
Depreciation | 23,500,000 | 26,000,000 | 16,900,000 |
Amortization of intangible assets | 15,700,000 | 16,200,000 | 10,500,000 |
Impairment of intangible assets | 4,800,000 | 3,000,000 | 0 |
Other assets impairment charges | 0 | 1,300,000 | 0 |
Inventory write-down | 3,100,000 | 3,100,000 | 0 |
Deferred taxes | (12,900,000) | (7,700,000) | (8,900,000) |
Amortization of deferred loan costs | 2,400,000 | 2,300,000 | 1,800,000 |
Loss (gain) from equity method investments, net of dividends received | 2,300,000 | (3,900,000) | (1,300,000) |
Other, net | 800,000 | 700,000 | 1,800,000 |
Changes in assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable | 14,800,000 | 9,000,000 | (23,100,000) |
Inventories | (11,100,000) | (2,400,000) | (4,200,000) |
Prepaid expenses and other assets | 4,300,000 | 2,000,000 | (10,100,000) |
Accounts payable | (9,000,000) | 5,200,000 | 4,900,000 |
Accrued operating liabilities and other long-term operating liabilities | 10,900,000 | (10,200,000) | 28,100,000 |
Deferred revenues | (5,200,000) | 2,400,000 | (1,600,000) |
Net cash provided by operating activities | 71,900,000 | 85,300,000 | 75,200,000 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (19,800,000) | (20,400,000) | (20,200,000) |
Acquisitions of businesses, net of cash acquired | (69,500,000) | (4,800,000) | (271,800,000) |
Investments in privately-held companies | (3,900,000) | 0 | 0 |
Net cash used in investing activities | (93,200,000) | (25,200,000) | (292,000,000) |
Cash flows from financing activities: | |||
Net transfers from parent | 0 | 0 | 5,000,000 |
Distributions to Varian Medical Systems, Inc. | 0 | 0 | (227,100,000) |
Taxes related to net share settlement of equity awards | (2,100,000) | (2,300,000) | (1,900,000) |
Borrowings under credit agreements | 85,400,000 | 10,000,000 | 749,000,000 |
Repayments of borrowing under credit agreements | (87,000,000) | (106,000,000) | (255,000,000) |
Proceeds from exercise of stock options | 800,000 | 3,800,000 | 2,800,000 |
Proceeds from shares issued under employee stock purchase plan | 3,800,000 | 3,300,000 | 0 |
Excess tax benefits from share-based compensation | 0 | 0 | 2,400,000 |
Payment of debt issuance costs | (500,000) | (400,000) | (11,900,000) |
Contributions from noncontrolling partner | 0 | 1,800,000 | 0 |
Dividends paid to redeemable noncontrolling interest | (500,000) | (600,000) | 0 |
Net cash (used in) provided by financing activities | (100,000) | (90,400,000) | 263,300,000 |
Effects of exchange rate changes on cash and cash equivalents and restricted cash | (700,000) | (500,000) | 900,000 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (22,100,000) | (30,800,000) | 47,400,000 |
Cash and cash equivalents and restricted cash at beginning of period | 53,400,000 | 84,200,000 | 36,800,000 |
Cash and cash equivalents and restricted cash at end of period | 31,300,000 | 53,400,000 | 84,200,000 |
Supplemental cash flow information: | |||
Cash paid for interest | 19,900,000 | 19,300,000 | 9,800,000 |
Cash paid for income tax | 8,200,000 | 13,800,000 | 6,000,000 |
Supplemental non-cash activities: | |||
Purchases of property, plant and equipment financed through accounts payable | 1,800,000 | 2,000,000 | 4,000,000 |
Transfers of property, plant and equipment from Varian Medical Systems, Inc. | 0 | 0 | 15,000,000 |
Other non-cash transfers to Varian Medical Systems, Inc. | $ 0 | $ 0 | $ 1,600,000 |
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 Sep. 30, 2016 | 0 | |||||||
Balance at beginning of period at Sep. 30, 2016 | $ 526 | $ 0 | $ 0 | $ 526 | $ 0 | $ 526 | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 51.6 | 16.5 | 35.1 | 51.6 | ||||
Net transfers to 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 | 37,600,000 | |||||||
Ending balance at Sep. 29, 2017 | 379 | $ 0.4 | 342.7 | 0 | 0.8 | 35.1 | 379 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 27.8 | 27.5 | 27.5 | 0.3 | ||||
Other | (0.2) | (0.2) | (0.2) | |||||
Exercise of stock options (in shares) | 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 | ||||||
Ending balance at Sep. 28, 2018 | $ 428.3 | $ 0.4 | 357.6 | 0 | 5.8 | 62.4 | 426.2 | 2.1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | $ 15.3 | 15.5 | 15.5 | (0.2) | ||||
Exercise of stock options (in shares) | 35,000 | 0 | ||||||
Exercise of stock options | $ 0.8 | 0.8 | 0.8 | |||||
Common stock issued upon vesting of restricted shares (in shares) | 200,000 | |||||||
Shares withheld on vesting of restricted stock (in shares) | 0 | |||||||
Shares withheld on vesting of restricted stock | (2.1) | (2.1) | (2.1) | |||||
Share-based compensation | 11.7 | 11.7 | 11.7 | |||||
Unrealized gain on interest rate swap contracts, net of tax | (6.2) | (6.2) | (6.2) | |||||
Unrealized gain (loss) on defined benefit obligations | (1.3) | (1.3) | (1.3) | |||||
Common stock issued under employee stock purchase plan (in shares) | 200,000 | |||||||
Common stock issued under employee stock purchase plan | 3.8 | 3.8 | 3.8 | |||||
Noncontrolling interest acquired/consolidated | $ 1.4 | 1.4 | ||||||
Shares outstanding, end of period (in shares) at Sep. 27, 2019 | 38,371,305 | 38,400,000 | ||||||
Ending balance at Sep. 27, 2019 | $ 448.2 | $ 0.4 | $ 371.8 | $ 0 | $ (1.7) | 74.4 | 444.9 | $ 3.3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Effect of adoption of ASC 606 | $ (3.5) | $ (3.5) | $ (3.5) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 27, 2019 | |
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 Medical products, which include X-ray imaging components, including X-ray tubes, digital detectors and accessories, high voltage connectors, 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, and veterinary, 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. 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 January 28 2017, the date of separation and distribution, the financial statements were prepared on a stand-alone basis and were derived from Varian’s consolidated financial statements and records as it operated as part of Varian prior to the distribution, in conformity with GAAP. Prior to the separation and distribution, the consolidated financial statements included allocations of certain Varian corporate expenses 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. 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 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. Reclassification The Company has reclassified $3.0 million from selling, general and administrative expense to impairment of intangible assets for the year ended September 28, 2018, to conform to the current year's presentation. Such reclassifications had no impact on net earnings as previously reported. Segment Reporting The Company has two reportable operating segments; (i) Medical and (ii) Industrial, which aligns with how its CEO, who is the Company's Chief Operating Decision Maker (“CODM”), reviews the Company’s performance. See Note 15 . Segment Information, included in this report, 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 2019 was the 52-week period that ended on September 27, 2019. Fiscal year 2018 was the 52-week period that ended on September 28, 2018. Fiscal year 2017 was the 52-week period that ended on September 29, 2017. 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 statements. As of September 27, 2019 , the Company had two variable interest entities neither of which were consolidated. 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. Such estimates include the valuation of inventories, goodwill and intangible assets, impairment on investments, and taxes on earnings. 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. Restricted Cash Restricted cash primarily consists of cash collateral related to certain leases and inventory arrangements. Restricted cash is included in other assets on the consolidated balance sheet. Cash and cash equivalents and restricted cash as reported within the consolidated statements of cash flows consisted of the following: Twelve Months Ended September 27, 2019 Twelve Months Ended September 28, 2018 Beginning of Period End of Period Beginning of Period End of Period Cash and cash equivalents $ 51.9 $ 29.9 $ 83.3 $ 51.9 Restricted cash 1.5 1.4 0.9 1.5 Cash and cash equivalents and restricted cash as reported per statement of cash flows $ 53.4 $ 31.3 $ 84.2 $ 53.4 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. Derivatives designated as a hedge are recorded on the Consolidated Balance Sheets at fair value as of the reporting date. For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income or loss and reclassified from accumulated other comprehensive loss into earnings when the hedged transaction affects earnings. For derivatives that are designated and qualify as net investment hedges, the gain or loss on the derivative is reported as a component of other comprehensive income or loss. Time value is excluded and the cash payments are recognized as an adjustment to interest expense. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective. 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. Credit is extended to customers based on an evaluation of the customer’s financial condition, and collateral is not required. During the periods presented, one of the Company's Medical segment customers accounted for a significant portion of revenues, which is as follows: Fiscal Year 2019 2018 2017 Canon Medical Systems Corporation 17.3 % 18.1 % 19.3 % Canon Medical Systems Corporation accounted for 10.1% and 9.8% of the Company’s accounts receivable as of September 27, 2019 and September 28, 2018 , respectively. Inventories Inventories are valued at the lower of cost or net realizable value. Costs include materials, labor and manufacturing overhead and is computed using standard cost (which approximates actual cost) on a first-in-first-out basis. The Company evaluates the carrying value of its inventories taking into consideration such factors as historical and anticipated future sales compared to quantities on hand and the prices the Company expects to obtain for products in its various markets. The Company 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 27, 2019 September 28, 2018 Raw materials and parts $ 160.1 $ 149.9 Work-in-process 27.9 25.4 Finished goods 60.2 59.8 Total inventories $ 248.2 $ 235.1 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 years 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 27, 2019 September 28, 2018 Land $ 8.3 $ 8.3 Buildings and leasehold improvements 134.4 138.1 Machinery 170.7 166.1 Construction in progress 28.5 23.1 $ 341.9 $ 335.6 Accumulated depreciation and amortization (199.6 ) (190.7 ) Property, plant, and equipment, net $ 142.3 $ 144.9 The Company recorded depreciation expense of $23.5 million , $26.0 million and $16.9 million , in fiscal years 2019 , 2018 and 2017 , respectively. During fiscal year 2019 the company recorded accelerated depreciation of $4.5 million on the machinery and equipment used in the fabrication of amorphous silicon glass at its facility in Santa Clara, CA. See Note 4 . Restructuring, included in this report, for further information. 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 Note 4 . Restructuring, included in this report, 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. Distributions received from an equity method investment are classified using the cumulative earnings approach. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment as operating cash flows and those in excess of that amount will be treated as returns of investment as investing cash flows. 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 years 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 for impairment at least annually at the beginning of the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performs a step one analysis, which consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit. 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 27, 2019 and 2018 , the Company recognized $4.8 million and $3.0 million of impairments of intangible assets related to the restructuring activities see Note 4 . Restructuring , included in this report. No goodwill impairment charges were recognized for any of the prior periods presented. No impairment charges were recognized in fiscal year 2017 . Loss Contingencies From time to time, the Company is a party to or otherwise involved in legal proceedings, claims and government inspections or investigations, customs and duties audits and other loss contingency 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 an unfavorable outcome is determined to be probable and the losses 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) 2019 2018 Accrued product warranty, at beginning of period $ 7.3 $ 7.0 Charged to cost of revenues 12.9 11.6 Actual product warranty expenditures (12.1 ) (11.3 ) Accrued product warranty, at end of period $ 8.1 $ 7.3 Revenue Recognition Effective September 29, 2018, the Company adopted the requirements of Accounting Standards Update (“ASU”) 2014-09 and related amendments, Revenue from Contracts with Customers (“ASC 606”), which superseded all prior revenue recognition methods and industry-specific guidance. See “Recently Adopted Accounting Pronouncements” below. The Company’s revenues are derived primarily from the sale of hardware and services. The Company recognizes its revenues net of any value-added or sales tax and net of sales discounts. 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. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, a performance obligation is satisfied Deferred Revenues Deferred revenue primarily represents (i) the amount received applicable to non-software products for which parts and services under the warranty contracts have not been delivered, and (ii) the amount received for service contracts for which the services have not been rendered. 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 $1.0 million and $0.6 million as of September 27, 2019 and September 28, 2018 , 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. Foreign Currency Translation The Company uses the U.S. Dollar predominately 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. For the foreign subsidiary where the local currency is the functional currency, translation adjustments of foreign currency financial statements into U.S. dollars are recorded to a separate component of accumulated other comprehensive (loss) earnings. Accounting Standards Recently Adopted In November 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires that the statement of cash flows explain the change in the total amount of restricted cash during the period and other additional disclosures. The Company adopted ASU 2016-18 in the first quarter of 2019 using the retrospective transition method and the Company's consolidated statements of cash flows have been retrospectively adjusted to reflect restricted cash balances. Net cash flows for fiscal years 2019, 2018 and 2017 did not change as a result of adopting ASU 2016-18. The Company adopted ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which was issued to reduce the diversity in practice in how certain transactions are classified in the statement of cash flows. The Company adopted ASU 2016-15 in the first quarter of 2019 retrospectively. Net cash flows for fiscal years 2019, 2018 and 2017 did not change as a result of adopting ASU 2016-15. The Company adopted ASC 606 as of September 29, 2018, using the modified retrospective transition method applied to those contracts which were not completed as of that date. The Company recorded a net reduction to retained earnings of $4.1 million , net of tax, as of September 29, 2018 due to the impact of adopting ASC 606. During the second quarter of 2019 the Company recorded an increase to retained earnings of $0.6 million , net of tax, to correct an error that was not quantitatively or qualitatively material to the current period, related to the adoption of ASC 606. The net cumulative impact of adopting ASC 606 was $3.5 million , net of tax. Refer to Note 18. Revenue Recognition , included in this report report for the detailed impact of adopting ASC 606. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends the application of hedge accounting and improves financial reporting of hedging relationships to more accurately present the economic effects of risk management activities in the financial statements. The ASU is effective for public companies for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company early adopted the provisions of ASU 2017-12 during the quarter ended September 27, 2019, using the modified retrospective method. The adoption did not have an impact on the consolidated financial statements. 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 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. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In addition, the ASU requires new disclosures. This standard will be effective for the Company's interim and annual periods beginning with the first quarter of fiscal 2021, and must be applied on a modified retrospective basis. The Company is currently evaluating the potential impact of this standard. 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 st |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Sep. 27, 2019 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Acquisition of Direct Conversion AB (publ) On April 29, 2019 , Varex completed the acquisition of 98.2% of the outstanding shares of common stock of Direct Conversion AB (publ) (“Direct Conversion”) for $ 69.5 million in cash, net of cash acquired, the assumption of Direct Conversion's debt of $4.5 million and deferred consideration equal to $9.9 million or 0.3 million shares of the Company’s common stock (subject to reduction to settle indemnity claims) to be paid on the first anniversary of the closing with a mixture of cash and shares of Varex common stock. The acquisition of Direct Conversion expands our detector product portfolio to include photon counting technology. This technology will allow Varex to expand its range of imaging applications and offer new solutions to both Medical and Industrial customers. The following table summarizes the preliminary purchase price allocation: (In millions) Fair Value Allocation of the purchase consideration: Accounts receivable $ 2.4 Inventories 5.7 Prepaid expenses and other current assets 0.7 Property, plant, and equipment 0.9 Goodwill 47.2 Intangible assets 32.9 Total assets acquired 89.8 Accounts payable (1.0 ) Accrued liabilities (1.5 ) Current maturities of long-term debt (1.0 ) Deferred revenues (0.9 ) Long-term debt (3.5 ) Other long-term liabilities (1.1 ) Total liabilities assumed (9.0 ) Noncontrolling interest (1.4 ) Net assets acquired, less noncontrolling interest $ 79.4 Net cash paid $ 69.5 Deferred consideration 9.9 Total consideration $ 79.4 The Company recorded the assets acquired and liabilities assumed at their preliminary estimated fair values. Intangibles were valued primarily using a discounted cash flow, which included estimated revenue growth and discount rate. Due to the complexity of this transaction as of September 27, 2019, the Company had not finalized the determination of the fair values allocated to various assets and liabilities, including, but not limited to, inventory; deferred tax assets and liabilities; intangible assets and the residual amount allocated to goodwill. The fair value assigned to goodwill is primarily attributable to expected synergies. The goodwill related to the Direct Conversion acquisition is not tax deductible. The following amounts represent the determination of the fair value and estimated weighted average useful lives of identifiable intangible assets for the Direct Conversion, which are amortized straight-line: (In millions) Fair Value Estimated Weighted Average Backlog $ 0.2 1 Trade names 2.5 5 Developed technology 18.4 10 In-process research and development 2.8 indefinite Customer relationships 9.0 10 Total intangible assets acquired $ 32.9 The following amounts represent revenues by reporting segment from Direct Conversion from the acquisition date of April 29, 2019 , through September 27, 2019: (In millions) Direct Conversion Revenue Medical $ 4.5 Industrial 1.8 Total Direct Conversion revenues $ 6.3 The acquisition of Direct Conversion did not have a significant impact on our consolidated results of operations on a pro forma basis for the current or prior years. 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 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 are 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 1, 2016. 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. 27, 2019 | |
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 2019 , 2018 and 2017 , the Company recorded (loss) and income on the equity investment in dpiX Holding of $(1.1) million , $3.4 million and $0.8 million , respectively. Income and loss on the equity investment in dpiX Holding is included in other (expense) income, 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 $48.1 million and $48.9 million at September 27, 2019 and September 28, 2018 , respectively. In fiscal years 2019 , 2018 and 2017 , the Company purchased glass transistor arrays from dpiX totaling $23.5 million , $19.3 million and $24.7 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 27, 2019 and September 28, 2018 , the Company had accounts payable to dpiX totaling $3.6 million and $3.7 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 27, 2019 , the Company estimated it has fixed cost commitments of $3.7 million related to this amended agreement through the remainder of calendar year 2019 . 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 $48.1 million and fixed cost commitments of $3.7 million . In November 2018, the Company and CETTEEN GmbH (“CETTEEN”), formed a German limited liability company that governs the affairs and conduct of the business of VEC Imaging Verwaltungsgesellschaft GmbH (“VEC”), a joint venture formed to develop technology to be used in X-ray imaging components. In accordance with the VEC agreement, net profits or losses are allocated to the members, in accordance with their ownership interest. The Company's investment in VEC is accounted for under the equity method. The Company has made contributions totaling $2.9 million , and has committed to contribute an additional $2.2 million , as milestones are achieved, and to provide certain full time employees to support prototyping and manufacturing activities in exchange for a 50% interest in VEC. CETTEEN made contributions of certain assets including intellectual property in exchange for a 50% interest in VEC. The Company's investment in VEC was $2.0 million as of September 27, 2019 . |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Sep. 27, 2019 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING Following the acquisition of the medical imaging business from PKI in May of 2017, 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. In connection with this initiative, we recorded $1.7 million in restructuring charges during fiscal year 2018. In July 2018, the Company committed to a plan to relocate the production of amorphous silicon glass for digital detectors, from its Santa Clara facility, to the jointly owned dpiX fabrication facility in Colorado. In July 2019, the Company committed to close its Santa Clara facility and to relocate the remaining production to its other existing facilities. The Company expects operations at the Santa Clara facility to cease by the end of December 2020 and all activities related to the closure of the facility to be complete by the end of March 2021. In connection with the relocation of the glass production and site closure the Company recorded $16.1 million and $14.2 million of restructuring and impairment charges during fiscal year 2019 and 2018, respectively. Fiscal year 2019 intangible asset impairment charges consisted of in-process research and development related to certain projects that were discontinued as a result of the Santa Clara facility closure. Fiscal year 2018 intangible asset impairment charges were related to a favorable leasehold interest that was impaired as a result of the amorphous silicon glass relocation. The Company expects to incur an additional $8.1 million to $12.1 million of restructuring charges through March 2021. The Company also incurred approximately $2.8 million and $0.8 million of other unrelated restructuring expenses during fiscal years 2019 and 2018, respectively. Cash outflows associated with these restructuring charges are limited to employee termination expenses, facility closure and equipment sales and disposals. Below is a detail of restructuring charges incurred during the 2019 and 2018 fiscal years, which predominately relate to the Company's Medical segment: (In millions) Location of Restructuring Charges in Consolidated Statements of Earnings September 27, 2019 September 28, 2018 Other assets impairment charges Selling, general and administrative $ — $ 1.3 Inventory write downs Cost of revenues 3.1 3.1 Intangible assets impairment Impairment of intangible assets 4.8 3.0 Accelerated depreciation Cost of revenues 4.5 4.2 Severance costs Selling, general and administrative 6.2 4.3 Facility closure costs Selling, general and administrative 0.3 0.8 Total restructuring charges $ 18.9 $ 16.7 |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 12 Months Ended |
Sep. 27, 2019 | |
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 27, 2019 September 28, 2018 Accrued compensation and benefits $ 32.1 $ 27.0 Product warranty 8.1 7.3 Income taxes payable 10.7 1.4 Payable to Varian Medical Systems — 2.3 Right of return liability 6.9 — Deferred consideration 8.9 — Other 9.0 9.5 Total accrued liabilities $ 75.7 $ 47.5 The following table summarizes the Company’s other long-term liabilities: (In millions) September 27, 2019 September 28, 2018 Long-term income tax payable $ 3.9 $ 3.5 Environment liabilities 0.9 1.3 Defined benefit obligation liability 5.5 3.3 Long-term right of return liability 19.5 — Long-term other 2.7 0.4 Total other long-term liabilities $ 32.5 $ 8.5 The following table summarizes the Company’s other income (expense), net: Fiscal Years (In millions) 2019 2018 2017 Income (loss) from equity method investments $ (2.3 ) $ 3.9 $ 1.3 Change in fair value of deferred consideration 1.0 — — Realized income (loss) on foreign currencies (1.9 ) (1.2 ) 1.9 Total other income (expense), net $ (3.2 ) $ 2.7 $ 3.2 |
NET EARNINGS PER SHARE
NET EARNINGS PER SHARE | 12 Months Ended |
Sep. 27, 2019 | |
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) 2019 2018 2017 Net earnings attributable to Varex $ 15.5 $ 27.5 $ 51.6 Weighted average shares outstanding - basic 38.2 37.9 37.6 Dilutive effect of potential common shares 0.4 0.5 0.4 Weighted average shares outstanding - diluted 38.6 38.4 38 Net earnings per share attributable to Varex - basic $ 0.41 $ 0.73 $ 1.37 Net earnings per share attributable to Varex - diluted $ 0.40 $ 0.72 $ 1.36 Anti-dilutive employee shared based awards, excluded 1.9 1.2 1.0 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. 27, 2019 | |
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 to manage its financial exposures to foreign currency exchange rates and interest rates. 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. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective. The changes in fair value for all trades that are not designated for hedge accounting are recognized in current period 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. As of September 27, 2019 , the Company had the following outstanding derivatives designated as cash flow hedging instruments: (In millions, except for number of instruments) Number of Instruments Notional Value Interest Rate Swap Contracts 6 $ 264.4 The following table summarizes the amount of pre-tax earnings 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 or (Loss) Recognized in OCI on Derivative Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (In millions) 2019 2018 2017 2019 2018 2017 Interest Rate Swap Contracts $ (6.3 ) $ 6.9 $ 0.6 Interest expense $ 1.9 $ 0.1 $ (0.3 ) The Company expects that $0.1 million of the accumulated other comprehensive (loss) income related to cash flow hedges will be realized in pre-tax earnings over the next 12 months, but 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. None of the balances were eligible for netting. The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded. Derivative Assets Derivative Liabilities (In millions) September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Derivatives designated as cash flow hedges Balance sheet location Balance sheet location Interest rate swap contracts Other current assets $ — $ 2.2 Other current liabilities $ — $ — Interest rate swap contracts Other non-current assets — 5.5 Other non-current liabilities (0.5 ) — $ — $ 7.7 $ (0.5 ) $ — Derivatives Designated as Hedging Instruments - Net Investment Hedges The Company uses cross currency swap contracts as net investment hedges to manage its risk of variability in foreign currency-denominated net investments in wholly-owned international operations. All changes in fair value of the derivatives designated as net investment hedges are reported in accumulated other comprehensive (loss) income along with the foreign currency translation adjustments on those investments. As of September 27, 2019 , the Company had the following outstanding derivatives designated as net investment hedging instruments: (In millions, except for number of instruments) Number of Instruments Notional Value Cross Currency Swap Contracts 4 $ 77.7 The following table summarizes the amount of pre-tax earnings recognized from derivative instruments for the periods indicated and the line items in the accompanying statements of operations where the results are recorded for net investment hedges: Amount of Gain or (Loss) Recognized in OCI on Derivative Location of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) (In millions) 2019 2018 2017 2019 2018 2017 Cross Currency Swap Contracts $ (0.2 ) $ — $ — Interest expense $ 0.2 $ — $ — These derivative instruments are subject to master netting agreements giving effect to rights of offset with each counterparty. None of the balances were eligible for netting. The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded: Derivative Assets Derivative Liabilities (In millions) September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Derivatives designated as net investment hedges Balance sheet location Balance sheet location Cross currency swap contracts Other current assets — — Other current liabilities (0.2 ) — $ — $ — $ (0.2 ) $ — 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 hedges for fiscal year 2019 was a loss of $1.5 million , which was primarily related to the purchase price hedge established following the announcement of the Company's planned acquisition of Direct Conversion. 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 27, 2019 : Notional Value of Derivatives not Designated as Hedging Instruments: In millions Buy contracts Sell contract Japanese yen $ 0.9 $ — Swiss franc — (1.0 ) Chinese renminbi 1.8 — Euro 8.8 — $ 11.5 $ (1.0 ) |
BORROWINGS
BORROWINGS | 12 Months Ended |
Sep. 27, 2019 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS The following table summarizes the Company's short-term and long-term debt: September 27, 2019 September 28, 2018 (In millions, except for percentages) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Current maturities of long-term debt Term facility $ 29.4 5.6 % $ 25.0 4.2 % Other debt 1.3 — Total current maturities of long-term debt $ 30.7 $ 25.0 Non-current maturities of long-term debt: Revolving credit facility $ 59.0 5.6 % $ 28.0 4.2 % Term facility 308.6 5.6 % 345.0 4.2 % Other debt 2.5 — Debt issuance costs (5.7 ) (8.2 ) Non-current maturities of long-term debt 364.4 364.8 Total long-term debt, net $ 395.1 $ 389.8 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 $200.0 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 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. The Company agreed to maintain financial covenants, which include maximum consolidated total leverage ratio, maximum senior secured leverage ratio, maximum capital expenditures and a minimum consolidated fixed charge coverage ratio. The Company was in compliance with all financial covenants under the Credit Agreement as of September 27, 2019 . 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 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 had permanently reducing the revolving credit commitment under the Credit Agreement by $50.0 million to $150.0 million . The reduction in the revolving credit commitment reduced the fees paid by the Company in connection with such commitment. Subsequent to fiscal year 2019, the Company, in accordance with the terms of the Credit Agreement, provided notice to the administrative agent that effective as of October 8, 2019 , the Company was permanently reducing the revolving credit commitment under the Credit Agreement by $25.0 million to $125.0 million . Subsequent to fiscal year 2019, the Company did not comply with the covenant under the Credit Agreement to timely deliver the Company's fiscal year 2019 annual financial statements. However, upon the filing of this Annual Report with the SEC, the Company will be able to deliver the fiscal year 2019 annual financial statements within the 30-day cure period set forth in the Credit Agreement and consequently no event of default will occur. At September 27, 2019 , the Company had $364.4 million in non-current maturities of long-term debt outstanding, net of deferred debt issuance costs of $5.7 million , and $30.7 million of current maturities of long-term debt outstanding. Future principal payments of the long-term debt outstanding as of September 27, 2019 are as follows: (In millions) Fiscal years: 2020 $ 30.7 2021 34.3 2022 335.8 Total debt outstanding 400.8 Less: current maturities of long-term debt (30.7 ) Non-current portion of long -term debt $ 370.1 |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Sep. 27, 2019 | |
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 27, 2019 Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Significant Unobservable Inputs Total Assets: Cash equivalents - money market funds $ — $ 8.8 $ — $ 8.8 Total assets measured at fair value $ — $ 8.8 $ — $ 8.8 Liabilities: Derivative liabilities $ — $ 0.7 $ — $ 0.7 Deferred consideration 8.9 — — 8.9 Total liabilities measured at fair value $ 8.9 $ 0.7 $ — $ 9.6 As of September 27, 2019 , the total outstanding borrowings under the Company's credit agreement were $395.1 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 28, 2018 , the Company determined the following levels of inputs for the following assets or liabilities: (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 Derivative assets — 7.7 — 7.7 Total assets measured at fair value $ — $ 26.1 $ — $ 26.1 Liabilities: Derivative liabilities $ — $ — $ — $ — |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Sep. 27, 2019 | |
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 28, 2018 $ 147.0 $ 96.6 $ 243.6 Business combination 26.0 21.2 47.2 Balance at September 27, 2019 $ 173.0 $ 117.8 $ 290.8 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: September 27, 2019 September 28, 2018 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 74.1 $ (28.4 ) $ 45.7 $ 57.9 $ (21.8 ) $ 36.1 Patents, licenses and other 12.7 (8.4 ) 4.3 9.9 (7.4 ) 2.5 Customer contracts and supplier relationship 50.7 (17.2 ) 33.5 42.6 (11.4 ) 31.2 Total intangible assets with finite lives 137.5 (54.0 ) 83.5 110.4 (40.6 ) 69.8 In-process R&D with indefinite lives 2.8 0.0 2.8 4.0 0.0 4.0 Total intangible assets $ 140.3 $ (54.0 ) $ 86.3 $ 114.4 $ (40.6 ) $ 73.8 Amortization expense for intangible assets was $15.7 million , $16.2 million and $10.5 million in fiscal years 2019 , 2018 and 2017 , respectively. The Company recognized an impairment loss of $4.8 million and $3.0 million in fiscal years 2019 and 2018 , respectively. These impairment costs were included in the consolidated statements of earnings under impairment of intangible assets. As of September 27, 2019 , the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal years: 2020 $ 17.2 2021 16.3 2022 14.7 2023 13.7 2024 9.1 Thereafter 12.5 Total $ 83.5 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 27, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments At September 27, 2019 , the Company was committed to minimum rentals under non-cancelable operating leases (including rent escalation clauses) for fiscal years 2020 through 2024 and therea fter, as follows: $7.5 million , $5.4 million , $4.7 million , $1.8 million , $0.9 million , and $0.2 million , respectively. Ren tal expenses were $5.1 million , $5.3 million , and $4.0 million for fiscal years 2019 , 2018 and 2017 , respectively . Other Commitments See Note 3. Related Party Transactions, included in this report, for additional information about the Company’s commitments to dpiX. See Note 12. Redeemable Noncontrolling Interests & Noncontrolling Interests, included in this report, for additional information about the Company’s commitment to the noncontrolling shareholders of MeVis. The Company has an environmental liability of approximately $0.9 million as of September 27, 2019 . Contingencies From time to time, the Company is a party to or otherwise involved in legal proceedings, claims and government inspections or investigations, customs and duty audits, other contingency matters, both inside and outside the United States, arising in the ordinary course of its business or otherwise. The Company accrues amounts for probable losses, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss (including, among other things, probable settlement value). A loss or a range of loss is disclosed when it is reasonably possible that a material loss will be incurred and can be estimated or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision. The Company did not have any contingent liabilities as of September 27, 2019 and September 28, 2018 . Legal expenses are expensed as incurred. |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS | 12 Months Ended |
Sep. 27, 2019 | |
Noncontrolling Interest [Abstract] | |
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS | REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS In April 2019, a subsidiary of Varex completed the acquisition of 98.2% of the outstanding shares of common stock of Direct Conversion. As the Company has majority voting rights it has consolidated Direct Conversion's operations in its consolidated financial statements and recorded the noncontrolling interest. The noncontrolling interest related to Direct Conversion is included in noncontrolling interest in the equity section of the Company's consolidated balance sheet. Earnings representing the noncontrolling interest's portion of Direct Conversion's income from operations is included in the Company's consolidated statements of earnings. In September 2018, the Company entered into a partnership in Saudi Arabia. The Company has majority voting rights with an approximate 75% interest. Accordingly, the Company has consolidated the operations of the Saudi Arabia partnership in 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 27, 2019 , the redemption value of redeemable noncontrolling interests in MeVis was $10.5 million . During fiscal year 2018, an immaterial number of MeVis’ shares were purchased under the put right. As of September 27, 2019 , 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 2019 2018 (In millions) Redeemable Noncontrolling Redeemable Noncontrolling Interest Balance at beginning of period $ 11.1 $ 2.1 $ 11.2 $ — Net earnings attributable to noncontrolling interests 0.5 (0.2 ) 0.5 0.3 Contributions from noncontrolling interests — 1.4 — 1.8 Dividend distributions (0.5 ) — (0.6 ) — Other (0.6 ) — — — Balance at end of period $ 10.5 $ 3.3 $ 11.1 $ 2.1 |
EMPLOYEE STOCK PLANS
EMPLOYEE STOCK PLANS | 12 Months Ended |
Sep. 27, 2019 | |
Share-based Payment Arrangement [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. 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 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) 2019 2018 2017 Cost of revenues $ 1.2 $ 1.3 $ 0.9 Research and development 2.2 1.8 1.5 Selling, general and administrative (1) 8.3 6.9 6.0 Total share-based compensation expense $ 11.7 $ 10.0 $ 8.4 (1) Includes allocated share-based compensation of $0.8 million for fiscal year 2017 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 27, 2019 was $23.1 million , and is expected to be recognized in the next 3 to 4 fiscal years. As of September 27, 2019 , there were approximately 1.2 million and 0.7 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 ESPP grants. The Company calculated the fair value of option grants and option component of ESPP grants on the respective dates of grant using the following weighted average assumptions: Employee Stock Option Plan Employee Stock Purchase Plans Fiscal Year Fiscal Year 2019 2018 2017 2019 2018 2017 Expected term (in years) 4.6 4.8 4.2 0.5 0.5 0.5 Risk-free interest rate 2.5 % 2.6 % 1.6 % 2.5 % 2.0 % 1.0 % Expected volatility 33.9 % 31.8 % 23.6 % 43.9 % 34.1 % 28.0 % Expected dividend 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % Weighted average fair value at grant date $10.19 $11.57 $8.08 $7.81 $8.92 $7.81 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 blended approach by using the Company's historic data for the years it has been publicly traded and a benchmark of other comparable companies’ volatility rates for the prior years. 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 Price range Weighted Average Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) Outstanding at September 28, 2018 2,011 $22.63 — $37.60 $ 30.35 Granted 297 $31.42 — $31.42 31.42 Canceled, expired or forfeited (4) $31.08 — $31.08 31.08 Exercised (35) $22.84 — $27.77 23.38 Outstanding at September 27, 2019 2,269 $22.63 — $37.60 $ 30.60 4.1 $ 1,220.3 Exercisable at September 27, 2019 1,477 $22.63 — $37.60 $ 29.67 3.4 $ 1,220.3 (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 $28.28 as of September 27, 2019 , the last trading date of the Company's respective fiscal years, 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. The weighted-average grant-date fair value of options granted during fiscal years 2019 , 2018 and 2017 was $3.0 million , $3.1 million and $9.2 million respectively. The total intrinsic value of the options exercised during the years ended September 27, 2019 , September 28, 2018 and September 29, 2017 was $0.2 million , $1.7 million and $1.4 million respectively 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 28, 2018 641 $ 33.60 Granted 288 31.29 Vested (201) 31.56 Canceled or expired (50) 34.13 Balance at September 27, 2019 678 $ 33.18 The total grant-date fair value of shares granted in fiscal year was $9.0 million , $10.1 million and $11.4 million for fiscal years 2019 , 2018 and 2017 , respectively. Shares outstanding at September 27, 2019 , September 28, 2018 and September 29, 2017 had an estimated market value of $19.2 million , $18.4 million and $17.8 million , respectively. |
TAXES ON EARNINGS
TAXES ON EARNINGS | 12 Months Ended |
Sep. 27, 2019 | |
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) 2019 2018 2017 Current provision: Federal $ 9.2 $ (2.1 ) $ 24.8 State and local 1.3 (0.3 ) 1.6 Foreign 6.8 7.5 5.3 Total current 17.3 5.1 31.7 Deferred provision (benefit): Federal (10.0 ) (7.0 ) (7.0 ) State and local (1.6 ) 0.7 (1.0 ) Foreign — (1.4 ) (0.9 ) Total deferred (11.6 ) (7.7 ) (8.9 ) Taxes on earnings $ 5.7 $ (2.6 ) $ 22.8 Earnings before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2019 2018 2017 United States $ 5.9 $ 3.7 $ 55.5 Foreign 15.6 22.0 19.3 Earnings before taxes $ 21.5 $ 25.7 $ 74.8 The effective tax rate differs from the U.S. federal statutory tax rate as a result of the following: Fiscal Years 2019 2018 2017 Federal statutory income tax rate 21.0 % 24.5 % 35.0 % State and local taxes, net of federal tax benefit (0.9 )% 1.1 % 1.3 % Revaluation of deferred tax liabilities for US statutory change — % (41.8 )% — % Mandatory repatriation tax on foreign earnings 1.9 % 13.0 % — % Domestic production activities deduction — % (0.8 )% (2.4 )% Research and development credit (10.2 )% (11.1 )% (2.6 )% Prior year deferred tax adjustments 4.7 % 1.9 % (4.0 )% Foreign Rate Difference 6 % 0.8 % — % Change in valuation allowance 11.2 % (1.9 )% 3.8 % US Tax Reform - International Provisions (4.7 )% — % — % Other (2.5 )% 4.2 % (0.6 )% Effective tax rate 26.5 % (10.1 )% 30.5 % 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 is phased in from a U.S. statutory federal rate of 24.5% in fiscal year ending September 28, 2018 to a rate of 21% for the fiscal year ending September 27, 2019. During fiscal year 2019, the Company’s effective tax rate varied from the U.S. federal statutory rate of 21% primarily because of the favorable impact of changes to the U.S. corporate tax structure resulting from U.S. Tax Reform, and U.S. research and development tax credits. These favorable U.S. tax items are offset by losses in certain foreign jurisdictions for which no benefit is recognized and earnings in other foreign jurisdictions that are taxed at higher rates. During fiscal year 2018, the Company’s effective tax rate varied from the U.S. federal statutory rate primarily because the favorable impact of changes to the U.S. corporate tax structure resulting from U.S. Tax Reform. During fiscal years 2018 and 2017, 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. 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. During the three months ended December 28, 2018, the Company completed its analysis of U.S. Tax Reform, and the accounting for the income tax effects has been finalized for the measurement period under SAB 118, with no significant adjustments from the provisional amounts. During fiscal year 2019, additional U.S. Tax Reform 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 became effective for the Company and, if applicable, have been included in the calculation of the fiscal year 2019 tax provision. The determination of the tax effects of U.S. Tax Reform may change following future legislation or further interpretation of U.S. Tax Reform from U.S. Federal and state tax authorities. The guidance for accounting for U.S. Tax Reform requires taxpayers to make an election regarding the accounting for GILTI. This policy election is to either: (1) treat GILTI as a period cost if and when incurred, or (2) recognize deferred taxes for basis differences that are expected to reverse as GILTI in future years. During the first quarter of fiscal year 2019, the Company has made the accounting policy election to account for GILTI under the period cost method. Significant components of deferred tax assets and liabilities are as follows: (In millions) September 27, 2019 September 28, 2018 Deferred Tax Assets: Inventory adjustments $ 5.6 $ 4.2 Share-based compensation 3.1 0.8 Product warranty 1.6 1.4 Deferred compensation 1.1 0.9 Net operating loss carryforwards 24.3 3.3 Accrued vacation 1.0 1.3 Credit carryforwards 1.9 1.8 Other 7.5 4.7 46.1 18.4 Valuation allowance (18.8 ) (4.0 ) Total deferred tax assets 27.3 14.4 Deferred Tax Liabilities: Acquired intangibles (19.3 ) (15.2 ) Property, plant and equipment (10.6 ) (14.3 ) Investments in privately held companies (3.3 ) (4.1 ) Other (2.3 ) (4.0 ) Total deferred tax liabilities (35.5 ) (37.6 ) Net deferred tax liabilities $ (8.2 ) $ (23.2 ) Reported As: Deferred tax assets $ 27.3 $ 14.4 Deferred tax liabilities (35.5 ) (37.6 ) Net deferred tax liabilities $ (8.2 ) $ (23.2 ) As a result of the changes to the U.S. taxation of foreign earnings included in U.S. Tax Reform, the Company reevaluated its previous indefinite reinvestment assertion with respect to these earnings during fiscal year 2018, which 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. The Company has modified this prior assertion for the year ended September 27, 2019 with respect to the acquisition of Direct Conversion. The modification was to assert that all earnings for Direct Conversion, located primarily in Sweden and Finland, are indefinitely reinvested in those countries. 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, the amount of deferred tax liability recorded related to the potential repatriation is approximately $0.1 million . This estimated liability is for U.S. State income taxes and foreign withholding taxes that would apply if the foreign earnings were actually repatriated in the form of a dividend. As of September 27, 2019, the Company has net operating loss carryforwards of approximately $24.3 million with $4.4 million expiring between 2020 and 2030 and $19.9 million carried forward indefinitely. 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 increased by $14.8 million during fiscal year 2019 and decreased by $0.3 million during fiscal year 2018. The increase during the current year was primarily related to the acquisition of Direct Conversion that included deferred tax assets subject to a valuation allowance as of acquisition. Changes in the Company's valuation allowance for deferred tax assets were as follows: Fiscal Years (In millions) 2019 2018 2017 Valuation allowance balance–beginning of fiscal year $ 4.0 $ 4.3 $ 2.5 Increases resulting from business combinations 12.0 — — Other increases 2.8 2.2 2.5 Other decreases — (2.5 ) (0.7 ) Valuation allowance balance—end of fiscal year $ 18.8 $ 4.0 $ 4.3 During fiscal year 2019, the Company paid U.S and foreign taxes of approximately $8.2 million . In fiscal year 2018, the Company paid U.S. and foreign taxes of approximately $13.8 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) 2019 2018 Unrecognized tax benefits balance–beginning of fiscal year $ 0.6 $ 0.5 Subtractions based on tax positions related to a prior year (0.2 ) — Additions based on tax positions related to the current year 0.2 0.1 Unrecognized tax benefits balance—end of fiscal year $ 0.6 $ 0.6 As of September 27, 2019 and September 28, 2018 , the total amount of gross unrecognized tax benefits was $0.6 million and $0.6 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 27, 2019 , $0.1 million interest and penalties have been included for this period. For the year ended September 28, 2018 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 2009 are no longer subject to examination. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Sep. 27, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has two reportable operating segments Medical and Industrial. The segments align the Company’s products and service offerings with customer use in medical and industrial markets and are consistent with how the Company’s Chief Executive Officer, who is also its 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 operating and reportable segment structure provides 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) 2019 2018 2017 Revenues Medical $ 596.8 $ 602.0 $ 556.9 Industrial 183.8 171.4 141.2 Total revenues 780.6 773.4 698.1 Gross margin Medical 188.9 190.5 193.6 Industrial 67.8 63.4 59.9 Total gross margin 256.7 253.9 253.5 Total operating expenses 211.0 209.4 169.8 Interest and other expenses, net (24.2 ) (18.8 ) (8.9 ) Earnings before taxes 21.5 25.7 74.8 Taxes (benefit) on earnings 5.7 (2.6 ) 22.8 Net earnings 15.8 28.3 52.0 Less: Net earnings attributable to noncontrolling interests 0.3 0.8 0.4 Net earnings attributable to Varex $ 15.5 $ 27.5 $ 51.6 The following table summarizes the Company’s total assets by its reportable segments: (In millions) September 27, 2019 September 28, 2018 Identifiable assets: Medical $ 794.3 $ 770.6 Industrial 244.6 217.3 Total reportable segments $ 1,038.9 $ 987.9 Geographic Information Revenues Property, plant and equipment, net Fiscal Years Fiscal Years (In millions) 2019 2018 2017 2019 2018 United States $ 275.3 $ 268.8 $ 231.9 $ 122.6 $ 127.9 Latin America 7.3 7.0 7.9 — — EMEA 269.0 254.5 219.5 11.4 8.7 APAC 229.0 243.1 238.8 8.3 8.3 Total company $ 780.6 $ 773.4 $ 698.1 $ 142.3 $ 144.9 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. 27, 2019 | |
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 $6.7 million , $6.5 million and $4.3 million in fiscal years 2019 , 2018 and 2017 , 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 $5.5 million and $3.3 million as of September 27, 2019 and September 28, 2018 , respectively. The Company’s net periodic benefit costs for the Company’s defined benefit plans was not material for fiscal years 2019 , 2018 and 2017 . |
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Sep. 27, 2019 | |
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 28, 2018 $ 5.8 $ — $ 5.8 Other comprehensive loss before reclassifications (8.3 ) (1.9 ) (10.2 ) Income tax benefit 2.1 0.6 2.7 Balance at September 27, 2019 $ (0.4 ) $ (1.3 ) $ (1.7 ) No amounts were reclassified out of accumulated other comprehensive income during fiscal years 2019 and 2018. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Sep. 27, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company adopted ASC 606 on September 29, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for fiscal year 2019 reflect the application of ASC 606 guidance while the reported results for fiscal year 2018 were prepared under the guidance of ASC 605, “Revenue Recognition.” The primary impacts of the adoption include: (1) recording a separate contract liability and contract asset related to the sale of X-ray tubes that were sold with an option for the customer to require the Company to repurchase specific parts of the X‑ray tube at a specific price; and (2) recording a liability related to the deferral of revenue for service type warranties that are provided to certain customers who purchase Linatron ® X-ray accelerators. The Company has made the following accounting policy elections and elected to use certain practical expedients, as permitted by the FASB, in applying ASC 606: (1) the Company accounts for amounts collected from customers for sales and other taxes, net of related amounts remitted to tax authorities; (2) the Company does not adjust the promised amount of consideration for the effects of a significant financing component, if, at contract inception, the Company expects the period between the time when the Company transfers a promised good or service to the customer and the time when the customer pays for that good or service will be one year or less; (3) the Company expenses costs to obtain a contract as they are incurred if the expected period of benefit, and therefore the amortization period, is one year or less; (4) the Company accounts for shipping and handling activities that occur after control transfers to the customer as a fulfillment cost rather than an additional promised service and these fulfillment costs are included as a component of cost of revenues; and (5) the Company does not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. Transaction price and allocation to performance obligations Transaction prices of products or services are typically based on contracted rates. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method when there is a large number of transactions with similar characteristics or the most likely amount method when there are two possible outcomes, depending on the circumstances of the transaction, to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company allows customers to return specific parts of purchased X-ray tubes for a partial refund credit, which is identified as variable consideration. ASC 606-10-55-23 requires that for sales with a right of return, revenue is reduced for expected returns, a liability is recorded for expected returns, and an asset is recorded for the right to recover products from customers on settling the liability. The Company recognizes a reduction to revenue and cost of sales at the time of sale and a corresponding contract liability and contract asset. The Company records this estimate based on the historical volume of product returns and adjusts the estimate on a quarterly basis based on the current quarter sales and current quarter returns. If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. The beginning net cumulative-effect adjustment to the balance sheet for the adoption of ASC 606 is as follows: Balance at Adjustment Due to Balance at (In millions) September 28, 2018 ASC 606 September 29, 2018 Assets: Prepaid expenses and other current assets $ 17.1 $ 6.4 $ 23.5 Other assets 16.5 18.0 34.5 Liabilities and Equity: Deferred revenues 13.2 0.3 13.5 Accrued liabilities 47.5 7.1 54.6 Deferred tax liabilities 23.2 (0.8 ) 22.4 Other long-term liabilities 8.5 21.3 29.8 Retained earnings 62.4 (3.5 ) 58.9 The following tables compare the reported consolidated balance sheet and statement of operations for fiscal year ended September 27, 2019, to the amounts that would have been reported if ASC 605 had been in effect: September 27, 2019 (In millions) Balance without Adoption As Reported Assets: Prepaid expenses and other current assets $ 13.1 $ 19.3 Other assets $ 10.0 $ 27.5 Liabilities and equity: Deferred revenues $ 9.9 $ 10.5 Accrued liabilities $ 68.8 $ 75.7 Deferred tax liabilities $ 9.1 $ 8.2 Other long-term liabilities $ 12.1 $ 32.5 Retained earnings $ 77.7 $ 74.4 Twelve Months Ended September 27, 2019 (In millions) Balance without Adoption As Reported Revenues 781.2 780.6 Cost of revenues 524.7 523.9 Taxes on earnings 5.7 5.7 Net earnings attributable to Varex 15.3 15.5 Contracts and performance obligations The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. The Company's performance obligations consist mainly of transferring control of products and services identified in the contracts or purchase orders. For each contract, the Company considers the obligation to transfer products and services to the customer, which are distinct, to be performance obligations. Revenue recognition Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. Product revenue is recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Service revenue is recognized over time as the services are rendered to the customer based on the extent of progress towards completion of the performance obligation. The Company recognizes service revenue over the term of the service contract. Services are expected to be transferred to the customer throughout the term of the contract and the Company believes recognizing revenue ratably over the term of the contract best depicts the transfer of value to the customer. Disaggregation of Revenue Revenue is disaggregated from contracts between geography and by reportable operating segment, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. Refer to Note 15 . Segment Information, included in this report, for the disaggregation of the Company’s revenue based on reportable operating segments and disaggregated by geographic region. Contract Balances Contract assets are included within the prepaid expenses and other current assets, and other assets balances. Contract liabilities, which also includes refund obligations are included within the accrued liabilities, deferred revenues, and other long-term liabilities balances. The following table summarizes the changes in the contract assets and refund liabilities for the twelve months ended September 27, 2019: (In millions) Contact Assets Balance at September 29, 2018 $ 24.4 Costs recovered from product returns during the period (6.4 ) Contract asset from shipments of products, subject to return during the period 5.7 Balance at September 27, 2019 $ 23.7 (In millions) Refund Liabilities Balance at September 29, 2018 $ 27.1 Recognition of revenue included in beginning of year refund liability (7.0 ) Additions to refund liabilities 6.3 Balance at September 27, 2019 $ 26.4 Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which revenue has not yet been recognized. As of September 27, 2019, total remaining performance obligations amounted to $265.2 million . The Company expects to recognize a majority of the remaining performance obligations over the next 12 months. Costs to Obtain or Fulfill a Customer Contract The Company has certain costs to obtain and fulfill a customer contract, such as commissions and shipping costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Incremental costs of obtaining contracts that would be recognized over greater than one year are not material. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. These costs are included as a component of cost of revenues. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 27, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On October 1, 2019, the Company, in accordance with the terms of the Credit Agreement, provided notice to the administrative agent that effective as of October 8, 2019, the Company was permanently reducing the revolving credit commitment under the Credit Agreement by $25.0 million to $125.0 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. 27, 2019 | |
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 January 28 2017, the date of separation and distribution, the financial statements were prepared on a stand-alone basis and were 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 | 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 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. |
Reclassification | Reclassification The Company has reclassified $3.0 million from selling, general and administrative expense to impairment of intangible assets for the year ended September 28, 2018, to conform to the current year's presentation. Such reclassifications had no impact on net earnings as previously reported. |
Segment Reporting | Segment Reporting The Company has two |
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 2019 was the 52-week period that ended on September 27, 2019. Fiscal year 2018 was the 52-week period that ended on September 28, 2018. Fiscal year 2017 was the 52-week period that ended on September 29, 2017. |
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 statements. As of September 27, 2019 , the Company had two |
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. Such estimates include the valuation of inventories, goodwill and intangible assets, impairment on investments, and taxes on earnings. Actual results could differ from these estimates. |
Cash and Cash Equivalents and Restricted Cash | 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. Restricted Cash Restricted cash primarily consists of cash collateral related to certain leases and inventory arrangements. Restricted cash is |
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. Derivatives designated as a hedge are recorded on the Consolidated Balance Sheets at fair value as of the reporting date. For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income or loss and reclassified from accumulated other comprehensive loss into earnings when the hedged transaction affects earnings. For derivatives that are designated and qualify as net investment hedges, the gain or loss on the derivative is reported as a component of other comprehensive income or loss. Time value is excluded and the cash payments are recognized as an adjustment to interest expense. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective. |
Concentration of Risk | Concentration of Risk |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. Costs include materials, labor and manufacturing overhead and is computed using standard cost (which approximates actual cost) on a first-in-first-out basis. The Company evaluates the carrying value of its inventories taking into consideration such factors as historical and anticipated future sales compared to quantities on hand and the prices the Company expects to obtain for products in its various markets. The Company 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 years 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. Distributions received from an equity method investment are classified using the cumulative earnings approach. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment as operating cash flows and those in excess of that amount will be treated as returns of investment as investing cash flows. 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 years 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 for impairment at least annually at the beginning of the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performs a step one analysis, which consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit. 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, customs and duties audits and other loss contingency 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 an unfavorable outcome is determined to be probable and the losses 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. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts |
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. |
Research and Development | Research and Development |
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. |
Foreign Currency Translation | Foreign Currency Translation |
Accounting Standards Recently Adopted, Recent Accounting Standards Updates Not Yet Effective | Accounting Standards Recently Adopted In November 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires that the statement of cash flows explain the change in the total amount of restricted cash during the period and other additional disclosures. The Company adopted ASU 2016-18 in the first quarter of 2019 using the retrospective transition method and the Company's consolidated statements of cash flows have been retrospectively adjusted to reflect restricted cash balances. Net cash flows for fiscal years 2019, 2018 and 2017 did not change as a result of adopting ASU 2016-18. The Company adopted ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which was issued to reduce the diversity in practice in how certain transactions are classified in the statement of cash flows. The Company adopted ASU 2016-15 in the first quarter of 2019 retrospectively. Net cash flows for fiscal years 2019, 2018 and 2017 did not change as a result of adopting ASU 2016-15. The Company adopted ASC 606 as of September 29, 2018, using the modified retrospective transition method applied to those contracts which were not completed as of that date. The Company recorded a net reduction to retained earnings of $4.1 million , net of tax, as of September 29, 2018 due to the impact of adopting ASC 606. During the second quarter of 2019 the Company recorded an increase to retained earnings of $0.6 million , net of tax, to correct an error that was not quantitatively or qualitatively material to the current period, related to the adoption of ASC 606. The net cumulative impact of adopting ASC 606 was $3.5 million , net of tax. Refer to Note 18. Revenue Recognition , included in this report report for the detailed impact of adopting ASC 606. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends the application of hedge accounting and improves financial reporting of hedging relationships to more accurately present the economic effects of risk management activities in the financial statements. The ASU is effective for public companies for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company early adopted the provisions of ASU 2017-12 during the quarter ended September 27, 2019, using the modified retrospective method. The adoption did not have an impact on the consolidated financial statements. 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 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. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In addition, the ASU requires new disclosures. This standard will be effective for the Company's interim and annual periods beginning with the first quarter of fiscal 2021, and must be applied on a modified retrospective basis. The Company is currently evaluating the potential impact of this standard. 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 has not completed its assessment of the new standard, but anticipate that the most substantial change to its consolidated financial statements will be a gross-up of its total assets and liabilities. The adoption is not expected to materially impact our results of operations in the upcoming fiscal years and interim periods. The Company will continue to monitor the overall impact of adoption and update our disclosures as appropriate. |
Revenue from Contract with Customer | Shipping and Handling Costs Shipping and handling costs are included as a component of cost of revenues. Revenue Recognition Effective September 29, 2018, the Company adopted the requirements of Accounting Standards Update (“ASU”) 2014-09 and related amendments, Revenue from Contracts with Customers (“ASC 606”), which superseded all prior revenue recognition methods and industry-specific guidance. See “Recently Adopted Accounting Pronouncements” below. The Company’s revenues are derived primarily from the sale of hardware and services. The Company recognizes its revenues net of any value-added or sales tax and net of sales discounts. 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. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, a performance obligation is satisfied Deferred Revenues Deferred revenue primarily represents (i) the amount received applicable to non-software products for which parts and services under the warranty contracts have not been delivered, and (ii) the amount received for service contracts for which the services have not been rendered. The Company adopted ASC 606 on September 29, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for fiscal year 2019 reflect the application of ASC 606 guidance while the reported results for fiscal year 2018 were prepared under the guidance of ASC 605, “Revenue Recognition.” The primary impacts of the adoption include: (1) recording a separate contract liability and contract asset related to the sale of X-ray tubes that were sold with an option for the customer to require the Company to repurchase specific parts of the X‑ray tube at a specific price; and (2) recording a liability related to the deferral of revenue for service type warranties that are provided to certain customers who purchase Linatron ® X-ray accelerators. The Company has made the following accounting policy elections and elected to use certain practical expedients, as permitted by the FASB, in applying ASC 606: (1) the Company accounts for amounts collected from customers for sales and other taxes, net of related amounts remitted to tax authorities; (2) the Company does not adjust the promised amount of consideration for the effects of a significant financing component, if, at contract inception, the Company expects the period between the time when the Company transfers a promised good or service to the customer and the time when the customer pays for that good or service will be one year or less; (3) the Company expenses costs to obtain a contract as they are incurred if the expected period of benefit, and therefore the amortization period, is one year or less; (4) the Company accounts for shipping and handling activities that occur after control transfers to the customer as a fulfillment cost rather than an additional promised service and these fulfillment costs are included as a component of cost of revenues; and (5) the Company does not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. Transaction price and allocation to performance obligations Transaction prices of products or services are typically based on contracted rates. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method when there is a large number of transactions with similar characteristics or the most likely amount method when there are two possible outcomes, depending on the circumstances of the transaction, to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company allows customers to return specific parts of purchased X-ray tubes for a partial refund credit, which is identified as variable consideration. ASC 606-10-55-23 requires that for sales with a right of return, revenue is reduced for expected returns, a liability is recorded for expected returns, and an asset is recorded for the right to recover products from customers on settling the liability. The Company recognizes a reduction to revenue and cost of sales at the time of sale and a corresponding contract liability and contract asset. The Company records this estimate based on the historical volume of product returns and adjusts the estimate on a quarterly basis based on the current quarter sales and current quarter returns. If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
Accounting Policies [Abstract] | |
Restrictions on Cash and Cash Equivalents | Cash and cash equivalents and restricted cash as reported within the consolidated statements of cash flows consisted of the following: Twelve Months Ended September 27, 2019 Twelve Months Ended September 28, 2018 Beginning of Period End of Period Beginning of Period End of Period Cash and cash equivalents $ 51.9 $ 29.9 $ 83.3 $ 51.9 Restricted cash 1.5 1.4 0.9 1.5 Cash and cash equivalents and restricted cash as reported per statement of cash flows $ 53.4 $ 31.3 $ 84.2 $ 53.4 |
Schedules of Concentration of Risk, by Risk Factor | Credit is extended to customers based on an evaluation of the customer’s financial condition, and collateral is not required. During the periods presented, one of the Company's Medical segment customers accounted for a significant portion of revenues, which is as follows: Fiscal Year 2019 2018 2017 Canon Medical Systems Corporation 17.3 % 18.1 % 19.3 % |
Schedule of Inventory, Current | The following table summarizes the Company’s inventories, net: (In millions) September 27, 2019 September 28, 2018 Raw materials and parts $ 160.1 $ 149.9 Work-in-process 27.9 25.4 Finished goods 60.2 59.8 Total inventories $ 248.2 $ 235.1 |
Property, Plant and Equipment | The following table summarizes the Company’s property, plant and equipment, net: (In millions) September 27, 2019 September 28, 2018 Land $ 8.3 $ 8.3 Buildings and leasehold improvements 134.4 138.1 Machinery 170.7 166.1 Construction in progress 28.5 23.1 $ 341.9 $ 335.6 Accumulated depreciation and amortization (199.6 ) (190.7 ) Property, plant, and equipment, net $ 142.3 $ 144.9 |
Schedule of Product Warranty Liability | The following table reflects the changes in the Company’s accrued product warranty: Fiscal Years (In millions) 2019 2018 Accrued product warranty, at beginning of period $ 7.3 $ 7.0 Charged to cost of revenues 12.9 11.6 Actual product warranty expenditures (12.1 ) (11.3 ) Accrued product warranty, at end of period $ 8.1 $ 7.3 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the 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 The following table summarizes the preliminary purchase price allocation: (In millions) Fair Value Allocation of the purchase consideration: Accounts receivable $ 2.4 Inventories 5.7 Prepaid expenses and other current assets 0.7 Property, plant, and equipment 0.9 Goodwill 47.2 Intangible assets 32.9 Total assets acquired 89.8 Accounts payable (1.0 ) Accrued liabilities (1.5 ) Current maturities of long-term debt (1.0 ) Deferred revenues (0.9 ) Long-term debt (3.5 ) Other long-term liabilities (1.1 ) Total liabilities assumed (9.0 ) Noncontrolling interest (1.4 ) Net assets acquired, less noncontrolling interest $ 79.4 Net cash paid $ 69.5 Deferred consideration 9.9 Total consideration $ 79.4 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 |
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 The following amounts represent the determination of the fair value and estimated weighted average useful lives of identifiable intangible assets for the Direct Conversion, which are amortized straight-line: (In millions) Fair Value Estimated Weighted Average Backlog $ 0.2 1 Trade names 2.5 5 Developed technology 18.4 10 In-process research and development 2.8 indefinite Customer relationships 9.0 10 Total intangible assets acquired $ 32.9 |
Schedule of Segment Reporting Information, by Segment | The following amounts represent revenues by reporting segment from Direct Conversion from the acquisition date of April 29, 2019 , through September 27, 2019: (In millions) Direct Conversion Revenue Medical $ 4.5 Industrial 1.8 Total Direct Conversion revenues $ 6.3 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) 2019 2018 2017 Revenues Medical $ 596.8 $ 602.0 $ 556.9 Industrial 183.8 171.4 141.2 Total revenues 780.6 773.4 698.1 Gross margin Medical 188.9 190.5 193.6 Industrial 67.8 63.4 59.9 Total gross margin 256.7 253.9 253.5 Total operating expenses 211.0 209.4 169.8 Interest and other expenses, net (24.2 ) (18.8 ) (8.9 ) Earnings before taxes 21.5 25.7 74.8 Taxes (benefit) on earnings 5.7 (2.6 ) 22.8 Net earnings 15.8 28.3 52.0 Less: Net earnings attributable to noncontrolling interests 0.3 0.8 0.4 Net earnings attributable to Varex $ 15.5 $ 27.5 $ 51.6 |
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. 27, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges | Below is a detail of restructuring charges incurred during the 2019 and 2018 fiscal years, which predominately relate to the Company's Medical segment: (In millions) Location of Restructuring Charges in Consolidated Statements of Earnings September 27, 2019 September 28, 2018 Other assets impairment charges Selling, general and administrative $ — $ 1.3 Inventory write downs Cost of revenues 3.1 3.1 Intangible assets impairment Impairment of intangible assets 4.8 3.0 Accelerated depreciation Cost of revenues 4.5 4.2 Severance costs Selling, general and administrative 6.2 4.3 Facility closure costs Selling, general and administrative 0.3 0.8 Total restructuring charges $ 18.9 $ 16.7 |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accrued Liabilities | The following table summarizes the Company’s accrued liabilities: (In millions) September 27, 2019 September 28, 2018 Accrued compensation and benefits $ 32.1 $ 27.0 Product warranty 8.1 7.3 Income taxes payable 10.7 1.4 Payable to Varian Medical Systems — 2.3 Right of return liability 6.9 — Deferred consideration 8.9 — Other 9.0 9.5 Total accrued liabilities $ 75.7 $ 47.5 |
Other Noncurrent Liabilities | The following table summarizes the Company’s other long-term liabilities: (In millions) September 27, 2019 September 28, 2018 Long-term income tax payable $ 3.9 $ 3.5 Environment liabilities 0.9 1.3 Defined benefit obligation liability 5.5 3.3 Long-term right of return liability 19.5 — Long-term other 2.7 0.4 Total other long-term liabilities $ 32.5 $ 8.5 |
Schedule of Other Nonoperating Income (Expense) | The following table summarizes the Company’s other income (expense), net: Fiscal Years (In millions) 2019 2018 2017 Income (loss) from equity method investments $ (2.3 ) $ 3.9 $ 1.3 Change in fair value of deferred consideration 1.0 — — Realized income (loss) on foreign currencies (1.9 ) (1.2 ) 1.9 Total other income (expense), net $ (3.2 ) $ 2.7 $ 3.2 |
NET EARNINGS PER SHARE (Tables)
NET EARNINGS PER SHARE (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
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) 2019 2018 2017 Net earnings attributable to Varex $ 15.5 $ 27.5 $ 51.6 Weighted average shares outstanding - basic 38.2 37.9 37.6 Dilutive effect of potential common shares 0.4 0.5 0.4 Weighted average shares outstanding - diluted 38.6 38.4 38 Net earnings per share attributable to Varex - basic $ 0.41 $ 0.73 $ 1.37 Net earnings per share attributable to Varex - diluted $ 0.40 $ 0.72 $ 1.36 Anti-dilutive employee shared based awards, excluded 1.9 1.2 1.0 |
FINANCIAL DERIVATIVES AND HED_2
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
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 27, 2019 : Notional Value of Derivatives not Designated as Hedging Instruments: In millions Buy contracts Sell contract Japanese yen $ 0.9 $ — Swiss franc — (1.0 ) Chinese renminbi 1.8 — Euro 8.8 — $ 11.5 $ (1.0 ) As of September 27, 2019 , the Company had the following outstanding derivatives designated as cash flow hedging instruments: (In millions, except for number of instruments) Number of Instruments Notional Value Interest Rate Swap Contracts 6 $ 264.4 September 27, 2019 , the Company had the following outstanding derivatives designated as net investment hedging instruments: (In millions, except for number of instruments) Number of Instruments Notional Value Cross Currency Swap Contracts 4 $ 77.7 |
Schedule of Interest Rate Derivative Instruments | The following table summarizes the amount of pre-tax earnings 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 or (Loss) Recognized in OCI on Derivative Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (In millions) 2019 2018 2017 2019 2018 2017 Interest Rate Swap Contracts $ (6.3 ) $ 6.9 $ 0.6 Interest expense $ 1.9 $ 0.1 $ (0.3 ) The Company expects that $0.1 million of the accumulated other comprehensive (loss) income related to cash flow hedges will be realized in pre-tax earnings over the next 12 months, but 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. None of the balances were eligible for netting. The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded. Derivative Assets Derivative Liabilities (In millions) September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Derivatives designated as cash flow hedges Balance sheet location Balance sheet location Interest rate swap contracts Other current assets $ — $ 2.2 Other current liabilities $ — $ — Interest rate swap contracts Other non-current assets — 5.5 Other non-current liabilities (0.5 ) — $ — $ 7.7 $ (0.5 ) $ — The following table summarizes the amount of pre-tax earnings recognized from derivative instruments for the periods indicated and the line items in the accompanying statements of operations where the results are recorded for net investment hedges: Amount of Gain or (Loss) Recognized in OCI on Derivative Location of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) (In millions) 2019 2018 2017 2019 2018 2017 Cross Currency Swap Contracts $ (0.2 ) $ — $ — Interest expense $ 0.2 $ — $ — These derivative instruments are subject to master netting agreements giving effect to rights of offset with each counterparty. None of the balances were eligible for netting. The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded: Derivative Assets Derivative Liabilities (In millions) September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Derivatives designated as net investment hedges Balance sheet location Balance sheet location Cross currency swap contracts Other current assets — — Other current liabilities (0.2 ) — $ — $ — $ (0.2 ) $ — |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
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 27, 2019 September 28, 2018 (In millions, except for percentages) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Current maturities of long-term debt Term facility $ 29.4 5.6 % $ 25.0 4.2 % Other debt 1.3 — Total current maturities of long-term debt $ 30.7 $ 25.0 Non-current maturities of long-term debt: Revolving credit facility $ 59.0 5.6 % $ 28.0 4.2 % Term facility 308.6 5.6 % 345.0 4.2 % Other debt 2.5 — Debt issuance costs (5.7 ) (8.2 ) Non-current maturities of long-term debt 364.4 364.8 Total long-term debt, net $ 395.1 $ 389.8 |
Schedule of Maturities of Long-term Debt | Future principal payments of the long-term debt outstanding as of September 27, 2019 are as follows: (In millions) Fiscal years: 2020 $ 30.7 2021 34.3 2022 335.8 Total debt outstanding 400.8 Less: current maturities of long-term debt (30.7 ) Non-current portion of long -term debt $ 370.1 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | At September 28, 2018 , the Company determined the following levels of inputs for the following assets or liabilities: (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 Derivative assets — 7.7 — 7.7 Total assets measured at fair value $ — $ 26.1 $ — $ 26.1 Liabilities: Derivative liabilities $ — $ — $ — $ — 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 27, 2019 Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Significant Unobservable Inputs Total Assets: Cash equivalents - money market funds $ — $ 8.8 $ — $ 8.8 Total assets measured at fair value $ — $ 8.8 $ — $ 8.8 Liabilities: Derivative liabilities $ — $ 0.7 $ — $ 0.7 Deferred consideration 8.9 — — 8.9 Total liabilities measured at fair value $ 8.9 $ 0.7 $ — $ 9.6 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
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 28, 2018 $ 147.0 $ 96.6 $ 243.6 Business combination 26.0 21.2 47.2 Balance at September 27, 2019 $ 173.0 $ 117.8 $ 290.8 |
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: September 27, 2019 September 28, 2018 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 74.1 $ (28.4 ) $ 45.7 $ 57.9 $ (21.8 ) $ 36.1 Patents, licenses and other 12.7 (8.4 ) 4.3 9.9 (7.4 ) 2.5 Customer contracts and supplier relationship 50.7 (17.2 ) 33.5 42.6 (11.4 ) 31.2 Total intangible assets with finite lives 137.5 (54.0 ) 83.5 110.4 (40.6 ) 69.8 In-process R&D with indefinite lives 2.8 0.0 2.8 4.0 0.0 4.0 Total intangible assets $ 140.3 $ (54.0 ) $ 86.3 $ 114.4 $ (40.6 ) $ 73.8 |
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: September 27, 2019 September 28, 2018 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 74.1 $ (28.4 ) $ 45.7 $ 57.9 $ (21.8 ) $ 36.1 Patents, licenses and other 12.7 (8.4 ) 4.3 9.9 (7.4 ) 2.5 Customer contracts and supplier relationship 50.7 (17.2 ) 33.5 42.6 (11.4 ) 31.2 Total intangible assets with finite lives 137.5 (54.0 ) 83.5 110.4 (40.6 ) 69.8 In-process R&D with indefinite lives 2.8 0.0 2.8 4.0 0.0 4.0 Total intangible assets $ 140.3 $ (54.0 ) $ 86.3 $ 114.4 $ (40.6 ) $ 73.8 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of September 27, 2019 , the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal years: 2020 $ 17.2 2021 16.3 2022 14.7 2023 13.7 2024 9.1 Thereafter 12.5 Total $ 83.5 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
Noncontrolling Interest [Abstract] | |
Changes in Redeemable Noncontrolling Interest | Changes in redeemable noncontrolling interests and noncontrolling interests were as follows: Fiscal Years 2019 2018 (In millions) Redeemable Noncontrolling Redeemable Noncontrolling Interest Balance at beginning of period $ 11.1 $ 2.1 $ 11.2 $ — Net earnings attributable to noncontrolling interests 0.5 (0.2 ) 0.5 0.3 Contributions from noncontrolling interests — 1.4 — 1.8 Dividend distributions (0.5 ) — (0.6 ) — Other (0.6 ) — — — Balance at end of period $ 10.5 $ 3.3 $ 11.1 $ 2.1 |
EMPLOYEE STOCK PLANS (Tables)
EMPLOYEE STOCK PLANS (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
Share-based Payment Arrangement [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) 2019 2018 2017 Cost of revenues $ 1.2 $ 1.3 $ 0.9 Research and development 2.2 1.8 1.5 Selling, general and administrative (1) 8.3 6.9 6.0 Total share-based compensation expense $ 11.7 $ 10.0 $ 8.4 (1) Includes allocated share-based compensation of $0.8 million for fiscal year 2017 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 ESPP grants. The Company calculated the fair value of option grants and option component of ESPP grants on the respective dates of grant using the following weighted average assumptions: Employee Stock Option Plan Employee Stock Purchase Plans Fiscal Year Fiscal Year 2019 2018 2017 2019 2018 2017 Expected term (in years) 4.6 4.8 4.2 0.5 0.5 0.5 Risk-free interest rate 2.5 % 2.6 % 1.6 % 2.5 % 2.0 % 1.0 % Expected volatility 33.9 % 31.8 % 23.6 % 43.9 % 34.1 % 28.0 % Expected dividend 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % Weighted average fair value at grant date $10.19 $11.57 $8.08 $7.81 $8.92 $7.81 |
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 Price range Weighted Average Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) Outstanding at September 28, 2018 2,011 $22.63 — $37.60 $ 30.35 Granted 297 $31.42 — $31.42 31.42 Canceled, expired or forfeited (4) $31.08 — $31.08 31.08 Exercised (35) $22.84 — $27.77 23.38 Outstanding at September 27, 2019 2,269 $22.63 — $37.60 $ 30.60 4.1 $ 1,220.3 Exercisable at September 27, 2019 1,477 $22.63 — $37.60 $ 29.67 3.4 $ 1,220.3 (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 $28.28 as of September 27, 2019 , the last trading date of the Company's respective fiscal years, 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 28, 2018 641 $ 33.60 Granted 288 31.29 Vested (201) 31.56 Canceled or expired (50) 34.13 Balance at September 27, 2019 678 $ 33.18 |
TAXES ON EARNINGS (Tables)
TAXES ON EARNINGS (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of Valuation Allowance [Table Text Block] | Changes in the Company's valuation allowance for deferred tax assets were as follows: Fiscal Years (In millions) 2019 2018 2017 Valuation allowance balance–beginning of fiscal year $ 4.0 $ 4.3 $ 2.5 Increases resulting from business combinations 12.0 — — Other increases 2.8 2.2 2.5 Other decreases — (2.5 ) (0.7 ) Valuation allowance balance—end of fiscal year $ 18.8 $ 4.0 $ 4.3 |
Schedule of Components of Income Tax Expense (Benefit) | Taxes on earnings were as follows: Fiscal Years (In millions) 2019 2018 2017 Current provision: Federal $ 9.2 $ (2.1 ) $ 24.8 State and local 1.3 (0.3 ) 1.6 Foreign 6.8 7.5 5.3 Total current 17.3 5.1 31.7 Deferred provision (benefit): Federal (10.0 ) (7.0 ) (7.0 ) State and local (1.6 ) 0.7 (1.0 ) Foreign — (1.4 ) (0.9 ) Total deferred (11.6 ) (7.7 ) (8.9 ) Taxes on earnings $ 5.7 $ (2.6 ) $ 22.8 |
Schedule of Income before Income Tax, Domestic and Foreign | Earnings before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2019 2018 2017 United States $ 5.9 $ 3.7 $ 55.5 Foreign 15.6 22.0 19.3 Earnings before taxes $ 21.5 $ 25.7 $ 74.8 |
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 2019 2018 2017 Federal statutory income tax rate 21.0 % 24.5 % 35.0 % State and local taxes, net of federal tax benefit (0.9 )% 1.1 % 1.3 % Revaluation of deferred tax liabilities for US statutory change — % (41.8 )% — % Mandatory repatriation tax on foreign earnings 1.9 % 13.0 % — % Domestic production activities deduction — % (0.8 )% (2.4 )% Research and development credit (10.2 )% (11.1 )% (2.6 )% Prior year deferred tax adjustments 4.7 % 1.9 % (4.0 )% Foreign Rate Difference 6 % 0.8 % — % Change in valuation allowance 11.2 % (1.9 )% 3.8 % US Tax Reform - International Provisions (4.7 )% — % — % Other (2.5 )% 4.2 % (0.6 )% Effective tax rate 26.5 % (10.1 )% 30.5 % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of deferred tax assets and liabilities are as follows: (In millions) September 27, 2019 September 28, 2018 Deferred Tax Assets: Inventory adjustments $ 5.6 $ 4.2 Share-based compensation 3.1 0.8 Product warranty 1.6 1.4 Deferred compensation 1.1 0.9 Net operating loss carryforwards 24.3 3.3 Accrued vacation 1.0 1.3 Credit carryforwards 1.9 1.8 Other 7.5 4.7 46.1 18.4 Valuation allowance (18.8 ) (4.0 ) Total deferred tax assets 27.3 14.4 Deferred Tax Liabilities: Acquired intangibles (19.3 ) (15.2 ) Property, plant and equipment (10.6 ) (14.3 ) Investments in privately held companies (3.3 ) (4.1 ) Other (2.3 ) (4.0 ) Total deferred tax liabilities (35.5 ) (37.6 ) Net deferred tax liabilities $ (8.2 ) $ (23.2 ) Reported As: Deferred tax assets $ 27.3 $ 14.4 Deferred tax liabilities (35.5 ) (37.6 ) Net deferred tax liabilities $ (8.2 ) $ (23.2 ) |
Schedule of Unrecognized Tax Benefits Roll Forward | Changes in the Company’s unrecognized tax benefits were as follows: Fiscal Years (In millions) 2019 2018 Unrecognized tax benefits balance–beginning of fiscal year $ 0.6 $ 0.5 Subtractions based on tax positions related to a prior year (0.2 ) — Additions based on tax positions related to the current year 0.2 0.1 Unrecognized tax benefits balance—end of fiscal year $ 0.6 $ 0.6 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following amounts represent revenues by reporting segment from Direct Conversion from the acquisition date of April 29, 2019 , through September 27, 2019: (In millions) Direct Conversion Revenue Medical $ 4.5 Industrial 1.8 Total Direct Conversion revenues $ 6.3 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) 2019 2018 2017 Revenues Medical $ 596.8 $ 602.0 $ 556.9 Industrial 183.8 171.4 141.2 Total revenues 780.6 773.4 698.1 Gross margin Medical 188.9 190.5 193.6 Industrial 67.8 63.4 59.9 Total gross margin 256.7 253.9 253.5 Total operating expenses 211.0 209.4 169.8 Interest and other expenses, net (24.2 ) (18.8 ) (8.9 ) Earnings before taxes 21.5 25.7 74.8 Taxes (benefit) on earnings 5.7 (2.6 ) 22.8 Net earnings 15.8 28.3 52.0 Less: Net earnings attributable to noncontrolling interests 0.3 0.8 0.4 Net earnings attributable to Varex $ 15.5 $ 27.5 $ 51.6 |
Reconciliation of Assets from Segment to Consolidated | The following table summarizes the Company’s total assets by its reportable segments: (In millions) September 27, 2019 September 28, 2018 Identifiable assets: Medical $ 794.3 $ 770.6 Industrial 244.6 217.3 Total reportable segments $ 1,038.9 $ 987.9 |
Revenue from External Customers by Geographic Areas | Geographic Information Revenues Property, plant and equipment, net Fiscal Years Fiscal Years (In millions) 2019 2018 2017 2019 2018 United States $ 275.3 $ 268.8 $ 231.9 $ 122.6 $ 127.9 Latin America 7.3 7.0 7.9 — — EMEA 269.0 254.5 219.5 11.4 8.7 APAC 229.0 243.1 238.8 8.3 8.3 Total company $ 780.6 $ 773.4 $ 698.1 $ 142.3 $ 144.9 |
OTHER COMPREHENSIVE INCOME (Tab
OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
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 28, 2018 $ 5.8 $ — $ 5.8 Other comprehensive loss before reclassifications (8.3 ) (1.9 ) (10.2 ) Income tax benefit 2.1 0.6 2.7 Balance at September 27, 2019 $ (0.4 ) $ (1.3 ) $ (1.7 ) |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Sep. 27, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of ASC 606 Adoption Impacts | The beginning net cumulative-effect adjustment to the balance sheet for the adoption of ASC 606 is as follows: Balance at Adjustment Due to Balance at (In millions) September 28, 2018 ASC 606 September 29, 2018 Assets: Prepaid expenses and other current assets $ 17.1 $ 6.4 $ 23.5 Other assets 16.5 18.0 34.5 Liabilities and Equity: Deferred revenues 13.2 0.3 13.5 Accrued liabilities 47.5 7.1 54.6 Deferred tax liabilities 23.2 (0.8 ) 22.4 Other long-term liabilities 8.5 21.3 29.8 Retained earnings 62.4 (3.5 ) 58.9 The following tables compare the reported consolidated balance sheet and statement of operations for fiscal year ended September 27, 2019, to the amounts that would have been reported if ASC 605 had been in effect: September 27, 2019 (In millions) Balance without Adoption As Reported Assets: Prepaid expenses and other current assets $ 13.1 $ 19.3 Other assets $ 10.0 $ 27.5 Liabilities and equity: Deferred revenues $ 9.9 $ 10.5 Accrued liabilities $ 68.8 $ 75.7 Deferred tax liabilities $ 9.1 $ 8.2 Other long-term liabilities $ 12.1 $ 32.5 Retained earnings $ 77.7 $ 74.4 Twelve Months Ended September 27, 2019 (In millions) Balance without Adoption As Reported Revenues 781.2 780.6 Cost of revenues 524.7 523.9 Taxes on earnings 5.7 5.7 Net earnings attributable to Varex 15.3 15.5 |
Schedule of Changes in Contract With Customer Assets And Liabilities | The following table summarizes the changes in the contract assets and refund liabilities for the twelve months ended September 27, 2019: (In millions) Contact Assets Balance at September 29, 2018 $ 24.4 Costs recovered from product returns during the period (6.4 ) Contract asset from shipments of products, subject to return during the period 5.7 Balance at September 27, 2019 $ 23.7 (In millions) Refund Liabilities Balance at September 29, 2018 $ 27.1 Recognition of revenue included in beginning of year refund liability (7.0 ) Additions to refund liabilities 6.3 Balance at September 27, 2019 $ 26.4 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Description of Business (Details) | Jan. 28, 2017 |
Varian Medical Systems, Inc. | |
Schedule of Pro Rata Distribution [Line Items] | |
Outstanding common stock, percentage distributed | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reclassification (Details) - USD ($) | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reclassification of selling, general and administrative | $ (128,100,000) | $ (123,400,000) | $ (102,500,000) |
Impairment of intangible assets | $ 4,800,000 | 3,000,000 | $ 0 |
Restatement Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reclassification of selling, general and administrative | 3,000,000 | ||
Impairment of intangible assets | $ 3,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | 12 Months Ended |
Sep. 27, 2019segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Variable Interest Entities (Details) | 12 Months Ended |
Sep. 27, 2019entity | |
Accounting Policies [Abstract] | |
Number of variable interest entities | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restricted Cash (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 29.9 | $ 51.9 | $ 83.3 | |
Restricted cash | 1.4 | 1.5 | 0.9 | |
Cash and cash equivalents and restricted cash as reported per statement of cash flows | $ 31.3 | $ 53.4 | $ 84.2 | $ 36.8 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Details) - Canon Medical Systems Corporation - Customer Concentration Risk | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 17.30% | 18.10% | 19.30% |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.10% | 9.80% |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 28, 2018 |
Accounting Policies [Abstract] | ||
Raw materials and parts | $ 160.1 | $ 149.9 |
Work-in-process | 27.9 | 25.4 |
Finished goods | 60.2 | 59.8 |
Total inventories | $ 248.2 | $ 235.1 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 341.9 | $ 335.6 | |
Accumulated depreciation and amortization | (199.6) | (190.7) | |
Property, plant, and equipment, net | 142.3 | 144.9 | |
Depreciation | 23.5 | 26 | $ 16.9 |
Accelerated depreciation | $ 4.5 | 4.2 | |
Land Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives | 15 years | ||
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 | 8.3 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 134.4 | 138.1 | |
Machinery | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 170.7 | 166.1 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 28.5 | $ 23.1 | |
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_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Intangible Assets (Details) | 12 Months Ended |
Sep. 27, 2019 | |
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_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of Long-Lived Assets, Intangible Assets and Goodwill (Details) - USD ($) | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Accounting Policies [Abstract] | |||
Impairment of intangible assets | $ 4,800,000 | $ 3,000,000 | $ 0 |
Goodwill, impairment loss | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 27, 2019 | Sep. 28, 2018 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Accrued product warranty, at beginning of period | $ 7.3 | $ 7 |
Charged to cost of revenues | 12.9 | 11.6 |
Actual product warranty expenditures | (12.1) | (11.3) |
Accrued product warranty, at end of period | $ 8.1 | $ 7.3 |
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_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 28, 2018 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 1 | $ 0.6 |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounting Standards Recently Adopted (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Mar. 29, 2019 | Dec. 28, 2018 | Sep. 29, 2018 | Sep. 28, 2018 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
(Decrease) increase to retained earnings for adoption of new accounting guidance | $ 74.4 | $ 58.9 | $ 62.4 | ||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
(Decrease) increase to retained earnings for adoption of new accounting guidance | $ (3.5) | $ 0.6 | $ (4.1) | $ (3.5) |
BUSINESS COMBINATIONS - Direct
BUSINESS COMBINATIONS - Direct Conversion Narrative (Details) - Direct Conversion AB - USD ($) $ in Millions | Apr. 29, 2019 | Apr. 30, 2019 |
Business Acquisition [Line Items] | ||
Percentage of voting interests acquired | 98.20% | |
Net cash paid | $ 69.5 | |
Debt assumed | 4.5 | |
Deferred payment, value assigned | $ 9.9 | |
Deferred payment (in shares) | 300,000 |
BUSINESS COMBINATIONS - Fair Va
BUSINESS COMBINATIONS - Fair Value of Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Apr. 29, 2019 | Aug. 31, 2018 | May 01, 2017 | Sep. 27, 2019 | Sep. 28, 2018 |
Allocation of the purchase consideration: | |||||
Goodwill | $ 290.8 | $ 243.6 | |||
Direct Conversion AB | |||||
Allocation of the purchase consideration: | |||||
Accounts Receivable | $ 2.4 | ||||
Inventory | 5.7 | ||||
Prepaids and other current assets | 0.7 | ||||
Property, plant, and equipment | 0.9 | ||||
Intangibles | 32.9 | ||||
Goodwill | 47.2 | ||||
Total assets acquired | 89.8 | ||||
Accounts payable | (1) | ||||
Accrued liabilities | (1.5) | ||||
Current maturities of long-term debt | (1) | ||||
Deferred revenues | (0.9) | ||||
Long-term debt | (3.5) | ||||
Other liabilities, non-current | (1.1) | ||||
Total liabilities assumed | (9) | ||||
Noncontrolling interest | (1.4) | ||||
Net assets acquired, less noncontrolling interest | 79.4 | ||||
Net cash paid | 69.5 | ||||
Deferred consideration | 9.9 | ||||
Total cash consideration | $ 79.4 | ||||
Virtual Media Integration, Ltd. | |||||
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 | ||||
Post-closing adjustments | 0.5 | ||||
Total cash consideration | $ 4.8 | ||||
PerkinElmer, Inc. | |||||
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 | ||||
Net cash paid | 277.4 | ||||
Total cash consideration | $ 273.2 |
BUSINESS COMBINATIONS - Intangi
BUSINESS COMBINATIONS - Intangibles Acquired (Details) - USD ($) $ in Millions | Apr. 29, 2019 | May 01, 2017 |
Direct Conversion AB | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | $ 32.9 | |
Direct Conversion AB | In-process research and development | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | 2.8 | |
Direct Conversion AB | Backlog | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | $ 0.2 | |
Estimated useful life | 1 year | |
Direct Conversion AB | Trade names | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | $ 2.5 | |
Estimated useful life | 5 years | |
Direct Conversion AB | Developed technology | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | $ 18.4 | |
Estimated useful life | 10 years | |
Direct Conversion AB | Customer relationships | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | $ 9 | |
Estimated useful life | 10 years | |
PerkinElmer, Inc. | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | $ 81.1 | |
PerkinElmer, Inc. | In-process research and development | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | 4 | |
PerkinElmer, Inc. | Favorable leasehold interests | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | $ 3.8 | |
Estimated useful life | 16 years | |
PerkinElmer, Inc. | Backlog | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | $ 1.2 | |
Estimated useful life | 1 year | |
PerkinElmer, Inc. | Trade names | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | $ 1.4 | |
Estimated useful life | 5 years | |
PerkinElmer, Inc. | Developed technology | ||
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | ||
Intangibles | $ 37.7 | |
Estimated useful life | 7 years | |
PerkinElmer, Inc. | 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) - USD ($) $ in Millions | 5 Months Ended | |
Sep. 27, 2019 | Sep. 29, 2017 | |
Direct Conversion AB | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 6.3 | |
Direct Conversion AB | Medical | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4.5 | |
Direct Conversion AB | Industrial | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 1.8 | |
PerkinElmer, Inc. | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 61.3 | |
PerkinElmer, Inc. | Medical | ||
Segment Reporting Information [Line Items] | ||
Revenues | 41.1 | |
PerkinElmer, Inc. | Industrial | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 20.2 |
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 - PerkinE
BUSINESS COMBINATIONS - PerkinElmer's Medical Imaging Narrative (Details) - PerkinElmer, Inc. $ in Millions | May 01, 2017USD ($)employee |
Business Acquisition [Line Items] | |
Net cash paid | $ 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 - 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 | Dec. 17, 2019USD ($) | Oct. 31, 2013 | Sep. 27, 2019USD ($)member | Sep. 27, 2019USD ($)member | Sep. 28, 2018USD ($) | Sep. 29, 2017USD ($) |
Related Party Transaction [Line Items] | ||||||
Income (loss) from equity method investments | $ (2.3) | $ 3.9 | $ 1.3 | |||
Contributions to equity method investments | $ 3.9 | 0 | 0 | |||
dpiX Holding | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment, ownership percentage | 40.00% | 40.00% | ||||
Number of consortium members | member | 4 | 4 | ||||
Income (loss) from equity method investments | $ (1.1) | 3.4 | 0.8 | |||
Equity method investments | $ 48.1 | 48.1 | 48.9 | |||
dpiX Holding | Equity Method Investee | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases from related party | 23.5 | 19.3 | $ 24.7 | |||
Accounts payable, related parties | $ 3.6 | $ 3.6 | $ 3.7 | |||
Percentage of manufacturing capacity | 50.00% | |||||
Percentage of fixed costs | 50.00% | |||||
dpiX LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment, ownership percentage | 100.00% | 100.00% | ||||
VEC Imaging | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | ||||
Equity method investments | $ 2 | $ 2 | ||||
Contributions to equity method investments | $ 2.9 | |||||
Fixed Cost Commitments | dpiX Holding | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, expected fixed cost | $ 3.7 | |||||
CETTEEN GmbH | VEC Imaging | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | ||||
Forecast | VEC Imaging | ||||||
Related Party Transaction [Line Items] | ||||||
Contributions to equity method investments | $ 2.2 |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 27, 2019 | Sep. 28, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and impairment charges | $ 18.9 | $ 16.7 |
Other unrelated restructuring costs | 2.8 | 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 | 16.1 | $ 14.2 |
Minimum | Santa Clara Facility Relocation | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected additional costs to be incurred | 8.1 | |
Maximum | Santa Clara Facility Relocation | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected additional costs to be incurred | $ 12.1 |
RESTRUCTURING - Restructuring C
RESTRUCTURING - Restructuring Charges Incurred (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Restructuring and Related Activities [Abstract] | |||
Other assets impairment charges | $ 0 | $ 1.3 | $ 0 |
Inventory write-down | 3.1 | 3.1 | $ 0 |
Intangible assets impairment | 4.8 | 3 | |
Accelerated depreciation | 4.5 | 4.2 | |
Severance costs | 6.2 | 4.3 | |
Facility closure costs | 0.3 | 0.8 | |
Total restructuring charges | $ 18.9 | $ 16.7 |
OTHER FINANCIAL INFORMATION - (
OTHER FINANCIAL INFORMATION - (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | Sep. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Accrued compensation and benefits | $ 32.1 | $ 27 | ||
Product warranty | 8.1 | 7.3 | ||
Income taxes payable | 10.7 | 1.4 | ||
Payable to Varian Medical Systems | 0 | 2.3 | ||
Right of return liability | 6.9 | 0 | ||
Deferred consideration | 8.9 | 0 | ||
Other | 9 | 9.5 | ||
Total accrued liabilities | 75.7 | 47.5 | $ 54.6 | |
Long-term income tax payable | 3.9 | 3.5 | ||
Environment liabilities | 0.9 | 1.3 | ||
Defined benefit obligation liability | 5.5 | 3.3 | ||
Long-term right of return liability | 19.5 | 0 | ||
Long-term other | 2.7 | 0.4 | ||
Total other long-term liabilities | 32.5 | 8.5 | $ 29.8 | |
Income (loss) from equity method investments | (2.3) | 3.9 | $ 1.3 | |
Change in fair value of deferred consideration | 1 | 0 | 0 | |
Realized income (loss) on foreign currencies | (1.9) | (1.2) | 1.9 | |
Total other income (expense), net | $ (3.2) | $ 2.7 | $ 3.2 |
NET EARNINGS PER SHARE - (Detai
NET EARNINGS PER SHARE - (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Earnings Per Share [Abstract] | |||
Net earnings attributable to Varex | $ 15.5 | $ 27.5 | $ 51.6 |
Weighted average shares outstanding - basic (in shares) | 38.2 | 37.9 | 37.6 |
Dilutive effect of potential common shares (in shares) | 0.4 | 0.5 | 0.4 |
Weighted average shares outstanding - diluted (in shares) | 38.6 | 38.4 | 38 |
Net earnings per share attributable to Varex - basic (in USD per share) | $ 0.41 | $ 0.73 | $ 1.37 |
Net earnings per share attributable to Varex - diluted (in USD per share) | $ 0.40 | $ 0.72 | $ 1.36 |
Anti-dilutive employee shared based awards, excluded (in shares) | 1.9 | 1.2 | 1 |
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 $ in Millions | Sep. 27, 2019USD ($)derivative |
Interest Rate Swap Contracts | |
Derivative [Line Items] | |
Number of Instruments | derivative | 6 |
Notional Value | $ | $ 264.4 |
Cross Currency Swap Contracts | |
Derivative [Line Items] | |
Number of Instruments | derivative | 4 |
Notional Value | $ | $ 77.7 |
FINANCIAL DERIVATIVES AND HED_4
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Narrative (Details) $ in Millions | 12 Months Ended |
Sep. 27, 2019USD ($) | |
Derivative [Line Items] | |
Loss on derivative instruments not designated as cash flow hedges | $ 1.5 |
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 | $ 0.1 |
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 - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Interest Rate Swap Contracts | |||
Derivative [Line Items] | |||
Amount of Gain or (Loss) Recognized in OCI on Derivative Fiscal Year Ended | $ (6.3) | $ 6.9 | $ 0.6 |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Fiscal Year Ended | 1.9 | 0.1 | (0.3) |
Cross Currency Swap Contracts | |||
Derivative [Line Items] | |||
Amount of Gain or (Loss) Recognized in OCI on Derivative Fiscal Year Ended | (0.2) | 0 | 0 |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Fiscal Year Ended | $ 0.2 | $ 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 - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 28, 2018 |
Interest Rate Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Assets | $ 0 | $ 7.7 |
Derivative Liabilities | (0.5) | 0 |
Cross Currency Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Assets | 0 | 0 |
Derivative Liabilities | (0.2) | 0 |
Other current assets | Interest Rate Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Assets | 0 | 2.2 |
Other current assets | Cross Currency Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Assets | 0 | 0 |
Other non-current assets | Interest Rate Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Assets | 0 | 5.5 |
Other current liabilities | Interest Rate Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Other current liabilities | Cross Currency Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Liabilities | (0.2) | 0 |
Other non-current liabilities | Interest Rate Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Liabilities | $ (0.5) | $ 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. 27, 2019USD ($) |
Buy contracts | |
Derivatives, Fair Value [Line Items] | |
Notional Value | $ 11.5 |
Buy contracts | Japanese yen | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0.9 |
Buy contracts | Swiss franc | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Buy contracts | Chinese renminbi | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 1.8 |
Buy contracts | Euro | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 8.8 |
Sell contract | |
Derivatives, Fair Value [Line Items] | |
Notional Value | (1) |
Sell contract | Japanese yen | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Sell contract | Swiss franc | |
Derivatives, Fair Value [Line Items] | |
Notional Value | (1) |
Sell contract | Chinese renminbi | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Sell contract | Euro | |
Derivatives, Fair Value [Line Items] | |
Notional Value | $ 0 |
BORROWINGS - Schedule of Short-
BORROWINGS - Schedule of Short-Term and Long-Term Debt (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 27, 2019 | Sep. 28, 2018 | |
Current maturities of long-term debt | ||
Current maturities of long-term debt | $ 30.7 | $ 25 |
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | 370.1 | |
Debt issuance costs | (5.7) | (8.2) |
Long-term debt outstanding | 364.4 | 364.8 |
Long-term Debt | 395.1 | 389.8 |
Other Debt | ||
Current maturities of long-term debt | ||
Current maturities of long-term debt | 1.3 | 0 |
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | 2.5 | 0 |
Secured Debt | ||
Current maturities of long-term debt | ||
Current maturities of long-term debt | 29.4 | 25 |
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | $ 308.6 | $ 345 |
Weighted-average interest rate, short-term debt | 5.60% | 4.20% |
Weighted-average interest rate, long-term debt | 5.60% | 4.20% |
Revolving Credit Facility | Revolving Credit Facility | ||
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | $ 59 | $ 28 |
Weighted-average interest rate, long-term debt | 5.60% | 4.20% |
BORROWINGS - Narrative (Details
BORROWINGS - Narrative (Details) - USD ($) | Oct. 08, 2019 | Oct. 10, 2018 | May 01, 2017 | Jan. 25, 2017 | Sep. 27, 2019 | Sep. 28, 2018 |
Line of Credit Facility [Line Items] | ||||||
Long-term debt, net | $ 364,400,000 | $ 364,800,000 | ||||
Debt issuance costs | 5,700,000 | 8,200,000 | ||||
Current maturities of long-term debt | 30,700,000 | 25,000,000 | ||||
Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Current maturities of long-term debt | $ 29,400,000 | $ 25,000,000 | ||||
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] | ||||||
Maximum borrowing capacity | $ 150,000,000 | $ 200,000,000 | ||||
Debt instrument, term | 5 years | |||||
Used capacity, commitment fee percentage | 0.125% | |||||
Permanent reduction in the revolving credit commitment | $ (50,000,000) | |||||
Revolving Credit Facility | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, term | 5 years | |||||
Proceeds from lines of credit | $ 97,000,000 | |||||
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% | |||||
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% | |||||
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% | 7.50% | ||||
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% | 10.00% | ||||
Revolving Credit Facility | Debt Instrument, Repayment, Period Five | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Repayment percentage | 10.00% | |||||
Subsequent Event | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 125,000,000 | |||||
Permanent reduction in the revolving credit commitment | (25,000,000) | |||||
Subsequent Event | Revolving Credit Facility | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 125,000,000 | |||||
Permanent reduction in the revolving credit commitment | $ 25,000,000 |
BORROWINGS - Schedule of Debt M
BORROWINGS - Schedule of Debt Maturities (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 28, 2018 |
Debt Disclosure [Abstract] | ||
2020 | $ 30.7 | |
2021 | 34.3 | |
2022 | 335.8 | |
Total debt outstanding | 400.8 | |
Less: current maturities of long-term debt | (30.7) | $ (25) |
Non-current portion of long -term debt | $ 370.1 |
FAIR VALUE - (Details)
FAIR VALUE - (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 28, 2018 |
Liabilities: | ||
Long-term debt, fair value | $ 395.1 | |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Cash equivalents - money market funds | 8.8 | $ 18.4 |
Derivative assets | 7.7 | |
Total assets measured at fair value | 8.8 | 26.1 |
Liabilities: | ||
Derivative liabilities | 0.7 | 0 |
Deferred consideration | 8.9 | |
Total liabilities measured at fair value | 9.6 | |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | ||
Assets: | ||
Cash equivalents - money market funds | 0 | 0 |
Derivative assets | 0 | |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Deferred consideration | 8.9 | |
Total liabilities measured at fair value | 8.9 | |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash equivalents - money market funds | 8.8 | 18.4 |
Derivative assets | 7.7 | |
Total assets measured at fair value | 8.8 | 26.1 |
Liabilities: | ||
Derivative liabilities | 0.7 | 0 |
Deferred consideration | 0 | |
Total liabilities measured at fair value | 0.7 | |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Cash equivalents - money market funds | 0 | 0 |
Derivative assets | 0 | |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | $ 0 |
Deferred consideration | 0 | |
Total liabilities measured at fair value | $ 0 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Summary of Goowill (Details) $ in Millions | 12 Months Ended |
Sep. 27, 2019USD ($) | |
Goodwill [Roll Forward] | |
Balance at September 28, 2018 | $ 243.6 |
Business combination | 47.2 |
Balance at September 27, 2019 | 290.8 |
Medical | |
Goodwill [Roll Forward] | |
Balance at September 28, 2018 | 147 |
Business combination | 26 |
Balance at September 27, 2019 | 173 |
Industrial | |
Goodwill [Roll Forward] | |
Balance at September 28, 2018 | 96.6 |
Business combination | 21.2 |
Balance at September 27, 2019 | $ 117.8 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 137,500,000 | $ 110,400,000 | |
Accumulated Amortization | (54,000,000) | (40,600,000) | |
Net Carrying Amount | 83,500,000 | 69,800,000 | |
In-process R&D with indefinite lives | 2,800,000 | 4,000,000 | |
Total intangible assets, gross | 140,300,000 | 114,400,000 | |
Total intangible assets, net | 86,300,000 | 73,800,000 | |
Amortization of intangible assets | 15,700,000 | 16,200,000 | $ 10,500,000 |
Impairment of intangible assets | 4,800,000 | 3,000,000 | $ 0 |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 74,100,000 | 57,900,000 | |
Accumulated Amortization | (28,400,000) | (21,800,000) | |
Net Carrying Amount | 45,700,000 | 36,100,000 | |
Patents, licenses and other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 12,700,000 | 9,900,000 | |
Accumulated Amortization | (8,400,000) | (7,400,000) | |
Net Carrying Amount | 4,300,000 | 2,500,000 | |
Customer contracts and supplier relationship | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 50,700,000 | 42,600,000 | |
Accumulated Amortization | (17,200,000) | (11,400,000) | |
Net Carrying Amount | $ 33,500,000 | $ 31,200,000 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Amortization Schedule (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 28, 2018 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2020 | $ 17.2 | |
2021 | 16.3 | |
2022 | 14.7 | |
2023 | 13.7 | |
2024 | 9.1 | |
Thereafter | 12.5 | |
Net Carrying Amount | $ 83.5 | $ 69.8 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Future minimum payments due, next twelve months | $ 7.5 | ||
Future minimum payments, due in two years | 5.4 | ||
Future minimum payments, due in three years | 4.7 | ||
Future minimum payments, due in four years | 1.8 | ||
Future minimum payments, due in five years | 0.9 | ||
Future minimum payments, due thereafter | 0.2 | ||
Operating leases, rent expense | 5.1 | $ 5.3 | $ 4 |
Environment liabilities | $ 0.9 | $ 1.3 |
REDEEMABLE NONCONTROLLING INT_3
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS - Narrative (Details) shares in Millions, $ in Millions | 1 Months Ended | |||||
Oct. 31, 2015€ / shares | Sep. 27, 2019USD ($)shares | Apr. 30, 2019 | Sep. 28, 2018USD ($) | Sep. 29, 2017USD ($) | Apr. 30, 2015 | |
Noncontrolling Interest [Line Items] | ||||||
Redeemable noncontrolling interest, equity, redemption value | $ | $ 10.5 | $ 11.1 | $ 11.2 | |||
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% | |||||
Direct Conversion AB | ||||||
Noncontrolling Interest [Line Items] | ||||||
Percentage of voting interests acquired | 98.20% | |||||
MeVis Medical Solutions AG (MeVis) | ||||||
Noncontrolling Interest [Line Items] | ||||||
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 | $ | $ 10.5 | |||||
Temporary equity, shares outstanding (in shares) | shares | 0.5 | |||||
MeVis Medical Solutions AG (MeVis) | MeVis Medical Solutions AG (MeVis) | ||||||
Noncontrolling Interest [Line Items] | ||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 26.30% |
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. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Noncontrolling Interest [Line Items] | |||
Balance at beginning of period | $ 11.1 | $ 11.2 | |
Net earnings attributable to noncontrolling interests | 0.5 | 0.5 | |
Dividends paid to redeemable noncontrolling interest | (0.5) | (0.6) | $ 0 |
Other | (0.6) | 0 | |
Balance at end of period | 10.5 | 11.1 | 11.2 |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Balance at beginning of period | 428.3 | 379 | 526 |
Contributions from noncontrolling interests | 1.4 | ||
Contributions from noncontrolling interests | 1.8 | ||
Balance at end of period | 3.3 | 2.1 | |
Noncontrolling Interests | |||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Balance at beginning of period | 2.1 | 0 | $ 0 |
Net earnings attributable to noncontrolling interests | (0.2) | 0.3 | |
Contributions from noncontrolling interests | $ 1.4 | ||
Contributions from noncontrolling interests | $ 1.8 |
EMPLOYEE STOCK PLANS - Narrativ
EMPLOYEE STOCK PLANS - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017 | Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options exercised, intrinsic value | $ 0.2 | $ 1.7 | $ 1.4 | |
Options, grants in period, grant date fair value | 3 | 3.1 | 9.2 | |
Grant-date fair value of shares granted in the period | 9 | 10.1 | 11.4 | |
Shares outstanding, market value | 19.2 | $ 18.4 | $ 17.8 | |
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost not yet recognized | $ 23.1 | |||
2017 ESPP | Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Purchase price of common stock, percent | 85.00% | 85.00% | ||
Stock plan offering period (in months) | 6 months | 6 months | ||
Number of shares authorized (in shares) | 1,000,000,000,000 | |||
2017 ESPP | Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant (in shares) | 700,000 | |||
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) | 1,200,000 | |||
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. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | $ 11.7 | $ 10 | $ 8.4 |
Cost of revenues | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | 1.2 | 1.3 | 0.9 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | 2.2 | 1.8 | 1.5 |
Selling, general and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | $ 8.3 | $ 6.9 | 6 |
Varian | General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | $ 0.8 |
EMPLOYEE STOCK PLANS - Valuatio
EMPLOYEE STOCK PLANS - Valuation Assumptions (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Dec. 28, 2018 | Dec. 29, 2017 | Sep. 27, 2019 | |
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 4 years 9 months 18 days | 4 years 2 months 12 days | 4 years 7 months 6 days |
Risk-free interest rate | 2.60% | 1.60% | 2.50% |
Expected volatility | 31.80% | 23.60% | 33.90% |
Expected dividend | 0.00% | 0.00% | 0.00% |
Weighted average fair value at grant date (in USD per share) | $ 11.57 | $ 8.08 | $ 10.19 |
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | 6 months | 6 months |
Risk-free interest rate | 2.00% | 1.00% | 2.50% |
Expected volatility | 34.10% | 28.00% | 43.90% |
Expected dividend | 0.00% | 0.00% | 0.00% |
Weighted average fair value at grant date (in USD per share) | $ 8.92 | $ 7.81 | $ 7.81 |
EMPLOYEE STOCK PLANS - Stock Op
EMPLOYEE STOCK PLANS - Stock Option Activity (Details) $ / shares in Units, shares in Thousands | 12 Months Ended |
Sep. 27, 2019USD ($)$ / sharesshares | |
Options | |
Options, outstanding, beginning balance (in shares) | shares | 2,011 |
Options, grants in period (in shares) | shares | 297 |
Options, forfeitures and expirations in period (in shares) | shares | (4) |
Options, exercises in period, value (in shares) | shares | (35) |
Options, outstanding, ending balance (in shares) | shares | 2,269 |
Options, exercisable (in shares) | shares | 1,477 |
Weighted Average Exercise Price | |
Options, outstanding, weighted average exercise price, beginning (in USD per share) | $ 30.35 |
Options, grants in period, weighted average exercise price (in USD per share) | 31.42 |
Options, forfeitures and expirations in period, weighted average exercise price (in USD per share) | 31.08 |
Options, exercises in period, weighted average exercise price (in USD per share) | 23.38 |
Options, outstanding, weighted average exercise price, ending (in USD per share) | 30.60 |
Options, exercisable, weighted average exercise price (in USD per share) | $ 29.67 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Options, outstanding, weighted average remaining contractual term (in years) | 4 years 1 month 6 days |
Options, exercisable, weighted average remaining contractual term (in years) | 3 years 4 months 24 days |
Options, outstanding, intrinsic value | $ | $ 1,220,300 |
Options, exercisable, intrinsic value | $ | $ 1,220,300 |
Share price (in usd per share) | $ 28.28 |
Minimum | |
Price Range | |
Options, outstanding, price, beginning (in USD per share) | 22.63 |
Options, grants in period, price (in USD per share) | 31.42 |
Options, forfeitures and expirations in period, price (in USD per share) | 31.08 |
Options, exercises in period, price (in USD per share) | 22.84 |
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) | 37.60 |
Options, grants in period, price (in USD per share) | 31.42 |
Options, forfeitures and expirations in period, price (in USD per share) | 31.08 |
Options, exercises in period, price (in USD per share) | 27.77 |
Options, outstanding, price, ending (in USD per share) | 37.60 |
Options, exercisable, price (in USD per share) | $ 37.60 |
EMPLOYEE STOCK PLANS - Restrict
EMPLOYEE STOCK PLANS - Restricted Stock and Performance Stock (Details) shares in Thousands | 12 Months Ended |
Sep. 27, 2019$ / sharesshares | |
Number of Shares | |
Restricted Stock Units and Performance Stock Units, nonvested, beginning balance (in shares) | shares | 641 |
Restricted Stock Units and Performance Stock Units, grants in period (in shares) | shares | 288 |
Restricted Stock Units and Performance Stock Units, vested in period (in shares) | shares | (201) |
Restricted Stock Units and Performance Stock Units, forfeited in period (in shares) | shares | (50) |
Restricted Stock Units and Performance Stock Units, nonvested, ending balance (in shares) | shares | 678 |
Weighted Average Grant-Date Fair Value | |
Restricted Stock Units and Performance Stock Units, nonvested, beginning of period, weighted average grant date fair value (in USD per share) | $ / shares | $ 33.60 |
Restricted Stock Units and Performance Stock Units, grants in period, weighted average grant date fair value (in USD per share) | $ / shares | 31.29 |
Restricted Stock Units and Performance Stock Units, vested in period, weighted average grant date fair value (in USD per share) | $ / shares | 31.56 |
Restricted Stock Units and Performance Stock Units, forfeitures, weighted average grant date fair value (in USD per share) | $ / shares | 34.13 |
Restricted Stock Units and Performance Stock Units, nonvested, end of period, weighted average grant date fair value (in USD per share) | $ / shares | $ 33.18 |
TAXES ON EARNINGS - Summary of
TAXES ON EARNINGS - Summary of Taxes by Jurisdiction and Classification (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Current provision: | |||
Federal | $ 9.2 | $ (2.1) | $ 24.8 |
State and local | 1.3 | (0.3) | 1.6 |
Foreign | 6.8 | 7.5 | 5.3 |
Total current | 17.3 | 5.1 | 31.7 |
Deferred provision (benefit): | |||
Federal | (10) | (7) | (7) |
State and local | (1.6) | 0.7 | (1) |
Foreign | 0 | (1.4) | (0.9) |
Total deferred | (11.6) | (7.7) | (8.9) |
Taxes on earnings | 5.7 | (2.6) | 22.8 |
United States | 5.9 | 3.7 | 55.5 |
Foreign | 15.6 | 22 | 19.3 |
Earnings before taxes | $ 21.5 | $ 25.7 | $ 74.8 |
TAXES ON EARNINGS - Income Tax
TAXES ON EARNINGS - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21.00% | 24.50% | 35.00% |
State and local taxes, net of federal tax benefit | (0.90%) | 1.10% | 1.30% |
Revaluation of deferred tax liabilities for US statutory change | 0.00% | (41.80%) | 0.00% |
Mandatory repatriation tax on foreign earnings | 1.90% | 13.00% | 0.00% |
Domestic production activities deduction | 0.00% | (0.80%) | (2.40%) |
Research and development credit | (10.20%) | (11.10%) | (2.60%) |
Prior year deferred tax adjustments | 4.70% | 1.90% | (4.00%) |
Foreign Rate Difference | 6.00% | 0.80% | 0.00% |
Change in valuation allowance | 11.20% | (1.90%) | 3.80% |
US Tax Reform - International Provisions | (0.047) | 0 | 0 |
Other | (2.50%) | 4.20% | (0.60%) |
Effective tax rate | 26.50% | (10.10%) | 30.50% |
TAXES ON EARNINGS - Narrative (
TAXES ON EARNINGS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21.00% | 24.50% | 35.00% |
Deferred tax liabilities of undistributed foreign earnings | $ 0.1 | ||
Net operating loss carryforwards | 24.3 | $ 3.3 | |
Operating loss carryforwards, that expire | 4.4 | ||
Operating loss carryforwards, that do not expire | 19.9 | ||
Operating loss carryforwards, valuation allowance increase (decrease) | 14.8 | (0.3) | |
Cash paid for income tax | 8.2 | 13.8 | $ 6 |
Unrecognized tax benefits | 0.6 | 0.6 | $ 0.5 |
Income tax penalties and interest expense | 0.1 | 0 | |
Unrecognized tax benefits, income tax penalties and interest accrued | $ 0.1 | $ 0 |
TAXES ON EARNINGS - Deferred Ta
TAXES ON EARNINGS - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 29, 2018 | Sep. 28, 2018 | Sep. 29, 2017 | Sep. 30, 2016 |
Deferred Tax Assets: | |||||
Inventory adjustments | $ 5.6 | $ 4.2 | |||
Share-based compensation | 3.1 | 0.8 | |||
Product warranty | 1.6 | 1.4 | |||
Deferred compensation | 1.1 | 0.9 | |||
Net operating loss carryforwards | 24.3 | 3.3 | |||
Accrued vacation | 1 | 1.3 | |||
Credit carryforwards | 1.9 | 1.8 | |||
Other | 7.5 | 4.7 | |||
Deferred tax assets, gross | 46.1 | 18.4 | |||
Valuation allowance | (18.8) | (4) | $ (4.3) | $ (2.5) | |
Total deferred tax assets | 27.3 | 14.4 | |||
Deferred Tax Liabilities: | |||||
Acquired intangibles | (19.3) | (15.2) | |||
Property, plant and equipment | (10.6) | (14.3) | |||
Investments in privately held companies | (3.3) | (4.1) | |||
Other | (2.3) | (4) | |||
Total deferred tax liabilities | (35.5) | (37.6) | |||
Net deferred tax liabilities | (8.2) | (23.2) | |||
Deferred tax assets | 27.3 | 14.4 | |||
Deferred tax liabilities | (35.5) | (37.6) | |||
Net deferred tax liabilities | $ 8.2 | $ 22.4 | $ 23.2 |
TAXES ON EARNINGS - Valuation A
TAXES ON EARNINGS - Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Deferred Tax Assets Valuation Allowance [Roll Forward] | |||
Valuation allowance balance–beginning of fiscal year | $ 4 | $ 4.3 | $ 2.5 |
Increases resulting from business combinations | 12 | 0 | 0 |
Other increases | 2.8 | 2.2 | 2.5 |
Other decreases | 0 | (2.5) | (0.7) |
Valuation allowance balance—end of fiscal year | $ 18.8 | $ 4 | $ 4.3 |
TAXES ON EARNINGS - Income Ta_2
TAXES ON EARNINGS - Income Tax Contingency (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 27, 2019 | Sep. 28, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits balance–beginning of fiscal year | $ 0.6 | $ 0.5 |
Subtractions based on tax positions related to a prior year | (0.2) | 0 |
Additions based on tax positions related to the current year | 0.2 | 0.1 |
Unrecognized tax benefits balance—end of fiscal year | $ 0.6 | $ 0.6 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 12 Months Ended |
Sep. 27, 2019segment | |
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. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Segment Reporting Information [Line Items] | |||
Revenues, net | $ 780.6 | $ 773.4 | $ 698.1 |
Gross margin | 256.7 | 253.9 | 253.5 |
Total operating expenses | 211 | 209.4 | 169.8 |
Interest and other expenses, net | (24.2) | (18.8) | (8.9) |
Earnings before taxes | 21.5 | 25.7 | 74.8 |
Taxes (benefit) on earnings | 5.7 | (2.6) | 22.8 |
Net earnings | 15.8 | 28.3 | 52 |
Less: Net earnings attributable to noncontrolling interests | 0.3 | 0.8 | 0.4 |
Net earnings attributable to Varex | 15.5 | 27.5 | 51.6 |
Medical | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 596.8 | 602 | 556.9 |
Gross margin | 188.9 | 190.5 | 193.6 |
Industrial | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 183.8 | 171.4 | 141.2 |
Gross margin | $ 67.8 | $ 63.4 | $ 59.9 |
SEGMENT INFORMATION - Assets (D
SEGMENT INFORMATION - Assets (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Sep. 28, 2018 |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,038.9 | $ 987.9 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,038.9 | 987.9 |
Medical | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 794.3 | 770.6 |
Industrial | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 244.6 | $ 217.3 |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | $ 780.6 | $ 773.4 | $ 698.1 |
Property, plant and equipment, net | 142.3 | 144.9 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 275.3 | 268.8 | 231.9 |
Property, plant and equipment, net | 122.6 | 127.9 | |
Latin America | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 7.3 | 7 | 7.9 |
Property, plant and equipment, net | 0 | 0 | |
EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 269 | 254.5 | 219.5 |
Property, plant and equipment, net | 11.4 | 8.7 | |
APAC | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 229 | 243.1 | $ 238.8 |
Property, plant and equipment, net | $ 8.3 | $ 8.3 |
EMPLOYEE BENEFIT PLANS - (Detai
EMPLOYEE BENEFIT PLANS - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Retirement Benefits [Abstract] | |||
Employer discretionary contribution amount | $ 6.7 | $ 6.5 | $ 4.3 |
Defined benefit pension plan liability | $ 5.5 | $ 3.3 |
OTHER COMPREHENSIVE INCOME - (D
OTHER COMPREHENSIVE INCOME - (Details) - USD ($) | 12 Months Ended | |
Sep. 27, 2019 | Sep. 28, 2018 | |
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | $ 428,300,000 | $ 379,000,000 |
Other comprehensive loss before reclassifications | (10,200,000) | |
Income tax benefit | 2,700,000 | |
Ending balance | 448,200,000 | 428,300,000 |
Amount reclassified out of accumulated other comprehensive income | 0 | 0 |
Unrealized Gain (Loss) on Derivative Financial Instruments | ||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | 5,800,000 | |
Other comprehensive loss before reclassifications | (8,300,000) | |
Income tax benefit | 2,100,000 | |
Ending balance | (400,000) | 5,800,000 |
Unrealized Gain on Defined Benefit Obligations | ||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | 0 | |
Other comprehensive loss before reclassifications | (1,900,000) | |
Income tax benefit | 600,000 | |
Ending balance | (1,300,000) | 0 |
Accumulated Other Comprehensive Income | ||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | 5,800,000 | |
Ending balance | $ (1,700,000) | $ 5,800,000 |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Balance Sheet Adjustment for ASC 606 Adoption (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Mar. 29, 2019 | Dec. 28, 2018 | Sep. 29, 2018 | Sep. 28, 2018 |
Assets | |||||
Prepaid expenses and other current assets | $ 19.3 | $ 23.5 | $ 17.1 | ||
Other assets | 27.5 | 34.5 | 16.5 | ||
Liabilities, redeemable noncontrolling interests and stockholders' equity | |||||
Deferred revenues | 10.5 | 13.5 | 13.2 | ||
Accrued liabilities | 75.7 | 54.6 | 47.5 | ||
Deferred tax liabilities | 8.2 | 22.4 | 23.2 | ||
Other long-term liabilities | 32.5 | 29.8 | 8.5 | ||
Retained earnings | 74.4 | 58.9 | 62.4 | ||
Balance without Adoption | |||||
Assets | |||||
Prepaid expenses and other current assets | 13.1 | 17.1 | |||
Other assets | 10 | 16.5 | |||
Liabilities, redeemable noncontrolling interests and stockholders' equity | |||||
Deferred revenues | 9.9 | 13.2 | |||
Accrued liabilities | 68.8 | 47.5 | |||
Deferred tax liabilities | 9.1 | 23.2 | |||
Other long-term liabilities | 12.1 | 8.5 | |||
Retained earnings | 77.7 | $ 62.4 | |||
ASU 2014-09 | Adjustment Due to ASC 606 | |||||
Assets | |||||
Prepaid expenses and other current assets | 6.4 | ||||
Other assets | 18 | ||||
Liabilities, redeemable noncontrolling interests and stockholders' equity | |||||
Deferred revenues | 0.3 | ||||
Accrued liabilities | 7.1 | ||||
Deferred tax liabilities | (0.8) | ||||
Other long-term liabilities | 21.3 | ||||
Retained earnings | $ (3.5) | $ 0.6 | $ (4.1) | $ (3.5) |
REVENUE RECOGNITION - Schedul_2
REVENUE RECOGNITION - Schedule of ASC 606 Adoption Impact On Income Statement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Revenues, net | $ 780.6 | $ 773.4 | $ 698.1 |
Cost of revenues | 523.9 | 519.5 | 444.6 |
Taxes (benefit) on earnings | 5.7 | (2.6) | 22.8 |
Net earnings attributable to Varex | 15.5 | $ 27.5 | $ 51.6 |
Balance without Adoption | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Revenues, net | 781.2 | ||
Cost of revenues | 524.7 | ||
Taxes (benefit) on earnings | 5.7 | ||
Net earnings attributable to Varex | $ 15.3 |
REVENUE RECOGNITION - Schedul_3
REVENUE RECOGNITION - Schedule of Changes in Contract Balances (Details) $ in Millions | 12 Months Ended |
Sep. 27, 2019USD ($) | |
Change in Contract with Customer, Asset [Abstract] | |
Balance at September 29, 2018 | $ 24.4 |
Costs recovered from product returns during the period | (6.4) |
Contract asset from shipments of products, subject to return during the period | 5.7 |
Balance at September 27, 2019 | 23.7 |
Change in Contract with Customer, Liability [Abstract] | |
Balance at September 29, 2018 | 27.1 |
Recognition of revenue included in beginning of year refund liability | (7) |
Additions to refund liabilities | 6.3 |
Balance at September 27, 2019 | $ 26.4 |
REVENUE RECOGNITION - Remaining
REVENUE RECOGNITION - Remaining Performance Obligations (Details) $ in Millions | Sep. 27, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, amount | $ 265.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-09-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
SUBSEQUENT EVENTS - (Details)
SUBSEQUENT EVENTS - (Details) - Revolving Credit Facility - USD ($) | Oct. 08, 2019 | Oct. 10, 2018 | May 01, 2017 |
Subsequent Event [Line Items] | |||
Revolving credit commitment | $ 400,000,000 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Permanent reduction in the revolving credit commitment | $ (25,000,000) | ||
Revolving credit commitment | 125,000,000 | ||
Revolving Credit Facility | |||
Subsequent Event [Line Items] | |||
Permanent reduction in the revolving credit commitment | $ (50,000,000) | ||
Revolving credit commitment | $ 150,000,000 | $ 200,000,000 | |
Revolving Credit Facility | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Permanent reduction in the revolving credit commitment | 25,000,000 | ||
Revolving credit commitment | $ 125,000,000 |