Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Nov. 08, 2022 | Apr. 01, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 30, 2022 | ||
Current Fiscal Year End Date | --09-30 | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 610.2 | ||
Entity Common Stock, Shares Outstanding | 40,100,000 | ||
Documents Incorporated by Reference | Documents Incorporated by Reference Portions of registrant’s proxy statement relating to registrant’s 2023 annual meeting of stockholders are incorporated by reference in Part III of this annual report on Form 10-K. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001681622 |
Audit Information
Audit Information | 12 Months Ended | |
Sep. 30, 2022 | Oct. 02, 2020 | |
Audit Information [Abstract] | ||
Auditor Firm ID | 34 | 238 |
Auditor Name | Deloitte & Touche LLP | PricewaterhouseCoopers LLP |
Auditor Location | Salt Lake City, Utah | Salt Lake City, Utah |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Income Statement [Abstract] | |||
Revenues, net | $ 859.4 | $ 818.1 | $ 738.3 |
Cost of revenues | 575.9 | 546.6 | 548.1 |
Gross profit | 283.5 | 271.5 | 190.2 |
Operating expenses: | |||
Research and development | 77 | 71.9 | 78.9 |
Selling, general and administrative | 118.3 | 125.5 | 142.2 |
Impairment of intangible assets | 0 | 0 | 2.8 |
Total operating expenses | 195.3 | 197.4 | 223.9 |
Operating income (loss) | 88.2 | 74.1 | (33.7) |
Interest income | 0.4 | 0.1 | 0.1 |
Interest expense | (39.8) | (42.1) | (31.4) |
Other expense, net | (4.3) | (3.5) | (7.6) |
Interest and other expense, net | (43.7) | (45.5) | (38.9) |
Income (loss) before taxes | 44.5 | 28.6 | (72.6) |
Income tax expense (benefit) | 13.7 | 10.7 | (15.2) |
Net income (loss) | 30.8 | 17.9 | (57.4) |
Less: Net income attributable to noncontrolling interests | 0.5 | 0.5 | 0.5 |
Net income (loss) attributable to Varex | $ 30.3 | $ 17.4 | $ (57.9) |
Net income (loss) per common share attributable to Varex | |||
Basic (in USD per share) | $ 0.76 | $ 0.44 | $ (1.49) |
Diluted (in USD per share) | $ 0.73 | $ 0.43 | $ (1.49) |
Weighted average common shares outstanding | |||
Basic (in shares) | 39.8 | 39.3 | 38.8 |
Diluted (in shares) | 41.6 | 40.3 | 38.8 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 30.8 | $ 17.9 | $ (57.4) |
Other comprehensive income (loss), net of tax | |||
Unrealized income on interest rate swap contracts | 0 | 0 | 0.4 |
Unrealized gain (loss) on defined benefit obligations | 1.4 | (0.1) | 0.6 |
Unrealized loss on forward contracts | (0.6) | 0 | 0 |
Unrealized loss on available-for-sale securities | (0.1) | 0 | 0 |
Foreign currency translation adjustments | (0.6) | (0.7) | 1.5 |
Total comprehensive income (loss) | 30.9 | 17.1 | (54.9) |
Less: Comprehensive income attributable to noncontrolling interests | 0.5 | 0.5 | 0.5 |
Comprehensive income (loss) attributable to Varex | $ 30.4 | $ 16.6 | $ (55.4) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 89.4 | $ 144.6 |
Accounts receivable, net of allowance for credit losses of $0.6 million and $1.0 million at September 30, 2022 and October 1, 2021, respectively | 173.3 | 155.3 |
Inventories, net | 303.2 | 224.8 |
Prepaid expenses and other current assets | 44 | 29.5 |
Total current assets | 609.9 | 554.2 |
Property, plant and equipment, net | 141.3 | 140.2 |
Goodwill | 284.5 | 292.2 |
Intangible assets, net | 33.6 | 50.7 |
Investments in privately-held companies | 46.4 | 49.3 |
Deferred tax assets | 2.3 | 4 |
Operating lease assets | 23.2 | 24.3 |
Other assets | 43.2 | 32.6 |
Total assets | 1,184.4 | 1,147.5 |
Current liabilities: | ||
Accounts payable | 78.2 | 58.8 |
Accrued liabilities and other current liabilities | 81.4 | 89.7 |
Current operating lease liabilities | 4 | 6.2 |
Current maturities of long-term debt | 2.1 | 2.8 |
Deferred revenues | 7.4 | 9.1 |
Total current liabilities | 173.1 | 166.6 |
Long-term debt, net | 412.3 | 431.7 |
Deferred tax liabilities | 0.5 | 2.2 |
Operating lease liabilities | 18 | 18.7 |
Other long-term liabilities | 33.8 | 31.8 |
Total liabilities | 637.7 | 651 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 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: 40,085,126 and 39,435,830 at September 30, 2022 and October 1, 2021, respectively | 0.4 | 0.4 |
Additional paid-in capital | 469.1 | 449.4 |
Accumulated other comprehensive income | 0.1 | 0 |
Retained earnings | 63.8 | 33.5 |
Total Varex stockholders' equity | 533.4 | 483.3 |
Noncontrolling interests | 13.3 | 13.2 |
Total stockholders' equity | 546.7 | 496.5 |
Total liabilities and stockholders' equity | $ 1,184.4 | $ 1,147.5 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 0.6 | $ 1 |
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) | 40,085,126 | 39,435,830 |
Common stock, shares, outstanding (in shares) | 40,085,126 | 39,435,830 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Total Varex Equity | Total Varex Equity Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Noncontrolling Interests |
Shares outstanding, beginning of period (in shares) at Sep. 27, 2019 | 38,400,000 | |||||||||
Balance at beginning of period at Sep. 27, 2019 | $ 448.2 | $ (0.3) | $ 444.9 | $ (0.3) | $ 0.4 | $ 371.8 | $ (1.7) | $ 74.4 | $ (0.3) | $ 3.3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (57.9) | (57.9) | (57.9) | 0 | ||||||
Exercise of stock options (in shares) | 100,000 | |||||||||
Exercise of stock options | 1.5 | 1.5 | 1.5 | |||||||
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 | (1.8) | (1.8) | (1.8) | |||||||
Common stock issued under employee stock purchase plan (in shares) | 200,000 | |||||||||
Common stock issued under employee stock purchase plan | 3.6 | 3.6 | 3.6 | |||||||
Share-based compensation | 13.4 | 13.4 | 13.4 | |||||||
Unrealized loss on forward contracts | 0 | |||||||||
Unrealized gain on interest rate swap contracts, net of tax | 0.4 | 0.4 | 0.4 | |||||||
Unrealized loss on available-for-sale securities | 0 | |||||||||
Unrealized loss on defined benefit obligations, net of tax | 0.6 | 0.6 | 0.6 | |||||||
Conversion feature of Convertible Notes, net of issuance costs | 49.7 | 49.7 | 49.7 | |||||||
Purchase of hedges | (61) | (61) | (61) | |||||||
Issuance of warrants | 49.8 | 49.8 | 49.8 | |||||||
Foreign currency translation adjustments | 1.5 | 1.5 | 1.5 | |||||||
Shares issued to settle deferred compensation (in shares) | 300,000 | |||||||||
Shares issued to settle deferred consideration | 7.4 | 7.4 | 7.4 | |||||||
Reclassification from mezzanine equity to equity for noncontrolling interest in MeVis Medical Solutions, AG | 11.3 | 11.3 | ||||||||
Other | (0.6) | (0.1) | (0.1) | (0.5) | ||||||
Shares outstanding, end of period (in shares) at Oct. 02, 2020 | 39,100,000 | |||||||||
Balance at ending of period at Oct. 02, 2020 | 465.8 | 451.7 | $ 0.4 | 434.4 | 0.8 | 16.1 | 14.1 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 17.9 | 17.4 | 17.4 | 0.5 | ||||||
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 | (1.5) | (1.5) | (1.5) | |||||||
Common stock issued under employee stock purchase plan (in shares) | 200,000 | |||||||||
Common stock issued under employee stock purchase plan | 2.8 | 2.8 | 2.8 | |||||||
Share-based compensation | 13.9 | 13.9 | 13.9 | |||||||
Unrealized loss on forward contracts | 0 | |||||||||
Unrealized gain on interest rate swap contracts, net of tax | 0 | |||||||||
Unrealized loss on available-for-sale securities | 0 | |||||||||
Unrealized loss on defined benefit obligations, net of tax | (0.1) | (0.1) | (0.1) | |||||||
Foreign currency translation adjustments | (0.7) | (0.7) | (0.7) | |||||||
Other | $ (1.6) | (0.2) | (0.2) | (1.4) | ||||||
Shares outstanding, end of period (in shares) at Oct. 01, 2021 | 39,435,830 | 39,400,000 | ||||||||
Balance at ending of period at Oct. 01, 2021 | $ 496.5 | 483.3 | $ 0.4 | 449.4 | 0 | 33.5 | 13.2 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | $ 30.8 | 30.3 | 30.3 | 0.5 | ||||||
Exercise of stock options (in shares) | 138,000 | 100,000 | ||||||||
Exercise of stock options | $ 3.8 | 3.8 | 3.8 | |||||||
Common stock issued upon vesting of restricted shares (in shares) | 400,000 | |||||||||
Shares withheld on vesting of restricted stock (in shares) | (100,000) | |||||||||
Shares withheld on vesting of restricted stock | (2.8) | (2.8) | (2.8) | |||||||
Common stock issued under employee stock purchase plan (in shares) | 300,000 | |||||||||
Common stock issued under employee stock purchase plan | 4.9 | 4.9 | 4.9 | |||||||
Share-based compensation | 14 | 14 | 14 | |||||||
Unrealized loss on forward contracts | (0.6) | (0.6) | (0.6) | |||||||
Unrealized gain on interest rate swap contracts, net of tax | 0 | |||||||||
Unrealized loss on available-for-sale securities | (0.1) | (0.1) | (0.1) | |||||||
Unrealized loss on defined benefit obligations, net of tax | 1.4 | 1.4 | 1.4 | |||||||
Foreign currency translation adjustments | (0.6) | (0.6) | (0.6) | |||||||
Other | $ (0.6) | (0.2) | (0.2) | (0.4) | ||||||
Shares outstanding, end of period (in shares) at Sep. 30, 2022 | 40,085,126 | 40,100,000 | ||||||||
Balance at ending of period at Sep. 30, 2022 | $ 546.7 | $ 533.4 | $ 0.4 | $ 469.1 | $ 0.1 | $ 63.8 | $ 13.3 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 30.8 | $ 17.9 | $ (57.4) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Share-based compensation expense | 14 | 13.9 | 13.4 |
Depreciation | 19 | 20.5 | 22.3 |
Amortization of intangible assets | 14.6 | 16.8 | 17.2 |
Deferred taxes | 0.6 | (3) | (3.1) |
Loss from equity method investments | 2.6 | 3 | 1.3 |
Amortization of deferred loan costs | 10.9 | 10 | 5.1 |
Impairment of intangible assets | 0 | 0 | 2.8 |
Other assets impairment charges | 0 | 0.5 | 2.7 |
Inventory write-down | 6.4 | 3.5 | 18.1 |
Loss on operating lease abandonment | 1.9 | 0 | 0 |
Other, net | 4.1 | 1.3 | 4.7 |
Changes in assets and liabilities: | |||
Accounts receivable | (18.1) | (32.9) | 17.7 |
Inventories | (85) | 42.8 | (42.7) |
Prepaid expenses and other assets | 10.3 | (0.9) | (9.3) |
Accounts payable | 19.7 | (13.6) | 14.3 |
Accrued liabilities and other current and long-term liabilities | (14.9) | 12.2 | 8.1 |
Deferred revenues | 0 | 0.6 | (2) |
Net cash provided by operating activities | 16.9 | 92.6 | 13.2 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (21.3) | (15.1) | (23.5) |
Loss on settlement of cash flow hedge | (0.5) | 0 | 0 |
Proceeds from maturities of marketable debt securities | 2 | 0 | 0 |
Purchase of marketable debt securities | (18.7) | 0 | 0 |
Purchase of marketable equity securities | (2.4) | 0 | 0 |
Purchase of certificates of deposit | (7.2) | 0 | 0 |
Acquisitions of businesses, net of cash acquired | 0 | 0 | (1.6) |
Proceeds from sales of business and assets | 1.7 | 0 | 0 |
Investments in and loans to privately-held companies | (0.6) | (1.4) | (1.8) |
Other | (1.4) | 0.3 | 0 |
Net cash used in investing activities | (48.4) | (16.2) | (26.9) |
Cash flows from financing activities: | |||
Proceeds from issuance of debt | 0 | 1.5 | 593.8 |
Repayments of borrowings | (29.4) | (33.1) | (483.9) |
Payment of debt issuance costs | 0 | 0 | (16.7) |
Proceeds from issuance of warrant | 0 | 0 | 49.8 |
Purchases of hedges | 0 | 0 | (61) |
Proceeds from shares issued under employee stock purchase plan | 4.9 | 2.8 | 3.6 |
Proceeds from exercise of stock options | 3.8 | 0 | 1.5 |
Taxes related to net share settlement of equity awards | (2.8) | (1.5) | (1.8) |
Other financing activities | (0.3) | (2) | (1.7) |
Net cash (used in) provided by financing activities | (23.8) | (32.3) | 83.6 |
Effects of exchange rate changes on cash and cash equivalents and restricted cash | (0.2) | (0.1) | 0.9 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (55.5) | 44 | 70.8 |
Cash and cash equivalents and restricted cash at beginning of period | 146.1 | 102.1 | 31.3 |
Cash and cash equivalents and restricted cash at end of period | 90.6 | 146.1 | 102.1 |
Supplemental cash flow information: | |||
Cash paid for interest | 29.5 | 21.6 | 16.7 |
Cash paid for income tax, net of refunds | 2.2 | 14.1 | 4.2 |
Supplemental non-cash activities: | |||
Purchases of property, plant and equipment financed through accounts payable | $ 1.5 | $ 1.5 | $ 1.6 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2022 | |
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 components including 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 equipment, as well as to independent service companies and distributors, and directly to end-users for replacement purposes. The Company also designs, manufactures, sells and services industrial products, which include Linatron® X-ray linear accelerators, digital detectors, high voltage connectors, imaging processing software and image detection products for security and inspection purposes, such as cargo screening at ports and borders and nondestructive examination in a variety of applications. The Company generally sells security and inspection products to OEM customers who incorporate Varex’s products into their inspection or irradiation systems and processes. The Company conducts an active research and development program to focus on new technology and applications in both the medical and industrial X-ray imaging markets. Basis of Presentation The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC and in accordance with accounting principles generally accepted in the United States ("GAAP"). The Company has consolidated all the majority owned subsidiaries and entities over which we have control. All intercompany balances and transactions have been eliminated in consolidation. Segment Reporting The Company has two reportable operating segments; (i) Medical and (ii) Industrial. See Note 16, 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 2022 was the 52-week period that ended September 30, 2022, fiscal year 2021 was the 52-week period that ended October 1, 2021, and fiscal year 2020 was the 53-week period that ended October 2, 2020. 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 entity has the obligation to absorb losses or the right to receive residual returns 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 30, 2022, the Company had variable interests in two entities, neither of which were consolidated by the Company. 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, valuation of goodwill and intangible assets, warranties, contract liabilities, long-lived asset valuations, impairment of investments, valuation of financial instruments, and taxes on income. Actual results could differ from these estimates. Impact of COVID-19 The coronavirus (“COVID-19”) pandemic, the emerging variants, uneven vaccination rates across the globe, and the mitigation efforts by governments to control its spread have created uncertainties and disruptions in the economic and financial markets. The extent to which COVID-19 will continue to impact the Company’s business and financial results depends on numerous evolving factors including: the magnitude and duration of COVID-19, the extent to which it will continue to impact worldwide macroeconomic conditions, including supply chain disruptions, interest rates, unemployment rates, the speed of the economic recovery, and governmental and business reactions to the pandemic. The Company has experienced continuing supply chain disruptions and other issues that are at least partially related to the ongoing COVID-19 pandemic. In addition, while we have from time to time taken significant precautions to maintain employee safety, such as implementing mask requirements, encouraging vaccination, and periodically asking non-production related employees to work from home when possible, the Company has experienced, and may in the future experience, COVID-19 related employee absences that adversely impact our production or business. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company, including the estimated future impacts of COVID-19, through the date of filing this report. The accounting matters assessed included, but were not limited to, the Company’s carrying value of goodwill, intangibles, long-lived assets, equity method investments, inventory and related reserves, and the allowance for credit losses. The Company’s assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material negative impacts to the Company’s consolidated financial statements in future reporting periods. These future developments are highly uncertain and the outcomes cannot be estimated with certainty. Actual results may differ from those estimates, and such differences may be material to the financial statements. 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 Company's Consolidated Balance Sheets. Cash and cash equivalents and restricted cash as reported within the Consolidated Statements of Cash Flows consisted of the following: Twelve Months Ended September 30, 2022 Twelve Months Ended October 1, 2021 (In millions) Beginning of Period End of Period Beginning of Period End of Period Cash and cash equivalents $ 144.6 $ 89.4 $ 100.6 $ 144.6 Restricted cash 1.5 1.2 1.5 1.5 Cash and cash equivalents and restricted cash as reported per statement of cash flows $ 146.1 $ 90.6 $ 102.1 $ 146.1 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 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 income ("OCI") 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 until the hedged item is sold. The portion of the change in fair value of the Company's net investment hedges (or cross currency swaps) related to the cross-currency basis spread is an excluded component in the assessment of the effectiveness of these net investment hedges (or cross currency swaps). A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective, in which case, a quantitative assessment of hedge effectiveness is performed. Concentration of Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash, cash equivalents, marketable securities, and trade accounts receivable. Cash held with financial institutions may exceed the Federal Deposit Insurance Corporation insurance limits or similar limits in foreign jurisdictions. To date, the Company has not 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 credit losses based upon the expected collectability of all accounts receivable. The Company obtains some of the components in its products from a limited group of suppliers or from a single-source supplier. When these suppliers are unable to meet the Company's supply needs, the Company's production is negatively impacted. Credit is extended to customers based on an evaluation of the customer’s financial condition, and collateral is not required. In certain circumstances, a customer may be required to prepay all or a portion of the contract price prior to transfer of control. During the periods presented, one of the Company's customers accounted for a significant portion of revenues, as set forth below: Fiscal Year 2022 2021 2020 Canon Medical Systems Corporation 17.2 % 17.9 % 20.5 % Canon Medical Systems Corporation accounted for 10.3% and 16.2% of the Company’s accounts receivable as of September 30, 2022 and October 1, 2021, respectively. Inventories, net Inventory is valued at the lower of cost or net realizable value. Costs include materials, labor, external service and manufacturing overhead and is computed 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 adjusts 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 30, 2022 October 1, 2021 Raw materials and parts $ 240.3 $ 168.0 Work-in-process 23.2 20.4 Finished goods 39.7 36.4 Total inventories $ 303.2 $ 224.8 The Company recorded inventory write-downs of $6.4 million, $3.5 million and $18.1 million for the twelve months ended September 30, 2022, October 1, 2021 and October 2, 2020, respectively, of which $0.0 million, $3.5 million, and $15.8 million were from certain discontinued products in relation to COVID-19. 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 is computed using the straight-line method over the estimated useful lives of the assets or remaining lease term. 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 up to thirty years. Machinery and equipment are depreciated over a range from three The following table summarizes the Company’s property, plant and equipment, net: (In millions) September 30, 2022 October 1, 2021 Land $ 8.3 $ 8.3 Buildings and leasehold improvements 149.2 148.7 Machinery and equipment 182.9 179.7 Construction in progress 29.1 18.1 Gross property, plant and equipment 369.5 354.8 Accumulated depreciation and amortization (228.2) (214.6) Total property, plant and equipment, net $ 141.3 $ 140.2 The Company recorded depreciation expense of $19.0 million, $20.5 million and $22.3 million in fiscal years 2022, 2021 and 2020, respectively. During fiscal years 2022, 2021 and 2020, the Company recorded accelerated depreciation of $0.0 million, $0.2 million and $2.9 million, respectively, which primarily related to the machinery and equipment used at the Santa Clara, California facility. See Note 5, 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, which means that distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment and classified as operating cash flows and those in excess of that amount will be treated as returns of investment and classified as investing cash flows. The Company reviews its equity investments in privately-held companies for impairment whenever events or changes in business circumstances are other than temporary and indicate that the carrying amount of the investments may not be fully recoverable. There were no impairments recorded during fiscal years 2022 and 2021. During the fiscal year 2020, the Company wrote off a $2.7 million cost investment in a privately-held company, the related expense is included as part of other expense, net in the Company's consolidated financial statements. Marketable Securities The Company's marketable securities consist primarily of financial instruments such as U.S. treasury securities, U.S. agency obligations, corporate bonds, commercial paper, money market funds, and equity securities. The Company classifies marketable debt securities as available-for-sale at the time of purchase and reevaluates such classifications as of each balance sheet date. All marketable debt securities are recorded at estimated fair value. Any unrealized gains or losses for marketable debt securities are included in accumulated other comprehensive income within the Consolidated Balance Sheets. Marketable equity securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date. All unrealized gains and losses on equity securities are recorded as part of other expense, net in the Company's consolidated financial statements. See Note 10, Fair Value, for further details. When the fair value of a debt security declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in our Consolidated Statements of Operations. When the fair value of a debt security declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in accumulated other comprehensive income, and are recognized in our Consolidated Statements of Operations only if we sell or intend to sell the security before recovery of its cost basis. There were no credit losses related to marketable debt securities recorded during the twelve months ended September 30, 2022. 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, net in the Company's Consolidated Balance Sheets. Intangible assets with finite lives are amortized over their estimated useful lives of primarily two 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 evaluation includes consideration of qualitative factors including industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit. If the Company determines that a quantitative analysis is necessary, the Company performs a step one analysis, which consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit. 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, the difference between the fair value and carrying amount 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. In fiscal years 2022, 2021 and 2020, the Company performed the annual goodwill impairment test for our two reporting units and found no impairment. During the fiscal years ended September 30, 2022, October 1, 2021 and October 2, 2020, the Company recognized $0.0 million, $0.0 million, and $2.8 million of impairments of intangible assets, respectively. Loss Contingencies From time to time, the Company is involved in legal proceedings, claims and government inspections or investigations, customs and duties 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. When a loss contingency is probable but not reasonably estimable the nature of the contingency and the fact that an estimate cannot be made is disclosed. See Note 12, Commitments and Contingencies, for further information regarding certain of our contractual obligations and contingencies. 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 Ended (In millions) September 30, 2022 October 1, 2021 Accrued product warranty, at beginning of period $ 8.5 $ 8.1 New accruals charged to cost of revenues 11.3 13.0 Product warranty expenditures (11.9) (12.6) Accrued product warranty, at end of period $ 7.9 $ 8.5 Leases The Company determines if an arrangement is or contains a lease at the inception of an arrangement. The Company's operating lease right-of-use ("ROU") assets represent the right to use an underlying asset over the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets may also include initial direct costs incurred and prepaid lease payments, less lease incentives. Lease liabilities and their corresponding ROU assets are recognized based on the present value of lease payments over the lease term, discounted using the Company's incremental borrowing rate. The Company recognizes operating leases with lease terms of more than twelve months in operating lease assets, current operating lease liabilities, and operating lease liabilities on its Consolidated Balance Sheets. The Company recognizes finance leases with lease terms of more than twelve months in property, plant and equipment, net, accrued liabilities and other current liabilities, and other long-term liabilities on its Consolidated Balance Sheets. For purposes of calculating lease liabilities and the corresponding ROU assets, the Company's lease term may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Revenue Recognition 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 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. 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. 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. Recognition of Revenue 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 generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Service revenue is generally recognized over the term of the service contract. Services are expected to be transferred to the customer throughout the term of the contract and the Company believes recognizing revenue ratably over the term of the contract best depicts the transfer of value to the customer. Disaggregation of Revenue 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 16, 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 in the Consolidated Balance Sheets. Contract liabilities, which also includes refund obligations, are included within the accrued liabilities and other current liabilities, deferred revenues, and other long-term liabilities balances in the Consolidated Balance Sheets. 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. 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 Credit Losses The Company evaluates the creditworthiness of customers prior to authorizing shipment for all major sale transactions. On a quarterly basis, the Company considers historical trends, current information and any reasonable and supportable forecasts to determine if an amount should be included in the allowance for credit losses. The Company had an allowance for credit losses of $0.6 million and $1.0 million as of September 30, 2022 and October 1, 2021, 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. 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 Operations 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. The Company records forfeitures as they occur. 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 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION The following tables summarize the changes in the contract assets and refund liabilities for the twelve months ended September 30, 2022 and October 1, 2021: (In millions) Contract Assets Balance at October 2, 2020 $ 24.6 Costs recovered from product returns during the period (4.8) Contract asset from shipments of products, subject to return during the period 6.4 Adjustment for actual vs. reserved product returns (1.9) Balance at October 1, 2021 $ 24.3 Costs recovered from product returns during the period (5.4) Contract asset from shipments of products, subject to return during the period 7.1 Adjustment for actual vs. reserved product returns (0.6) Balance at September 30, 2022 $ 25.4 (In millions) Refund Liabilities Balance at October 2, 2020 $ 27.4 Release of refund liability included in beginning of year refund liability (5.3) Additions to refund liabilities 7.1 Adjustment for actual vs. reserved product returns (2.2) Balance at October 1, 2021 $ 27.0 Release of refund liability included in beginning of year refund liability (6.1) Additions to refund liabilities 7.9 Adjustment for actual vs. reserved product returns (0.6) Balance at September 30, 2022 $ 28.2 During fiscal year 2022, the Company recognized revenue of $6.7 million related to deferred revenue which existed at October 1, 2021. During fiscal year 2021, the Company recognized revenue of $6.9 million related to deferred revenue which existed at October 2, 2020. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which revenue has not yet been recognized, which are primarily related to contracts where control will be transferred to customers over the next 12 months. See Note 1, Summary of Significant Accounting Policies, for details on the nature of the remaining performance obligations within these contracts and how they will be resolved. |
LEASES
LEASES | 12 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | LEASES On September 28, 2019, the Company adopted ASC 842, which amended the guidance for the accounting and reporting of leases. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. The Company has operating and finance leases for office space, warehouse and manufacturing space, vehicles, and certain equipment. The Company's lease agreements do not contain any material residual value guarantees, variable lease costs, bargain purchase options or restrictive covenants. The Company does not have any lease transactions with related parties. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet and expense for these leases is recognized on a straight-line basis over the lease term. The Company's leases have remaining lease terms of less than one year to approximately ten years, some of which may include options to extend the leases for up to five years and some include options to terminate early. These options have been included in the determination of the lease liability when it is reasonably certain that the option will be exercised. Right-of-use assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease contract. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of fixed lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company's incremental borrowing rate is based on a credit-adjusted risk-free rate, which best approximates a secured rate over a similar term of lease. During the twelve months ended September 30, 2022, the Company recorded a loss due to abandonment of $1.9 million, which is included in selling, general and administrative on the Consolidated Statements of Operations. The following table presents supplemental balance sheet information related to the Company's operating and finance leases: (In millions) Balance Sheet Location September 30, 2022 October 1, 2021 Assets Operating lease right-of-use assets Operating lease assets $ 23.2 $ 24.3 Finance lease right-of-use assets Property, plant and equipment, net 0.3 0.5 Liabilities Operating lease liabilities (current) Current operating lease liabilities 4.0 6.2 Finance lease liabilities (current) Accrued liabilities and other current liabilities 0.2 0.2 Operating lease liabilities (non-current) Operating lease liabilities 18.0 18.7 Finance lease liabilities (non-current) Other long-term liabilities $ 0.1 $ 0.3 The following table presents the weighted average remaining lease term and discount rate information related to the Company's operating and finance leases: September 30, 2022 October 1, 2021 Operating lease weighted average remaining lease term (in years) 6.4 5.9 Operating lease weighted average discount rate 5.6 % 5.5 % Finance lease weighted average remaining lease term (in years) 2.0 2.5 Finance lease weighted average discount rate 3.6 % 3.6 % The following table provides information related to the Company’s operating and finance leases: (In millions) 2022 2021 2020 Total operating lease costs (1) $ 6.4 $ 8.1 $ 8.4 Total finance lease costs $ 0.2 $ 0.3 $ 0.3 Operating cash flows from operating leases $ 7.3 $ 7.9 $ 8.0 Financing cash flows from finance leases 0.2 0.2 0.3 Total cash paid for amounts included in the measurement of lease liabilities $ 7.5 $ 8.1 $ 8.3 Noncash operating right-of-use assets obtained in exchange for new lease liabilities $ 5.4 $ 5.6 $ 10.6 Noncash finance right-of-use assets obtained in exchange for new lease liabilities 0.1 0.2 0.2 Total right-of-use assets obtained in exchange for new lease liabilities $ 5.5 $ 5.8 $ 10.8 (1) Includes variable and short-term lease expense, which were immaterial for fiscal years 2022, 2021, and 2020. As of September 30, 2022, maturities of operating lease and finance lease liabilities for each of the following five years and a total thereafter were as follows: (In millions) Fiscal years: Operating Leases Finance Leases 2023 $ 5.2 $ 0.2 2024 4.6 0.1 2025 4.4 — 2026 3.1 — 2027 2.8 — Thereafter 6.5 — Total future lease payments $ 26.6 $ 0.3 Less: imputed interest (4.6) — Present value of lease liabilities $ 22.0 $ 0.3 As of September 30, 2022 |
LEASES | LEASES On September 28, 2019, the Company adopted ASC 842, which amended the guidance for the accounting and reporting of leases. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. The Company has operating and finance leases for office space, warehouse and manufacturing space, vehicles, and certain equipment. The Company's lease agreements do not contain any material residual value guarantees, variable lease costs, bargain purchase options or restrictive covenants. The Company does not have any lease transactions with related parties. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet and expense for these leases is recognized on a straight-line basis over the lease term. The Company's leases have remaining lease terms of less than one year to approximately ten years, some of which may include options to extend the leases for up to five years and some include options to terminate early. These options have been included in the determination of the lease liability when it is reasonably certain that the option will be exercised. Right-of-use assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease contract. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of fixed lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company's incremental borrowing rate is based on a credit-adjusted risk-free rate, which best approximates a secured rate over a similar term of lease. During the twelve months ended September 30, 2022, the Company recorded a loss due to abandonment of $1.9 million, which is included in selling, general and administrative on the Consolidated Statements of Operations. The following table presents supplemental balance sheet information related to the Company's operating and finance leases: (In millions) Balance Sheet Location September 30, 2022 October 1, 2021 Assets Operating lease right-of-use assets Operating lease assets $ 23.2 $ 24.3 Finance lease right-of-use assets Property, plant and equipment, net 0.3 0.5 Liabilities Operating lease liabilities (current) Current operating lease liabilities 4.0 6.2 Finance lease liabilities (current) Accrued liabilities and other current liabilities 0.2 0.2 Operating lease liabilities (non-current) Operating lease liabilities 18.0 18.7 Finance lease liabilities (non-current) Other long-term liabilities $ 0.1 $ 0.3 The following table presents the weighted average remaining lease term and discount rate information related to the Company's operating and finance leases: September 30, 2022 October 1, 2021 Operating lease weighted average remaining lease term (in years) 6.4 5.9 Operating lease weighted average discount rate 5.6 % 5.5 % Finance lease weighted average remaining lease term (in years) 2.0 2.5 Finance lease weighted average discount rate 3.6 % 3.6 % The following table provides information related to the Company’s operating and finance leases: (In millions) 2022 2021 2020 Total operating lease costs (1) $ 6.4 $ 8.1 $ 8.4 Total finance lease costs $ 0.2 $ 0.3 $ 0.3 Operating cash flows from operating leases $ 7.3 $ 7.9 $ 8.0 Financing cash flows from finance leases 0.2 0.2 0.3 Total cash paid for amounts included in the measurement of lease liabilities $ 7.5 $ 8.1 $ 8.3 Noncash operating right-of-use assets obtained in exchange for new lease liabilities $ 5.4 $ 5.6 $ 10.6 Noncash finance right-of-use assets obtained in exchange for new lease liabilities 0.1 0.2 0.2 Total right-of-use assets obtained in exchange for new lease liabilities $ 5.5 $ 5.8 $ 10.8 (1) Includes variable and short-term lease expense, which were immaterial for fiscal years 2022, 2021, and 2020. As of September 30, 2022, maturities of operating lease and finance lease liabilities for each of the following five years and a total thereafter were as follows: (In millions) Fiscal years: Operating Leases Finance Leases 2023 $ 5.2 $ 0.2 2024 4.6 0.1 2025 4.4 — 2026 3.1 — 2027 2.8 — Thereafter 6.5 — Total future lease payments $ 26.6 $ 0.3 Less: imputed interest (4.6) — Present value of lease liabilities $ 22.0 $ 0.3 As of September 30, 2022 |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2022 | |
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 holding company 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 operating agreement, net profits or losses are allocated to the members in accordance with their ownership interests. The investment in dpiX Holding is accounted for under the equity method of accounting. When the Company recognizes its share of net profits or losses of dpiX Holding, profits or losses in inventory purchased from dpiX are eliminated. In fiscal years 2022, 2021 and 2020, the Company recorded a loss on the equity investment in dpiX Holding of $2.6 million, $2.3 million and $0.8 million, respectively. Loss on the equity investment in dpiX Holding is included in other expense, net in the Consolidated Statements of Operations. The carrying value of the equity investment in dpiX Holding was $42.4 million and $45.0 million at September 30, 2022 and October 1, 2021, respectively. In fiscal years 2022, 2021 and 2020, the Company purchased glass transistor arrays from dpiX totaling $21.0 million, $18.5 million and $20.4 million, respectively. These purchases of glass transistor arrays are included as a component of inventories, net on the Consolidated Balance Sheets or cost of revenues in the Consolidated Statements of Operations. As of September 30, 2022 and October 1, 2021, the Company had accounts payable to dpiX totaling $3.1 million and $2.8 million, respectively. The Company has the right to 50% of dpiX’s total manufacturing capacity. In addition, the Company is required to pay for 50% of dpiX's fixed costs, as determined at the beginning of each calendar year. In January 2022, the fixed cost commitment was determined and approved by the dpiX board of directors to be $13.2 million for calendar year 2022. As of September 30, 2022, the Company estimated it has fixed cost commitments of $3.3 million related to this amended agreement through the remainder of calendar year 2022. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement). The Company has determined that dpiX Holding 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 unilaterally direct the activities of dpiX Holding and therefore is not the primary beneficiary of dpiX Holding. The Company’s exposure to loss as a result of its involvement with dpiX Holding is limited to the carrying value of the Company’s investment of $42.4 million and fixed cost commitments. In November 2018, the Company (through one of its wholly-owned subsidiaries) and CETTEEN GmbH (“CETTEEN”), formed a German limited liability company that governs the affairs and conduct of the business of VEC Imaging GmbH & Co. KG (“VEC”), a joint venture formed to develop technology for use in X-ray imaging components. In accordance with the VEC agreement, net profits or losses are allocated to the members in accordance with their ownership interest. The Company's investment in VEC is accounted for under the equity method of accounting. The Company has determined that VEC is a variable interest entity. In fiscal years 2022, 2021 and 2020, the Company recorded a loss on the equity investment in VEC of $0.8 million, $1.1 million, and $1.2 million respectively. The Company's investment in VEC was $2.5 million and $3.0 million as of September 30, 2022 and October 1, 2021, respectively. In fiscal years 2022 and 2021, the Company made contributions to VEC totaling $0.3 million and $1.2 million, respectively. As of September 30, 2022 and October 1, 2021 the Company had loans outstanding to VEC totaling $0.6 million and $0.3 million, respectively, and other receivables from VEC of $0.3 million at September 30, 2022 and October 1, 2021, respectively, which are recorded in prepaid expenses and other current assets in the Consolidated Balance Sheets. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING In July 2018, the Company committed 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 ceased all operations at the Santa Clara facility as of October 2, 2020, and all activities related to the closure of the facility were completed by the end of December 2020. In connection with the relocation of the glass production and site closure, the Company recorded $0.0 million, $0.0 million and $9.1 million of restructuring charges during fiscal years 2022, 2021 and 2020, respectively. On July 29, 2020, the Company commenced the implementation of a reduction in workforce to reduce the Company’s operating costs and address the impact of the COVID-19 pandemic. This action resulted in the reduction of the Company’s workforce by approximately 94 employees, of whom nearly all were located within the United States. This reduction was in addition to the reduction in workforce associated with the closure of the Company’s Santa Clara facility. 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 2022, 2021 and 2020 fiscal years, which predominately relate to the Company's Medical segment: (In millions) Location of Restructuring Charges in Consolidated Statements of Operations 2022 2021 2020 Other assets impairment charges Selling, general and administrative $ 1.8 $ — $ — Inventory write downs Cost of revenues — — 1.3 Accelerated depreciation Cost of revenues — 0.2 2.9 Severance costs Selling, general and administrative — 0.6 5.7 Facility closure costs Selling, general and administrative — 0.2 3.6 Total restructuring charges $ 1.8 $ 1.0 $ 13.5 |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 12 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER FINANCIAL INFORMATION | OTHER FINANCIAL INFORMATION The following table summarizes the Company’s accrued liabilities and other current liabilities: (In millions) September 30, 2022 October 1, 2021 Accrued compensation and benefits $ 37.5 $ 44.2 Product warranty 7.9 8.5 Taxes payable 11.3 8.0 Right of return liability 6.8 6.7 Accrued interest 11.7 12.5 Other 6.2 9.8 Total accrued liabilities and other current liabilities $ 81.4 $ 89.7 The following table summarizes the Company’s other long-term liabilities: (In millions) September 30, 2022 October 1, 2021 Long-term income tax payable $ 4.3 $ 1.8 Environmental liabilities 1.3 0.6 Defined benefit obligation liability 3.3 5.9 Long-term right of return liability 21.4 20.3 Long-term other 3.5 3.2 Total other long-term liabilities $ 33.8 $ 31.8 The following table summarizes the Company’s other expense, net: Fiscal Years (In millions) 2022 2021 2020 Loss from equity method investments $ (3.0) $ (3.4) $ (2.1) Change in fair value of deferred consideration — — 0.9 Impairment of investment — — (2.7) Realized losses on foreign currencies, net (1.5) (0.2) (3.7) Other 0.2 0.1 — Total other expense, net $ (4.3) $ (3.5) $ (7.6) |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 12 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE Basic net income (loss) per common share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock outstanding during the reporting period. Diluted net income (loss) per common share reflects the effects of potentially dilutive securities, which is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding and dilutive common shares. A reconciliation of the numerator and denominator used in the calculation of basic and diluted income per common share is as follows: Fiscal Year (In millions, except per share amounts) 2022 2021 2020 Net income (loss) attributable to Varex $ 30.3 $ 17.4 $ (57.9) Weighted average shares outstanding – basic 39.8 39.3 38.8 Dilutive effect of Convertible Senior Notes 1.3 0.6 — Dilutive effect of share-based awards and other 0.5 0.4 — Weighted average shares outstanding – diluted 41.6 40.3 38.8 Net income (loss) per share attributable to Varex – basic $ 0.76 $ 0.44 $ (1.49) Net income (loss) per share attributable to Varex – diluted $ 0.73 $ 0.43 $ (1.49) Anti-dilutive share-based awards, excluded 3.0 2.8 3.5 Potentially dilutive shares, which are based on the weighted-average shares of common stock underlying stock options, unvested stock awards, purchase rights granted under the employee stock purchase plan, warrants and convertible notes using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted net income (loss) per share attributable to Varex when their effect is dilutive. Since we intend to settle in cash the principal outstanding under our Convertible Senior Notes, we apply the treasury stock method applied using our average share price during the period when calculating their potential dilutive effect, if any. Furthermore, in connection with the offerings of our notes, we entered into convertible note hedges and warrants (see Note 9, Borrowings ). However, our convertible note hedges are not included when calculating potentially dilutive shares since their effect is always anti-dilutive. Warrants, which have a strike price above our average share price for the periods presented, were out of the money and were not included in the tables above. Because the Company incurred a net loss for fiscal year 2020, none of the potentially dilutive common shares were included in the diluted share calculation for that period as they would have been anti-dilutive. |
FINANCIAL DERIVATIVES AND HEDGI
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES | 12 Months Ended |
Sep. 30, 2022 | |
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, in which case the Company would test for effectiveness on a more frequent basis. The changes in fair value for all trades that are not designated for hedge accounting are recognized in current period income. The Company does not offset fair value amounts recognized for derivative instruments in its 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 that meet certain minimum credit ratings to help mitigate counterparty credit risk. Derivatives Designated as Hedging Instruments - Cash Flow Hedges During the twelve months ended October 2, 2020 the Company used interest rate swap contracts as cash flow hedges to manage its exposure to fluctuations in LIBOR interest rates. Interest rate swap contracts effectively fix the LIBOR component of variable interest rate debt for a specific period of time. During the twelve months ended September 30, 2022, the Company entered into forward contracts which have been designated as cash flow hedges and are intended to manage its risk of variability in foreign currency-denominated contracts. All changes in fair value of the derivatives designated as cash flow hedges are reported in accumulated other comprehensive income in the Consolidated Balance Sheet. As of September 30, 2022, 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 Forward contracts 4 $ 2.5 The following table summarizes the amount of pre-tax loss recognized from derivative instruments for the periods indicated: Amount of Loss Recognized in OCI on Derivatives Location of Loss Reclassified from Accumulated OCI into Income Amount of Loss Reclassified from Accumulated OCI into Income (In millions) 2022 2021 2020 2022 2021 2020 Interest rate swap contracts $ — $ — $ (3.4) Interest expense $ — $ — $ (1.5) Forward contracts (0.8) — — Interest expense — — — $ (0.8) $ — $ (3.4) $ — $ — $ (1.5) 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: (In millions) Derivative Liabilities Derivatives designated as cash flow hedges Balance sheet location 2022 Forward contracts Accrued liabilities and other current liabilities $ 0.3 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 majority-owned international operations. All changes in fair value of the derivatives designated as net investment hedges are reported in accumulated other comprehensive income along with the foreign currency translation adjustments on those investments. In September 2020, the Company terminated one of the net investment swaps and the loss on the swap was recorded in accumulated other comprehensive income where it will remain until substantial liquidation of the international operations. As of September 30, 2022, 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 3 $ 66.6 The following table summarizes the amount of pre-tax gain (loss) 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 Derivatives Location of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) (In millions) 2022 2021 2020 2022 2021 2020 Cross currency swap contracts $ 8.7 $ (0.3) $ (1.3) Interest expense $ 1.2 $ 1.3 $ 1.5 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: (In millions) Derivative Assets and Liabilities Derivatives Designated as Net Investment Hedges Balance Sheet Location 2022 2021 Cross currency swap contracts Prepaid expenses and other current assets $ 1.2 $ 1.2 Cross currency swap contracts Other assets 6.3 — Cross currency swap contracts Other long-term liabilities $ — $ 2.4 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, lease contracts, third-party accounts receivable and payable, and intercompany accounts receivable 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 expense, net and offsets the change in fair value of the foreign currency-denominated assets and liabilities, which are also recorded in other expense, net. The Company has 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 as of September 30, 2022: Notional Value of Derivatives not Designated as Hedging Instruments: (In millions of equivalent USD) Buy contracts Sell contracts Indian Rupee $ — $ 5.2 Chinese Renminbi — 11.1 Euro — 9.1 Total notional value $ — $ 25.4 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS The following table summarizes the Company's short-term and long-term debt: September 30, 2022 October 1, 2021 (In millions, except for percentages) Amount Weighted-Avg Effective Interest Rate Amount Weighted-Avg Effective Interest Rate $ Change Current maturities of long-term debt Other debt $ 2.1 $ 2.8 $ (0.7) Total current maturities of long-term debt $ 2.1 $ 2.8 $ (0.7) Non-current maturities of long-term debt: Convertible Senior Unsecured Notes $ 200.0 10.9% $ 200.0 10.9% $ — Senior Secured Notes 243.0 8.2% 270.0 8.2% (27.0) Other debt 4.6 7.8 (3.2) Total non-current maturities of long-term debt: $ 447.6 $ 477.8 $ (30.2) Unamortized issuance costs and debt discounts Unamortized discount - Convertible Notes $ (28.7) $ (37.6) $ 8.9 Unamortized issuance costs - Convertible Notes (3.1) (4.1) 1.0 Debt issuance costs - Senior Secured Notes (3.5) (4.4) 0.9 Total $ (35.3) $ (46.1) $ 10.8 Total debt outstanding, net $ 414.4 $ 434.5 $ (20.1) Equity component of Convertible Senior Unsecured Notes (1) $ 49.7 $ 49.7 $ — (1) Included in additional paid-in capital on the Consolidated Balance Sheets. Future principal payments of long-term debt outstanding as of September 30, 2022 are as follows: (In millions) Fiscal years: 2023 $ 2.1 2024 1.4 2025 201.4 2026 1.2 2027 243.6 Thereafter — Total debt outstanding $ 449.7 Less: current maturities of long-term debt (2.1) Non-current portion of long -term debt $ 447.6 The following table summarizes the Company's interest expense: Twelve Months Ended September 30, 2022 October 1, 2021 October 2, 2020 Contractual interest coupon and other $ 27.6 $ 30.7 $ 19.1 Amortization/extinguishment of debt issuance costs 3.4 3.5 7.0 Amortization of debt discounts 8.8 7.9 5.3 Total interest expense $ 39.8 $ 42.1 $ 31.4 Convertible Senior Unsecured Notes On June 9, 2020, Varex issued $200.0 million in aggregate principal amount of 4.00% convertible senior unsecured notes due 2025 (“Convertible Notes”). The net proceeds from the issuance of the Convertible Notes, after deducting transaction fees and offering expense payable by the Company, were approximately $193.1 million. The Convertible Notes bear interest at the annual rate of 4.00%, payable semiannually on June 1 and December 1 of each year, beginning on December 1, 2020, and will mature on June 1, 2025, unless earlier converted or repurchased by us. Call Spread On June 4, 2020 and June 5, 2020, in connection with the offering of the Convertible Notes, Varex entered into privately negotiated convertible note hedge transactions (collectively, the “Hedge Transactions”). The Hedge Transactions cover, subject to customary anti-dilution adjustments, the number of shares of Varex common stock that initially underlie the Convertible Notes. The Hedge Transactions are expected generally to reduce the potential dilution and/or offset any cash payments Varex is required to make in excess of the principal amount due upon conversion of the Convertible Notes in the event that the market price of Varex common stock is greater than the strike price of the Hedge Transactions, which was initially $20.81 per share (subject to adjustment under the terms of the Hedge Transactions). The strike price of $20.81 corresponds to the initial conversion price of the Convertible Notes. The number of shares underlying the Hedge Transactions is 9.6 million. On June 4, 2020 and June 5, 2020, Varex also entered into privately negotiated warrant transactions (collectively, the “Warrant Transactions” and, together with the Hedge Transactions, the “Call Spread Transactions”), whereby the Company sold warrants at a higher strike price relating to the same number of shares of Varex common stock that initially underlie the Convertible Notes, subject to customary anti-dilution adjustments. The initial strike price of the warrants is $24.975 per share (subject to adjustment under the terms of the Warrant Transactions), which is 50% above the last reported sale price of Varex common stock on June 4, 2020. The Warrant Transactions could have a dilutive effect to the Company's stockholders to the extent that the market price per share of Varex common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants. The number of shares underlying the Warrant Transactions is 9.6 million. The number of warrants outstanding as of September 30, 2022, was 9.6 million. Senior Secured Notes Varex issued $300.0 million aggregate principal amount of 7.875% Senior Secured Notes due 2027 (the "Senior Secured Notes") pursuant to an indenture dated September 30, 2020, among Varex, certain of its direct or indirect wholly-owned subsidiaries as guarantors, and Wells Fargo Bank, National Association as trustee and collateral agent. Interest payments are paid semiannually on April 15 and October 15 of each year, beginning on April 15, 2021. The Senior Secured Notes are secured by a first priority lien on substantially all of the assets of Varex and the assets and capital stock of its subsidiary guarantors (subject to exceptions), except for assets for which a first priority security interest is pledged for the ABL Facility (defined below), in which the Senior Secured Notes will have a second lien security interest. The Senior Secured Notes include negative covenants, subject to certain exceptions, restricting or limiting Varex's ability and the ability of its restricted subsidiaries to, among other things, incur liens on collateral; sell certain assets; incur additional indebtedness; pay dividends; issue preferred shares; consolidate, merge, or sell all or substantially all of its assets; and enter into certain transactions with their affiliates. On July 15, 2021, the Company redeemed $30 million of Senior Secured Notes, in accordance with the terms and conditions of the governing indenture, by paying cash of $31.5 million, inclusive of the redemption premium and accrued interest, and recognized a $1.4 million loss related to the redemption premium and the write-off of previously recorded debt issuance costs. The redemption price of the redeemed notes was 103% of the principal amount, plus accrued and unpaid interest from, and including, April 15, 2021 to, but excluding, the redemption date of July 15, 2021. On March 18, 2022, the Company redeemed $27 million of Senior Secured Notes, in accordance with the terms and conditions of the governing indenture, by paying cash of $28.7 million, inclusive of the redemption premium and accrued interest, and recognized a $1.2 million loss related to the redemption premium and the write-off of previously recorded debt issuance costs. The redemption price of the redeemed notes was 103% of the principal amount, plus accrued and unpaid interest from, and including, October 15, 2021 to, but excluding, the redemption date of March 18, 2022. As of September 30, 2022, the aggregate principal amount of the outstanding Senior Secured Notes was $243.0 million. Asset-Based Loan Concurrent with the termination of the Credit Agreement (defined below) and closing of the Senior Secured Notes on September 30, 2020, the Company entered into a revolving credit agreement consisting of a $100.0 million asset-based loan revolving credit facility (the “Asset-Based Loan”, or "ABL Facility"). From September 30, 2020 through March 9, 2022, borrowings under the Asset-Based Loan bore interest at floating rates based on LIBOR, or a comparable rate, or a base rate, and an applicable margin based on Average Daily Excess Availability (as defined in the Asset-Based Loan Agreement). In addition, the Company was required to pay a quarterly commitment fee of 0.375% to 0.5%, based on the aggregate unused commitments under the Asset-Based Loan. On March 9, 2022, the ABL Facility was amended to transition the reference rate for certain dollar denominated advances to the Secured Overnight Financing Rate ("SOFR") from the London Interbank Offered Rate ("LIBOR") and the quarterly commitment fee was amended to 0.25%, based on the aggregate unused commitments under the Asset-Based Loan. Additionally, the applicable margin rates were reduced by 75 basis points and the interest rate floor was reduced from 50 basis points to 0 basis points. The ABL Facility matures on the earlier of September 30, 2025 or 91 days prior to the maturity of the Convertible Notes, at which time all outstanding amounts under the ABL Facility will be due and payable. The maximum availability under our ABL Facility is $100.0 million; however, the borrowing base under the ABL fluctuates from month-to-month depending on the amount of eligible accounts receivable, inventory, and real estate. As of September 30, 2022, the amount available under our ABL Facility was $94.5 million, and the ABL Facility remains undrawn. The ABL Facility includes various restrictive covenants that limit our ability to engage in certain transactions, including the incurrence of debt, payment of dividends and other restrictive payments, existence of restrictions affecting subsidiaries, sales of stock and assets, certain affiliate transactions, modifications of debt documents and organizational documents, changes to line of business and fiscal year, incurrence of liens, making fundamental changes, prepayments of junior indebtedness, and certain other transactions. The ABL Facility contains a minimum Fixed Charge Coverage Ratio of 1.00 to 1.00 that is tested when excess availability under the ABL is less than the greater of (i) 10.0% of the Loan Cap (the lesser of (a) the aggregate commitments under the ABL Facility and (b) the aggregate borrowing base) and (ii) $7.5 million. As of September 30, 2022, the Company is compliant with the ABL Facility covenants. The ABL Facility will have a first lien security interest on accounts receivable, cash, and inventory as well as certain real estate and holds second lien security interest on all other assets. Credit Agreement On May 1, 2017 Varex entered into a secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $200.0 million with a term of five years, 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, which was subsequently amended. On September 30, 2020, the Company terminated the Credit Agreement. The Company repaid the outstanding Term Facility balance of $265.5 million and accrued interest of $2.0 million with proceeds received from the issuance of the Senior Secured Notes (defined above) and wrote off approximately $3.8 million of previously recorded debt issuance costs, which resulted in a $3.8 million loss on extinguishment of debt, recorded as interest expense within the Consolidated Statements of Operations. |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Assets/Liabilities Measured at Fair Value on a Recurring Basis The fair values of certain of the Company’s financial instruments, including bank deposits included in cash and cash equivalents, accounts receivable, net and accounts payable, approximate their fair values due to their short maturities. As of September 30, 2022, the fair value of the Company's Convertible Notes and Senior Secured Notes, as defined in Note 9, Borrowings and measured using Level 1 inputs, were $250.2 million and $241.3 million, respectively. As of October 1, 2021, the fair values of the Company's Convertible Notes and Senior Secured Notes, measured using Level 1 inputs, were $296.3 million and $304.8 million, respectively. The Company has elected to use the income approach to value its derivative instruments using standard valuation techniques and Level 2 inputs, such as currency spot rates, forward points and credit default swap spreads. 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 2022. In the tables below, the Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. Fair Value Measurements at September 30, 2022 (In millions) Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Significant Unobservable Inputs Total Assets: Money market funds $ — $ 36.6 $ — $ 36.6 Commercial paper — 5.9 — 5.9 Corporate notes/bonds — 3.6 — 3.6 Government agencies — 0.3 — 0.3 US Treasury bills — 10.2 — 10.2 Derivative assets — 7.5 — 7.5 Marketable equity securities 2.5 — — 2.5 Total assets measured at fair value $ 2.5 $ 64.1 $ — $ 66.6 Liabilities: Derivative liabilities $ — $ 0.3 $ — $ 0.3 Total liabilities measured at fair value $ — $ 0.3 $ — $ 0.3 At October 1, 2021, the Company determined the following levels of inputs for the following assets or liabilities: Fair Value Measurements at October 1, 2021 (In millions) Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Money market funds $ — $ 88.2 $ — $ 88.2 Derivative assets — 1.2 — 1.2 Total assets measured at fair value $ — $ 89.4 $ — $ 89.4 Liabilities: Derivative liabilities $ — $ 2.4 $ — $ 2.4 Total liabilities measured at fair value $ — $ 2.4 $ — $ 2.4 The Company holds assets under its deferred compensation plan which total $5.4 million as of September 30, 2022. Marketable Debt Securities The following is a summary of marketable debt securities, which are included within the cash and cash equivalents, prepaid expenses and other current assets, and other assets balances on the Consolidated Balance Sheets. September 30, 2022 (In millions) Amortized Costs Unrealized Gains Unrealized Losses Fair Value Commercial paper $ 5.9 $ — $ — $ 5.9 Corporate notes/bonds 3.7 — (0.1) 3.6 US Treasury bills 10.2 — — 10.2 Government agencies 0.3 — — 0.3 Total marketable debt securities $ 20.1 $ — $ (0.1) $ 20.0 On October 1, 2021, the Company did not hold any marketable debt securities. The contractual maturities of marketable debt securities as of September 30, 2022, are shown in the table below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations. September 30, 2022 (In millions) Amortized Costs Fair Value Contractual maturities: Due within one year $ 17.8 $ 17.7 Due after one year through five years 2.3 2.3 Total marketable debt securities $ 20.1 $ 20.0 During the twelve months ended September 30, 2022, there were no gross realized gains or losses from the sale of certain marketable debt securities that were reclassified out of accumulated other comprehensive income. The following table summarizes the balance sheet locations for marketable debt securities: September 30, 2022 (In millions) Commercial paper Corporate notes/bonds Government agencies Treasury Bills Total Cash and cash equivalents $ — $ — $ — $ 3.3 $ 3.3 Prepaid expenses and other current assets 5.9 1.9 0.3 6.4 14.5 Other assets — 1.7 — 0.5 2.2 Total marketable debt securities $ 5.9 $ 3.6 $ 0.3 $ 10.2 $ 20.0 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The following table reflects goodwill by reportable segment: (In millions) Medical Industrial Total Balance at October 1, 2021 $ 173.9 $ 118.3 $ 292.2 Foreign currency translation adjustments (4.5) (3.2) (7.7) Balance at September 30, 2022 $ 169.4 $ 115.1 $ 284.5 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 30, 2022 October 1, 2021 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 70.0 $ (49.9) $ 20.1 $ 74.2 $ (45.5) $ 28.7 Patents, licenses and other 12.3 (11.6) 0.7 12.8 (10.9) 1.9 Customer contracts and supplier relationship 49.6 (36.8) 12.8 51.1 (31.0) 20.1 Total intangible assets $ 131.9 $ (98.3) $ 33.6 $ 138.1 $ (87.4) $ 50.7 Amortization expense for intangible assets was $14.6 million, $16.8 million and $17.2 million in fiscal years 2022, 2021 and 2020, respectively. The Company recognized intangible asset impairment charges of $0.0 million, $0.0 million, and $2.8 million in fiscal years 2022, 2021, and 2020, respectively, which are included in the Consolidated Statements of Operations under impairment of intangible assets. These impairment charges related primarily to the Company's Medical reporting segment. As of September 30, 2022, the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal years: 2023 $ 12.9 2024 8.7 2025 2.6 2026 2.5 2027 2.4 Thereafter 4.5 Total $ 33.6 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments See Note 3 , Leases, included in this report, for additional information about the Company's lease commitments. Purchase Agreement With Supplier During fiscal year 2020, Varex entered into a purchase agreement with a supplier to acquire certain equipment and intellectual property from the supplier that is utilized to manufacture X-ray cables utilized in Varex's products. As of September 30, 2022, transfer of the underlying equipment has been completed and installation and calibration is underway. All activities related to this asset purchase are expected to be completed during the 2023 fiscal year. Total consideration to be paid by Varex for the acquired assets is expected to be ¥1,084.7 million, subject to potential decreases for costs incurred by the Company. On April 14, 2022, we entered into a foreign currency hedge related to this Japanese Yen payment, which is expected to fix the purchase price of these assets at approximately $7.9 million. As of September 30, 2022, the Company has made payments totaling $5.4 million and estimates that our remaining cash payments to be made total $2.5 million. Other Commitments See Note 4, Related-Party Transactions, included in this report, for additional information about the Company’s commitments to dpiX. See Note 13 , 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 $1.6 million as of September 30, 2022. In the fourth quarter of fiscal year 2022, the Company entered into several agreements with a third-party company, whose stock is publicly traded on a foreign exchange. Under these agreements, the Company will make certain milestone payments of up to $5 million upon achievement of specified milestones. During fiscal year 2022, the first of these milestones was achieved and the Company paid $1 million to the third party company, which was recorded in research and development in the Consolidated Statements of Operations. The remaining milestones are expected to be achieved in fiscal year 2023. In addition, the Company agreed to acquire, through two separate purchases, a fixed number of shares for consideration of approximately $5 million, representing 9.9% of the shares of the third-party company outstanding on the date the agreements were signed. The Company completed the acquisition of the first tranche of shares during fiscal year 2022 for approximately $2.4 million. The Company has recorded this investment as marketable equity securities, which is included in other assets on the Consolidated Balance Sheet. Refer to Note 1, Summary of Significant Accounting Policies , and Note 10, Fair Value . The second tranche of the investment is subject to foreign regulatory approval and, if approved, is expected to be completed in fiscal year 2023. Contingencies The Company did not have any material contingent liabilities as of September 30, 2022 and October 1, 2021. Legal expenses are expensed as incurred. |
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS | 12 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
NONCONTROLLING INTERESTS | NONCONTROLLING INTERESTS In April 2019, a subsidiary of Varex acquired 98.2% of the outstanding shares of common stock of Direct Conversion. In April 2021, the Company acquired all of the remaining shares representing the noncontrolling interests in Direct Conversion such that the Company now owns 100% of the outstanding shares of common stock of Direct Conversion. As a result, the Company consolidates Direct Conversion's operations in its consolidated financial statements and no longer records any noncontrolling interest in the equity section of the Company's Consolidated Balance Sheets related to Direct Conversion 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 the Company's 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 interests in the equity section of the Company’s Consolidated Balance Sheets. Income representing the noncontrolling partner's share of income from operations is included in the Company's Consolidated Statements of Operations. 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. Unde r 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. During fiscal year 2018 , an immaterial number of MeVis’ shares were purchased under the put right. During the fourth quarter of fiscal year 2020, the put right granted to the noncontrolling shareholders of MeVis under the DPLTA expired unexercised, which resulted in the redeemable noncontrolling interests being reclassified to permanent equity as noncontrolling interest in the Consolidated Balance Sheet. As of September 30, 2022, noncontrolling shareholders together held approximately 0.5 million shares of MeVis, representing 26.3% of the outstanding shares. Changes in noncontrolling interests and redeemable noncontrolling interests were as follows: Fiscal Years 2022 2021 (In millions) Noncontrolling Noncontrolling Interest Balance at beginning of period $ 13.2 $ 14.1 Net income attributable to noncontrolling interests 0.5 0.5 Other, including foreign currency remeasurement (0.4) (1.4) Balance at end of period $ 13.3 $ 13.2 |
EMPLOYEE STOCK PLANS
EMPLOYEE STOCK PLANS | 12 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
EMPLOYEE STOCK PLANS | EMPLOYEE STOCK PLANS Employee Stock Plans Certain of the Company's employees participate in the Varex Imaging Corporation 2020 Omnibus Stock Plan (the “2020 Stock Plan”), the 2017 Omnibus Stock Plan (the “2017 Stock Plan”), and the Varex Imaging Corporation 2017 Employee Stock Purchase Plan (the “2017 ESPP”) which allow the grants of stock options, restricted stock units and performance shares among other types of awards to eligible employees. 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-month purchase period. During the fiscal year 2022, the Company's Board of Directors approved an increase in the number of shares available for issuance under the 2017 ESPP of 0.8 million shares. As of September 30, 2022 the 2017 ESPP provides for the purchase of up to 1.8 million shares of Varex common stock. Share-Based Compensation Expense Share-based compensation expense recognized in the Consolidated Statements of Operations is based on awards ultimately expected to vest. Share-based compensation expense includes expenses related to the Company’s direct employees. 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) 2022 2021 2020 Cost of revenues $ 1.6 $ 1.4 $ 1.1 Research and development 3.1 3.0 2.5 Selling, general and administrative 9.3 9.5 9.8 Total share-based compensation expense $ 14.0 $ 13.9 $ 13.4 The unrecognized share-based compensation cost as of September 30, 2022 was $23.2 million, and is expected to be recognized over a weighted average period of 2.5 fiscal years. As of September 30, 2022, there were approximately 3.2 million and 0.8 million shares of common stock available for future issuances under the 2020 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 2022 2021 2020 2022 2021 2020 Expected term (in years) 7.0 7.0 6.1 0.4 0.5 0.5 Risk-free interest rate 1.4 % 1.0 % 1.1 % 1.6 % 0.1 % 0.9 % Expected volatility 42.7 % 41.5 % 36.9 % 33.6 % 68.4 % 50.0 % Expected dividend — % — % — % — % — % — % Weighted average fair value at grant date $12.07 $9.37 $7.53 $5.41 $5.90 $7.94 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 typically 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 or end of a six-month purchase period. The Company has elected to use the simplified method in calculating the expected term of its options due to a lack of sufficient historical information. 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 debt facilities. 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 October 1, 2021 2,811 $13.61 - $37.60 $ 28.69 4.7 $ 5,161.0 Granted 319 $30.95 - $30.95 $ 30.95 Canceled, expired or forfeited (90) $25.17 - $31.42 $ 30.22 Exercised (138) $13.61 - $30.74 $ 27.11 Outstanding at September 30, 2022 2,902 $13.61 - $37.60 $ 28.97 4.5 $ 1,361.4 Exercisable at September 30, 2022 2,085 $13.61 - $37.60 $ 29.81 3.1 $ 666.1 (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 $21.14 as of September 30, 2022, 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 grant-date fair value of options granted during fiscal years 2022, 2021 and 2020 was $3.9 million, $3.7 million and $4.4 million, respectively. The total intrinsic value of the options exercised during the years ended September 30, 2022, October 1, 2021 and October 2, 2020 was $0.5 million, $0.0 million and $0.4 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 the 2020 Stock Plan: (In thousands, except per share amounts) Number of Shares Weighted Average Balance at October 1, 2021 1,080 $ 23.25 Granted 392 27.53 Vested (364) 24.83 Canceled, expired or forfeited (63) 22.31 Balance at September 30, 2022 1,045 $ 24.35 The total grant-date fair value of shares granted was $10.8 million, $8.9 million and $11.9 million for fiscal years 2022, 2021 and 2020, respectively. Shares outstanding at September 30, 2022, October 1, 2021 and October 2, 2020 had an estimated market value of $22.1 million, $30.9 million and $11.8 million, respectively. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | TAXES ON INCOME Income tax expense or benefit 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. Income tax expense (benefit) was as follows: Fiscal Years (In millions) 2022 2021 2020 Current income tax expense (benefit) Federal $ 3.7 $ 5.4 $ (16.3) State and local 0.2 1.4 (1.4) Foreign 10.3 6.8 5.7 Total current $ 14.2 $ 13.6 $ (12.0) Deferred i ncome tax expense (benefit) : Federal $ 0.4 $ 1.8 $ (1.7) State and local (0.9) (1.3) 0.6 Foreign — (3.4) (2.1) Total deferred $ (0.5) $ (2.9) $ (3.2) Income tax expense (benefit) $ 13.7 $ 10.7 $ (15.2) Income (loss) before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2022 2021 2020 United States $ 16.4 $ (4.1) $ (74.1) Foreign 28.1 32.7 1.5 Income (loss) before taxes $ 44.5 $ 28.6 $ (72.6) The effective tax rate differs from the U.S. federal statutory tax rate as a result of the following: Fiscal Years 2022 2021 2020 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State and local taxes, net of federal tax benefit (1.4) 0.3 1.0 Statutory rate change impact on prior year deferreds 1.1 — — Return to provision (2.1) 4.2 2.8 Research and development credit (0.9) (4.2) 3.7 Prior year research and development credit — (0.3) — Foreign rate difference 6.5 1.7 (0.4) Foreign research innovation box — (3.8) — Change in valuation allowance 6.3 8.4 (11.0) U.S. tax reform - international provisions (4.6) (0.7) — U.S. net operating loss carryback — 5.2 5.6 Other 4.9 5.6 (1.8) Effective tax rate 30.8 % 37.4 % 20.9 % During fiscal year 2022, the Company's effective tax rate varied from the U.S. federal statutory rate of 21% primarily due to the unfavorable impact of profit in foreign jurisdictions with statutory tax rates greater than 21% and also U.S. deferred tax attributes and losses in certain foreign jurisdictions for which a valuation allowance is provided. These unfavorable items are partially offset by the favorable impact of U.S. tax reform international provisions, return to provision adjustments, and R&D tax credits. During fiscal year 2021, the Company’s effective tax rate varied from the U.S. federal statutory rate of 21% primarily because of the unfavorable impact of U.S. deferred tax attributes and losses in certain foreign jurisdictions for which a valuation allowance is provided and a reduction in benefit for U.S. net operating losses carried back to prior years. These unfavorable items are partially offset by the favorable impact of R&D tax credits and U.S. tax reform international provisions. During fiscal year 2020, the Company’s effective tax rate varied from the U.S. federal statutory rate of 21% primarily because of the favorable impact of U.S. net operating losses to be carried back to tax years with greater U.S. federal statutory rates. These favorable tax items were mostly offset by the unfavorable impact of additional losses in certain foreign jurisdictions, limitations on interest expense, and R&D credits for which no benefit is recognized. The Company has estimated its fiscal year 2022 GILTI (global intangible low-taxed income), BEAT (base-erosion anti-abuse tax), FDII (foreign-derived intangible income), limitations on interest expense deductions, and other components of U.S. tax reform, and have included these amounts in the calculation of the fiscal year 2022 tax provision. The Company has made an accounting policy election, as allowed by the SEC and FASB, to recognize the impact of GILTI as a period cost if and when incurred. Significant components of deferred tax assets and liabilities are as follows: (In millions) September 30, 2022 October 1, 2021 (1) Deferred tax assets: Inventory adjustments $ 6.4 $ 4.9 Share-based compensation 6.3 5.5 Product warranty 1.4 1.8 Unrealized exchange gain 2.6 1.7 Deferred compensation 1.3 1.6 Net operating loss carryforwards 19.7 25.7 Accrued vacation 0.9 1.0 Accrued incentives 2.8 4.2 Credit carryforwards 2.5 3.3 Deferred financing fees 2.4 3.0 Interest expense limitation 3.9 4.3 Capitalized interest 0.9 — Lease liabilities 5.4 6.8 Other 2.5 4.7 $ 59.0 $ 68.5 Valuation allowance (32.2) (30.2) Total deferred tax assets $ 26.8 $ 38.3 Deferred tax liabilities: Acquired intangibles $ (7.9) $ (13.9) Property, plant and equipment (8.8) (13.0) Investments in privately held companies (1.4) (1.8) Operating lease assets (5.6) (6.5) Other (1.3) (1.3) Total deferred tax liabilities (25.0) (36.5) Net deferred tax assets $ 1.8 $ 1.8 Reported As: Deferred tax assets $ 26.8 $ 38.3 Deferred tax liabilities (25.0) (36.5) Net deferred tax assets (liabilities) $ 1.8 $ 1.8 (1) Certain prior year amounts have been reclassified to conform to current year presentation. The Company is maintaining its reinvestment assertion with respect to foreign earnings for the year ended September 30, 2022, which is that all earnings prior to fiscal year 2018 are permanently reinvested for all countries, and that all earnings for Direct Conversion, located primarily in Sweden and Finland, are also indefinitely reinvested in those countries, but post fiscal year 2017 earnings in all other countries are not permanently reinvested. Due to the level of earnings available for repatriation, the treaty benefits applicable to jurisdictions in which those earnings are located, and the now favorable 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 repatriated in the form of a dividend. As of September 30, 2022, the Company had foreign net operating loss carryforwards ("NOL") of approximately $19.3 million with $0.9 million expiring between 2022 and 2033 and $18.4 million carried forward indefinitely. During fiscal year 2022, the Company received cash tax refunds related to NOL carryback claims for U.S. losses incurred during fiscal year 2020. The valuation allowance relates primarily to net operating losses in certain foreign jurisdictions, limitations on interest expense deductions, and other deferred tax attributes where, based on the weight of available evidence, it is more likely than not that the tax benefit will not be realized. The valuation allowance increased by $2.0 million during fiscal year 2022 and increased by $1.5 million during fiscal year 2021. The increase during the current year was primarily related to other U.S. deferred tax attributes. Changes in the Company's valuation allowance for deferred tax assets were as follows: Fiscal Years (In millions) 2022 2021 2020 Valuation allowance balance–beginning of fiscal year $ 30.2 $ 28.7 $ 18.8 Other increases 6.9 5.4 10.2 Other decreases (4.9) (3.9) (0.3) Valuation allowance balance—end of fiscal year $ 32.2 $ 30.2 $ 28.7 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) 2022 2021 Unrecognized tax benefits balance–beginning of fiscal year $ 1.1 $ 0.8 Additions based on tax positions related to a prior year 0.1 0.4 Additions based on tax positions related to the current year — 0.1 Reductions resulting from the expiration of the applicable statute of limitations — (0.2) Unrecognized tax benefits balance—end of fiscal year $ 1.2 $ 1.1 As of September 30, 2022 and October 1, 2021, the total amount of gross unrecognized tax benefits was $1.2 million and $1.1 million, respectively, all of which would affect the effective tax rate if recognized. The Company includes interest and penalties related to income taxes within income tax expense (benefit) on the Consolidated Statements of Operations. For the year ended September 30, 2022, $0.2 million interest and penalties have been included for this period. For the year ended October 1, 2021, $0.2 million interest and penalties have been included for this period. For the year ended October 2, 2020, $0.1 million interest and penalties have been included for this 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. Other periods for entities acquired are still open and subject to examination. Generally, periods prior to 2012 are no longer subject to examination. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has two reportable operating segments: Medical and Industrial, which aligns with how its Chief Executive Officer ("CEO"), who is the Company's Chief Operating Decision Maker (“CODM”), reviews the Company’s performance. The segments align the Company’s products and service offerings with customer use in medical and industrial markets and are consistent with how the Company’s CEO evaluates the business for the allocation of resources. The CODM allocates resources to and evaluates the financial performance of each operating segment primarily based on revenues and gross profit. The operating and reportable segment structure provides alignment between business strategies and operating results. Description of Segments The Medical segment designs, manufactures, sells and services X-ray imaging components, including X-ray tubes, digital detectors, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, heat exchangers, ionization chambers and buckys (a component of X-ray units that holds X-ray film cassettes). These components are used in a range of medical imaging applications including CT, mammography, oncology, cardiac, surgery, dental, and other diagnostic radiography uses. The Industrial segment designs, develops, manufactures, sells and services X-ray imaging products for use in a number of markets, including security applications for cargo screening at ports and borders and baggage screening at airports, and nondestructive testing and inspection applications used in a number of other markets. The Company's Industrial products include Linatron ® X-ray linear accelerators, X-ray tubes, digital detectors and high voltage connectors. In addition, the Company licenses proprietary image-processing and detection software designed to work with other Varex products to provide packaged sub-assembly solutions to Industrial customers. 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) 2022 2021 2020 Revenues Medical $ 674.7 $ 643.8 $ 584.5 Industrial 184.7 174.3 153.8 Total revenues 859.4 818.1 738.3 Gross profit Medical 210.5 203.2 136.4 Industrial 73.0 68.3 53.8 Total gross profit 283.5 271.5 190.2 Total operating expenses 195.3 197.4 223.9 Interest and other expense, net (43.7) (45.5) (38.9) Income (loss) before taxes 44.5 28.6 (72.6) Income tax expense (benefit) 13.7 10.7 (15.2) Net income (loss) 30.8 17.9 (57.4) Less: Net income attributable to noncontrolling interests 0.5 0.5 0.5 Net income (loss) attributable to Varex $ 30.3 $ 17.4 $ (57.9) The Company does not disclose total assets by segment as this information is not provided to the CODM. Geographic Information Revenues Long-Lived Assets Fiscal Years Fiscal Years (In millions) 2022 2021 2020 2022 2021 Americas $ 273.3 $ 268.5 $ 255.0 $ 99.8 $ 105.4 EMEA 280.8 276.3 231.5 23.2 23.9 APAC 305.3 273.3 251.8 18.3 10.9 Total company $ 859.4 $ 818.1 $ 738.3 $ 141.3 $ 140.2 Revenue in the United States of America was $263.7 million, $262.3 million and $249.8 million in fiscal years 2022, 2021 and 2020, respectively. The Company operates various manufacturing and marketing operations outside the United States. Americas includes North and South America. 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. 30, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS 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. The Company made matching contributions to the plan totaling $4.4 million, $2.8 million and $4.4 million in fiscal years 2022, 2021 and 2020, respectively. The Company also maintains defined benefit plans for certain employees located outside the US. The net pension liability is included in other long-term liabilities on the Company's Consolidated Balance Sheets and totaled $3.3 million and $5.9 million as of September 30, 2022 and October 1, 2021, respectively. The Company’s net periodic benefit costs for the Company’s defined benefit plans were not material for fiscal years 2022, 2021, and 2020. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | 12 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME The following tables present the changes in the accumulated balances for each component of other comprehensive income (loss): (In millions) Unrealized (Loss) Gain on Derivative Financial Instruments Unrealized (Loss) Gain on Defined Benefit Obligations CTA, Including Impact of Net Investment Hedge Unrealized Loss on Available-for-Sale Securities Accumulated Other Comprehensive Income (Loss) Balance at October 2, 2020 $ — $ (0.7) $ 1.5 $ — $ 0.8 Other comprehensive loss before reclassifications — (0.1) (0.3) — (0.4) Income tax impact — — 0.1 — 0.1 Foreign currency translation adjustment — — (0.5) — (0.5) Balance at October 1, 2021 $ — $ (0.8) $ 0.8 $ — $ — Other comprehensive (loss) income before reclassifications (0.8) 2.0 8.7 (0.1) 9.8 Income tax impact 0.2 (0.6) (0.4) — (0.8) Foreign currency translation adjustment — — (8.9) $ — (8.9) Balance at September 30, 2022 $ (0.6) $ 0.6 $ 0.2 $ (0.1) $ 0.1 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC and in accordance with accounting principles generally accepted in the United States ("GAAP"). The Company has consolidated all the majority owned subsidiaries and entities over which we have control. All intercompany balances and transactions have been eliminated in consolidation. |
Segment Reporting | Segment Reporting The Company has two reportable operating segments; (i) Medical and (ii) Industrial. |
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 2022 was the 52-week period that ended September 30, 2022, fiscal year 2021 was the 52-week period that ended October 1, 2021, and fiscal year 2020 was the 53-week period that ended October 2, 2020. |
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 entity has the obligation to absorb losses or the right to receive residual returns 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 30, 2022, the Company had variable interests in two entities, neither of which were consolidated by the Company. |
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, valuation of goodwill and intangible assets, warranties, contract liabilities, long-lived asset valuations, impairment of investments, valuation of financial instruments, and taxes on income. Actual results could differ from these estimates. |
Cash and Cash Equivalents 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 |
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 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 income ("OCI") 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 until the hedged item is sold. The portion of the change in fair value of the Company's net investment hedges (or cross currency swaps) related to the cross-currency basis spread is an excluded component in the assessment of the effectiveness of these net investment hedges (or cross currency swaps). A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective, in which case, a quantitative assessment of hedge effectiveness is performed. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash, cash equivalents, marketable securities, and trade accounts receivable. Cash held with financial institutions may exceed the Federal Deposit Insurance Corporation insurance limits or similar limits in foreign jurisdictions. To date, the Company has not 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 credit losses based upon the expected collectability of all accounts receivable. The Company obtains some of the components in its products from a limited group of suppliers or from a single-source supplier. When these suppliers are unable to meet the Company's supply needs, the Company's production is negatively impacted. |
Inventories, net | Inventories, net Inventory is valued at the lower of cost or net realizable value. Costs include materials, labor, external service and manufacturing overhead and is computed 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 adjusts 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 is computed using the straight-line method over the estimated useful lives of the assets or remaining lease term. 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 up to thirty years. Machinery and equipment are depreciated over a range from three |
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, which means that distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment and classified as operating cash flows and those in excess of that amount will be treated as returns of investment and classified as investing cash flows. The Company reviews its equity investments in privately-held companies for impairment whenever events or changes in business circumstances are other than temporary and indicate that the carrying amount of the investments may not be fully recoverable. |
Marketable Securities | Marketable Securities The Company's marketable securities consist primarily of financial instruments such as U.S. treasury securities, U.S. agency obligations, corporate bonds, commercial paper, money market funds, and equity securities. The Company classifies marketable debt securities as available-for-sale at the time of purchase and reevaluates such classifications as of each balance sheet date. All marketable debt securities are recorded at estimated fair value. Any unrealized gains or losses for marketable debt securities are included in accumulated other comprehensive income within the Consolidated Balance Sheets. Marketable equity securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date. All unrealized gains and losses on equity securities are recorded as part of other expense, net in the Company's consolidated financial statements. See Note 10, Fair Value, for further details. When the fair value of a debt security declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in our Consolidated Statements of Operations. When the fair value of a debt security declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in accumulated other comprehensive income, and are recognized in our Consolidated Statements of Operations only if we sell or intend to sell the security before recovery of its cost basis. There were no credit losses related to marketable debt securities recorded during the twelve months ended September 30, 2022. |
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, net in the Company's Consolidated Balance Sheets. Intangible assets with finite lives are amortized over their estimated useful lives of primarily two |
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. |
Loss Contingencies | Loss Contingencies From time to time, the Company is involved in legal proceedings, claims and government inspections or investigations, customs and duties 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. When a loss contingency is probable but not reasonably estimable the nature of the contingency and the fact that an estimate cannot be made is disclosed. See Note 12, Commitments and Contingencies, for further information regarding certain of our contractual obligations and contingencies. |
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. |
Leases | Leases The Company determines if an arrangement is or contains a lease at the inception of an arrangement. The Company's operating lease right-of-use ("ROU") assets represent the right to use an underlying asset over the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets may also include initial direct costs incurred and prepaid lease payments, less lease incentives. Lease liabilities and their corresponding ROU assets are recognized based on the present value of lease payments over the lease term, discounted using the Company's incremental borrowing rate. The Company recognizes operating leases with lease terms of more than twelve months in operating lease assets, current operating lease liabilities, and operating lease liabilities on its Consolidated Balance Sheets. The Company recognizes finance leases with lease terms of more than twelve months in property, plant and equipment, net, accrued liabilities and other current liabilities, and other long-term liabilities on its Consolidated Balance Sheets. For purposes of calculating lease liabilities and the corresponding ROU assets, the Company's lease term may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. |
Revenue Recognition | Revenue Recognition 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 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. 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. 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. Recognition of Revenue 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 generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Service revenue is generally recognized over the term of the service contract. Services are expected to be transferred to the customer throughout the term of the contract and the Company believes recognizing revenue ratably over the term of the contract best depicts the transfer of value to the customer. Disaggregation of Revenue 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 16, 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 in the Consolidated Balance Sheets. Contract liabilities, which also includes refund obligations, are included within the accrued liabilities and other current liabilities, deferred revenues, and other long-term liabilities balances in the Consolidated Balance Sheets. 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. 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 Credit Losses | Allowance for Credit Losses The Company evaluates the creditworthiness of customers prior to authorizing shipment for all major sale transactions. On a quarterly basis, the Company considers historical trends, current information and any reasonable and supportable forecasts to determine if an amount should be included in the allowance for credit losses. |
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. 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. |
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. |
Research and Development | Research and Development Research and development costs are expensed as incurred. These costs primarily include employees’ compensation, consulting fees and material costs. |
Taxes on Income | Taxes on Income Current income tax expense or benefit is the amount of income taxes expected to be payable or receivable 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. Future changes in tax regulation can have a material impact, including tax rate changes or the realization of deferred tax assets. 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. U.S. tax reform introduced a limitation of business interest deduction under IRC Section 163(j), which may be difficult to utilize without significant taxable income. Also, net operating loss carryforwards in jurisdictions with current losses provide uncertainty for realization. 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. A portion of the U.S. general business tax credits for research outside of the financial statement line for research and development ("R&D") have a small degree of uncertainty. A reasonable reserve is maintained on the uncertain portion until either the Internal Revenue Service chooses to audit or the statute of limitation expires. A reserve for R&D is typical for companies that calculate and utilize this general business credit. 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. |
Foreign Currency Translation | 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 Operations in other expense, net. For the foreign subsidiaries 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 income. |
Recently Adopted Accounting Pronouncements and Recent Accounting Standards Updates Not Yet Effective | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the current guidance, and improving the consistent application and simplification of other areas of the guidance. The Company adopted this ASU on October 2, 2021, using a prospective approach. The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. This pronouncement changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans and replaces the incurred loss methodology with a new, forward-looking “expected loss” model that considers the risk of loss over the asset’s contractual life, even if remote, historical experience, current conditions, and reasonable and supportable forecasts of future relevant events. The Company adopted this ASU on October 3, 2020, using a modified retrospective approach. The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements and related disclosures. Recent Accounting Standards Updates Not Yet Effective In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The standard removes certain separation models in ASC 470-20 for convertible instruments, and, as a result, embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under ASC 815. These convertible debt instruments will be accounted for as a single liability measured at amortized cost. This will also result in the interest expense recognized for convertible debt instruments to be typically closer to the coupon interest rate. Further, the ASU made amendments to the earnings per share (“EPS”) guidance in Topic 260 for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU is effective for annual periods beginning after December 15, 2021, including interim periods within those years. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company will adopt the new standard effective October 1, 2022, the first day of the fiscal year ending September 29, 2023, using the modified retrospective method. On the date of adoption, the Company estimates that its entry to adopt this ASU will be to record a reduction in additional paid-in capital of $34.6 million, an increase to long-term debt, net of $28.0 million, an increase to deferred tax assets of $6.7 million, and an increase to retained earnings of $13.3 million in 2023 for the after-tax impact of previously recognized amortization of the debt discount associated with the Company’s Convertible Senior Notes. The unamortized discount on our Convertible Notes (see Note 9, Borrowings ) will be reclassified from equity to liabilities and the interest expense from our Convertible Notes will decrease and be closer to the coupon rate of 4.00%. The impact that adoption of ASU 2020-06 will have on our net income per diluted share will depend on the amount of earnings in each period and our share price, and could result in additional dilution. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate (e.g., LIBOR) reform on financial reporting. Adoption of the guidance is elective and is permitted from March 12, 2020 through December 31, 2022. The Company will evaluate transactions or contract modifications occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis. The Company determined this ASU will not have a material impact on its financial position, results of operations or cash flows. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
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 30, 2022 Twelve Months Ended October 1, 2021 (In millions) Beginning of Period End of Period Beginning of Period End of Period Cash and cash equivalents $ 144.6 $ 89.4 $ 100.6 $ 144.6 Restricted cash 1.5 1.2 1.5 1.5 Cash and cash equivalents and restricted cash as reported per statement of cash flows $ 146.1 $ 90.6 $ 102.1 $ 146.1 |
Schedules of Concentration of Risk, by Risk Factor | Fiscal Year 2022 2021 2020 Canon Medical Systems Corporation 17.2 % 17.9 % 20.5 % |
Schedule of Inventory, Net | The following table summarizes the Company’s inventories, net: (In millions) September 30, 2022 October 1, 2021 Raw materials and parts $ 240.3 $ 168.0 Work-in-process 23.2 20.4 Finished goods 39.7 36.4 Total inventories $ 303.2 $ 224.8 |
Schedule of Property, Plant and Equipment, Net | The following table summarizes the Company’s property, plant and equipment, net: (In millions) September 30, 2022 October 1, 2021 Land $ 8.3 $ 8.3 Buildings and leasehold improvements 149.2 148.7 Machinery and equipment 182.9 179.7 Construction in progress 29.1 18.1 Gross property, plant and equipment 369.5 354.8 Accumulated depreciation and amortization (228.2) (214.6) Total property, plant and equipment, net $ 141.3 $ 140.2 |
Schedule of Product Warranty Liability | The following table reflects the changes in the Company’s accrued product warranty: Fiscal Years Ended (In millions) September 30, 2022 October 1, 2021 Accrued product warranty, at beginning of period $ 8.5 $ 8.1 New accruals charged to cost of revenues 11.3 13.0 Product warranty expenditures (11.9) (12.6) Accrued product warranty, at end of period $ 7.9 $ 8.5 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Rollforward of Contract Assets and Liabilities | The following tables summarize the changes in the contract assets and refund liabilities for the twelve months ended September 30, 2022 and October 1, 2021: (In millions) Contract Assets Balance at October 2, 2020 $ 24.6 Costs recovered from product returns during the period (4.8) Contract asset from shipments of products, subject to return during the period 6.4 Adjustment for actual vs. reserved product returns (1.9) Balance at October 1, 2021 $ 24.3 Costs recovered from product returns during the period (5.4) Contract asset from shipments of products, subject to return during the period 7.1 Adjustment for actual vs. reserved product returns (0.6) Balance at September 30, 2022 $ 25.4 (In millions) Refund Liabilities Balance at October 2, 2020 $ 27.4 Release of refund liability included in beginning of year refund liability (5.3) Additions to refund liabilities 7.1 Adjustment for actual vs. reserved product returns (2.2) Balance at October 1, 2021 $ 27.0 Release of refund liability included in beginning of year refund liability (6.1) Additions to refund liabilities 7.9 Adjustment for actual vs. reserved product returns (0.6) Balance at September 30, 2022 $ 28.2 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information, Weighted Average Remaining Lease Terms and Discount Rates | The following table presents supplemental balance sheet information related to the Company's operating and finance leases: (In millions) Balance Sheet Location September 30, 2022 October 1, 2021 Assets Operating lease right-of-use assets Operating lease assets $ 23.2 $ 24.3 Finance lease right-of-use assets Property, plant and equipment, net 0.3 0.5 Liabilities Operating lease liabilities (current) Current operating lease liabilities 4.0 6.2 Finance lease liabilities (current) Accrued liabilities and other current liabilities 0.2 0.2 Operating lease liabilities (non-current) Operating lease liabilities 18.0 18.7 Finance lease liabilities (non-current) Other long-term liabilities $ 0.1 $ 0.3 The following table presents the weighted average remaining lease term and discount rate information related to the Company's operating and finance leases: September 30, 2022 October 1, 2021 Operating lease weighted average remaining lease term (in years) 6.4 5.9 Operating lease weighted average discount rate 5.6 % 5.5 % Finance lease weighted average remaining lease term (in years) 2.0 2.5 Finance lease weighted average discount rate 3.6 % 3.6 % |
Schedule of Lease Cost and Supplemental Cash Flow Information | The following table provides information related to the Company’s operating and finance leases: (In millions) 2022 2021 2020 Total operating lease costs (1) $ 6.4 $ 8.1 $ 8.4 Total finance lease costs $ 0.2 $ 0.3 $ 0.3 Operating cash flows from operating leases $ 7.3 $ 7.9 $ 8.0 Financing cash flows from finance leases 0.2 0.2 0.3 Total cash paid for amounts included in the measurement of lease liabilities $ 7.5 $ 8.1 $ 8.3 Noncash operating right-of-use assets obtained in exchange for new lease liabilities $ 5.4 $ 5.6 $ 10.6 Noncash finance right-of-use assets obtained in exchange for new lease liabilities 0.1 0.2 0.2 Total right-of-use assets obtained in exchange for new lease liabilities $ 5.5 $ 5.8 $ 10.8 (1) Includes variable and short-term lease expense, which were immaterial for fiscal years 2022, 2021, and 2020. |
Schedule of Finance Lease Liability Maturities | As of September 30, 2022, maturities of operating lease and finance lease liabilities for each of the following five years and a total thereafter were as follows: (In millions) Fiscal years: Operating Leases Finance Leases 2023 $ 5.2 $ 0.2 2024 4.6 0.1 2025 4.4 — 2026 3.1 — 2027 2.8 — Thereafter 6.5 — Total future lease payments $ 26.6 $ 0.3 Less: imputed interest (4.6) — Present value of lease liabilities $ 22.0 $ 0.3 |
Schedule of Operating Lease Liability Maturities | As of September 30, 2022, maturities of operating lease and finance lease liabilities for each of the following five years and a total thereafter were as follows: (In millions) Fiscal years: Operating Leases Finance Leases 2023 $ 5.2 $ 0.2 2024 4.6 0.1 2025 4.4 — 2026 3.1 — 2027 2.8 — Thereafter 6.5 — Total future lease payments $ 26.6 $ 0.3 Less: imputed interest (4.6) — Present value of lease liabilities $ 22.0 $ 0.3 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges | Below is a detail of restructuring charges incurred during the 2022, 2021 and 2020 fiscal years, which predominately relate to the Company's Medical segment: (In millions) Location of Restructuring Charges in Consolidated Statements of Operations 2022 2021 2020 Other assets impairment charges Selling, general and administrative $ 1.8 $ — $ — Inventory write downs Cost of revenues — — 1.3 Accelerated depreciation Cost of revenues — 0.2 2.9 Severance costs Selling, general and administrative — 0.6 5.7 Facility closure costs Selling, general and administrative — 0.2 3.6 Total restructuring charges $ 1.8 $ 1.0 $ 13.5 |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accrued Liabilities | The following table summarizes the Company’s accrued liabilities and other current liabilities: (In millions) September 30, 2022 October 1, 2021 Accrued compensation and benefits $ 37.5 $ 44.2 Product warranty 7.9 8.5 Taxes payable 11.3 8.0 Right of return liability 6.8 6.7 Accrued interest 11.7 12.5 Other 6.2 9.8 Total accrued liabilities and other current liabilities $ 81.4 $ 89.7 |
Other Noncurrent Liabilities | The following table summarizes the Company’s other long-term liabilities: (In millions) September 30, 2022 October 1, 2021 Long-term income tax payable $ 4.3 $ 1.8 Environmental liabilities 1.3 0.6 Defined benefit obligation liability 3.3 5.9 Long-term right of return liability 21.4 20.3 Long-term other 3.5 3.2 Total other long-term liabilities $ 33.8 $ 31.8 |
Schedule of Other Expense, Net | The following table summarizes the Company’s other expense, net: Fiscal Years (In millions) 2022 2021 2020 Loss from equity method investments $ (3.0) $ (3.4) $ (2.1) Change in fair value of deferred consideration — — 0.9 Impairment of investment — — (2.7) Realized losses on foreign currencies, net (1.5) (0.2) (3.7) Other 0.2 0.1 — Total other expense, net $ (4.3) $ (3.5) $ (7.6) |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Income per Common Share | A reconciliation of the numerator and denominator used in the calculation of basic and diluted income per common share is as follows: Fiscal Year (In millions, except per share amounts) 2022 2021 2020 Net income (loss) attributable to Varex $ 30.3 $ 17.4 $ (57.9) Weighted average shares outstanding – basic 39.8 39.3 38.8 Dilutive effect of Convertible Senior Notes 1.3 0.6 — Dilutive effect of share-based awards and other 0.5 0.4 — Weighted average shares outstanding – diluted 41.6 40.3 38.8 Net income (loss) per share attributable to Varex – basic $ 0.76 $ 0.44 $ (1.49) Net income (loss) per share attributable to Varex – diluted $ 0.73 $ 0.43 $ (1.49) Anti-dilutive share-based awards, excluded 3.0 2.8 3.5 |
FINANCIAL DERIVATIVES AND HED_2
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | As of September 30, 2022, 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 Forward contracts 4 $ 2.5 (In millions, except for number of instruments) Number of Instruments Notional Value Cross currency swap contracts 3 $ 66.6 (In millions) Derivative Assets and Liabilities Derivatives Designated as Net Investment Hedges Balance Sheet Location 2022 2021 Cross currency swap contracts Prepaid expenses and other current assets $ 1.2 $ 1.2 Cross currency swap contracts Other assets 6.3 — Cross currency swap contracts Other long-term liabilities $ — $ 2.4 Notional Value of Derivatives not Designated as Hedging Instruments: (In millions of equivalent USD) Buy contracts Sell contracts Indian Rupee $ — $ 5.2 Chinese Renminbi — 11.1 Euro — 9.1 Total notional value $ — $ 25.4 |
Schedule of Interest Rate Derivative Instruments | The following table summarizes the amount of pre-tax loss recognized from derivative instruments for the periods indicated: Amount of Loss Recognized in OCI on Derivatives Location of Loss Reclassified from Accumulated OCI into Income Amount of Loss Reclassified from Accumulated OCI into Income (In millions) 2022 2021 2020 2022 2021 2020 Interest rate swap contracts $ — $ — $ (3.4) Interest expense $ — $ — $ (1.5) Forward contracts (0.8) — — Interest expense — — — $ (0.8) $ — $ (3.4) $ — $ — $ (1.5) Amount of Gain or (Loss) Recognized in OCI on Derivatives Location of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) (In millions) 2022 2021 2020 2022 2021 2020 Cross currency swap contracts $ 8.7 $ (0.3) $ (1.3) Interest expense $ 1.2 $ 1.3 $ 1.5 |
Schedule of Net Investment Hedges | 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: (In millions) Derivative Liabilities Derivatives designated as cash flow hedges Balance sheet location 2022 Forward contracts Accrued liabilities and other current liabilities $ 0.3 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
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 30, 2022 October 1, 2021 (In millions, except for percentages) Amount Weighted-Avg Effective Interest Rate Amount Weighted-Avg Effective Interest Rate $ Change Current maturities of long-term debt Other debt $ 2.1 $ 2.8 $ (0.7) Total current maturities of long-term debt $ 2.1 $ 2.8 $ (0.7) Non-current maturities of long-term debt: Convertible Senior Unsecured Notes $ 200.0 10.9% $ 200.0 10.9% $ — Senior Secured Notes 243.0 8.2% 270.0 8.2% (27.0) Other debt 4.6 7.8 (3.2) Total non-current maturities of long-term debt: $ 447.6 $ 477.8 $ (30.2) Unamortized issuance costs and debt discounts Unamortized discount - Convertible Notes $ (28.7) $ (37.6) $ 8.9 Unamortized issuance costs - Convertible Notes (3.1) (4.1) 1.0 Debt issuance costs - Senior Secured Notes (3.5) (4.4) 0.9 Total $ (35.3) $ (46.1) $ 10.8 Total debt outstanding, net $ 414.4 $ 434.5 $ (20.1) Equity component of Convertible Senior Unsecured Notes (1) $ 49.7 $ 49.7 $ — (1) Included in additional paid-in capital on the Consolidated Balance Sheets. |
Schedule of Maturities of Long-term Debt | Future principal payments of long-term debt outstanding as of September 30, 2022 are as follows: (In millions) Fiscal years: 2023 $ 2.1 2024 1.4 2025 201.4 2026 1.2 2027 243.6 Thereafter — Total debt outstanding $ 449.7 Less: current maturities of long-term debt (2.1) Non-current portion of long -term debt $ 447.6 |
Interest Income and Interest Expense Disclosure | The following table summarizes the Company's interest expense: Twelve Months Ended September 30, 2022 October 1, 2021 October 2, 2020 Contractual interest coupon and other $ 27.6 $ 30.7 $ 19.1 Amortization/extinguishment of debt issuance costs 3.4 3.5 7.0 Amortization of debt discounts 8.8 7.9 5.3 Total interest expense $ 39.8 $ 42.1 $ 31.4 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | In the tables below, the Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. Fair Value Measurements at September 30, 2022 (In millions) Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Significant Unobservable Inputs Total Assets: Money market funds $ — $ 36.6 $ — $ 36.6 Commercial paper — 5.9 — 5.9 Corporate notes/bonds — 3.6 — 3.6 Government agencies — 0.3 — 0.3 US Treasury bills — 10.2 — 10.2 Derivative assets — 7.5 — 7.5 Marketable equity securities 2.5 — — 2.5 Total assets measured at fair value $ 2.5 $ 64.1 $ — $ 66.6 Liabilities: Derivative liabilities $ — $ 0.3 $ — $ 0.3 Total liabilities measured at fair value $ — $ 0.3 $ — $ 0.3 At October 1, 2021, the Company determined the following levels of inputs for the following assets or liabilities: Fair Value Measurements at October 1, 2021 (In millions) Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Money market funds $ — $ 88.2 $ — $ 88.2 Derivative assets — 1.2 — 1.2 Total assets measured at fair value $ — $ 89.4 $ — $ 89.4 Liabilities: Derivative liabilities $ — $ 2.4 $ — $ 2.4 Total liabilities measured at fair value $ — $ 2.4 $ — $ 2.4 |
Schedule of Gains and (Losses) on Marketable Securities | The following is a summary of marketable debt securities, which are included within the cash and cash equivalents, prepaid expenses and other current assets, and other assets balances on the Consolidated Balance Sheets. September 30, 2022 (In millions) Amortized Costs Unrealized Gains Unrealized Losses Fair Value Commercial paper $ 5.9 $ — $ — $ 5.9 Corporate notes/bonds 3.7 — (0.1) 3.6 US Treasury bills 10.2 — — 10.2 Government agencies 0.3 — — 0.3 Total marketable debt securities $ 20.1 $ — $ (0.1) $ 20.0 |
Schedule of Marketable Securities | The contractual maturities of marketable debt securities as of September 30, 2022, are shown in the table below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations. September 30, 2022 (In millions) Amortized Costs Fair Value Contractual maturities: Due within one year $ 17.8 $ 17.7 Due after one year through five years 2.3 2.3 Total marketable debt securities $ 20.1 $ 20.0 September 30, 2022 (In millions) Commercial paper Corporate notes/bonds Government agencies Treasury Bills Total Cash and cash equivalents $ — $ — $ — $ 3.3 $ 3.3 Prepaid expenses and other current assets 5.9 1.9 0.3 6.4 14.5 Other assets — 1.7 — 0.5 2.2 Total marketable debt securities $ 5.9 $ 3.6 $ 0.3 $ 10.2 $ 20.0 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table reflects goodwill by reportable segment: (In millions) Medical Industrial Total Balance at October 1, 2021 $ 173.9 $ 118.3 $ 292.2 Foreign currency translation adjustments (4.5) (3.2) (7.7) Balance at September 30, 2022 $ 169.4 $ 115.1 $ 284.5 |
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 30, 2022 October 1, 2021 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 70.0 $ (49.9) $ 20.1 $ 74.2 $ (45.5) $ 28.7 Patents, licenses and other 12.3 (11.6) 0.7 12.8 (10.9) 1.9 Customer contracts and supplier relationship 49.6 (36.8) 12.8 51.1 (31.0) 20.1 Total intangible assets $ 131.9 $ (98.3) $ 33.6 $ 138.1 $ (87.4) $ 50.7 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of September 30, 2022, the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal years: 2023 $ 12.9 2024 8.7 2025 2.6 2026 2.5 2027 2.4 Thereafter 4.5 Total $ 33.6 |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Changes in Redeemable Noncontrolling Interest | Changes in noncontrolling interests and redeemable noncontrolling interests were as follows: Fiscal Years 2022 2021 (In millions) Noncontrolling Noncontrolling Interest Balance at beginning of period $ 13.2 $ 14.1 Net income attributable to noncontrolling interests 0.5 0.5 Other, including foreign currency remeasurement (0.4) (1.4) Balance at end of period $ 13.3 $ 13.2 |
EMPLOYEE STOCK PLANS (Tables)
EMPLOYEE STOCK PLANS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
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) 2022 2021 2020 Cost of revenues $ 1.6 $ 1.4 $ 1.1 Research and development 3.1 3.0 2.5 Selling, general and administrative 9.3 9.5 9.8 Total share-based compensation expense $ 14.0 $ 13.9 $ 13.4 |
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 2022 2021 2020 2022 2021 2020 Expected term (in years) 7.0 7.0 6.1 0.4 0.5 0.5 Risk-free interest rate 1.4 % 1.0 % 1.1 % 1.6 % 0.1 % 0.9 % Expected volatility 42.7 % 41.5 % 36.9 % 33.6 % 68.4 % 50.0 % Expected dividend — % — % — % — % — % — % Weighted average fair value at grant date $12.07 $9.37 $7.53 $5.41 $5.90 $7.94 |
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 October 1, 2021 2,811 $13.61 - $37.60 $ 28.69 4.7 $ 5,161.0 Granted 319 $30.95 - $30.95 $ 30.95 Canceled, expired or forfeited (90) $25.17 - $31.42 $ 30.22 Exercised (138) $13.61 - $30.74 $ 27.11 Outstanding at September 30, 2022 2,902 $13.61 - $37.60 $ 28.97 4.5 $ 1,361.4 Exercisable at September 30, 2022 2,085 $13.61 - $37.60 $ 29.81 3.1 $ 666.1 (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 $21.14 as of September 30, 2022, 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 the 2020 Stock Plan: (In thousands, except per share amounts) Number of Shares Weighted Average Balance at October 1, 2021 1,080 $ 23.25 Granted 392 27.53 Vested (364) 24.83 Canceled, expired or forfeited (63) 22.31 Balance at September 30, 2022 1,045 $ 24.35 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) was as follows: Fiscal Years (In millions) 2022 2021 2020 Current income tax expense (benefit) Federal $ 3.7 $ 5.4 $ (16.3) State and local 0.2 1.4 (1.4) Foreign 10.3 6.8 5.7 Total current $ 14.2 $ 13.6 $ (12.0) Deferred i ncome tax expense (benefit) : Federal $ 0.4 $ 1.8 $ (1.7) State and local (0.9) (1.3) 0.6 Foreign — (3.4) (2.1) Total deferred $ (0.5) $ (2.9) $ (3.2) Income tax expense (benefit) $ 13.7 $ 10.7 $ (15.2) |
Schedule of Income before Income Tax, Domestic and Foreign | Income (loss) before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2022 2021 2020 United States $ 16.4 $ (4.1) $ (74.1) Foreign 28.1 32.7 1.5 Income (loss) before taxes $ 44.5 $ 28.6 $ (72.6) |
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 2022 2021 2020 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State and local taxes, net of federal tax benefit (1.4) 0.3 1.0 Statutory rate change impact on prior year deferreds 1.1 — — Return to provision (2.1) 4.2 2.8 Research and development credit (0.9) (4.2) 3.7 Prior year research and development credit — (0.3) — Foreign rate difference 6.5 1.7 (0.4) Foreign research innovation box — (3.8) — Change in valuation allowance 6.3 8.4 (11.0) U.S. tax reform - international provisions (4.6) (0.7) — U.S. net operating loss carryback — 5.2 5.6 Other 4.9 5.6 (1.8) Effective tax rate 30.8 % 37.4 % 20.9 % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of deferred tax assets and liabilities are as follows: (In millions) September 30, 2022 October 1, 2021 (1) Deferred tax assets: Inventory adjustments $ 6.4 $ 4.9 Share-based compensation 6.3 5.5 Product warranty 1.4 1.8 Unrealized exchange gain 2.6 1.7 Deferred compensation 1.3 1.6 Net operating loss carryforwards 19.7 25.7 Accrued vacation 0.9 1.0 Accrued incentives 2.8 4.2 Credit carryforwards 2.5 3.3 Deferred financing fees 2.4 3.0 Interest expense limitation 3.9 4.3 Capitalized interest 0.9 — Lease liabilities 5.4 6.8 Other 2.5 4.7 $ 59.0 $ 68.5 Valuation allowance (32.2) (30.2) Total deferred tax assets $ 26.8 $ 38.3 Deferred tax liabilities: Acquired intangibles $ (7.9) $ (13.9) Property, plant and equipment (8.8) (13.0) Investments in privately held companies (1.4) (1.8) Operating lease assets (5.6) (6.5) Other (1.3) (1.3) Total deferred tax liabilities (25.0) (36.5) Net deferred tax assets $ 1.8 $ 1.8 Reported As: Deferred tax assets $ 26.8 $ 38.3 Deferred tax liabilities (25.0) (36.5) Net deferred tax assets (liabilities) $ 1.8 $ 1.8 (1) Certain prior year amounts have been reclassified to conform to current year presentation. |
Summary of Valuation Allowance | Changes in the Company's valuation allowance for deferred tax assets were as follows: Fiscal Years (In millions) 2022 2021 2020 Valuation allowance balance–beginning of fiscal year $ 30.2 $ 28.7 $ 18.8 Other increases 6.9 5.4 10.2 Other decreases (4.9) (3.9) (0.3) Valuation allowance balance—end of fiscal year $ 32.2 $ 30.2 $ 28.7 |
Schedule of Unrecognized Tax Benefits Roll Forward | Changes in the Company’s unrecognized tax benefits were as follows: Fiscal Years (In millions) 2022 2021 Unrecognized tax benefits balance–beginning of fiscal year $ 1.1 $ 0.8 Additions based on tax positions related to a prior year 0.1 0.4 Additions based on tax positions related to the current year — 0.1 Reductions resulting from the expiration of the applicable statute of limitations — (0.2) Unrecognized tax benefits balance—end of fiscal year $ 1.2 $ 1.1 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Information related to the Company’s segments is as follows: Fiscal Year (In millions) 2022 2021 2020 Revenues Medical $ 674.7 $ 643.8 $ 584.5 Industrial 184.7 174.3 153.8 Total revenues 859.4 818.1 738.3 Gross profit Medical 210.5 203.2 136.4 Industrial 73.0 68.3 53.8 Total gross profit 283.5 271.5 190.2 Total operating expenses 195.3 197.4 223.9 Interest and other expense, net (43.7) (45.5) (38.9) Income (loss) before taxes 44.5 28.6 (72.6) Income tax expense (benefit) 13.7 10.7 (15.2) Net income (loss) 30.8 17.9 (57.4) Less: Net income attributable to noncontrolling interests 0.5 0.5 0.5 Net income (loss) attributable to Varex $ 30.3 $ 17.4 $ (57.9) |
Revenue from External Customers by Geographic Areas | Geographic Information Revenues Long-Lived Assets Fiscal Years Fiscal Years (In millions) 2022 2021 2020 2022 2021 Americas $ 273.3 $ 268.5 $ 255.0 $ 99.8 $ 105.4 EMEA 280.8 276.3 231.5 23.2 23.9 APAC 305.3 273.3 251.8 18.3 10.9 Total company $ 859.4 $ 818.1 $ 738.3 $ 141.3 $ 140.2 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The following tables present the changes in the accumulated balances for each component of other comprehensive income (loss): (In millions) Unrealized (Loss) Gain on Derivative Financial Instruments Unrealized (Loss) Gain on Defined Benefit Obligations CTA, Including Impact of Net Investment Hedge Unrealized Loss on Available-for-Sale Securities Accumulated Other Comprehensive Income (Loss) Balance at October 2, 2020 $ — $ (0.7) $ 1.5 $ — $ 0.8 Other comprehensive loss before reclassifications — (0.1) (0.3) — (0.4) Income tax impact — — 0.1 — 0.1 Foreign currency translation adjustment — — (0.5) — (0.5) Balance at October 1, 2021 $ — $ (0.8) $ 0.8 $ — $ — Other comprehensive (loss) income before reclassifications (0.8) 2.0 8.7 (0.1) 9.8 Income tax impact 0.2 (0.6) (0.4) — (0.8) Foreign currency translation adjustment — — (8.9) $ — (8.9) Balance at September 30, 2022 $ (0.6) $ 0.6 $ 0.2 $ (0.1) $ 0.1 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | 12 Months Ended |
Sep. 30, 2022 segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Variable Interest Entities (Details) | 12 Months Ended |
Sep. 30, 2022 entity | |
Accounting Policies [Abstract] | |
Number of variable interest entities | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restricted Cash (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | Sep. 27, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 89.4 | $ 144.6 | $ 100.6 | |
Restricted cash | 1.2 | 1.5 | 1.5 | |
Cash and cash equivalents and restricted cash as reported per statement of cash flows | $ 90.6 | $ 146.1 | $ 102.1 | $ 31.3 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Details) - Canon Medical Systems Corporation - Customer Concentration Risk | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 17.20% | 17.90% | 20.50% |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.30% | 16.20% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Inventory [Line Items] | |||
Raw materials and parts | $ 240.3 | $ 168 | |
Work-in-process | 23.2 | 20.4 | |
Finished goods | 39.7 | 36.4 | |
Total inventories | 303.2 | 224.8 | |
Inventory write-down | 6.4 | 3.5 | $ 18.1 |
COVID-19 Pandemic | |||
Inventory [Line Items] | |||
Inventory write-down | $ 0 | $ 3.5 | $ 15.8 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | $ 369.5 | $ 354.8 | |
Accumulated depreciation and amortization | (228.2) | (214.6) | |
Total property, plant and equipment, net | 141.3 | 140.2 | |
Depreciation | 19 | 20.5 | $ 22.3 |
Santa Clara Relocation, Workforce Reduction and Other Restructuring Activities | |||
Property, Plant and Equipment [Line Items] | |||
Accelerated depreciation | $ 0 | 0.2 | $ 2.9 |
Land Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives (in years) | 15 years | ||
Building | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives (in years) | 30 years | ||
Land | |||
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | $ 8.3 | 8.3 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | 149.2 | 148.7 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | 182.9 | 179.7 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | $ 29.1 | $ 18.1 | |
Minimum | Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives (in years) | 3 years | ||
Maximum | Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives (in years) | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Investments (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Accounting Policies [Abstract] | |||
Equity method investment, other than temporary impairment | $ 0 | $ 0 | $ 2,700,000 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Intangible Assets (Details) | 12 Months Ended |
Sep. 30, 2022 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life (in years) | 2 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life (in years) | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of Long-Lived Assets, Intangible Assets and Goodwill (Details) | 12 Months Ended | ||
Sep. 30, 2022 USD ($) reportingUnit | Oct. 01, 2021 USD ($) reportingUnit | Oct. 02, 2020 USD ($) reportingUnit | |
Accounting Policies [Abstract] | |||
Number of reporting units | reportingUnit | 2 | 2 | 2 |
Impairment of indefinite-lived intangible assets, excluding goodwill | $ 0 | $ 0 | $ 0 |
Impairment of intangible assets | $ 0 | $ 0 | $ 2,800,000 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Accrued product warranty, at beginning of period | $ 8.5 | $ 8.1 |
New accruals charged to cost of revenues | 11.3 | 13 |
Product warranty expenditures | (11.9) | (12.6) |
Accrued product warranty, at end of period | $ 7.9 | $ 8.5 |
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_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Credit Losses (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Accounting Policies [Abstract] | ||
Allowance for credit losses | $ 0.6 | $ 1 |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Adopted Accounting Standards (Details) - USD ($) $ in Millions | Oct. 01, 2022 | Sep. 30, 2022 | Oct. 01, 2021 | Jun. 09, 2020 |
Debt Instrument [Line Items] | ||||
Additional paid-in capital | $ (469.1) | $ (449.4) | ||
Long-term debt, net | 412.3 | 431.7 | ||
Deferred tax assets | 2.3 | 4 | ||
Retained earnings | $ 63.8 | $ 33.5 | ||
Convertible Notes | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 4% | |||
Forecast | Accounting Standards Update 2020-06 | ||||
Debt Instrument [Line Items] | ||||
Additional paid-in capital | $ 34.6 | |||
Long-term debt, net | 28 | |||
Deferred tax assets | 6.7 | |||
Retained earnings | $ 13.3 |
REVENUE RECOGNITION - Rollfowar
REVENUE RECOGNITION - Rollfoward of Contract Assets and Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Contract Assets | ||
Contract with customer, asset, beginning balance | $ 24.3 | $ 24.6 |
Costs recovered from product returns during the period | (5.4) | (4.8) |
Contract asset from shipments of products, subject to return during the period | 7.1 | 6.4 |
Adjustment for actual vs. reserved product returns | (0.6) | (1.9) |
Contract with customer, asset, ending balance | 25.4 | 24.3 |
Refund Liabilities | ||
Contract with customer, liability, beginning balance | 27 | 27.4 |
Release of refund liability included in beginning of year refund liability | (6.1) | (5.3) |
Additions to refund liabilities | 7.9 | 7.1 |
Adjustment for actual vs. reserved product returns | (0.6) | (2.2) |
Contract with customer, liability, ending balance | $ 28.2 | $ 27 |
Revenue from Contract with Cust
Revenue from Contract with Customer - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, liability, revenue recognized | $ 6.7 | $ 6.9 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Lease renewal term (in years) | 5 years | ||
Loss on operating lease abandonment | $ 1.9 | $ 0 | $ 0 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term (in years) | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term (in years) | 10 years |
LEASES - Schedule of Lease Righ
LEASES - Schedule of Lease Right-of-Use Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Assets | ||
Operating lease assets | $ 23.2 | $ 24.3 |
Finance lease right-of-use assets | $ 0.3 | $ 0.5 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net | Property, plant and equipment, net |
Liabilities | ||
Operating lease liabilities (current) | $ 4 | $ 6.2 |
Finance lease liabilities (current) | 0.2 | 0.2 |
Operating lease liabilities (non-current) | 18 | 18.7 |
Finance lease liabilities (non-current) | $ 0.1 | $ 0.3 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities and other current liabilities | Accrued liabilities and other current liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
LEASES - Schedule of Weighted A
LEASES - Schedule of Weighted Average Remaining Lease Terms and Discount Rates (Details) | Sep. 30, 2022 | Oct. 01, 2021 |
Operating Leases [Abstract] | ||
Operating lease weighted average remaining lease term (in years) | 6 years 4 months 24 days | 5 years 10 months 24 days |
Operating lease weighted average discount rate | 5.60% | 5.50% |
Finance Leases [Abstract] | ||
Finance lease weighted average remaining lease term (in years) | 2 years | 2 years 6 months |
Finance lease weighted average discount rate | 3.60% | 3.60% |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Lease Cost and Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Leases [Abstract] | |||
Total operating lease costs | $ 6.4 | $ 8.1 | $ 8.4 |
Total finance lease costs | 0.2 | 0.3 | 0.3 |
Operating cash flows from operating leases | 7.3 | 7.9 | 8 |
Financing cash flows from finance leases | 0.2 | 0.2 | 0.3 |
Total cash paid for amounts included in the measurement of lease liabilities | 7.5 | 8.1 | 8.3 |
Noncash operating right-of-use assets obtained in exchange for new lease liabilities | 5.4 | 5.6 | 10.6 |
Noncash finance right-of-use assets obtained in exchange for new lease liabilities | 0.1 | 0.2 | 0.2 |
Total right-of-use assets obtained in exchange for new lease liabilities | $ 5.5 | $ 5.8 | $ 10.8 |
LEASES - Schedule of Operatin_2
LEASES - Schedule of Operating and Finance Lease Liability Maturities (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Operating Leases | |
2023 | $ 5.2 |
2024 | 4.6 |
2025 | 4.4 |
2026 | 3.1 |
2027 | 2.8 |
Thereafter | 6.5 |
Total future lease payments | 26.6 |
Less: imputed interest | (4.6) |
Present value of lease liabilities | 22 |
Finance Leases | |
2023 | 0.2 |
2024 | 0.1 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
Thereafter | 0 |
Total future lease payments | 0.3 |
Less: imputed interest | 0 |
Present value of lease liabilities | $ 0.3 |
RELATED-PARTY TRANSACTIONS - In
RELATED-PARTY TRANSACTIONS - Investment in Privately Held Companies (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Related Party Transaction [Line Items] | ||||
Loss from equity method investments | $ (3) | $ (3.4) | $ (2.1) | |
Equity method investments | 2.5 | 3 | ||
Contributions to equity method investments | $ 0.6 | 1.4 | 1.8 | |
Equity Method Investee | dpiX Holding | ||||
Related Party Transaction [Line Items] | ||||
Percentage of manufacturing capacity | 50% | |||
dpiX Holding | ||||
Related Party Transaction [Line Items] | ||||
Loss from equity method investments | $ 2.6 | 2.3 | 0.8 | |
Equity method investments | $ 42.4 | 45 | ||
dpiX Holding | Equity Method Investee | ||||
Related Party Transaction [Line Items] | ||||
Equity method investment, ownership percentage | 40% | |||
Purchases from related party | $ 21 | 18.5 | 20.4 | |
Accounts payable, related parties | $ 3.1 | 2.8 | ||
Percentage of fixed costs | 50% | |||
dpiX Holding | Fixed Cost Commitments | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, expected fixed cost | $ 13.2 | |||
dpiX Holding | Fixed Cost Commitments | Forecast | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, expected fixed cost | $ 3.3 | |||
VEC Imaging | ||||
Related Party Transaction [Line Items] | ||||
Contributions to equity method investments | 0.3 | 1.2 | ||
Due to related parties | 0.6 | 0.3 | ||
VEC Imaging | Equity Method Investee | ||||
Related Party Transaction [Line Items] | ||||
Loss from equity method investments | (0.8) | $ (1.1) | $ (1.2) | |
VEC Imaging | Equity Method Investee | ||||
Related Party Transaction [Line Items] | ||||
Other receivables | $ 0.3 | |||
dpiX LLC | Equity Method Investee | dpiX Holding | ||||
Related Party Transaction [Line Items] | ||||
Equity method investment, ownership percentage | 100% |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) $ in Millions | 12 Months Ended | |||
Jul. 29, 2020 employee | Sep. 30, 2022 USD ($) | Oct. 01, 2021 USD ($) | Oct. 02, 2020 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Approximate number of positions eliminated | employee | 94 | |||
Glass Production And Site Closure | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and impairment charges | $ | $ 0 | $ 0 | $ 9.1 |
RESTRUCTURING - Restructuring C
RESTRUCTURING - Restructuring Charges Incurred (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Other assets impairment charges | $ 0 | $ 0.5 | $ 2.7 |
Medical | |||
Restructuring Cost and Reserve [Line Items] | |||
Other assets impairment charges | 1.8 | 0 | 0 |
Inventory write downs | 0 | 0 | 1.3 |
Accelerated depreciation | 0 | 0.2 | 2.9 |
Severance costs | 0 | 0.6 | 5.7 |
Facility closure costs | 0 | 0.2 | 3.6 |
Total restructuring charges | $ 1.8 | $ 1 | $ 13.5 |
OTHER FINANCIAL INFORMATION - A
OTHER FINANCIAL INFORMATION - Accrued Liabilities and Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued compensation and benefits | $ 37.5 | $ 44.2 |
Product warranty | 7.9 | 8.5 |
Taxes payable | 11.3 | 8 |
Right of return liability | 6.8 | 6.7 |
Accrued interest | 11.7 | 12.5 |
Other | 6.2 | 9.8 |
Total accrued liabilities and other current liabilities | $ 81.4 | $ 89.7 |
OTHER FINANCIAL INFORMATION - O
OTHER FINANCIAL INFORMATION - Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Long-term income tax payable | $ 4.3 | $ 1.8 |
Environmental liabilities | 1.3 | 0.6 |
Defined benefit obligation liability | 3.3 | 5.9 |
Long-term right of return liability | 21.4 | 20.3 |
Long-term other | 3.5 | 3.2 |
Total other long-term liabilities | $ 33.8 | $ 31.8 |
OTHER FINANCIAL INFORMATION -_2
OTHER FINANCIAL INFORMATION - Other Income (Expense) Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Loss from equity method investments | $ (3) | $ (3.4) | $ (2.1) |
Change in fair value of deferred consideration | 0 | 0 | 0.9 |
Impairment of investment | 0 | 0 | (2.7) |
Realized losses on foreign currencies, net | (1.5) | (0.2) | (3.7) |
Other | 0.2 | 0.1 | 0 |
Total other expense, net | $ (4.3) | $ (3.5) | $ (7.6) |
NET INCOME (LOSS) PER SHARE - (
NET INCOME (LOSS) PER SHARE - (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Earnings Per Share [Abstract] | |||
Net income (loss) attributable to Varex | $ 30.3 | $ 17.4 | $ (57.9) |
Net income (loss) attributable to Varex | $ 30.3 | $ 17.4 | $ (57.9) |
Weighted average shares outstanding - basic (in shares) | 39.8 | 39.3 | 38.8 |
Dilutive effect of convertible senior notes (in shares) | 1.3 | 0.6 | 0 |
Dilutive effect of common share-based awards and other (in shares) | 0.5 | 0.4 | 0 |
Diluted (in shares) | 41.6 | 40.3 | 38.8 |
Net earnings per share attributable to Varex - basic (in USD per share) | $ 0.76 | $ 0.44 | $ (1.49) |
Net earnings per share attributable to Varex - diluted (in USD per share) | $ 0.73 | $ 0.43 | $ (1.49) |
Anti-dilutive employee shared based awards, excluded (in shares) | 3 | 2.8 | 3.5 |
FINANCIAL DERIVATIVES AND HED_3
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Derivative Instruments (Details) - Cash Flow Hedging - Designated as Hedging Instrument $ in Millions | Sep. 30, 2022 USD ($) derivativeContract |
Forward contracts | |
Derivative [Line Items] | |
Number of Instruments | derivativeContract | 4 |
Notional Value | $ | $ 2.5 |
Cross currency swap contracts | |
Derivative [Line Items] | |
Number of Instruments | derivativeContract | 3 |
Notional Value | $ | $ 66.6 |
FINANCIAL DERIVATIVES AND HED_4
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Income Recognized From Derivative Instruments (Details) - Designated as Hedging Instrument - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Derivative [Line Items] | |||
Amount of Loss Recognized in OCI on Derivatives Fiscal Year Ended | $ (0.8) | $ 0 | $ (3.4) |
Amount of Loss Reclassified from Accumulated OCI into Income Fiscal Year Ended | 0 | 0 | (1.5) |
Interest Rate Swap | |||
Derivative [Line Items] | |||
Amount of Loss Recognized in OCI on Derivatives Fiscal Year Ended | 0 | 0 | (3.4) |
Interest Rate Swap | Interest Expense | |||
Derivative [Line Items] | |||
Amount of Loss Reclassified from Accumulated OCI into Income Fiscal Year Ended | 0 | 0 | (1.5) |
Forward contracts | |||
Derivative [Line Items] | |||
Amount of Loss Recognized in OCI on Derivatives Fiscal Year Ended | (0.8) | 0 | 0 |
Forward contracts | Interest Expense | |||
Derivative [Line Items] | |||
Amount of Loss Reclassified from Accumulated OCI into Income Fiscal Year Ended | 0 | 0 | 0 |
Cross currency swap contracts | |||
Derivative [Line Items] | |||
Amount of Loss Recognized in OCI on Derivatives Fiscal Year Ended | 8.7 | (0.3) | (1.3) |
Cross currency swap contracts | Interest Expense | |||
Derivative [Line Items] | |||
Amount of Loss Reclassified from Accumulated OCI into Income Fiscal Year Ended | $ 1.2 | $ 1.3 | $ 1.5 |
FINANCIAL DERIVATIVES AND HED_5
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Derivatives at Fair Value (Details) - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Forward contracts | Accrued liabilities and other current liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | $ 0.3 | |
Cross currency swap contracts | Prepaid expenses and other current assets | ||
Derivative [Line Items] | ||
Derivative assets | 1.2 | $ 1.2 |
Cross currency swap contracts | Other assets | ||
Derivative [Line Items] | ||
Derivative assets | 6.3 | 0 |
Cross currency swap contracts | Other long-term liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | $ 0 | $ (2.4) |
FINANCIAL DERIVATIVES AND HED_6
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Foreign Currency Contracts (Details) - Foreign Exchange Contract $ in Millions | Sep. 30, 2022 USD ($) |
Short | |
Derivatives, Fair Value [Line Items] | |
Notional Value | $ 25.4 |
Indian Rupee | Short | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 5.2 |
Chinese Renminbi | Short | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 11.1 |
Euro | Short | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 9.1 |
Designated as Hedging Instrument | Long | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Designated as Hedging Instrument | Indian Rupee | Long | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Designated as Hedging Instrument | Chinese Renminbi | Long | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Designated as Hedging Instrument | Euro | Long | |
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. 30, 2022 | Oct. 01, 2021 | |
Current maturities of long-term debt | ||
Current maturities of long-term debt | $ 2.1 | $ 2.8 |
Net repayments of long term debt current maturities | (0.7) | |
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | 447.6 | 477.8 |
Net proceeds(repayments) from long-term debt, excluding current maturities | (30.2) | |
Unamortized issuance costs and debt discounts | ||
Total | (35.3) | (46.1) |
Total | 10.8 | |
Total debt outstanding, net | 414.4 | 434.5 |
Net proceeds from (repayments for) debt, net of issuance costs | (20.1) | |
Equity component of Convertible Senior Unsecured Notes change | 0 | |
Convertible Debt | ||
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | $ 200 | $ 200 |
Weighted-average interest rate, long-term debt | 10.90% | 10.90% |
Proceeds from convertible debt | $ 0 | |
Unamortized issuance costs and debt discounts | ||
Debt issuance costs | (28.7) | $ (37.6) |
Unamortized issuance costs - Convertible Notes | (3.1) | (4.1) |
Non-cash operating lease expense | 8.9 | |
Decrease in unamortized discount | 1 | |
Equity component of Convertible Senior Unsecured Notes | 49.7 | 49.7 |
Other Debt | ||
Current maturities of long-term debt | ||
Current maturities of long-term debt | 2.1 | 2.8 |
Proceeds from repayment of other debt | (0.7) | |
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | 4.6 | 7.8 |
Repayment of other long-term debt | (3.2) | |
Senior Secured Notes | Secured Debt | ||
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | $ 243 | $ 270 |
Weighted-average interest rate, long-term debt | 8.20% | 8.20% |
Repayments for senior secured notes | $ (27) | |
Secured Debt | ||
Unamortized issuance costs and debt discounts | ||
Debt issuance costs | (3.5) | $ (4.4) |
Non-cash operating lease expense | $ 0.9 |
BORROWINGS - Schedule of Debt M
BORROWINGS - Schedule of Debt Maturities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Debt Disclosure [Abstract] | ||
2023 | $ 2.1 | |
2024 | 1.4 | |
2025 | 201.4 | |
2026 | 1.2 | |
2027 | 243.6 | |
Thereafter | 0 | |
Total debt outstanding | 449.7 | |
Less: current maturities of long-term debt | (2.1) | $ (2.8) |
Non-current portion of long -term debt | $ 447.6 | $ 477.8 |
BORROWINGS - Interest Income an
BORROWINGS - Interest Income and Interest Expense Disclosure (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Debt Disclosure [Abstract] | |||
Contractual interest coupon and other | $ 27.6 | $ 30.7 | $ 19.1 |
Amortization/extinguishment of debt issuance costs | 3.4 | 3.5 | 7 |
Amortization of debt discounts | 8.8 | 7.9 | 5.3 |
Total interest expense | $ 39.8 | $ 42.1 | $ 31.4 |
BORROWINGS - Convertible Senior
BORROWINGS - Convertible Senior Unsecured Notes Narrative (Details) - Convertible Debt - USD ($) | 12 Months Ended | |
Jun. 09, 2020 | Sep. 30, 2022 | |
Line of Credit Facility [Line Items] | ||
Proceeds from convertible debt | $ 0 | |
Convertible Notes | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, face amount | $ 200,000,000 | |
Interest rate, stated percentage | 4% | |
Proceeds from convertible debt | $ 193,100,000 |
BORROWINGS - Call Spread Narrat
BORROWINGS - Call Spread Narrative (Details) shares in Millions | 12 Months Ended | |
Jun. 05, 2020 shares $ / shares | Sep. 30, 2022 shares | |
Debt Instrument [Line Items] | ||
Exercise price of warrants or rights (USD per share) | $ 24.975 | |
Increase of strike price over sale price | 50% | |
Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Convertible, conversion price (USD per share) | $ 20.81 | |
Number of warrants (in shares) | shares | 9.6 | 9.6 |
BORROWINGS - Senior Secured Not
BORROWINGS - Senior Secured Notes Narrative (Details) - USD ($) | Mar. 18, 2022 | Jul. 15, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2020 |
Debt Instrument [Line Items] | |||||
Long-term debt excluding current maturities, gross | $ 447,600,000 | $ 477,800,000 | |||
Senior Secured Notes | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 300,000,000 | ||||
Interest rate, stated percentage | 7.875% | ||||
Senior Notes | $ 30,000,000 | ||||
Debt instrument, redemption of senior secured notes, including premium and accrued interest | $ 28,700,000 | 31,500,000 | |||
Loss related to redemption premium and write-offs | $ 1,200,000 | $ 1,400,000 | |||
Debt instrument, redemption price, percentage of principal amount redeemed | 103% | 103% | |||
Repayments of senior debt | $ 27,000,000 | ||||
Long-term debt excluding current maturities, gross | $ 243,000,000 | $ 270,000,000 |
BORROWINGS - Asset-Based Loan N
BORROWINGS - Asset-Based Loan Narrative (Details) - Revolving Credit Facility - Asset-Based Loan Revolving Credit Facility - Secured Debt | 12 Months Ended | 17 Months Ended | |||
Mar. 09, 2022 | Sep. 30, 2022 USD ($) | Mar. 09, 2022 | Mar. 08, 2022 | Sep. 30, 2020 USD ($) | |
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | |||
Available borrowing capacity | $ 94,500,000 | ||||
Debt covenant, fixed charge coverage ratio | 1 | ||||
Debt covenant, line of credit facility, excess availability as percent of Line Cap threshold | 10% | ||||
Debt covenant, line of credit facility, excess availability threshold | $ 7,500,000 | ||||
Applicable Margin Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.75% | ||||
Minimum | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, commitment fee percentage | 0.25% | 0.375% | |||
Interest rate, stated percentage | 0% | 0% | 0.50% | ||
Maximum | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, commitment fee percentage | 0.50% |
BORROWINGS - Credit Agreement N
BORROWINGS - Credit Agreement Narrative (Details) - USD ($) | Sep. 30, 2020 | May 01, 2017 |
Revolving Credit Facility and Secured Debt | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 400,000,000 | |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Repayments of debt | $ 265,500,000 | |
Payment of debt accrued interest | 2,000,000 | |
Write off of deferred debt issuance cost | 3,800,000 | |
Loss on extinguishment of debt | $ 3,800,000 | |
Revolving Credit Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 200,000,000 | |
Debt instrument term | 5 years |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - USD ($) | Sep. 30, 2022 | Oct. 01, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan | $ 5,400,000 | |
Amortized Costs | 20,100,000 | $ 0 |
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Convertible Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 250,200,000 | 296,300,000 |
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Secured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 241,300,000 | $ 304,800,000 |
FAIR VALUE - Schedule of Fair V
FAIR VALUE - Schedule of Fair Value Inputs (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Assets | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Assets | Assets |
Liabilities: | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities | Liabilities |
Fair Value, Measurements, Recurring | ||
Assets | ||
Money market funds | $ 36.6 | $ 88.2 |
Commercial paper | 5.9 | |
Corporate notes/bonds | 3.6 | |
Government agencies | 0.3 | |
US Treasury bills | 10.2 | |
Derivative assets | 7.5 | 1.2 |
Fair Value | 2.5 | |
Total assets measured at fair value | 66.6 | 89.4 |
Liabilities: | ||
Derivative liabilities | 0.3 | 2.4 |
Total liabilities measured at fair value | 0.3 | 2.4 |
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Fair Value, Measurements, Recurring | ||
Assets | ||
Money market funds | 0 | 0 |
Commercial paper | 0 | |
Corporate notes/bonds | 0 | |
Government agencies | 0 | |
US Treasury bills | 0 | |
Derivative assets | 0 | 0 |
Fair Value | 2.5 | |
Total assets measured at fair value | 2.5 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | ||
Assets | ||
Money market funds | 36.6 | 88.2 |
Commercial paper | 5.9 | |
Corporate notes/bonds | 3.6 | |
Government agencies | 0.3 | |
US Treasury bills | 10.2 | |
Derivative assets | 7.5 | 1.2 |
Fair Value | 0 | |
Total assets measured at fair value | 64.1 | 89.4 |
Liabilities: | ||
Derivative liabilities | 0.3 | 2.4 |
Total liabilities measured at fair value | 0.3 | 2.4 |
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | ||
Assets | ||
Money market funds | 0 | 0 |
Commercial paper | 0 | |
Corporate notes/bonds | 0 | |
Government agencies | 0 | |
US Treasury bills | 0 | |
Derivative assets | 0 | 0 |
Fair Value | 0 | |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Total liabilities measured at fair value | $ 0 | $ 0 |
FAIR VALUE - Summary of Marketa
FAIR VALUE - Summary of Marketable Securities (Details) - USD ($) | Sep. 30, 2022 | Oct. 01, 2021 |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Amortized Costs | $ 20,100,000 | $ 0 |
Unrealized Gains | 0 | |
Unrealized Losses | (100,000) | |
Total marketable debt securities | 20,000,000 | |
Commercial paper | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Amortized Costs | 5,900,000 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Total marketable debt securities | 5,900,000 | |
Corporate notes/bonds | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Amortized Costs | 3,700,000 | |
Unrealized Gains | 0 | |
Unrealized Losses | (100,000) | |
Total marketable debt securities | 3,600,000 | |
US Treasury bills | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Amortized Costs | 10,200,000 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Total marketable debt securities | 10,200,000 | |
Government agencies | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Amortized Costs | 300,000 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Total marketable debt securities | $ 300,000 |
FAIR VALUE - Contractual Maturi
FAIR VALUE - Contractual Maturities of Marketable Securities (Details) - USD ($) | Sep. 30, 2022 | Oct. 01, 2021 |
Amortized Costs | ||
Due within one year | $ 17,800,000 | |
Due after one year through five years | 2,300,000 | |
Total marketable debt securities | 20,100,000 | $ 0 |
Fair Value | ||
Due within one year | 17,700,000 | |
Due after one year through five years | 2,300,000 | |
Total marketable debt securities | $ 20,000,000 |
FAIR VALUE - Balance Sheet Mark
FAIR VALUE - Balance Sheet Marketable Securities (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | $ 20 |
Commercial paper | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 5.9 |
Corporate notes/bonds | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 3.6 |
Government agencies | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 0.3 |
US Treasury bills | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 10.2 |
Cash and cash equivalents | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 3.3 |
Cash and cash equivalents | Commercial paper | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 0 |
Cash and cash equivalents | Corporate notes/bonds | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 0 |
Cash and cash equivalents | Government agencies | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 0 |
Cash and cash equivalents | US Treasury bills | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 3.3 |
Prepaid expenses and other current assets | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 14.5 |
Prepaid expenses and other current assets | Commercial paper | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 5.9 |
Prepaid expenses and other current assets | Corporate notes/bonds | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 1.9 |
Prepaid expenses and other current assets | Government agencies | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 0.3 |
Prepaid expenses and other current assets | US Treasury bills | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 6.4 |
Other assets | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 2.2 |
Other assets | Commercial paper | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 0 |
Other assets | Corporate notes/bonds | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 1.7 |
Other assets | Government agencies | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | 0 |
Other assets | US Treasury bills | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total marketable debt securities | $ 0.5 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Summary of Goodwill (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Balance at October 1, 2021 | $ 292.2 |
Foreign currency translation adjustments | (7.7) |
Balance at September 30, 2022 | 284.5 |
Medical | |
Goodwill [Roll Forward] | |
Balance at October 1, 2021 | 173.9 |
Foreign currency translation adjustments | (4.5) |
Balance at September 30, 2022 | 169.4 |
Industrial | |
Goodwill [Roll Forward] | |
Balance at October 1, 2021 | 118.3 |
Foreign currency translation adjustments | (3.2) |
Balance at September 30, 2022 | $ 115.1 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 131.9 | $ 138.1 |
Accumulated Amortization | (98.3) | (87.4) |
Net Carrying Amount | 33.6 | 50.7 |
Acquired existing technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 70 | 74.2 |
Accumulated Amortization | (49.9) | (45.5) |
Net Carrying Amount | 20.1 | 28.7 |
Patents, licenses and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 12.3 | 12.8 |
Accumulated Amortization | (11.6) | (10.9) |
Net Carrying Amount | 0.7 | 1.9 |
Customer contracts and supplier relationship | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 49.6 | 51.1 |
Accumulated Amortization | (36.8) | (31) |
Net Carrying Amount | $ 12.8 | $ 20.1 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 14.6 | $ 16.8 | $ 17.2 |
Impairment of intangible assets | $ 0 | $ 0 | $ 2.8 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Amortization Schedule (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 |
Fiscal years: | ||
2023 | $ 12.9 | |
2024 | 8.7 | |
2025 | 2.6 | |
2026 | 2.5 | |
2027 | 2.4 | |
Thereafter | 4.5 | |
Net Carrying Amount | $ 33.6 | $ 50.7 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - (Details) ¥ in Millions, $ in Millions | 12 Months Ended | ||
Sep. 27, 2024 CNY (¥) | Sep. 27, 2024 USD ($) | Sep. 30, 2022 USD ($) purchase | |
Other Commitments [Line Items] | |||
Payments to acquire productive assets | $ 5.4 | ||
Payments to acquire productive assets, remaining amount | 2.5 | ||
Environmental liability, current and noncurrent | 1.6 | ||
Milestone payment amount potentially to be paid | 5 | ||
Milestone payment made | $ 1 | ||
Number of separate purchases | purchase | 2 | ||
Purchase of stock, agreement amount | $ 5 | ||
Shares purchased, percentage of outstanding shares | 9.90% | ||
Payment for purchase of stock | $ 2.4 | ||
Forecast | |||
Other Commitments [Line Items] | |||
Payments to acquire productive assets | ¥ 1,084.7 | $ 7.9 |
NONCONTROLLING INTERESTS - Narr
NONCONTROLLING INTERESTS - Narrative (Details) - € / shares shares in Millions | 1 Months Ended | |||||
Oct. 31, 2015 | Sep. 30, 2022 | Apr. 30, 2021 | Apr. 30, 2019 | Sep. 30, 2018 | Apr. 30, 2015 | |
Joint Venture In Saudi Arabia | ||||||
Noncontrolling Interest [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent | 75% | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 25% | |||||
Direct Conversion AB | ||||||
Noncontrolling Interest [Line Items] | ||||||
Percentage of voting interests acquired | 98.20% | |||||
Percentage of voting interests owned | 100% | |||||
MeVis Medical Solutions AG (MeVis) | ||||||
Noncontrolling Interest [Line Items] | ||||||
Percentage of voting interests acquired | 73.50% | |||||
Annual recurring compensation (in euros per share) | € 0.95 | |||||
Temporary equity, redemption price per share (in eur per share) | € 19.77 | |||||
Temporary equity, shares outstanding (in 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% |
NONCONTROLLING INTERESTS - Summ
NONCONTROLLING INTERESTS - Summary of Changes in Redeemable Noncontrolling Interests & Noncontrolling INterets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||
Balance at beginning of period | $ 13.2 | |
Balance at end of period | 13.3 | $ 13.2 |
Noncontrolling Interests | ||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||
Balance at beginning of period | 13.2 | 14.1 |
Net income attributable to noncontrolling interests | 0.5 | 0.5 |
Other, including foreign currency remeasurement | (0.4) | (1.4) |
Balance at end of period | $ 13.3 | $ 13.2 |
EMPLOYEE STOCK PLANS - Narrativ
EMPLOYEE STOCK PLANS - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017 | Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend | 0% | |||
Options, grants in period, grant date fair value | $ 3.9 | $ 3.7 | $ 4.4 | |
Options exercised, intrinsic value | 0.5 | 0 | 0.4 | |
Grant-date fair value of shares granted in the period | 10.8 | 8.9 | 11.9 | |
Shares outstanding, market value | $ 22.1 | $ 30.9 | $ 11.8 | |
Employee Stock Purchase Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend | 0% | 0% | 0% | |
Employee Stock Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost not yet recognized | $ 23.2 | |||
Compensation cost period for recognition (in years) | 2 years 6 months | |||
Expected dividend | 0% | 0% | 0% | |
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 | |||
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 | |||
2017 ESPP | Employee Stock Purchase Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Purchase price of common stock, percent | 85% | 85% | ||
Purchase period | 6 months | |||
Number of additional shares authorized (in shares) | 0.8 | |||
Number of shares authorized (in shares) | 1.8 | |||
Stock plan offering period (in months) | 6 months | |||
2017 ESPP | Employee Stock Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant (in shares) | 0.8 | |||
2020 Omnibus Stock Plan | Employee Stock Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant (in shares) | 3.2 |
EMPLOYEE STOCK PLANS - Share-ba
EMPLOYEE STOCK PLANS - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | $ 14 | $ 13.9 | $ 13.4 |
Cost of revenues | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | 1.6 | 1.4 | 1.1 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | 3.1 | 3 | 2.5 |
Selling, general and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | $ 9.3 | $ 9.5 | $ 9.8 |
EMPLOYEE STOCK PLANS - Valuatio
EMPLOYEE STOCK PLANS - Valuation Assumptions (Details) - $ / shares | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend | 0% | ||
Employee Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 7 years | 7 years | 6 years 1 month 6 days |
Risk-free interest rate | 1.40% | 1% | 1.10% |
Expected volatility | 42.70% | 41.50% | 36.90% |
Expected dividend | 0% | 0% | 0% |
Weighted average fair value at grant date (in USD per share) | $ 12.07 | $ 9.37 | $ 7.53 |
Employee Stock Purchase Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 4 months 24 days | 6 months | 6 months |
Risk-free interest rate | 1.60% | 0.10% | 0.90% |
Expected volatility | 33.60% | 68.40% | 50% |
Expected dividend | 0% | 0% | 0% |
Weighted average fair value at grant date (in USD per share) | $ 5.41 | $ 5.90 | $ 7.94 |
EMPLOYEE STOCK PLANS - Stock Op
EMPLOYEE STOCK PLANS - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Options | ||
Options, outstanding, beginning balance (in shares) | 2,811 | |
Options, grants in period (in shares) | 319 | |
Options, forfeitures and expirations in period (in shares) | (90) | |
Options exercised in period (in shares) | (138) | |
Options, outstanding, ending balance (in shares) | 2,902 | 2,811 |
Options, exercisable (in shares) | 2,085 | |
Weighted Average Exercise Price | ||
Options, outstanding, weighted average exercise price, beginning (in USD per share) | $ 28.69 | |
Options, grants in period, weighted average exercise price (in USD per share) | 30.95 | |
Options, forfeitures and expirations in period, weighted average exercise price (in USD per share) | 30.22 | |
Options, exercises in period, weighted average exercise price (in USD per share) | 27.11 | |
Options, outstanding, weighted average exercise price, ending (in USD per share) | 28.97 | $ 28.69 |
Options, exercisable, weighted average exercise price (in USD per share) | $ 29.81 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Options, outstanding, weighted average remaining contractual term (in years) | 4 years 6 months | 4 years 8 months 12 days |
Options, exercisable, weighted average remaining contractual term (in years) | 3 years 1 month 6 days | |
Options, outstanding, intrinsic value | $ 1,361.4 | $ 5,161 |
Options, exercisable, intrinsic value | $ 666.1 | |
Share price (in usd per share) | $ 21.14 | |
Minimum | ||
Price Range | ||
Options, outstanding, price, beginning (in USD per share) | 13.61 | |
Options, grants in period, price (in USD per share) | 30.95 | |
Options, forfeitures and expirations in period, price (in USD per share) | 25.17 | |
Options, exercises in period, price (in USD per share) | 13.61 | |
Options, outstanding, price, ending (in USD per share) | 13.61 | $ 13.61 |
Options, exercisable, price (in USD per share) | 13.61 | |
Maximum | ||
Price Range | ||
Options, outstanding, price, beginning (in USD per share) | 37.60 | |
Options, grants in period, price (in USD per share) | 30.95 | |
Options, forfeitures and expirations in period, price (in USD per share) | 31.42 | |
Options, exercises in period, price (in USD per share) | 30.74 | |
Options, outstanding, price, ending (in USD per share) | 37.60 | $ 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. 30, 2022 $ / shares shares | |
Number of Shares | |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, nonvested, beginning balance (in shares) | shares | 1,080 |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, grants in period (in shares) | shares | 392 |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, vested in period (in shares) | shares | (364) |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, canceled, expired or forfeited in period (in shares) | shares | (63) |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, nonvested, ending balance (in shares) | shares | 1,045 |
Weighted Average Grant-Date Fair Value | |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, nonvested, beginning of period, weighted average grant date fair value (in USD per share) | $ / shares | $ 23.25 |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, grants in period, weighted average grant date fair value (in USD per share) | $ / shares | 27.53 |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, vested in period, weighted average grant date fair value (in USD per share) | $ / shares | 24.83 |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, canceled, expired or forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 22.31 |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, nonvested, end of period, weighted average grant date fair value (in USD per share) | $ / shares | $ 24.35 |
TAXES ON INCOME- Summary of Tax
TAXES ON INCOME- Summary of Taxes by Jurisdiction and Classification (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Current income tax expense (benefit) | |||
Federal | $ 3.7 | $ 5.4 | $ (16.3) |
State and local | 0.2 | 1.4 | (1.4) |
Foreign | 10.3 | 6.8 | 5.7 |
Total current | 14.2 | 13.6 | (12) |
Deferred income tax expense (benefit): | |||
Federal | 0.4 | 1.8 | (1.7) |
State and local | (0.9) | (1.3) | 0.6 |
Foreign | 0 | (3.4) | (2.1) |
Total deferred | (0.5) | (2.9) | (3.2) |
Income tax expense (benefit) | 13.7 | 10.7 | (15.2) |
United States | 16.4 | (4.1) | (74.1) |
Foreign | 28.1 | 32.7 | 1.5 |
Income (loss) before taxes | $ 44.5 | $ 28.6 | $ (72.6) |
TAXES ON INCOME - Income Tax Ra
TAXES ON INCOME - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21% | 21% | 21% |
State and local taxes, net of federal tax benefit | (1.40%) | 0.30% | 1% |
Statutory rate change impact on prior year deferreds | 1.10% | 0% | 0% |
Return to provision | (2.10%) | 4.20% | 2.80% |
Research and development credit | (0.90%) | (4.20%) | 3.70% |
Prior year research and development credit | 0% | (0.30%) | 0% |
Foreign rate difference | 6.50% | 1.70% | (0.40%) |
Foreign research innovation box | 0% | (3.80%) | 0% |
Change in valuation allowance | 6.30% | 8.40% | (11.00%) |
U.S. tax reform - international provisions | (4.60%) | (0.70%) | 0% |
U.S. net operating loss carryback | 0% | 5.20% | 5.60% |
Other | 4.90% | 5.60% | (1.80%) |
Effective tax rate | 30.80% | 37.40% | 20.90% |
TAXES ON INCOME - Deferred Tax
TAXES ON INCOME - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | Sep. 27, 2019 |
Deferred tax assets: | ||||
Inventory adjustments | $ 6.4 | $ 4.9 | ||
Share-based compensation | 6.3 | 5.5 | ||
Product warranty | 1.4 | 1.8 | ||
Unrealized exchange gain | 2.6 | 1.7 | ||
Deferred compensation | 1.3 | 1.6 | ||
Net operating loss carryforwards | 19.7 | 25.7 | ||
Accrued vacation | 0.9 | 1 | ||
Accrued incentives | 2.8 | 4.2 | ||
Credit carryforwards | 2.5 | 3.3 | ||
Deferred financing fees | 2.4 | 3 | ||
Interest expense limitation | 3.9 | 4.3 | ||
Capitalized interest | 0.9 | 0 | ||
Lease liabilities | 5.4 | 6.8 | ||
Other | 2.5 | 4.7 | ||
Deferred tax assets, gross | 59 | 68.5 | ||
Valuation allowance | (32.2) | (30.2) | $ (28.7) | $ (18.8) |
Total deferred tax assets | 26.8 | 38.3 | ||
Deferred tax liabilities: | ||||
Acquired intangibles | (7.9) | (13.9) | ||
Property, plant and equipment | (8.8) | (13) | ||
Investments in privately held companies | (1.4) | (1.8) | ||
Operating lease assets | (5.6) | (6.5) | ||
Other | (1.3) | (1.3) | ||
Total deferred tax liabilities | (25) | (36.5) | ||
Net deferred tax assets | $ 1.8 | $ 1.8 |
TAXES ON INCOME - Narrative (De
TAXES ON INCOME - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Deferred tax liabilities of undistributed foreign earnings | $ 0.1 | ||
Net operating loss carryforwards | 19.7 | $ 25.7 | |
Operating loss carryforwards, valuation allowance increase | 2 | 1.5 | |
Unrecognized tax benefits | 1.2 | 1.1 | $ 0.8 |
Income tax penalties and interest expense | 0.2 | $ 0.2 | $ 0.1 |
Foreign Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 19.3 | ||
Operating loss carryforwards, that expire | 0.9 | ||
Operating loss carryforwards, that do not expire | $ 18.4 |
TAXES ON INCOME - Valuation All
TAXES ON INCOME - Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Deferred Tax Assets Valuation Allowance [Roll Forward] | |||
Valuation allowance balance–beginning of fiscal year | $ 30.2 | $ 28.7 | $ 18.8 |
Other increases | 6.9 | 5.4 | 10.2 |
Other decreases | (4.9) | (3.9) | (0.3) |
Valuation allowance balance—end of fiscal year | $ 32.2 | $ 30.2 | $ 28.7 |
TAXES ON INCOME - Income Tax Co
TAXES ON INCOME - Income Tax Contingency (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits balance–beginning of fiscal year | $ 1.1 | $ 0.8 |
Additions based on tax positions related to a prior year | 0.1 | 0.4 |
Additions based on tax positions related to the current year | 0 | 0.1 |
Reductions resulting from the expiration of the applicable statute of limitations | 0 | (0.2) |
Unrecognized tax benefits balance—end of fiscal year | $ 1.2 | $ 1.1 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 12 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Summary o
SEGMENT INFORMATION - Summary of Segment Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Segment Reporting Information [Line Items] | |||
Revenues, net | $ 859.4 | $ 818.1 | $ 738.3 |
Gross profit | 283.5 | 271.5 | 190.2 |
Total operating expenses | 195.3 | 197.4 | 223.9 |
Interest and other expense, net | (43.7) | (45.5) | (38.9) |
Income (loss) before taxes | 44.5 | 28.6 | (72.6) |
Income tax expense (benefit) | 13.7 | 10.7 | (15.2) |
Net income (loss) | 30.8 | 17.9 | (57.4) |
Less: Net income attributable to noncontrolling interests | 0.5 | 0.5 | 0.5 |
Net income (loss) attributable to Varex | 30.3 | 17.4 | (57.9) |
Medical | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 674.7 | 643.8 | 584.5 |
Gross profit | 210.5 | 203.2 | 136.4 |
Industrial | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 184.7 | 174.3 | 153.8 |
Gross profit | $ 73 | $ 68.3 | $ 53.8 |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | $ 859.4 | $ 818.1 | $ 738.3 |
Property, plant and equipment, net | 141.3 | 140.2 | |
Americas | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 273.3 | 268.5 | 255 |
Property, plant and equipment, net | 99.8 | 105.4 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 263.7 | 262.3 | 249.8 |
EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 280.8 | 276.3 | 231.5 |
Property, plant and equipment, net | 23.2 | 23.9 | |
APAC | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 305.3 | 273.3 | $ 251.8 |
Property, plant and equipment, net | $ 18.3 | $ 10.9 |
EMPLOYEE BENEFIT PLANS - (Detai
EMPLOYEE BENEFIT PLANS - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Retirement Benefits [Abstract] | |||
Employer discretionary contribution amount | $ 4.4 | $ 2.8 | $ 4.4 |
Defined benefit pension plan liability | $ 3.3 | $ 5.9 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 | |
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | $ 496.5 | $ 465.8 | $ 448.2 |
Other comprehensive (loss) income before reclassifications | 9.8 | (0.4) | |
Income tax impact | (0.8) | 0.1 | |
Foreign currency translation adjustments | (0.6) | (0.7) | 1.5 |
Balance at ending of period | 546.7 | 496.5 | 465.8 |
Unrealized (Loss) Gain on Derivative Financial Instruments | |||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | 0 | 0 | |
Other comprehensive (loss) income before reclassifications | (0.8) | 0 | |
Income tax impact | 0.2 | 0 | |
Foreign currency translation adjustments | 0 | 0 | |
Balance at ending of period | (0.6) | 0 | 0 |
Unrealized (Loss) Gain on Defined Benefit Obligations | |||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | (0.8) | (0.7) | |
Other comprehensive (loss) income before reclassifications | 2 | (0.1) | |
Income tax impact | (0.6) | 0 | |
Foreign currency translation adjustments | 0 | 0 | |
Balance at ending of period | 0.6 | (0.8) | (0.7) |
CTA, Including Impact of Net Investment Hedge | |||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | 0.8 | 1.5 | |
Other comprehensive (loss) income before reclassifications | 8.7 | (0.3) | |
Income tax impact | (0.4) | 0.1 | |
Foreign currency translation adjustments | (8.9) | (0.5) | |
Balance at ending of period | 0.2 | 0.8 | 1.5 |
Unrealized Loss on Available-for-Sale Securities | |||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | 0 | 0 | |
Other comprehensive (loss) income before reclassifications | (0.1) | 0 | |
Income tax impact | 0 | 0 | |
Foreign currency translation adjustments | 0 | 0 | |
Balance at ending of period | (0.1) | 0 | 0 |
Accumulated Other Comprehensive Income (Loss) | |||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | 0 | 0.8 | |
Balance at ending of period | $ 0.1 | $ 0 | $ 0.8 |