Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Nov. 08, 2023 | Mar. 31, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 29, 2023 | ||
Current Fiscal Year End Date | --09-29 | ||
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 | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 728.7 | ||
Entity Common Stock, Shares Outstanding | 40,500,000 | ||
Documents Incorporated by Reference | Documents Incorporated by Reference Portions of registrant’s proxy statement relating to registrant’s 2024 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 | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001681622 |
Audit Information
Audit Information | 12 Months Ended |
Sep. 29, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Salt Lake City, Utah |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Income Statement [Abstract] | |||
Revenues, net | $ 893.4 | $ 859.4 | $ 818.1 |
Cost of revenues | 603.1 | 575.9 | 546.6 |
Gross profit | 290.3 | 283.5 | 271.5 |
Operating expenses: | |||
Research and development | 84.8 | 77 | 71.9 |
Selling, general and administrative | 128.4 | 118.3 | 125.5 |
Total operating expenses | 213.2 | 195.3 | 197.4 |
Operating income | 77.1 | 88.2 | 74.1 |
Interest income | 3.7 | 0.4 | 0.1 |
Interest expense | (29.3) | (39.8) | (42.1) |
Other expense, net | (20.2) | (4.3) | (3.5) |
Interest and other expense, net | (45.8) | (43.7) | (45.5) |
Income before taxes | 31.3 | 44.5 | 28.6 |
Income tax (benefit) expense | (17.4) | 13.7 | 10.7 |
Net income | 48.7 | 30.8 | 17.9 |
Less: Net income attributable to noncontrolling interests | 0.5 | 0.5 | 0.5 |
Net income attributable to Varex | $ 48.2 | $ 30.3 | $ 17.4 |
Net income per common share attributable to Varex | |||
Basic (in USD per share) | $ 1.20 | $ 0.76 | $ 0.44 |
Diluted (in USD per share) | $ 1.08 | $ 0.73 | $ 0.43 |
Weighted average common shares outstanding | |||
Basic (in shares) | 40.3 | 39.8 | 39.3 |
Diluted (in shares) | 50.3 | 41.6 | 40.3 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 48.7 | $ 30.8 | $ 17.9 |
Other comprehensive (loss) income, net of tax | |||
Unrealized (loss) gain on defined benefit obligations | (1) | 1.4 | (0.1) |
Income (loss) on forward contracts | 0.1 | (0.6) | 0 |
Unrealized income (loss) on available-for-sale securities | 0.1 | (0.1) | 0 |
Foreign currency translation adjustments | (0.5) | (0.6) | (0.7) |
Total comprehensive income | 47.4 | 30.9 | 17.1 |
Less: Comprehensive income attributable to noncontrolling interests | 0.5 | 0.5 | 0.5 |
Comprehensive income attributable to Varex | $ 46.9 | $ 30.4 | $ 16.6 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 152.6 | $ 89.4 |
Accounts receivable, net of allowance for credit losses of $0.6 million and $0.6 million at September 29, 2023 and September 30, 2022, respectively | 163.6 | 173.3 |
Inventories, net | 277.5 | 303.2 |
Prepaid expenses and other current assets | 64.6 | 44 |
Total current assets | 658.3 | 609.9 |
Property, plant and equipment, net | 143.6 | 141.3 |
Goodwill | 288.5 | 284.5 |
Intangible assets, net | 22.4 | 33.6 |
Investments in privately-held companies | 29 | 46.4 |
Deferred tax assets | 41.3 | 2.3 |
Operating lease assets | 29 | 23.2 |
Other assets | 37.5 | 43.2 |
Total assets | 1,249.6 | 1,184.4 |
Current liabilities: | ||
Accounts payable | 64.7 | 78.2 |
Accrued liabilities and other current liabilities | 82.6 | 81.4 |
Current operating lease liabilities | 3.8 | 4 |
Current maturities of long-term debt | 1.5 | 2.1 |
Deferred revenues | 10.2 | 7.4 |
Total current liabilities | 162.8 | 173.1 |
Long-term debt, net | 441.1 | 412.3 |
Deferred tax liabilities | 0 | 0.5 |
Operating lease liabilities | 23.1 | 18 |
Other long-term liabilities | 41.6 | 33.8 |
Total liabilities | 668.6 | 637.7 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value: 20,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $0.01 par value: 150,000,000 shares authorized Shares issued and outstanding: 40,529,573 and 40,085,126 at September 29, 2023 and September 30, 2022, respectively | 0.4 | 0.4 |
Additional paid-in capital | 450.4 | 469.1 |
Accumulated other comprehensive (loss) income | (1.2) | 0.1 |
Retained earnings | 118.1 | 63.8 |
Total Varex stockholders' equity | 567.7 | 533.4 |
Noncontrolling interests | 13.3 | 13.3 |
Total stockholders' equity | 581 | 546.7 |
Total liabilities and stockholders' equity | $ 1,249.6 | $ 1,184.4 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 0.6 | $ 0.6 |
Preferred stock, par value per share (in 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 (in 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) | 40,529,573 | 40,085,126 |
Common stock, shares, outstanding (in shares) | 40,529,573 | 40,085,126 |
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 | Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income | Retained Earnings | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Noncontrolling Interests |
Balance at beginning of period at Oct. 02, 2020 | $ 465.8 | $ 451.7 | $ 0.4 | $ 434.4 | $ 0.8 | $ 16.1 | $ 14.1 | ||||
Shares outstanding, beginning of period (in shares) at Oct. 02, 2020 | 39,100,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net 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 | (1.5) | (1.5) | (1.5) | ||||||||
Shares withheld on vesting of restricted stock (in shares) | (100,000) | ||||||||||
Common stock issued under employee stock purchase plan | 2.8 | 2.8 | 2.8 | ||||||||
Common stock issued under employee stock purchase plan (in shares) | 200,000 | ||||||||||
Share-based compensation | 13.9 | 13.9 | 13.9 | ||||||||
Unrealized and realized loss (gain) on forward contracts | 0 | ||||||||||
Unrealized loss (gain) on change in fair value of available-for-sale securities | 0 | ||||||||||
Unrealized loss (gain) 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) | |||||||
Balance at ending of period at Oct. 01, 2021 | 496.5 | 483.3 | $ 0.4 | 449.4 | 0 | 33.5 | 13.2 | ||||
Shares outstanding, end of period (in shares) at Oct. 01, 2021 | 39,400,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 30.8 | 30.3 | 30.3 | 0.5 | |||||||
Exercise of stock options | 3.8 | 3.8 | 3.8 | ||||||||
Exercise of stock options (in shares) | 100,000 | ||||||||||
Common stock issued upon vesting of restricted shares (in shares) | 400,000 | ||||||||||
Shares withheld on vesting of restricted stock | (2.8) | (2.8) | (2.8) | ||||||||
Shares withheld on vesting of restricted stock (in shares) | (100,000) | ||||||||||
Common stock issued under employee stock purchase plan | 4.9 | 4.9 | 4.9 | ||||||||
Common stock issued under employee stock purchase plan (in shares) | 300,000 | ||||||||||
Share-based compensation | 14 | 14 | 14 | ||||||||
Unrealized and realized loss (gain) on forward contracts | (0.6) | (0.6) | (0.6) | ||||||||
Unrealized loss (gain) on change in fair value of available-for-sale securities | (0.1) | (0.1) | (0.1) | ||||||||
Unrealized loss (gain) 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) | |||||||
Balance at ending of period at Sep. 30, 2022 | $ 546.7 | $ (28.5) | 533.4 | $ (28.5) | $ 0.4 | 469.1 | $ (34.6) | 0.1 | 63.8 | $ 6.1 | 13.3 |
Shares outstanding, end of period (in shares) at Sep. 30, 2022 | 40,085,126 | 40,100,000 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 | ||||||||||
Net income | $ 48.7 | 48.2 | 48.2 | 0.5 | |||||||
Exercise of stock options | $ 0.2 | 0.2 | 0.2 | ||||||||
Exercise of stock options (in shares) | 13,000 | ||||||||||
Common stock issued upon vesting of restricted shares (in shares) | 200,000 | ||||||||||
Shares withheld on vesting of restricted stock | $ (1.4) | (1.4) | (1.4) | ||||||||
Shares withheld on vesting of restricted stock (in shares) | (100,000) | ||||||||||
Common stock issued under employee stock purchase plan | 3.9 | 3.9 | 3.9 | ||||||||
Common stock issued under employee stock purchase plan (in shares) | 300,000 | ||||||||||
Share-based compensation | 13.5 | 13.5 | 13.5 | ||||||||
Unrealized and realized loss (gain) on forward contracts | 0.1 | 0.1 | 0.1 | ||||||||
Unrealized loss (gain) on change in fair value of available-for-sale securities | 0.1 | 0.1 | 0.1 | ||||||||
Unrealized loss (gain) on defined benefit obligations, net of tax | (1) | (1) | (1) | ||||||||
Foreign currency translation adjustments | (0.5) | (0.5) | (0.5) | ||||||||
Other | (0.8) | (0.3) | (0.3) | (0.5) | |||||||
Balance at ending of period at Sep. 29, 2023 | $ 581 | $ 567.7 | $ 0.4 | $ 450.4 | $ (1.2) | $ 118.1 | $ 13.3 | ||||
Shares outstanding, end of period (in shares) at Sep. 29, 2023 | 40,529,573 | 40,500,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 48,700,000 | $ 30,800,000 | $ 17,900,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share-based compensation expense | 13,500,000 | 14,000,000 | 13,900,000 |
Depreciation | 19,500,000 | 19,000,000 | 20,500,000 |
Amortization of intangible assets | 13,700,000 | 14,600,000 | 16,800,000 |
Deferred taxes | (39,500,000) | 600,000 | (3,000,000) |
Loss from equity method investments | 1,600,000 | 2,600,000 | 3,000,000 |
Impairment of equity method investment | 16,400,000 | 0 | 0 |
Amortization of deferred loan costs | 2,600,000 | 10,900,000 | 10,000,000 |
Other assets impairment charges | 0 | 0 | 500,000 |
Inventory write-down | 5,600,000 | 6,400,000 | 3,500,000 |
Loss on operating lease abandonment | 0 | 1,900,000 | 0 |
Other, net | 3,000,000 | 4,100,000 | 1,300,000 |
Changes in assets and liabilities: | |||
Accounts receivable | 9,800,000 | (18,100,000) | (32,900,000) |
Inventories | 20,200,000 | (85,000,000) | 42,800,000 |
Prepaid expenses and other assets | 7,000,000 | 10,300,000 | (900,000) |
Accounts payable | (15,000,000) | 19,700,000 | (13,600,000) |
Accrued liabilities and other current and long-term liabilities | (1,000,000) | (14,900,000) | 12,200,000 |
Deferred revenues | 2,300,000 | 0 | 600,000 |
Net cash provided by operating activities | 108,400,000 | 16,900,000 | 92,600,000 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (20,700,000) | (21,300,000) | (15,100,000) |
Loss on settlement of cash flow hedge | (200,000) | (500,000) | 0 |
Proceeds from maturities of marketable debt securities | 28,300,000 | 2,000,000 | 0 |
Purchase of marketable debt securities | (52,200,000) | (18,700,000) | 0 |
Purchase of marketable equity securities | (2,700,000) | (2,400,000) | 0 |
Purchase of certificates of deposit | (1,000,000) | (7,200,000) | 0 |
Acquisitions of businesses and assets | (1,000,000) | 0 | 0 |
Settlement of net investment hedge | 7,000,000 | 0 | 0 |
Proceeds from sales of business and assets | 0 | 1,700,000 | 0 |
Investments in and loans to privately-held companies | 0 | (600,000) | (1,400,000) |
Other | (2,400,000) | (1,400,000) | 300,000 |
Net cash used in investing activities | (44,900,000) | (48,400,000) | (16,200,000) |
Cash flows from financing activities: | |||
Proceeds from issuance of debt | 0 | 0 | 1,500,000 |
Repayments of borrowings | (2,400,000) | (29,400,000) | (33,100,000) |
Proceeds from shares issued under employee stock purchase plan | 3,900,000 | 4,900,000 | 2,800,000 |
Proceeds from exercise of stock options | 200,000 | 3,800,000 | 0 |
Taxes related to net share settlement of equity awards | (1,400,000) | (2,800,000) | (1,500,000) |
Other financing activities | (500,000) | (300,000) | (2,000,000) |
Net cash used in financing activities | (200,000) | (23,800,000) | (32,300,000) |
Effects of exchange rate changes on cash and cash equivalents and restricted cash | 100,000 | (200,000) | (100,000) |
Net increase (decrease) in cash and cash equivalents and restricted cash | 63,400,000 | (55,500,000) | 44,000,000 |
Cash and cash equivalents and restricted cash at beginning of period | 90,600,000 | 146,100,000 | 102,100,000 |
Cash and cash equivalents and restricted cash at end of period | 154,000,000 | 90,600,000 | 146,100,000 |
Supplemental cash flow information: | |||
Cash paid for interest | 27,400,000 | 29,500,000 | 21,600,000 |
Cash paid for income tax, net of refunds | 16,700,000 | 2,200,000 | 14,100,000 |
Supplemental non-cash activities: | |||
Purchases of property, plant and equipment financed through accounts payable | $ 2,700,000 | $ 1,500,000 | $ 1,500,000 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 29, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Varex Imaging Corporation (the “Company” or “Varex”) designs, manufactures, sells, and services a broad range of medical products, which include X-ray imaging components including X-ray tubes, flat panel and photon counting detectors and accessories, ionization chambers, high voltage connectors, image processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, and heat exchangers. The Company sells its products to imaging system original equipment manufacturer (“OEM”) customers for incorporation into new medical diagnostic, radiation therapy, dental, and veterinary equipment, as well as to independent service companies and distributors, and directly to end-users for replacement purposes. The Company also designs, manufactures, sells and services industrial products, which include Linatron® X-ray linear accelerators, X-ray tubes, digital detectors, high voltage connectors, coolers, imaging processing software and image detection products for security and inspection purposes, such as cargo screening at ports and borders and nondestructive examination in a variety of applications. The Company generally sells security and inspection products to OEM customers who incorporate Varex’s products into their inspection or irradiation systems and processes. The Company 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 Securities and Exchange Commission ("SEC") and in accordance with accounting principles generally accepted in the United States ("GAAP"). The Company has consolidated all its majority owned subsidiaries and entities over which it has control. All intercompany balances and transactions have been eliminated in consolidation. Reclassification of Prior Period Presentation Certain prior period amounts in the Notes to the Consolidated Financial Statements have had a change in presentation to conform to current period presentation. This change does not affect previously reported results. Segment Reporting 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 2023 was the 52-week period that ended September 29, 2023, fiscal year 2022 was the 52-week period that ended September 30, 2022, and fiscal year 2021 was the 52-week period that ended October 1, 2021. 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 29, 2023, 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, receivables, warranties, refund liabilities, long-lived asset valuations, impairment of investments, valuation of financial instruments, and taxes on income. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers unrestricted currency on hand, demand deposits, time deposits, and all highly-liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. Restricted Cash 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 29, 2023 Twelve Months Ended September 30, 2022 (In millions) Beginning of Period End of Period Beginning of Period End of Period Cash and cash equivalents $ 89.4 $ 152.6 $ 144.6 $ 89.4 Restricted cash 1.2 1.4 1.5 1.2 Total as presented in the Consolidated Statements of Cash Flows $ 90.6 $ 154.0 $ 146.1 $ 90.6 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 (loss) 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, certificates of deposit, and trade accounts receivable. Cash held with financial institutions may exceed the Federal Deposit Insurance Corporation insurance limits or similar limits in foreign jurisdictions. To date, the Company has not realized any losses on its deposits of cash and cash equivalents. The Company performs ongoing credit evaluations of its customers and, except for government tenders, group purchases, and orders with a letter of credit, its industrial customers often provide a down payment. The Company maintains an allowance for credit losses based upon the expected collectability of all accounts receivable. The Company obtains some of the components in its products from a limited group of suppliers or from a single-source supplier. When these suppliers are unable to meet the Company's supply needs, the Company's production is negatively impacted. 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 2023 2022 2021 Canon Medical Systems Corporation 16.5 % 17.2 % 17.9 % Canon Medical Systems Corporation accounted for 13.8% and 10.3% of the Company’s accounts receivable as of September 29, 2023 and September 30, 2022, 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 29, 2023 September 30, 2022 Raw materials and parts $ 217.5 $ 240.3 Work-in-process 20.0 23.2 Finished goods 40.0 39.7 Total inventories $ 277.5 $ 303.2 The Company recorded inventory write-downs of $5.6 million, $6.4 million and $3.5 million for the twelve months ended September 29, 2023, September 30, 2022, and October 1, 2021, respectively. 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 29, 2023 September 30, 2022 Land $ 8.3 $ 8.3 Buildings and leasehold improvements 159.1 149.2 Machinery and equipment 194.9 182.9 Construction in progress 20.8 29.1 Gross property, plant and equipment 383.1 369.5 Accumulated depreciation and amortization (239.5) (228.2) Total property, plant and equipment, net $ 143.6 $ 141.3 The Company recorded depreciation expense of $19.5 million, $19.0 million, and $20.5 million in fiscal years 2023, 2022 and 2021, respectively. Equity Method 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, but not control, these investments. The Company records impairment losses on its equity method investments if an impairment exists and is deemed to be other-than-temporary, which is based on various factors, including but not limited to, the length of time the fair value of the investment is below the carrying value, the absence of an ability to recover the carrying amount of the investment, and the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. In the fourth quarter of fiscal year 2023, the Company assessed its equity method investment in dpiX Holding LLC (“dpiX Holding”) for impairment and engaged an external service firm to perform a valuation of its ownership interest in dpiX Holding as of July 1, 2023. The fair value of the Company's equity interest in dpiX Holding as of the valuation date was determined to be $27.6 million. The Company's carrying value of its investment as of July 1, 2023 was $44.0 million. The Company concluded the loss in value of the investment was other than temporary and was primarily due to reductions in forecasted glass purchases by Varex, as the Company is one of dpiX LLC's (“dpiX”) largest customers. See Note 4, Related-Party Transactions, for details on the Company's investment in dpiX Holding. As a result, the Company recorded a before-tax impairment charge totaling $16.4 million, which is included in other expense, net in the Company's Consolidated Statements of Operations. There were no impairments recorded during fiscal year 2022 or 2021. Marketable Securities The Company's marketable securities consist primarily of financial instruments such as United States treasury securities, United States agency obligations, corporate bonds, commercial paper, money market funds, and equity securities. Marketable Debt Securities The Company's marketable debt securities are classified as available-for-sale. Classification of marketable debt securities is determined at the time of purchase, and the Company reevaluates such classification as of each balance sheet date. Marketable debt securities are recorded at estimated fair value and included in cash and cash equivalents, prepaid expenses and other current assets, and other assets within the Consolidated Balance Sheets. Any unrealized gains or losses are included in accumulated other comprehensive (loss) income within the Consolidated Balance Sheets. When the fair value of a marketable debt security declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in the Consolidated Statements of Operations. When the fair value of a marketable debt security declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in accumulated other comprehensive (loss) income, and are recognized in the Consolidated Statements of Operations only if the Company sells or intends to sell the security before recovery of its cost basis. There were no impairments related to marketable debt securities recorded during the twelve months ended September 29, 2023. Marketable Equity Securities Marketable equity securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date and included in other assets within the Consolidated Balance Sheets. All unrealized gains and losses on marketable equity securities are recorded as part of other expense, net in the Company's Consolidated Statements of Operations. See Note 10, Fair Value , for further details. 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 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. In fiscal years 2023, 2022, and 2021, the Company performed the annual goodwill qualitative impairment test for our two reporting units and determined that, at those dates, it was not more likely than not that the fair values of the reporting units were less than their carrying amount and accordingly recorded no impairment. 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. Environmental Obligations The Company's operations and facilities, past and present, are subject to environmental laws, including laws that regulate the handling, storage, transport, and disposal of hazardous substances. Certain of those laws impose cleanup liabilities under certain circumstances. In connection with those laws and certain of our past and present operations and facilities, the Company is obligated to indemnify Varian for the cleanup liabilities related to prior corporate restructuring activities. The Company anticipates that it will be obligated to reimburse Varian for 20% of the liabilities of Varian related to these sites (after adjusting for any insurance proceeds or tax benefits received by Varian). As of September 29, 2023 and September 30, 2022, the Company's estimated liability for these sites was $2.8 million and $1.1 million, net of expected insurance proceeds, respectively. 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 29, 2023 September 30, 2022 Accrued product warranty, at beginning of period $ 7.9 $ 8.5 New accruals charged to cost of revenues 12.7 11.3 Product warranty expenditures (12.9) (11.9) Accrued product warranty, at end of period $ 7.7 $ 7.9 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 imaging components including X-ray tubes, digital detectors and image-processing tools and security and inspection products are generally sold on a stand-alone basis. However, the Company occasionally sells its digital detectors, X-ray tubes and imaging processing tools as a package that is optimized for digital X-ray imaging and sells its Linatron® X-ray linear accelerators together with its image processing software and image detection products to OEM customers that incorporate them into their inspection or irradiation systems and processes. Service contracts are often sold with certain security and inspection products and computer-aided detection products. 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 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. 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 and a liability is recorded for expected returns, and an asset is recorded for the right to recover products from customers on settling the liability. The Company recognizes a reduction to revenue and cost of sales at the time of sale and a corresponding refund liability and right of return asset. The Company records this estimate based on the historical volume of product returns and adjusts the estimate on a quarterly basis based on the current quarter sales and current quarter returns. If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation could be sold separately. 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 liabilities are included within the deferred revenues, and other long-term liabilities balances in the Consolidated Balance Sheets. The Company does not have any material contract assets. Deferred revenue represents the Company's obligation to transfer goods or services to its customers for which it has already received consideration (or the amount is due) from the customer. The Company's deferred revenue balance primarily relates to contract advances and billings for warranty contracts. Deferred revenue that is estimated to be recognized during the following twelve-month period is recorded as deferred revenues and the remaining portion is recorded as other long-term liabilities in the 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. 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 $0.6 million as of September 29, 2023 and September 30, 2022, 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 Note 14, Employee Stock Plans , included in this report. 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 costs are expensed as incurred. These costs primarily include employees’ compensation, consulting fees, and material costs. 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 realizatio |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Sep. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Right of Return Assets and Refund Liabilities Right of return assets are included within the prepaid expenses and other current assets, and other assets in the Consolidated Balance Sheets. Refund liabilities are included within the accrued liabilities and other current liabilities and other long-term liabilities in the Consolidated Balance Sheets. The following tables summarize the changes in the right of return assets and refund liabilities for the twelve months ended September 29, 2023 and September 30, 2022: (In millions) Right of Return Assets Balance at October 1, 2021 $ 24.3 Costs recovered from product returns during the period (5.4) Right of return assets 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 Costs recovered from product returns during the period (5.1) Right of return assets from shipments of products, subject to return during the period 6.8 Adjustment for actual vs. reserved product returns (1.1) Balance at September 29, 2023 $ 26.0 (In millions) Refund Liabilities 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 Release of refund liability included in beginning of year refund liability (5.6) Additions to refund liabilities 7.5 Adjustment for actual vs. reserved product returns (1.2) Balance at September 29, 2023 $ 28.9 During fiscal year 2023, the Company recognized revenue of $6.7 million related to deferred revenue which existed at September 30, 2022. During fiscal year 2022, the Company recognized revenue of $6.7 million related to deferred revenue which existed at October 1, 2021. 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. 29, 2023 | |
Leases [Abstract] | |
LEASES | LEASES 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 ninety-five 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 29, 2023 September 30, 2022 Assets Operating lease right-of-use assets Operating lease assets $ 29.0 $ 23.2 Finance lease right-of-use assets Property, plant and equipment, net 0.3 0.3 Liabilities Operating lease liabilities (current) Current operating lease liabilities 3.8 4.0 Finance lease liabilities (current) Accrued liabilities and other current liabilities 0.1 0.2 Operating lease liabilities (non-current) Operating lease liabilities 23.1 18.0 Finance lease liabilities (non-current) Other long-term liabilities $ 0.2 $ 0.1 The following table presents the weighted average remaining lease term and discount rate information related to the Company's operating and finance leases: September 29, 2023 September 30, 2022 Operating lease weighted average remaining lease term (in years) 7.8 6.4 Operating lease weighted average discount rate 7.9 % 5.6 % Finance lease weighted average remaining lease term (in years) 3.6 2.0 Finance lease weighted average discount rate 4.7 % 3.6 % The following table provides information related to the Company’s operating and finance leases: (In millions) 2023 2022 2021 Total operating lease costs (1) $ 5.8 $ 6.4 $ 8.1 Total finance lease costs $ 0.2 $ 0.2 $ 0.3 Operating cash flows from operating leases $ 7.8 $ 7.3 $ 7.9 Financing cash flows from finance leases 0.3 0.2 0.2 Total cash paid for amounts included in the measurement of lease liabilities $ 8.1 $ 7.5 $ 8.1 Noncash operating right-of-use assets obtained in exchange for new lease liabilities $ 10.6 $ 5.4 $ 5.6 Noncash finance right-of-use assets obtained in exchange for new lease liabilities 0.2 0.1 0.2 Total right-of-use assets obtained in exchange for new lease liabilities $ 10.8 $ 5.5 $ 5.8 (1) Includes variable and short-term lease expense, which were immaterial for fiscal years 2023, 2022, and 2021. As of September 29, 2023, 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 2024 $ 5.6 $ 0.1 2025 5.5 0.1 2026 4.4 0.1 2027 4.2 — 2028 3.3 — Thereafter 14.7 — Total future lease payments $ 37.7 $ 0.3 Less: imputed interest (10.8) — Present value of lease liabilities $ 26.9 $ 0.3 As of September 29, 2023 |
LEASES | LEASES 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 ninety-five 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 29, 2023 September 30, 2022 Assets Operating lease right-of-use assets Operating lease assets $ 29.0 $ 23.2 Finance lease right-of-use assets Property, plant and equipment, net 0.3 0.3 Liabilities Operating lease liabilities (current) Current operating lease liabilities 3.8 4.0 Finance lease liabilities (current) Accrued liabilities and other current liabilities 0.1 0.2 Operating lease liabilities (non-current) Operating lease liabilities 23.1 18.0 Finance lease liabilities (non-current) Other long-term liabilities $ 0.2 $ 0.1 The following table presents the weighted average remaining lease term and discount rate information related to the Company's operating and finance leases: September 29, 2023 September 30, 2022 Operating lease weighted average remaining lease term (in years) 7.8 6.4 Operating lease weighted average discount rate 7.9 % 5.6 % Finance lease weighted average remaining lease term (in years) 3.6 2.0 Finance lease weighted average discount rate 4.7 % 3.6 % The following table provides information related to the Company’s operating and finance leases: (In millions) 2023 2022 2021 Total operating lease costs (1) $ 5.8 $ 6.4 $ 8.1 Total finance lease costs $ 0.2 $ 0.2 $ 0.3 Operating cash flows from operating leases $ 7.8 $ 7.3 $ 7.9 Financing cash flows from finance leases 0.3 0.2 0.2 Total cash paid for amounts included in the measurement of lease liabilities $ 8.1 $ 7.5 $ 8.1 Noncash operating right-of-use assets obtained in exchange for new lease liabilities $ 10.6 $ 5.4 $ 5.6 Noncash finance right-of-use assets obtained in exchange for new lease liabilities 0.2 0.1 0.2 Total right-of-use assets obtained in exchange for new lease liabilities $ 10.8 $ 5.5 $ 5.8 (1) Includes variable and short-term lease expense, which were immaterial for fiscal years 2023, 2022, and 2021. As of September 29, 2023, 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 2024 $ 5.6 $ 0.1 2025 5.5 0.1 2026 4.4 0.1 2027 4.2 — 2028 3.3 — Thereafter 14.7 — Total future lease payments $ 37.7 $ 0.3 Less: imputed interest (10.8) — Present value of lease liabilities $ 26.9 $ 0.3 As of September 29, 2023 |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Sep. 29, 2023 | |
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, a holding company that has a 100% ownership interest in dpiX, a supplier of amorphous silicon-based thin film transistor arrays for flat panels used in the Company's digital image detectors. In accordance with the dpiX Holding operating agreement, net profits or losses are allocated to the members in accordance with their ownership interests. 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 2023, 2022, and 2021, the Company recorded loss on the equity investment in dpiX Holding of $0.2 million, $2.6 million, and $2.3 million, respectively. The 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 $25.8 million and $42.4 million at September 29, 2023 and September 30, 2022, respectively. The Company recorded an impairment of its investment in dpiX Holding of $16.4 million in the fourth quarter of 2023. See Note 1, Summary of Significant Accounting Policies, for details on the nature of the impairment. There were no impairments recorded during fiscal year 2022 or 2021. In fiscal years 2023, 2022 and 2021, the Company purchased glass transistor arrays from dpiX totaling $18.7 million, $21.0 million and $18.5 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 29, 2023 and September 30, 2022, the Company had accounts payable to dpiX totaling $2.7 million and $3.1 million, respectively. In October 2013, the Company entered into an amended agreement with dpiX and other parties that, among other things, provides it with the right to 50% of dpiX’s total manufacturing capacity. In addition, the Company is required to pay for 50% of dpiX's fixed costs, as determined at the beginning of each calendar year. In January 2023, the fixed cost commitment was determined and approved by the dpiX board of directors to be $13.1 million for calendar year 2023. As of September 29, 2023, the Company estimated it has fixed cost commitments of $3.3 million related to the amended agreement through the remainder of calendar year 2023. 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 the at-risk equity holders, as a group, lack the characteristics of a controlling financial interest. Majority votes are required to direct the manufacturing activities, legal operations and other activities that most significantly affect dpiX’s economic performance. The Company does not have majority voting rights and no power to unilaterally direct the activities of dpiX Holding, and therefore, is not the primary beneficiary of dpiX Holding. The Company’s exposure to loss as a result of its involvement with dpiX Holding is limited to the carrying value of the Company’s investment of $25.8 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. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Sep. 29, 2023 | |
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 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. 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 2023, 2022 and 2021 fiscal years, which predominately relate to the Company's Medical segment: (In millions) Location of Restructuring Charges in Consolidated Statements of Operations 2023 2022 2021 Other assets impairment charges Selling, general and administrative $ — $ 1.8 $ — Accelerated depreciation Cost of revenues — — 0.2 Severance costs Selling, general and administrative — — 0.6 Facility closure costs Selling, general and administrative — — 0.2 Total restructuring charges $ — $ 1.8 $ 1.0 |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 12 Months Ended |
Sep. 29, 2023 | |
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 29, 2023 September 30, 2022 Accrued compensation and benefits $ 33.4 $ 36.7 Product warranty 7.7 7.9 Taxes payable 13.3 11.3 Refund liability 7.2 6.8 Accrued interest 11.6 11.7 Other 9.4 7.0 Total accrued liabilities and other current liabilities $ 82.6 $ 81.4 The following table summarizes the Company’s other long-term liabilities: (In millions) September 29, 2023 September 30, 2022 Long-term income tax payable $ 4.6 $ 4.3 Environmental liabilities 1.9 1.3 Defined benefit obligation liability 5.2 3.3 Long-term refund liability 21.7 21.4 Derivative liability 4.9 — Long-term other 3.3 3.5 Total other long-term liabilities $ 41.6 $ 33.8 The following table summarizes the Company’s other expense, net: Fiscal Years (In millions) 2023 2022 2021 Loss from equity method investments $ (1.4) $ (3.0) $ (3.4) Impairment of equity method investment (16.4) — — Realized losses on foreign currencies, net (1.0) (1.5) (0.2) Other (1.4) 0.2 0.1 Total other expense, net $ (20.2) $ (4.3) $ (3.5) |
NET INCOME PER SHARE
NET INCOME PER SHARE | 12 Months Ended |
Sep. 29, 2023 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic net income per common share is computed by dividing the net income for the period by the weighted average number of shares of common stock outstanding during the reporting period. Diluted net income per common share reflects the effects of potentially dilutive securities, which is computed by dividing the sum of net income and any adjustments to net income 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 net income per common share is as follows: Fiscal Year (In millions, except per share amounts) 2023 2022 2021 Net income per share - basic Net income attributable to Varex $ 48.2 $ 30.3 $ 17.4 Basic weighted average shares outstanding 40.3 39.8 39.3 Basic net income per share attributable to Varex $ 1.20 $ 0.76 $ 0.44 Net income per share - diluted Net income attributable to Varex $ 48.2 $ 30.3 $ 17.4 Interest expense on Convertible Notes, net of tax 6.2 — — Diluted net income 54.4 30.3 17.4 Basic weighted average shares outstanding 40.3 39.8 39.3 Dilutive effect of Convertible Senior Notes 9.6 1.3 0.6 Dilutive effect of share-based awards and other 0.4 0.5 0.4 Diluted weighted average shares outstanding 50.3 41.6 40.3 Diluted net income per share attributable to Varex $ 1.08 $ 0.73 $ 0.43 Anti-dilutive share summary Share-based awards and other 2.7 3.0 2.8 Warrants 9.6 — — Total anti-dilutive shares 12.3 3.0 2.8 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 per share attributable to Varex when their effect is dilutive. As of October 1, 2022, the Company adopted ASU 2020-06 using the modified retrospective method. The standard requires the Company to apply the if-converted method in relation to the Convertible Notes, which requires the Company to assume that the Convertible Notes would have been converted using only share settlement at the beginning of the period, resulting in an additional 9.6 shares outstanding. Using this method, the numerator is affected by adding back the after-tax interest expense and the denominator is affected by including the effect of potential share settlement, if the effect is dilutive. Prior to the adoption of ASU 2020-06, the Convertible Notes were accounted for using the treasury stock method for purposes of net income per share. See Note 1, Summary of Significant Accounting Policies, "Recently Adopted Accounting Pronouncements" for further details concerning the adoption of ASU 2020-06. Furthermore, in connection with the offering of the Convertible Notes, the Company entered into convertible note hedges and warrants (see Note 9, Borrowings ). However, the Company's convertible note hedges are not included when calculating potentially dilutive shares since their effect is always anti-dilutive. |
FINANCIAL DERIVATIVES AND HEDGI
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES | 12 Months Ended |
Sep. 29, 2023 | |
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 - 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 (loss) income along with the foreign currency translation adjustments on those investments. During the first quarter of fiscal year 2023, the Company terminated all three of its previously outstanding cross currency swap contracts which resulted in cash received upon settlement of $7.3 million. The gain on the cross currency swap contracts was recorded in accumulated other comprehensive (loss) income where it will remain until such time that substantial liquidation of the international operations should occur. Concurrent with the termination of the previous cross currency swap contracts, the Company entered into two new cross currency swap contracts which have been designated as net investment hedges. As of September 29, 2023, 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 2 $ 58.7 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 (Loss) or Gain 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) 2023 2022 2021 2023 2022 2021 Cross currency swap contracts $ (4.4) $ 8.7 $ (0.3) Interest expense $ 0.9 $ 1.2 $ 1.3 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 2023 2022 Cross currency swap contracts Prepaid expenses and other current assets $ 0.7 $ 1.2 Cross currency swap contracts Other assets — 6.3 Cross currency swap contracts Other long-term liabilities $ 4.9 $ — 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 are generally entered into at the end of one fiscal period and expire by the end of the next fiscal period. These forward contracts are not designated for hedge accounting treatment; therefore, the change in fair value of these derivatives is recorded as a component of other expense, net in the Consolidated Statements of Operations and offsets the change in fair value of the foreign currency-denominated assets and liabilities, which are also recorded as a component of other expense, net. The Company has not and does not intend to use derivative financial instruments for speculative or trading purposes. The following table shows the notional amounts of outstanding foreign currency contracts as of September 29, 2023: Notional Value of Derivatives not Designated as Hedging Instruments: (In millions of equivalent USD) Sell contracts Australian Dollar $ 3.9 Chinese Renminbi 8.6 Euro 15.9 Indian Rupee 6.3 Total notional value $ 34.7 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Sep. 29, 2023 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS The following table summarizes the Company's short-term and long-term debt: September 29, 2023 September 30, 2022 (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 $ 1.5 $ 2.1 $ (0.6) Non-current maturities of long-term debt: Convertible Senior Unsecured Notes $ 200.0 4.8% $ 200.0 10.9% $ — Senior Secured Notes 243.0 8.2% 243.0 8.2% — Other debt 3.5 4.6 (1.1) Total non-current maturities of long-term debt: $ 446.5 $ 447.6 $ (1.1) Unamortized issuance costs and debt discounts Unamortized discount - Convertible Notes (1) $ — $ (28.7) $ 28.7 Unamortized issuance costs - Convertible Notes (1) (2.5) (3.1) 0.6 Debt issuance costs - Senior Secured Notes (2.9) (3.5) 0.6 Total $ (5.4) $ (35.3) $ 29.9 Total debt outstanding, net $ 442.6 $ 414.4 $ 28.2 Equity component of Convertible Senior Unsecured Notes (1)(2) $ — $ 49.7 $ (49.7) (1) In connection with the adoption of ASU 2020-06, the unamortized discount and equity component related to the Convertible Notes were derecognized and the carrying value of the issuance costs was adjusted in the first quarter of fiscal year 2023. Refer to Note 1, Summary of Significant Accounting Policies for further details. (2) Included in additional paid-in capital on the Consolidated Balance Sheets. Future principal payments of long-term debt outstanding as of September 29, 2023 are as follows: (In millions) Fiscal years: 2024 $ 1.5 2025 201.5 2026 1.3 2027 243.7 2028 — Thereafter — Total debt outstanding $ 448.0 Less: current maturities of long-term debt (1.5) Non-current portion of long-term debt $ 446.5 The following table summarizes the Company's interest expense: Twelve Months Ended September 29, 2023 September 30, 2022 October 1, 2021 Contractual interest coupon and other $ 26.7 $ 27.6 $ 30.7 Amortization/extinguishment of debt issuance costs 2.6 3.4 3.5 Amortization of debt discounts — 8.8 7.9 Total interest expense $ 29.3 $ 39.8 $ 42.1 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 Varex. The Convertible Notes are convertible into cash, shares of Varex common stock or a combination thereof, at Varex’s election, at an initial conversion rate of 48.048 shares of common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $20.81 per share, subject to adjustment pursuant to the terms of the indenture governing the Convertible Notes. The Convertible Notes may be converted at any time after, and including, December 15, 2024, until the close of business on the second scheduled trading day immediately before the maturity date. The maximum number of shares issuable upon conversion of the Convertible Notes is 9.6 million. 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 29, 2023, 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 29, 2023, the aggregate principal amount of the outstanding Senior Secured Notes was $243.0 million. Asset-Based Loan 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 the London Interbank Offered Rate ("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% annualized, 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 LIBOR and the quarterly commitment fee was amended to 0.25% annualized, 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 29, 2023, the amount available under our ABL Facility was $88.7 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 29, 2023, the Company is compliant with the ABL Facility covenants. |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Sep. 29, 2023 | |
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 29, 2023, 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 $228.4 million and $243.6 million, respectively. As of September 30, 2022, the fair values of the Company's Convertible Notes and Senior Secured Notes, measured using Level 1 inputs, were $250.2 million and $241.3 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. 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 29, 2023 (In millions) Quoted Prices in Active Markets Significant Other Significant Unobservable Inputs Total Assets: Money market funds $ — $ 45.4 $ — $ 45.4 Commercial paper — 6.0 — 6.0 Corporate notes/bonds — 8.3 — 8.3 Government agencies — 6.6 — 6.6 US Treasury bills — 28.6 — 28.6 Derivative assets — 0.7 — 0.7 Deferred compensation plan (1) 6.3 — — 6.3 Marketable equity securities 4.1 — — 4.1 Total assets measured at fair value $ 10.4 $ 95.6 $ — $ 106.0 Liabilities: Derivative liabilities $ — $ 4.9 $ — $ 4.9 Total liabilities measured at fair value $ — $ 4.9 $ — $ 4.9 (1) The assets held under the Company’s deferred compensation plan are classified in Level 1 as they relate primarily to publicly traded mutual funds for which there are observable market prices in active markets. Fair Value Measurements at September 30, 2022 (In millions) Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) 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 Deferred compensation plan (1) 5.4 — — 5.4 Marketable equity securities 2.5 — — 2.5 Total assets measured at fair value $ 7.9 $ 64.1 $ — $ 72.0 Liabilities: Derivative liabilities $ — $ 0.3 $ — $ 0.3 Total liabilities measured at fair value $ — $ 0.3 $ — $ 0.3 (1) The assets held under the Company’s deferred compensation plan are classified in Level 1 as they relate primarily to publicly traded mutual funds for which there are observable market prices in active markets. Nonrecurring Fair Value Measurements In the fourth quarter of fiscal year 2023, the Company assessed its equity method investment in dpiX Holding for impairment and concluded that the carrying value of the investment was greater than its fair value. The nonrecurring fair value measurements used by the Company to impair its equity method investment in dpiX Holding was calculated by equal weighting of the income approach based on estimated discounted future cash flows and the market approach based on comparable publicly traded companies in similar lines of businesses. Under the income approach, fair value is determined based on a discounted cash flow technique that uses estimates of cash flows discounted to present value using rates commensurate with the risks associated with those cash flows. Under the market approach, a market-based value is derived by relating multiples for earnings and cash flow measures for a group of comparable public companies to the same measure for each reporting unit to estimate fair value. This valuation resulted in a Level 3 nonrecurring fair value measurement. See Note 1, Summary of Significant Accounting Policies, for details on the nature of the impairment. 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 29, 2023 (In millions) Amortized Costs Unrealized Losses Fair Value Commercial paper $ 6.0 $ — $ 6.0 Corporate notes/bonds 8.3 — 8.3 US Treasury bills 28.6 — 28.6 Government agencies 6.6 — 6.6 Total marketable debt securities $ 49.5 $ — $ 49.5 The following table summarizes the marketable debt securities on the Consolidated Balance Sheets as of September 30, 2022. September 30, 2022 (In millions) Amortized Costs 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 The contractual maturities of marketable debt securities as of September 29, 2023, 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 29, 2023 (In millions) Amortized Costs Fair Value Contractual maturities: Due within one year $ 49.5 $ 49.5 Due after one year through five years — — Total marketable debt securities $ 49.5 $ 49.5 During the twelve months ended September 29, 2023, there were no gross realized gains or losses from the sale of certain marketable debt securities that were reclassified out of accumulated other comprehensive (loss) income. The following tables summarizes the balance sheet locations for marketable debt securities: September 29, 2023 (In millions) Commercial paper Corporate notes/bonds Government agencies Treasury Bills Total Cash and cash equivalents $ 6.0 $ — $ — $ 2.2 $ 8.2 Prepaid expenses and other current assets — 8.3 6.6 26.4 41.3 Total marketable debt securities $ 6.0 $ 8.3 $ 6.6 $ 28.6 $ 49.5 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. 29, 2023 | |
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 September 30, 2022 $ 169.4 $ 115.1 $ 284.5 Business combination — 0.5 0.5 Foreign currency translation adjustments 2.1 1.4 3.5 Balance at September 29, 2023 $ 171.5 $ 117.0 $ 288.5 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 29, 2023 September 30, 2022 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 72.3 $ (57.8) $ 14.5 $ 70.0 $ (49.9) $ 20.1 Patents, licenses and other 12.5 (12.2) 0.3 12.3 (11.6) 0.7 Customer contracts and supplier relationship 50.3 (42.7) 7.6 49.6 (36.8) 12.8 Total intangible assets $ 135.1 $ (112.7) $ 22.4 $ 131.9 $ (98.3) $ 33.6 Amortization expense for intangible assets was $13.7 million, $14.6 million and $16.8 million in fiscal years 2023, 2022 and 2021, respectively. As of September 29, 2023, the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal years: 2024 $ 9.1 2025 3.1 2026 3.0 2027 2.8 2028 2.7 Thereafter 1.7 Total $ 22.4 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 29, 2023 | |
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. 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 $2.8 million as of September 29, 2023. See Note 1, Summary of Significant Accounting Policies, included in the accompanying Notes to Consolidated Financial Statements for additional information. In 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 years 2022 and 2023, the Company paid $1 million and $2 million, respectively, 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 2024. The Company enters into purchase agreements with its suppliers in the ordinary course of its business for the purchase of goods and services. Some of these purchase agreements are non-cancellable and thus contractually obligate the Company to future cash payments. The Company has non-cancellable supplier purchase obligations of approximately $7.3 million as of September 29, 2023. Contingencies The Company did not have any material contingent liabilities as of September 29, 2023 and September 30, 2022. Legal expenses are expensed as incurred. |
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS | 12 Months Ended |
Sep. 29, 2023 | |
Noncontrolling Interest [Abstract] | |
NONCONTROLLING INTERESTS | NONCONTROLLING INTERESTS 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. In fiscal years 2017 and 2018, the Company purchased an immaterial number of MeVis' shares for an additional 0.2% of outstanding shares under the put right such that the Company now owns 73.7% of the outstanding shares of common stock of MeVis . 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 Sheets. As of September 29, 2023, noncontrolling shareholders together held approximately 0.5 million shares of MeVis, representing 26.3% of the outstanding shares. Changes in noncontrolling interests were as follows: Fiscal Years 2023 2022 (In millions) Noncontrolling Noncontrolling Interest Balance at beginning of period $ 13.3 $ 13.2 Net income attributable to noncontrolling interests 0.5 0.5 Other, including foreign currency remeasurement (0.5) (0.4) Balance at end of period $ 13.3 $ 13.3 |
EMPLOYEE STOCK PLANS
EMPLOYEE STOCK PLANS | 12 Months Ended |
Sep. 29, 2023 | |
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 29, 2023 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 the option value of the employee stock purchase plan shares: Fiscal Year (In millions) 2023 2022 2021 Cost of revenues $ 1.7 $ 1.6 $ 1.4 Research and development 3.3 3.1 3.0 Selling, general and administrative 8.5 9.3 9.5 Total share-based compensation expense $ 13.5 $ 14.0 $ 13.9 The unrecognized share-based compensation cost as of September 29, 2023 was $23.1 million, and is expected to be recognized over a weighted average period of 2.5 fiscal years. As of September 29, 2023, there were approximately 2.2 million and 0.6 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 2023 2022 2021 2023 2022 2021 Expected term (in years) 6.9 7.0 7.0 0.5 0.4 0.5 Risk-free interest rate 3.6 % 1.4 % 1.0 % 4.8 % 1.6 % 0.1 % Expected volatility 43.9 % 42.7 % 41.5 % 34.8 % 33.6 % 68.4 % Expected dividend — % — % — % — % — % — % Weighted average fair value at grant date $9.75 $12.07 $9.37 $4.96 $5.41 $5.90 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 September 30, 2022 2,902 $13.61 - $37.60 $ 28.97 4.5 $ 1,361.4 Granted 415 $22.13 - $24.55 22.31 Canceled, expired or forfeited (442) $22.13 - $37.10 28.92 Exercised (13) $13.61 - $13.61 13.61 Outstanding at September 29, 2023 2,862 $13.61 - $37.60 $ 28.08 4.8 $ 871.4 Exercisable at September 29, 2023 2,080 $13.61 - $37.60 $ 29.44 3.4 $ 642.6 (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 $18.79 as of September 29, 2023, 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 2023, 2022 and 2021 was $4.0 million, $3.9 million and $3.7 million, respectively. The total intrinsic value of the options exercised during the years ended September 29, 2023, September 30, 2022 and October 1, 2021 was $0.1 million, $0.5 million and $0.0 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 September 30, 2022 1,045 $ 24.35 Granted 566 20.00 Vested (255) 24.71 Canceled, expired or forfeited (79) 23.75 Balance at September 29, 2023 1,277 $ 22.30 The total grant-date fair value of shares granted was $11.3 million, $10.8 million and $8.9 million for fiscal years 2023, 2022 and 2021, respectively. Shares outstanding at September 29, 2023, September 30, 2022 and October 1, 2021 had an estimated market value of $24.0 million, $22.1 million and $30.9 million, respectively. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Sep. 29, 2023 | |
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 (benefit) expense was as follows: Fiscal Years (In millions) 2023 2022 2021 Current income tax expense Federal $ 9.8 $ 3.7 $ 5.4 State and local 0.3 0.2 1.4 Foreign 12.6 10.3 6.8 Total current $ 22.7 $ 14.2 $ 13.6 Deferred i ncome tax (benefit) expense : Federal $ (38.0) $ 0.4 $ 1.8 State and local (0.2) (0.9) (1.3) Foreign (1.9) — (3.4) Total deferred (40.1) (0.5) (2.9) Income tax (benefit) expense $ (17.4) $ 13.7 $ 10.7 Income before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2023 2022 2021 United States $ (6.2) $ 16.4 $ (4.1) Foreign 37.5 28.1 32.7 Income before taxes $ 31.3 $ 44.5 $ 28.6 The effective tax rate differs from the U.S. federal statutory tax rate as a result of the following: Fiscal Years 2023 2022 2021 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State and local taxes, net of federal tax benefit 0.3 (1.4) 0.3 Statutory rate change impact on prior year deferreds — 1.1 — Return to provision (4.7) (2.1) 4.2 Research and development credit (8.4) (0.9) (4.2) Prior year research and development credit — — (0.3) Foreign rate difference 6.3 6.5 1.7 Foreign research innovation box — — (3.8) Change in valuation allowance (65.7) 6.3 8.4 U.S. tax reform - international provisions (9.2) (4.6) (0.7) U.S. net operating loss carryback — — 5.2 Other 4.8 4.9 5.6 Effective tax rate (55.6) % 30.8 % 37.4 % During fiscal year 2023, the Company's effective tax rate varied from the U.S. federal statutory rate of 21% primarily due to the favorable impact of the release of the U.S. valuation allowance, U.S. tax reform regarding international provisions, R&D credits, and return to provision adjustments. These favorable items were partially offset by the unfavorable impact of profit in foreign jurisdictions with statutory tax rates greater than 21%. 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. The Company has estimated its fiscal year 2023 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 2023 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 29, 2023 September 30, 2022 Deferred tax assets: Inventory adjustments $ 5.9 $ 6.4 Share-based compensation 6.7 6.3 Product warranty 1.5 1.4 Unrealized exchange gain 2.5 2.6 Deferred compensation 1.4 1.3 Net operating loss carryforwards 19.4 19.7 Accrued vacation 0.3 0.9 Accrued incentives 2.0 2.8 Credit carryforwards 2.7 2.5 Deferred financing fees 5.7 2.4 Interest expense limitation — 3.9 Capitalized interest 1.1 0.9 Lease liabilities 6.1 5.4 Investments in privately held companies 3.2 — Research and experimentation capitalization 17.6 — Other 4.1 2.5 $ 80.2 $ 59.0 Valuation allowance (18.7) (32.2) Total deferred tax assets $ 61.5 $ 26.8 Deferred tax liabilities: Acquired intangibles $ (5.3) $ (7.9) Property, plant and equipment (8.0) (8.8) Investments in privately held companies — (1.4) Operating lease assets (6.0) (5.6) Other (0.9) (1.3) Total deferred tax liabilities (20.2) (25.0) Net deferred tax assets $ 41.3 $ 1.8 Reported As: Deferred tax assets $ 61.5 $ 26.8 Deferred tax liabilities (20.2) (25.0) Net deferred tax assets $ 41.3 $ 1.8 The Company is maintaining its reinvestment assertion with respect to foreign earnings for the year ended September 29, 2023, 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 29, 2023, the Company had foreign net operating loss carryforwards ("NOL") of approximately $19.3 million with $0.8 million expiring between 2023 and 2034 and $18.5 million carried forward indefinitely. The valuation allowance relates primarily to net operating losses in certain foreign jurisdictions 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 decreased by $13.5 million during fiscal year 2023 and increased by $2.0 million during fiscal year 2022. The decrease during the current year was primarily related to the release of the valuation allowance against U.S. deferred tax attributes. Changes in the Company's valuation allowance for deferred tax assets were as follows: Fiscal Years (In millions) 2023 2022 2021 Valuation allowance balance–beginning of fiscal year $ 32.2 $ 30.2 $ 28.7 Other increases — 6.9 5.4 Other decreases (13.5) (4.9) (3.9) Valuation allowance balance—end of fiscal year $ 18.7 $ 32.2 $ 30.2 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) 2023 2022 Unrecognized tax benefits balance–beginning of fiscal year $ 1.2 $ 1.1 Additions based on tax positions related to a prior year — 0.1 Additions based on tax positions related to the current year 0.2 — Unrecognized tax benefits balance—end of fiscal year $ 1.4 $ 1.2 As of September 29, 2023 and September 30, 2022, the total amount of gross unrecognized tax benefits was $1.4 million and $1.2 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 29, 2023, $0.2 million interest and penalties have been included for this period. 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. 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. 29, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has two reportable operating segments: Medical and Industrial, which aligns with how its 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 and accessories, ionization chambers, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, and heat exchangers. These components are used in a range of medical imaging applications including CT, mammography, oncology, cardiac, surgery, dental, and other diagnostic radiography uses. 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, irradiation, and inspection applications used in a number of other vertical markets. The Company's industrial products include Linatron® X-ray linear accelerators, X-ray tubes, digital detectors, high voltage connectors, and coolers. In addition, the Company licenses proprietary image-processing and detection software designed to work with other Varex products to provide packaged sub-assembly solutions to industrial customers. 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) 2023 2022 2021 Revenues Medical $ 673.3 $ 674.7 $ 643.8 Industrial 220.1 184.7 174.3 Total revenues 893.4 859.4 818.1 Gross profit Medical 205.5 210.5 203.2 Industrial 84.8 73.0 68.3 Total gross profit 290.3 283.5 271.5 Total operating expenses 213.2 195.3 197.4 Interest and other expense, net (45.8) (43.7) (45.5) Income before taxes 31.3 44.5 28.6 Income tax (benefit) expense (17.4) 13.7 10.7 Net income 48.7 30.8 17.9 Less: Net income attributable to noncontrolling interests 0.5 0.5 0.5 Net income attributable to Varex $ 48.2 $ 30.3 $ 17.4 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) 2023 2022 2021 2023 2022 Americas $ 281.8 $ 273.3 $ 268.5 $ 101.8 $ 99.8 EMEA 290.7 280.8 276.3 22.8 23.2 APAC 320.9 305.3 273.3 19.0 18.3 Total company $ 893.4 $ 859.4 $ 818.1 $ 143.6 $ 141.3 Revenue in the United States of America was $275.1 million, $263.7 million and $262.3 million in fiscal years 2023, 2022 and 2021, 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. 29, 2023 | |
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 $4.9 million, $4.4 million and $2.8 million in fiscal years 2023, 2022 and 2021, respectively. The Company also maintains defined benefit plans for certain employees located outside the United States. The net pension liability is included in other long-term liabilities on the Company's Consolidated Balance Sheets and totaled $5.2 million and $3.3 million as of September 29, 2023 and September 30, 2022, respectively. The Company’s net periodic benefit costs for the Company’s defined benefit plans were not material for fiscal years 2023, 2022, and 2021. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | 12 Months Ended |
Sep. 29, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME The following tables present the changes in the accumulated balances for each component of other comprehensive (loss) income: (In millions) (Loss) Income on Forward Contracts Unrealized (Loss) Gain on Defined Benefit Obligations CTA, Including Impact of Net Investment Hedge Unrealized (Loss) Income on Available-For-Sale Securities Accumulated Other Comprehensive Income (Loss) Balance at October 01, 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 Other comprehensive (loss) income before reclassifications 0.1 (1.2) (4.4) 0.1 (5.4) Income tax impact — 0.2 — — 0.2 Foreign currency translation adjustment — — 3.9 — 3.9 Balance at September 29, 2023 $ (0.5) $ (0.4) $ (0.3) $ — $ (1.2) |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Pay vs Performance Disclosure | |||
Net income attributable to Varex | $ 48.2 | $ 30.3 | $ 17.4 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 29, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 29, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and in accordance with accounting principles generally accepted in the United States ("GAAP"). The Company has consolidated all its majority owned subsidiaries and entities over which it has 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 2023 was the 52-week period that ended September 29, 2023, fiscal year 2022 was the 52-week period that ended September 30, 2022, and fiscal year 2021 was the 52-week period that ended October 1, 2021. |
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 29, 2023, 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, receivables, warranties, refund liabilities, long-lived asset valuations, impairment of investments, valuation of financial instruments, and taxes on income. Actual results could differ from these estimates. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents The Company considers unrestricted currency on hand, demand deposits, time deposits, and all highly-liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. Restricted Cash |
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 (loss) 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, certificates of deposit, and trade accounts receivable. Cash held with financial institutions may exceed the Federal Deposit Insurance Corporation insurance limits or similar limits in foreign jurisdictions. To date, the Company has not realized any losses on its deposits of cash and cash equivalents. The Company performs ongoing credit evaluations of its customers and, except for government tenders, group purchases, and orders with a letter of credit, its industrial customers often provide a down payment. The Company maintains an allowance for credit losses based upon the expected collectability of all accounts receivable. The Company obtains some of the components in its products from a limited group of suppliers or from a single-source supplier. When these suppliers are unable to meet the Company's supply needs, the Company's production is negatively impacted. |
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 |
Equity Method Investments | Equity Method 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, but not control, these investments. The Company records impairment losses on its equity method investments if an impairment exists and is deemed to be other-than-temporary, which is based on various factors, including but not limited to, the length of time the fair value of the investment is below the carrying value, the absence of an ability to recover the carrying amount of the investment, and the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. |
Marketable Securities | Marketable Securities The Company's marketable securities consist primarily of financial instruments such as United States treasury securities, United States agency obligations, corporate bonds, commercial paper, money market funds, and equity securities. Marketable Debt Securities The Company's marketable debt securities are classified as available-for-sale. Classification of marketable debt securities is determined at the time of purchase, and the Company reevaluates such classification as of each balance sheet date. Marketable debt securities are recorded at estimated fair value and included in cash and cash equivalents, prepaid expenses and other current assets, and other assets within the Consolidated Balance Sheets. Any unrealized gains or losses are included in accumulated other comprehensive (loss) income within the Consolidated Balance Sheets. When the fair value of a marketable debt security declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in the Consolidated Statements of Operations. When the fair value of a marketable debt security declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in accumulated other comprehensive (loss) income, and are recognized in the Consolidated Statements of Operations only if the Company sells or intends to sell the security before recovery of its cost basis. There were no impairments related to marketable debt securities recorded during the twelve months ended September 29, 2023. Marketable Equity Securities Marketable equity securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date and included in other assets within the Consolidated Balance Sheets. All unrealized gains and losses on marketable equity securities are recorded as part of other expense, net in the Company's Consolidated Statements of Operations. See Note 10, Fair Value , for further details. |
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. The Company evaluates goodwill for impairment at least annually at the beginning of the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The evaluation includes consideration of qualitative factors including industry and market considerations, overall |
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. Environmental Obligations |
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 |
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 imaging components including X-ray tubes, digital detectors and image-processing tools and security and inspection products are generally sold on a stand-alone basis. However, the Company occasionally sells its digital detectors, X-ray tubes and imaging processing tools as a package that is optimized for digital X-ray imaging and sells its Linatron® X-ray linear accelerators together with its image processing software and image detection products to OEM customers that incorporate them into their inspection or irradiation systems and processes. Service contracts are often sold with certain security and inspection products and computer-aided detection products. 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 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. 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 and a liability is recorded for expected returns, and an asset is recorded for the right to recover products from customers on settling the liability. The Company recognizes a reduction to revenue and cost of sales at the time of sale and a corresponding refund liability and right of return asset. The Company records this estimate based on the historical volume of product returns and adjusts the estimate on a quarterly basis based on the current quarter sales and current quarter returns. If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation could be sold separately. 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 liabilities are included within the deferred revenues, and other long-term liabilities balances in the Consolidated Balance Sheets. The Company does not have any material contract assets. Deferred revenue represents the Company's obligation to transfer goods or services to its customers for which it has already received consideration (or the amount is due) from the customer. The Company's deferred revenue balance primarily relates to contract advances and billings for warranty contracts. Deferred revenue that is estimated to be recognized during the following twelve-month period is recorded as deferred revenues and the remaining portion is recorded as other long-term liabilities in the 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. |
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. 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. We regularly evaluate the realizability of our deferred tax assets based on the weight of all available evidence, both positive and negative, including the history of recent earnings and expected future taxable income on a jurisdictional basis and our ability to generate sufficient taxable income in the future to realize the net deferred tax assets. As of September 29, 2023, based on our assessment of the realizability of our net deferred tax assets, we reached the conclusion that it was more likely than not that the U.S. federal deferred tax assets are realizable due to cumulative income in recent years and the expectation of sustained profitability in future periods. As a result, we released the valuation allowance against all of the U.S. federal deferred tax assets. We continue to maintain a valuation allowance against U.S. state R&D credit carryforwards and a partial valuation allowance against state net operating losses that are not expected to be realizable. We also maintain full valuation allowances against the net deferred tax assets in Sweden, Finland, and Saudi Arabia, due to their recent historical losses and the uncertainty of their future taxable income to realize their net operating losses. The 2017 Tax Cuts and Jobs Act ("TCJA") included a provision requiring research and development expenditures to be capitalized for tax years beginning after December 31, 2021, which was effective for the Company starting in fiscal year 2023. Because the Company has a significant amount of research and development expenditures, U.S. taxable income and cash taxes are expected to be significantly higher over the next several years. |
Foreign Currency Remeasurement and Translation | Foreign Currency Remeasurement and 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 (loss) income. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board issued Accounting Standard Update ("ASU") 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The standard removed 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 are accounted for as a single liability measured at amortized cost. This results 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 was requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The Company adopted this ASU on October 1, 2022, using the modified retrospective method. On the date of adoption, the Company recorded an entry to reduce additional paid-in capital by $34.6 million, increase long-term debt, net by $28.0 million, decrease deferred tax assets by $0.5 million, and increase retained earnings by $6.1 million for the after-tax impact of previously recognized amortization of the debt discount associated with the Company’s Convertible Notes (as defined herein). The unamortized discount on the Company's Convertible Notes (see Note 9, Borrowings ) was derecognized in the first quarter of fiscal year 2023, which removed the amortization of the debt discount, and brought the effective interest rate closer to the coupon rate of 4.00%. The impact that the adoption of ASU 2020-06 has on the Company's net income per diluted share will depend on the amount of earnings in each period and could result in additional dilution. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
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 29, 2023 Twelve Months Ended September 30, 2022 (In millions) Beginning of Period End of Period Beginning of Period End of Period Cash and cash equivalents $ 89.4 $ 152.6 $ 144.6 $ 89.4 Restricted cash 1.2 1.4 1.5 1.2 Total as presented in the Consolidated Statements of Cash Flows $ 90.6 $ 154.0 $ 146.1 $ 90.6 |
Schedules of Concentration of Risk, by Risk Factor | During the periods presented, one of the Company's customers accounted for a significant portion of revenues, as set forth below: Fiscal Year 2023 2022 2021 Canon Medical Systems Corporation 16.5 % 17.2 % 17.9 % |
Schedule of Inventory, Net | The following table summarizes the Company’s inventories, net: (In millions) September 29, 2023 September 30, 2022 Raw materials and parts $ 217.5 $ 240.3 Work-in-process 20.0 23.2 Finished goods 40.0 39.7 Total inventories $ 277.5 $ 303.2 |
Schedule of Property, Plant and Equipment, Net | The following table summarizes the Company’s property, plant and equipment, net: (In millions) September 29, 2023 September 30, 2022 Land $ 8.3 $ 8.3 Buildings and leasehold improvements 159.1 149.2 Machinery and equipment 194.9 182.9 Construction in progress 20.8 29.1 Gross property, plant and equipment 383.1 369.5 Accumulated depreciation and amortization (239.5) (228.2) Total property, plant and equipment, net $ 143.6 $ 141.3 |
Schedule of Product Warranty Liability | The following table reflects the changes in the Company’s accrued product warranty: Fiscal Years Ended (In millions) September 29, 2023 September 30, 2022 Accrued product warranty, at beginning of period $ 7.9 $ 8.5 New accruals charged to cost of revenues 12.7 11.3 Product warranty expenditures (12.9) (11.9) Accrued product warranty, at end of period $ 7.7 $ 7.9 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Right of Return Assets and Refund Liabilities | The following tables summarize the changes in the right of return assets and refund liabilities for the twelve months ended September 29, 2023 and September 30, 2022: (In millions) Right of Return Assets Balance at October 1, 2021 $ 24.3 Costs recovered from product returns during the period (5.4) Right of return assets 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 Costs recovered from product returns during the period (5.1) Right of return assets from shipments of products, subject to return during the period 6.8 Adjustment for actual vs. reserved product returns (1.1) Balance at September 29, 2023 $ 26.0 (In millions) Refund Liabilities 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 Release of refund liability included in beginning of year refund liability (5.6) Additions to refund liabilities 7.5 Adjustment for actual vs. reserved product returns (1.2) Balance at September 29, 2023 $ 28.9 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
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 29, 2023 September 30, 2022 Assets Operating lease right-of-use assets Operating lease assets $ 29.0 $ 23.2 Finance lease right-of-use assets Property, plant and equipment, net 0.3 0.3 Liabilities Operating lease liabilities (current) Current operating lease liabilities 3.8 4.0 Finance lease liabilities (current) Accrued liabilities and other current liabilities 0.1 0.2 Operating lease liabilities (non-current) Operating lease liabilities 23.1 18.0 Finance lease liabilities (non-current) Other long-term liabilities $ 0.2 $ 0.1 The following table presents the weighted average remaining lease term and discount rate information related to the Company's operating and finance leases: September 29, 2023 September 30, 2022 Operating lease weighted average remaining lease term (in years) 7.8 6.4 Operating lease weighted average discount rate 7.9 % 5.6 % Finance lease weighted average remaining lease term (in years) 3.6 2.0 Finance lease weighted average discount rate 4.7 % 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) 2023 2022 2021 Total operating lease costs (1) $ 5.8 $ 6.4 $ 8.1 Total finance lease costs $ 0.2 $ 0.2 $ 0.3 Operating cash flows from operating leases $ 7.8 $ 7.3 $ 7.9 Financing cash flows from finance leases 0.3 0.2 0.2 Total cash paid for amounts included in the measurement of lease liabilities $ 8.1 $ 7.5 $ 8.1 Noncash operating right-of-use assets obtained in exchange for new lease liabilities $ 10.6 $ 5.4 $ 5.6 Noncash finance right-of-use assets obtained in exchange for new lease liabilities 0.2 0.1 0.2 Total right-of-use assets obtained in exchange for new lease liabilities $ 10.8 $ 5.5 $ 5.8 (1) Includes variable and short-term lease expense, which were immaterial for fiscal years 2023, 2022, and 2021. |
Schedule of Finance Lease Liability Maturities | As of September 29, 2023, 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 2024 $ 5.6 $ 0.1 2025 5.5 0.1 2026 4.4 0.1 2027 4.2 — 2028 3.3 — Thereafter 14.7 — Total future lease payments $ 37.7 $ 0.3 Less: imputed interest (10.8) — Present value of lease liabilities $ 26.9 $ 0.3 |
Schedule of Operating Lease Liability Maturities | As of September 29, 2023, 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 2024 $ 5.6 $ 0.1 2025 5.5 0.1 2026 4.4 0.1 2027 4.2 — 2028 3.3 — Thereafter 14.7 — Total future lease payments $ 37.7 $ 0.3 Less: imputed interest (10.8) — Present value of lease liabilities $ 26.9 $ 0.3 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges | Below is a detail of restructuring charges incurred during the 2023, 2022 and 2021 fiscal years, which predominately relate to the Company's Medical segment: (In millions) Location of Restructuring Charges in Consolidated Statements of Operations 2023 2022 2021 Other assets impairment charges Selling, general and administrative $ — $ 1.8 $ — Accelerated depreciation Cost of revenues — — 0.2 Severance costs Selling, general and administrative — — 0.6 Facility closure costs Selling, general and administrative — — 0.2 Total restructuring charges $ — $ 1.8 $ 1.0 |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
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 29, 2023 September 30, 2022 Accrued compensation and benefits $ 33.4 $ 36.7 Product warranty 7.7 7.9 Taxes payable 13.3 11.3 Refund liability 7.2 6.8 Accrued interest 11.6 11.7 Other 9.4 7.0 Total accrued liabilities and other current liabilities $ 82.6 $ 81.4 |
Schedule of Other Noncurrent Liabilities | The following table summarizes the Company’s other long-term liabilities: (In millions) September 29, 2023 September 30, 2022 Long-term income tax payable $ 4.6 $ 4.3 Environmental liabilities 1.9 1.3 Defined benefit obligation liability 5.2 3.3 Long-term refund liability 21.7 21.4 Derivative liability 4.9 — Long-term other 3.3 3.5 Total other long-term liabilities $ 41.6 $ 33.8 |
Schedule of Other Expense, Net | The following table summarizes the Company’s other expense, net: Fiscal Years (In millions) 2023 2022 2021 Loss from equity method investments $ (1.4) $ (3.0) $ (3.4) Impairment of equity method investment (16.4) — — Realized losses on foreign currencies, net (1.0) (1.5) (0.2) Other (1.4) 0.2 0.1 Total other expense, net $ (20.2) $ (4.3) $ (3.5) |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
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 net income per common share is as follows: Fiscal Year (In millions, except per share amounts) 2023 2022 2021 Net income per share - basic Net income attributable to Varex $ 48.2 $ 30.3 $ 17.4 Basic weighted average shares outstanding 40.3 39.8 39.3 Basic net income per share attributable to Varex $ 1.20 $ 0.76 $ 0.44 Net income per share - diluted Net income attributable to Varex $ 48.2 $ 30.3 $ 17.4 Interest expense on Convertible Notes, net of tax 6.2 — — Diluted net income 54.4 30.3 17.4 Basic weighted average shares outstanding 40.3 39.8 39.3 Dilutive effect of Convertible Senior Notes 9.6 1.3 0.6 Dilutive effect of share-based awards and other 0.4 0.5 0.4 Diluted weighted average shares outstanding 50.3 41.6 40.3 Diluted net income per share attributable to Varex $ 1.08 $ 0.73 $ 0.43 Anti-dilutive share summary Share-based awards and other 2.7 3.0 2.8 Warrants 9.6 — — Total anti-dilutive shares 12.3 3.0 2.8 |
FINANCIAL DERIVATIVES AND HED_2
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | As of September 29, 2023, 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 2 $ 58.7 Notional Value of Derivatives not Designated as Hedging Instruments: (In millions of equivalent USD) Sell contracts Australian Dollar $ 3.9 Chinese Renminbi 8.6 Euro 15.9 Indian Rupee 6.3 Total notional value $ 34.7 |
Schedule of Net Investment Hedges | 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 (Loss) or Gain 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) 2023 2022 2021 2023 2022 2021 Cross currency swap contracts $ (4.4) $ 8.7 $ (0.3) Interest expense $ 0.9 $ 1.2 $ 1.3 (In millions) Derivative Assets and Liabilities Derivatives Designated as Net Investment Hedges Balance Sheet Location 2023 2022 Cross currency swap contracts Prepaid expenses and other current assets $ 0.7 $ 1.2 Cross currency swap contracts Other assets — 6.3 Cross currency swap contracts Other long-term liabilities $ 4.9 $ — |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
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 29, 2023 September 30, 2022 (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 $ 1.5 $ 2.1 $ (0.6) Non-current maturities of long-term debt: Convertible Senior Unsecured Notes $ 200.0 4.8% $ 200.0 10.9% $ — Senior Secured Notes 243.0 8.2% 243.0 8.2% — Other debt 3.5 4.6 (1.1) Total non-current maturities of long-term debt: $ 446.5 $ 447.6 $ (1.1) Unamortized issuance costs and debt discounts Unamortized discount - Convertible Notes (1) $ — $ (28.7) $ 28.7 Unamortized issuance costs - Convertible Notes (1) (2.5) (3.1) 0.6 Debt issuance costs - Senior Secured Notes (2.9) (3.5) 0.6 Total $ (5.4) $ (35.3) $ 29.9 Total debt outstanding, net $ 442.6 $ 414.4 $ 28.2 Equity component of Convertible Senior Unsecured Notes (1)(2) $ — $ 49.7 $ (49.7) (1) In connection with the adoption of ASU 2020-06, the unamortized discount and equity component related to the Convertible Notes were derecognized and the carrying value of the issuance costs was adjusted in the first quarter of fiscal year 2023. Refer to Note 1, Summary of Significant Accounting Policies for further details. (2) 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 29, 2023 are as follows: (In millions) Fiscal years: 2024 $ 1.5 2025 201.5 2026 1.3 2027 243.7 2028 — Thereafter — Total debt outstanding $ 448.0 Less: current maturities of long-term debt (1.5) Non-current portion of long-term debt $ 446.5 |
Schedule of Interest Expense | The following table summarizes the Company's interest expense: Twelve Months Ended September 29, 2023 September 30, 2022 October 1, 2021 Contractual interest coupon and other $ 26.7 $ 27.6 $ 30.7 Amortization/extinguishment of debt issuance costs 2.6 3.4 3.5 Amortization of debt discounts — 8.8 7.9 Total interest expense $ 29.3 $ 39.8 $ 42.1 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
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 29, 2023 (In millions) Quoted Prices in Active Markets Significant Other Significant Unobservable Inputs Total Assets: Money market funds $ — $ 45.4 $ — $ 45.4 Commercial paper — 6.0 — 6.0 Corporate notes/bonds — 8.3 — 8.3 Government agencies — 6.6 — 6.6 US Treasury bills — 28.6 — 28.6 Derivative assets — 0.7 — 0.7 Deferred compensation plan (1) 6.3 — — 6.3 Marketable equity securities 4.1 — — 4.1 Total assets measured at fair value $ 10.4 $ 95.6 $ — $ 106.0 Liabilities: Derivative liabilities $ — $ 4.9 $ — $ 4.9 Total liabilities measured at fair value $ — $ 4.9 $ — $ 4.9 (1) The assets held under the Company’s deferred compensation plan are classified in Level 1 as they relate primarily to publicly traded mutual funds for which there are observable market prices in active markets. Fair Value Measurements at September 30, 2022 (In millions) Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) 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 Deferred compensation plan (1) 5.4 — — 5.4 Marketable equity securities 2.5 — — 2.5 Total assets measured at fair value $ 7.9 $ 64.1 $ — $ 72.0 Liabilities: Derivative liabilities $ — $ 0.3 $ — $ 0.3 Total liabilities measured at fair value $ — $ 0.3 $ — $ 0.3 (1) The assets held under the Company’s deferred compensation plan are classified in Level 1 as they relate primarily to publicly traded mutual funds for which there are observable market prices in active markets. |
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 29, 2023 (In millions) Amortized Costs Unrealized Losses Fair Value Commercial paper $ 6.0 $ — $ 6.0 Corporate notes/bonds 8.3 — 8.3 US Treasury bills 28.6 — 28.6 Government agencies 6.6 — 6.6 Total marketable debt securities $ 49.5 $ — $ 49.5 The following table summarizes the marketable debt securities on the Consolidated Balance Sheets as of September 30, 2022. September 30, 2022 (In millions) Amortized Costs 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 29, 2023, 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 29, 2023 (In millions) Amortized Costs Fair Value Contractual maturities: Due within one year $ 49.5 $ 49.5 Due after one year through five years — — Total marketable debt securities $ 49.5 $ 49.5 September 29, 2023 (In millions) Commercial paper Corporate notes/bonds Government agencies Treasury Bills Total Cash and cash equivalents $ 6.0 $ — $ — $ 2.2 $ 8.2 Prepaid expenses and other current assets — 8.3 6.6 26.4 41.3 Total marketable debt securities $ 6.0 $ 8.3 $ 6.6 $ 28.6 $ 49.5 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. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table reflects goodwill by reportable segment: (In millions) Medical Industrial Total Balance at September 30, 2022 $ 169.4 $ 115.1 $ 284.5 Business combination — 0.5 0.5 Foreign currency translation adjustments 2.1 1.4 3.5 Balance at September 29, 2023 $ 171.5 $ 117.0 $ 288.5 |
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 29, 2023 September 30, 2022 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 72.3 $ (57.8) $ 14.5 $ 70.0 $ (49.9) $ 20.1 Patents, licenses and other 12.5 (12.2) 0.3 12.3 (11.6) 0.7 Customer contracts and supplier relationship 50.3 (42.7) 7.6 49.6 (36.8) 12.8 Total intangible assets $ 135.1 $ (112.7) $ 22.4 $ 131.9 $ (98.3) $ 33.6 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of September 29, 2023, the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal years: 2024 $ 9.1 2025 3.1 2026 3.0 2027 2.8 2028 2.7 Thereafter 1.7 Total $ 22.4 |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
Noncontrolling Interest [Abstract] | |
Changes in Redeemable Noncontrolling Interest | Changes in noncontrolling interests were as follows: Fiscal Years 2023 2022 (In millions) Noncontrolling Noncontrolling Interest Balance at beginning of period $ 13.3 $ 13.2 Net income attributable to noncontrolling interests 0.5 0.5 Other, including foreign currency remeasurement (0.5) (0.4) Balance at end of period $ 13.3 $ 13.3 |
EMPLOYEE STOCK PLANS (Tables)
EMPLOYEE STOCK PLANS (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
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 the option value of the employee stock purchase plan shares: Fiscal Year (In millions) 2023 2022 2021 Cost of revenues $ 1.7 $ 1.6 $ 1.4 Research and development 3.3 3.1 3.0 Selling, general and administrative 8.5 9.3 9.5 Total share-based compensation expense $ 13.5 $ 14.0 $ 13.9 |
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 2023 2022 2021 2023 2022 2021 Expected term (in years) 6.9 7.0 7.0 0.5 0.4 0.5 Risk-free interest rate 3.6 % 1.4 % 1.0 % 4.8 % 1.6 % 0.1 % Expected volatility 43.9 % 42.7 % 41.5 % 34.8 % 33.6 % 68.4 % Expected dividend — % — % — % — % — % — % Weighted average fair value at grant date $9.75 $12.07 $9.37 $4.96 $5.41 $5.90 |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes the activity for stock options under Varex’s employee incentive plans for the Company’s employees: (In thousands, except per share amounts and the remaining term) Options Price range Weighted Average Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) Outstanding at September 30, 2022 2,902 $13.61 - $37.60 $ 28.97 4.5 $ 1,361.4 Granted 415 $22.13 - $24.55 22.31 Canceled, expired or forfeited (442) $22.13 - $37.10 28.92 Exercised (13) $13.61 - $13.61 13.61 Outstanding at September 29, 2023 2,862 $13.61 - $37.60 $ 28.08 4.8 $ 871.4 Exercisable at September 29, 2023 2,080 $13.61 - $37.60 $ 29.44 3.4 $ 642.6 (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 $18.79 as of September 29, 2023, 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 September 30, 2022 1,045 $ 24.35 Granted 566 20.00 Vested (255) 24.71 Canceled, expired or forfeited (79) 23.75 Balance at September 29, 2023 1,277 $ 22.30 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax (benefit) expense was as follows: Fiscal Years (In millions) 2023 2022 2021 Current income tax expense Federal $ 9.8 $ 3.7 $ 5.4 State and local 0.3 0.2 1.4 Foreign 12.6 10.3 6.8 Total current $ 22.7 $ 14.2 $ 13.6 Deferred i ncome tax (benefit) expense : Federal $ (38.0) $ 0.4 $ 1.8 State and local (0.2) (0.9) (1.3) Foreign (1.9) — (3.4) Total deferred (40.1) (0.5) (2.9) Income tax (benefit) expense $ (17.4) $ 13.7 $ 10.7 |
Schedule of Income before Income Tax, Domestic and Foreign | Income before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2023 2022 2021 United States $ (6.2) $ 16.4 $ (4.1) Foreign 37.5 28.1 32.7 Income before taxes $ 31.3 $ 44.5 $ 28.6 |
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 2023 2022 2021 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State and local taxes, net of federal tax benefit 0.3 (1.4) 0.3 Statutory rate change impact on prior year deferreds — 1.1 — Return to provision (4.7) (2.1) 4.2 Research and development credit (8.4) (0.9) (4.2) Prior year research and development credit — — (0.3) Foreign rate difference 6.3 6.5 1.7 Foreign research innovation box — — (3.8) Change in valuation allowance (65.7) 6.3 8.4 U.S. tax reform - international provisions (9.2) (4.6) (0.7) U.S. net operating loss carryback — — 5.2 Other 4.8 4.9 5.6 Effective tax rate (55.6) % 30.8 % 37.4 % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of deferred tax assets and liabilities are as follows: (In millions) September 29, 2023 September 30, 2022 Deferred tax assets: Inventory adjustments $ 5.9 $ 6.4 Share-based compensation 6.7 6.3 Product warranty 1.5 1.4 Unrealized exchange gain 2.5 2.6 Deferred compensation 1.4 1.3 Net operating loss carryforwards 19.4 19.7 Accrued vacation 0.3 0.9 Accrued incentives 2.0 2.8 Credit carryforwards 2.7 2.5 Deferred financing fees 5.7 2.4 Interest expense limitation — 3.9 Capitalized interest 1.1 0.9 Lease liabilities 6.1 5.4 Investments in privately held companies 3.2 — Research and experimentation capitalization 17.6 — Other 4.1 2.5 $ 80.2 $ 59.0 Valuation allowance (18.7) (32.2) Total deferred tax assets $ 61.5 $ 26.8 Deferred tax liabilities: Acquired intangibles $ (5.3) $ (7.9) Property, plant and equipment (8.0) (8.8) Investments in privately held companies — (1.4) Operating lease assets (6.0) (5.6) Other (0.9) (1.3) Total deferred tax liabilities (20.2) (25.0) Net deferred tax assets $ 41.3 $ 1.8 Reported As: Deferred tax assets $ 61.5 $ 26.8 Deferred tax liabilities (20.2) (25.0) Net deferred tax assets $ 41.3 $ 1.8 |
Schedule of Valuation Allowance | Changes in the Company's valuation allowance for deferred tax assets were as follows: Fiscal Years (In millions) 2023 2022 2021 Valuation allowance balance–beginning of fiscal year $ 32.2 $ 30.2 $ 28.7 Other increases — 6.9 5.4 Other decreases (13.5) (4.9) (3.9) Valuation allowance balance—end of fiscal year $ 18.7 $ 32.2 $ 30.2 |
Schedule of Unrecognized Tax Benefits Roll Forward | Changes in the Company’s unrecognized tax benefits were as follows: Fiscal Years (In millions) 2023 2022 Unrecognized tax benefits balance–beginning of fiscal year $ 1.2 $ 1.1 Additions based on tax positions related to a prior year — 0.1 Additions based on tax positions related to the current year 0.2 — Unrecognized tax benefits balance—end of fiscal year $ 1.4 $ 1.2 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Information related to the Company’s segments is as follows: Fiscal Year (In millions) 2023 2022 2021 Revenues Medical $ 673.3 $ 674.7 $ 643.8 Industrial 220.1 184.7 174.3 Total revenues 893.4 859.4 818.1 Gross profit Medical 205.5 210.5 203.2 Industrial 84.8 73.0 68.3 Total gross profit 290.3 283.5 271.5 Total operating expenses 213.2 195.3 197.4 Interest and other expense, net (45.8) (43.7) (45.5) Income before taxes 31.3 44.5 28.6 Income tax (benefit) expense (17.4) 13.7 10.7 Net income 48.7 30.8 17.9 Less: Net income attributable to noncontrolling interests 0.5 0.5 0.5 Net income attributable to Varex $ 48.2 $ 30.3 $ 17.4 |
Schedule of Revenue from External Customers by Geographic Areas | Geographic Information Revenues Long-Lived Assets Fiscal Years Fiscal Years (In millions) 2023 2022 2021 2023 2022 Americas $ 281.8 $ 273.3 $ 268.5 $ 101.8 $ 99.8 EMEA 290.7 280.8 276.3 22.8 23.2 APAC 320.9 305.3 273.3 19.0 18.3 Total company $ 893.4 $ 859.4 $ 818.1 $ 143.6 $ 141.3 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables) | 12 Months Ended |
Sep. 29, 2023 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive (Loss) Income | The following tables present the changes in the accumulated balances for each component of other comprehensive (loss) income: (In millions) (Loss) Income on Forward Contracts Unrealized (Loss) Gain on Defined Benefit Obligations CTA, Including Impact of Net Investment Hedge Unrealized (Loss) Income on Available-For-Sale Securities Accumulated Other Comprehensive Income (Loss) Balance at October 01, 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 Other comprehensive (loss) income before reclassifications 0.1 (1.2) (4.4) 0.1 (5.4) Income tax impact — 0.2 — — 0.2 Foreign currency translation adjustment — — 3.9 — 3.9 Balance at September 29, 2023 $ (0.5) $ (0.4) $ (0.3) $ — $ (1.2) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | 12 Months Ended |
Sep. 29, 2023 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. 29, 2023 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. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 152.6 | $ 89.4 | $ 144.6 | |
Restricted cash | 1.4 | 1.2 | 1.5 | |
Total as presented in the Consolidated Statements of Cash Flows | $ 154 | $ 90.6 | $ 146.1 | $ 102.1 |
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. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Revenue from Contract with Customer Benchmark | |||
Concentration Risk | |||
Concentration risk, percentage | 16.50% | 17.20% | 17.90% |
Accounts Receivable | |||
Concentration Risk | |||
Concentration risk, percentage | 13.80% | 10.30% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Accounting Policies [Abstract] | |||
Raw materials and parts | $ 217.5 | $ 240.3 | |
Work-in-process | 20 | 23.2 | |
Finished goods | 40 | 39.7 | |
Total inventories | 277.5 | 303.2 | |
Inventory write-down | $ 5.6 | $ 6.4 | $ 3.5 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 383.1 | $ 369.5 | |
Accumulated depreciation and amortization | (239.5) | (228.2) | |
Total property, plant and equipment, net | 143.6 | 141.3 | |
Depreciation | $ 19.5 | 19 | $ 20.5 |
Land Improvements | |||
Property, Plant and Equipment | |||
Property, plant and equipment, useful lives (in years) | 15 years | ||
Building | |||
Property, Plant and Equipment | |||
Property, plant and equipment, useful lives (in years) | 30 years | ||
Land | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 8.3 | 8.3 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | 159.1 | 149.2 | |
Machinery and equipment | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | 194.9 | 182.9 | |
Construction in progress | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 20.8 | $ 29.1 | |
Minimum | Machinery and equipment | |||
Property, Plant and Equipment | |||
Property, plant and equipment, useful lives (in years) | 3 years | ||
Maximum | Machinery and equipment | |||
Property, Plant and Equipment | |||
Property, plant and equipment, useful lives (in years) | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Equity Method Investments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Sep. 29, 2023 | Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | Jul. 01, 2023 | |
Related Party Transaction | |||||
Impairment of equity method investment | $ 16,400,000 | $ 16,400,000 | $ 0 | $ 0 | |
dpiX Holding | Estimate of Fair Value Measurement | |||||
Related Party Transaction | |||||
Equity method investments, fair value disclosure | $ 27,600,000 | ||||
dpiX Holding | Reported Value Measurement | |||||
Related Party Transaction | |||||
Equity method investments, fair value disclosure | $ 44,000,000 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Intangible Assets (Details) | Sep. 29, 2023 |
Minimum | |
Finite-Lived Intangible Assets | |
Finite-lived intangible asset, useful life (in years) | 2 years |
Maximum | |
Finite-Lived Intangible Assets | |
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. 29, 2023 USD ($) unit | Sep. 30, 2022 USD ($) unit | Oct. 01, 2021 USD ($) unit | |
Accounting Policies [Abstract] | |||
Number of reporting units | unit | 2 | 2 | 2 |
Impairment of indefinite-lived intangible assets, excluding goodwill | $ | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Environmental Obligations (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Accounting Policies [Abstract] | ||
Percentage of liabilities obligated to reimburse | 20% | |
Environmental liability, current and noncurrent | $ 2.8 | $ 1.1 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 29, 2023 | Sep. 30, 2022 | |
Movement in Standard Product Warranty Accrual | ||
Accrued product warranty, at beginning of period | $ 7.9 | $ 8.5 |
New accruals charged to cost of revenues | 12.7 | 11.3 |
Product warranty expenditures | (12.9) | (11.9) |
Accrued product warranty, at end of period | $ 7.7 | $ 7.9 |
Minimum | ||
Product Warranty Liability | ||
Warranty term (month) | 12 months | |
Maximum | ||
Product Warranty Liability | ||
Warranty term (month) | 24 months |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Credit Losses (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Accounting Policies [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 0.6 | $ 0.6 |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Adopted Accounting Standards (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Oct. 01, 2022 | Sep. 30, 2022 | Jun. 09, 2020 |
Debt Instrument | ||||
Additional paid-in capital | $ (450.4) | $ (469.1) | ||
Long-term debt, net | 441.1 | 412.3 | ||
Deferred tax assets | 41.3 | 2.3 | ||
Retained earnings | $ 118.1 | $ 63.8 | ||
Accounting Standards Update 2020-06 | ||||
Debt Instrument | ||||
Additional paid-in capital | $ 34.6 | |||
Long-term debt, net | 28 | |||
Deferred tax assets | 0.5 | |||
Retained earnings | $ 6.1 | |||
Convertible Notes | Convertible Debt | ||||
Debt Instrument | ||||
Interest rate, stated percentage | 4% |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Right of Return Assets and Refund Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 29, 2023 | Sep. 30, 2022 | |
Right of Return Assets | ||
Balance at beginning of period | $ 25.4 | $ 24.3 |
Costs recovered from product returns during the period | (5.1) | (5.4) |
Right of return assets from shipments of products, subject to return during the period | 6.8 | 7.1 |
Adjustment for actual vs. reserved product returns | (1.1) | (0.6) |
Balance at end of period | 26 | 25.4 |
Refund Liabilities | ||
Balance at beginning of period | 28.2 | 27 |
Release of refund liability included in beginning of year refund liability | (5.6) | (6.1) |
Additions to refund liabilities | 7.5 | 7.9 |
Adjustment for actual vs. reserved product returns | (1.2) | (0.6) |
Balance at end of period | $ 28.9 | $ 28.2 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 29, 2023 | Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, liability, revenue recognized | $ 6.7 | $ 6.7 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Lessee, Lease, Description | |||
Lease renewal term (in years) | 5 years | ||
Loss on operating lease abandonment | $ 0 | $ 1.9 | $ 0 |
Minimum | |||
Lessee, Lease, Description | |||
Remaining lease term (in years) | 1 year | ||
Maximum | |||
Lessee, Lease, Description | |||
Remaining lease term (in years) | 95 years |
LEASES - Schedule of Lease Righ
LEASES - Schedule of Lease Right-of-Use Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Assets | ||
Operating lease right-of-use assets | $ 29 | $ 23.2 |
Finance lease right-of-use assets | 0.3 | 0.3 |
Liabilities | ||
Operating lease liabilities (current) | 3.8 | 4 |
Finance lease liabilities (current) | 0.1 | 0.2 |
Operating lease liabilities (non-current) | 23.1 | 18 |
Finance lease liabilities (non-current) | $ 0.2 | $ 0.1 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net | Property, plant and equipment, net |
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. 29, 2023 | Sep. 30, 2022 |
Operating Leases | ||
Operating lease weighted average remaining lease term (in years) | 7 years 9 months 18 days | 6 years 4 months 24 days |
Operating lease weighted average discount rate | 7.90% | 5.60% |
Finance Leases | ||
Finance lease weighted average remaining lease term (in years) | 3 years 7 months 6 days | 2 years |
Finance lease weighted average discount rate | 4.70% | 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. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Leases [Abstract] | |||
Total operating lease costs | $ 5.8 | $ 6.4 | $ 8.1 |
Total finance lease costs | 0.2 | 0.2 | 0.3 |
Operating cash flows from operating leases | 7.8 | 7.3 | 7.9 |
Financing cash flows from finance leases | 0.3 | 0.2 | 0.2 |
Total cash paid for amounts included in the measurement of lease liabilities | 8.1 | 7.5 | 8.1 |
Noncash operating right-of-use assets obtained in exchange for new lease liabilities | 10.6 | 5.4 | 5.6 |
Noncash finance right-of-use assets obtained in exchange for new lease liabilities | 0.2 | 0.1 | 0.2 |
Total right-of-use assets obtained in exchange for new lease liabilities | $ 10.8 | $ 5.5 | $ 5.8 |
LEASES - Schedule of Operatin_2
LEASES - Schedule of Operating and Finance Lease Liability Maturities (Details) $ in Millions | Sep. 29, 2023 USD ($) |
Operating Leases | |
2024 | $ 5.6 |
2025 | 5.5 |
2026 | 4.4 |
2027 | 4.2 |
2028 | 3.3 |
Thereafter | 14.7 |
Total future lease payments | 37.7 |
Less: imputed interest | (10.8) |
Present value of lease liabilities | 26.9 |
Finance Leases | |
2024 | 0.1 |
2025 | 0.1 |
2026 | 0.1 |
2027 | 0 |
2028 | 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 ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Oct. 30, 2013 | Sep. 29, 2023 | Dec. 31, 2023 | Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Related Party Transaction | ||||||
Loss from equity method investments | $ 1,400,000 | $ 3,000,000 | $ 3,400,000 | |||
Impairment of equity method investment | $ 16,400,000 | 16,400,000 | 0 | 0 | ||
Accounts payable | 64,700,000 | 64,700,000 | 78,200,000 | |||
Prepaid expenses and other current assets | $ 64,600,000 | 64,600,000 | 44,000,000 | |||
Fixed Cost Commitments | Forecast | dpiX Holding | ||||||
Related Party Transaction | ||||||
Related party transaction, amounts of transaction | $ 13,100,000 | |||||
Equity Method Investee | ||||||
Related Party Transaction | ||||||
Percentage of manufacturing capacity | 50% | |||||
dpiX Holding | Purchases | ||||||
Related Party Transaction | ||||||
Purchases from related party | $ 18,700,000 | 21,000,000 | 18,500,000 | |||
dpiX Holding | Equity Method Investee | ||||||
Related Party Transaction | ||||||
Equity method investment, ownership percentage | 40% | 40% | ||||
Loss from equity method investments | $ 200,000 | 2,600,000 | 2,300,000 | |||
Equity method investments | $ 25,800,000 | 25,800,000 | 42,400,000 | |||
Accounts payable | $ 2,700,000 | $ 2,700,000 | 3,100,000 | |||
Percentage of fixed costs | 50% | |||||
dpiX Holding | Equity Method Investee | Fixed Cost Commitments | Forecast | ||||||
Related Party Transaction | ||||||
Related party transaction, expected fixed cost | $ 3,300,000 | |||||
dpiX LLC | dpiX Holding | Equity Method Investee | ||||||
Related Party Transaction | ||||||
Equity method investment, ownership percentage | 100% | 100% | ||||
VEC Imaging | Equity Method Investee | ||||||
Related Party Transaction | ||||||
Loss from equity method investments | $ 400,000 | 800,000 | $ 1,100,000 | |||
Equity method investments | $ 2,100,000 | 2,100,000 | 2,500,000 | |||
Prepaid expenses and other current assets | $ 700,000 | $ 700,000 | $ 900,000 |
RESTRUCTURING - Restructuring C
RESTRUCTURING - Restructuring Charges Incurred (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Restructuring Cost and Reserve | |||
Other assets impairment charges | $ 0 | $ 0 | $ 0.5 |
Medical | |||
Restructuring Cost and Reserve | |||
Other assets impairment charges | 0 | 1.8 | 0 |
Accelerated depreciation | 0 | 0 | 0.2 |
Severance costs | 0 | 0 | 0.6 |
Facility closure costs | 0 | 0 | 0.2 |
Total restructuring charges | $ 0 | $ 1.8 | $ 1 |
OTHER FINANCIAL INFORMATION - A
OTHER FINANCIAL INFORMATION - Accrued Liabilities and Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued compensation and benefits | $ 33.4 | $ 36.7 |
Product warranty | 7.7 | 7.9 |
Taxes payable | 13.3 | 11.3 |
Refund liability | 7.2 | 6.8 |
Accrued interest | 11.6 | 11.7 |
Other | 9.4 | 7 |
Total accrued liabilities and other current liabilities | $ 82.6 | $ 81.4 |
OTHER FINANCIAL INFORMATION - O
OTHER FINANCIAL INFORMATION - Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Long-term income tax payable | $ 4.6 | $ 4.3 |
Environmental liabilities | 1.9 | 1.3 |
Defined benefit obligation liability | 5.2 | 3.3 |
Long-term refund liability | 21.7 | 21.4 |
Derivative liability | 4.9 | 0 |
Long-term other | 3.3 | 3.5 |
Total other long-term liabilities | $ 41.6 | $ 33.8 |
OTHER FINANCIAL INFORMATION -_2
OTHER FINANCIAL INFORMATION - Other Income (Expense) Net (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Loss from equity method investments | $ (1,400,000) | $ (3,000,000) | $ (3,400,000) | |
Impairment of equity method investment | $ (16,400,000) | (16,400,000) | 0 | 0 |
Realized losses on foreign currencies, net | (1,000,000) | (1,500,000) | (200,000) | |
Other | (1,400,000) | 200,000 | 100,000 | |
Total other expense, net | $ (20,200,000) | $ (4,300,000) | $ (3,500,000) |
NET INCOME PER SHARE - Reconcil
NET INCOME PER SHARE - Reconciliation of Numerator and Denominator for Basic and Diluted Net (Loss) Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Net income per share - basic | |||
Net income attributable to Varex | $ 48.2 | $ 30.3 | $ 17.4 |
Basic weighted average shares outstanding (in shares) | 40.3 | 39.8 | 39.3 |
Basic net income per share attributable to Varex (in USD per share) | $ 1.20 | $ 0.76 | $ 0.44 |
Net income per share - diluted | |||
Net income attributable to Varex | $ 48.2 | $ 30.3 | $ 17.4 |
Interest expense on Convertible Notes, net of tax | 6.2 | 0 | 0 |
Diluted net income | $ 54.4 | $ 30.3 | $ 17.4 |
Dilutive effect of Convertible Senior Notes (in shares) | 9.6 | 1.3 | 0.6 |
Dilutive effect of share-based awards and other (in shares) | 0.4 | 0.5 | 0.4 |
Diluted weighted average shares outstanding (in shares) | 50.3 | 41.6 | 40.3 |
Diluted net income per share attributable to Varex (in USD per share) | $ 1.08 | $ 0.73 | $ 0.43 |
Anti-dilutive shares (in shares) | 12.3 | 3 | 2.8 |
Share-based awards and other | |||
Net income per share - diluted | |||
Anti-dilutive shares (in shares) | 2.7 | 3 | 2.8 |
Warrants | |||
Net income per share - diluted | |||
Anti-dilutive shares (in shares) | 9.6 | 0 | 0 |
NET INCOME PER SHARE - Narrativ
NET INCOME PER SHARE - Narrative (Details) - shares shares in Millions | 12 Months Ended | |
Jun. 05, 2020 | Sep. 29, 2023 | |
Convertible Notes | Convertible Debt | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Number of warrants (in shares) | 9.6 | 9.6 |
FINANCIAL DERIVATIVES AND HED_3
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Narrative (Details) - Cross currency swap contracts - Net Investment Hedging - Designated as Hedging Instrument $ in Millions | 3 Months Ended | |
Dec. 30, 2022 USD ($) instrument | Sep. 29, 2023 instrument | |
Derivative | ||
Derivative number of instruments terminated | 3 | |
Derivative, cash received on hedge | $ | $ 7.3 | |
Number of Instruments | 2 |
FINANCIAL DERIVATIVES AND HED_4
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Derivative Instruments (Details) - Net Investment Hedging - Designated as Hedging Instrument - Cross currency swap contracts $ in Millions | Sep. 29, 2023 USD ($) instrument |
Derivative | |
Number of Instruments | instrument | 2 |
Notional Value | $ | $ 58.7 |
FINANCIAL DERIVATIVES AND HED_5
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Income Recognized From Derivative Instruments (Details) - Cross currency swap contracts - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Derivative | |||
Amount of (Loss) or Gain Recognized in OCI on Derivatives | $ (4.4) | $ 8.7 | $ (0.3) |
Interest Expense | |||
Derivative | |||
Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) | $ 0.9 | $ 1.2 | $ 1.3 |
FINANCIAL DERIVATIVES AND HED_6
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Derivatives at Fair Value (Details) - Net Investment Hedging - Derivatives Designated as Net Investment Hedges - Cross currency swap contracts - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Prepaid expenses and other current assets | ||
Derivative | ||
Derivative assets fair value, gross | $ 0.7 | $ 1.2 |
Other assets | ||
Derivative | ||
Derivative assets fair value, gross | 0 | 6.3 |
Other long-term liabilities | ||
Derivative | ||
Derivative liabilities fair value, gross | $ 4.9 | $ 0 |
FINANCIAL DERIVATIVES AND HED_7
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Balance Sheet Hedges (Details) - Short - Foreign Exchange Contract $ in Millions | Sep. 29, 2023 USD ($) |
Derivative | |
Notional Value | $ 34.7 |
Australian Dollar | |
Derivative | |
Notional Value | 3.9 |
Chinese Renminbi | |
Derivative | |
Notional Value | 8.6 |
Euro | |
Derivative | |
Notional Value | 15.9 |
Indian Rupee | |
Derivative | |
Notional Value | $ 6.3 |
BORROWINGS - Schedule of Short-
BORROWINGS - Schedule of Short-Term and Long-Term Debt (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 29, 2023 | Sep. 30, 2022 | |
Current maturities of long-term debt | ||
Current maturities of long-term debt | $ 1.5 | $ 2.1 |
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | 446.5 | 447.6 |
Net proceeds(repayments) from long-term debt, excluding current maturities | (1.1) | |
Unamortized issuance costs and debt discounts | ||
Total | (5.4) | (35.3) |
Total | 29.9 | |
Total debt outstanding, net | 442.6 | 414.4 |
Net proceeds from (repayments for) debt, net of issuance costs | 28.2 | |
Equity component of Convertible Senior Unsecured Notes Change | 49.7 | |
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 (as a percent) | 4.80% | 10.90% |
Proceeds from convertible debt | $ 0 | |
Unamortized issuance costs and debt discounts | ||
Debt issuance costs | 0 | $ (28.7) |
Unamortized issuance costs - Convertible Notes | (2.5) | (3.1) |
Non-cash operating lease expense | 28.7 | |
Decrease in unamortized discount | 0.6 | |
Equity component of Convertible Senior Unsecured Notes | 0 | 49.7 |
Other Debt | ||
Current maturities of long-term debt | ||
Current maturities of long-term debt | 1.5 | 2.1 |
Proceeds from repayment of other debt | (0.6) | |
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | 3.5 | 4.6 |
Repayment of other long-term debt | (1.1) | |
Senior Secured Notes | Secured Debt | ||
Non-current maturities of long-term debt: | ||
Long-term debt excluding current maturities, gross | $ 243 | $ 243 |
Weighted-average interest rate, long-term debt (as a percent) | 8.20% | 8.20% |
Repayments for senior secured notes | $ 0 | |
Secured Debt | ||
Unamortized issuance costs and debt discounts | ||
Debt issuance costs | (2.9) | $ (3.5) |
Non-cash operating lease expense | $ 0.6 |
BORROWINGS - Schedule of Debt M
BORROWINGS - Schedule of Debt Maturities (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Debt Disclosure [Abstract] | ||
2024 | $ 1.5 | |
2025 | 201.5 | |
2026 | 1.3 | |
2027 | 243.7 | |
2028 | 0 | |
Thereafter | 0 | |
Total debt outstanding | 448 | |
Less: current maturities of long-term debt | (1.5) | $ (2.1) |
Non-current portion of long-term debt | $ 446.5 | $ 447.6 |
BORROWINGS - Interest Expense (
BORROWINGS - Interest Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Debt Disclosure [Abstract] | |||
Contractual interest coupon and other | $ 26.7 | $ 27.6 | $ 30.7 |
Amortization/extinguishment of debt issuance costs | 2.6 | 3.4 | 3.5 |
Amortization of debt discounts | 0 | 8.8 | 7.9 |
Total interest expense | $ 29.3 | $ 39.8 | $ 42.1 |
BORROWINGS - Convertible Senior
BORROWINGS - Convertible Senior Unsecured Notes Narrative (Details) - Convertible Debt $ / shares in Units, shares in Millions | 12 Months Ended | ||
Jun. 09, 2020 USD ($) shares $ / shares | Jun. 05, 2020 shares $ / shares | Sep. 29, 2023 USD ($) shares | |
Line of Credit Facility | |||
Proceeds from convertible debt | $ 0 | ||
Convertible Notes | |||
Line of Credit Facility | |||
Debt instrument, face amount | $ 200,000,000 | ||
Interest rate, stated percentage | 4% | ||
Proceeds from convertible debt | $ 193,100,000 | ||
Conversion ratio | 0.048084 | ||
Convertible, conversion price (USD per share) | $ / shares | $ 20.81 | $ 20.81 | |
Number of warrants (in shares) | shares | 9.6 | 9.6 | |
Convertible Notes | Maximum | |||
Line of Credit Facility | |||
Number of warrants (in shares) | shares | 9.6 |
BORROWINGS - Call Spread Narrat
BORROWINGS - Call Spread Narrative (Details) shares in Millions | 12 Months Ended | ||
Jun. 05, 2020 shares $ / shares | Sep. 29, 2023 shares | Jun. 09, 2020 $ / shares | |
Debt Instrument | |||
Exercise price of warrants or rights (USD per share) | $ 24.975 | ||
Increase of strike price over sale price percentage | 50% | ||
Convertible Notes | Convertible Debt | |||
Debt Instrument | |||
Convertible, conversion price (USD per share) | $ 20.81 | $ 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. 29, 2023 | Sep. 30, 2022 | Sep. 30, 2020 |
Debt Instrument | |||||
Long-term debt excluding current maturities, gross | $ 446,500,000 | $ 447,600,000 | |||
Senior Secured Notes | Secured Debt | |||||
Debt Instrument | |||||
Debt instrument, face amount | $ 300,000,000 | ||||
Interest rate, stated percentage | 7.875% | ||||
Debt redeemed | $ 27,000,000 | $ 30,000,000 | |||
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 | $ 28,700,000 | $ 31,500,000 | |||
Long-term debt excluding current maturities, gross | $ 243,000,000 | $ 243,000,000 |
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. 29, 2023 USD ($) | Mar. 09, 2022 | Mar. 08, 2022 | Sep. 30, 2020 USD ($) | |
Debt Instrument | |||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | |||
Available borrowing capacity | $ 88,700,000 | ||||
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 | |||||
Basis spread on variable rate | 0.75% | ||||
Minimum | |||||
Debt Instrument | |||||
Line of credit facility, commitment fee percentage | 0.25% | 0.375% | |||
Interest rate, stated percentage | 0% | 0% | 0.50% | ||
Maximum | |||||
Debt Instrument | |||||
Line of credit facility, commitment fee percentage | 0.50% |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - Quoted Prices in Active Markets (Level 1) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Convertible Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term debt, fair value | $ 228.4 | $ 250.2 |
Secured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term debt, fair value | $ 243.6 | $ 241.3 |
FAIR VALUE - Schedule of Fair V
FAIR VALUE - Schedule of Fair Value Inputs (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
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 | $ 45.4 | $ 36.6 |
Commercial paper | 6 | 5.9 |
Corporate notes/bonds | 8.3 | 3.6 |
Government agencies | 6.6 | 0.3 |
US Treasury bills | 28.6 | 10.2 |
Derivative assets | 0.7 | 7.5 |
Deferred compensation plan | 6.3 | 5.4 |
Marketable equity securities | 4.1 | 2.5 |
Total assets measured at fair value | 106 | 72 |
Liabilities: | ||
Derivative liabilities | 4.9 | 0.3 |
Total liabilities measured at fair value | 4.9 | 0.3 |
Quoted Prices in Active Markets (Level 1) | Fair Value, Measurements, Recurring | ||
Assets | ||
Money market funds | 0 | 0 |
Commercial paper | 0 | 0 |
Corporate notes/bonds | 0 | 0 |
Government agencies | 0 | 0 |
US Treasury bills | 0 | 0 |
Derivative assets | 0 | 0 |
Deferred compensation plan | 6.3 | 5.4 |
Marketable equity securities | 4.1 | 2.5 |
Total assets measured at fair value | 10.4 | 7.9 |
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 | 45.4 | 36.6 |
Commercial paper | 6 | 5.9 |
Corporate notes/bonds | 8.3 | 3.6 |
Government agencies | 6.6 | 0.3 |
US Treasury bills | 28.6 | 10.2 |
Derivative assets | 0.7 | 7.5 |
Deferred compensation plan | 0 | 0 |
Marketable equity securities | 0 | 0 |
Total assets measured at fair value | 95.6 | 64.1 |
Liabilities: | ||
Derivative liabilities | 4.9 | 0.3 |
Total liabilities measured at fair value | 4.9 | 0.3 |
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | ||
Assets | ||
Money market funds | 0 | 0 |
Commercial paper | 0 | 0 |
Corporate notes/bonds | 0 | 0 |
Government agencies | 0 | 0 |
US Treasury bills | 0 | 0 |
Derivative assets | 0 | 0 |
Deferred compensation plan | 0 | 0 |
Marketable equity securities | 0 | 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 ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Total marketable debt securities | $ 49.5 | $ 20.1 |
Unrealized Losses | 0 | (0.1) |
Total marketable debt securities | 49.5 | 20 |
Commercial paper | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Total marketable debt securities | 6 | 5.9 |
Unrealized Losses | 0 | 0 |
Total marketable debt securities | 6 | 5.9 |
Corporate notes/bonds | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Total marketable debt securities | 8.3 | 3.7 |
Unrealized Losses | 0 | (0.1) |
Total marketable debt securities | 8.3 | 3.6 |
US Treasury bills | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Total marketable debt securities | 28.6 | 10.2 |
Unrealized Losses | 0 | 0 |
Total marketable debt securities | 28.6 | 10.2 |
Government agencies | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Total marketable debt securities | 6.6 | 0.3 |
Unrealized Losses | 0 | 0 |
Total marketable debt securities | $ 6.6 | $ 0.3 |
FAIR VALUE - Schedule of Contra
FAIR VALUE - Schedule of Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Amortized Costs | ||
Due within one year | $ 49.5 | |
Due after one year through five years | 0 | |
Total marketable debt securities | 49.5 | $ 20.1 |
Fair Value | ||
Due within one year | 49.5 | |
Due after one year through five years | 0 | |
Total marketable debt securities | $ 49.5 | $ 20 |
FAIR VALUE - Schedule of Balanc
FAIR VALUE - Schedule of Balance Sheet Marketable Securities (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | $ 49.5 | $ 20 |
Cash and cash equivalents | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 8.2 | 3.3 |
Prepaid expenses and other current assets | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 41.3 | 14.5 |
Other assets | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 2.2 | |
Commercial paper | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 6 | 5.9 |
Commercial paper | Cash and cash equivalents | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 6 | 0 |
Commercial paper | Prepaid expenses and other current assets | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 0 | 5.9 |
Commercial paper | Other assets | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 0 | |
Corporate notes/bonds | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 8.3 | 3.6 |
Corporate notes/bonds | Cash and cash equivalents | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 0 | 0 |
Corporate notes/bonds | Prepaid expenses and other current assets | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 8.3 | 1.9 |
Corporate notes/bonds | Other assets | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 1.7 | |
Government agencies | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 6.6 | 0.3 |
Government agencies | Cash and cash equivalents | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 0 | 0 |
Government agencies | Prepaid expenses and other current assets | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 6.6 | 0.3 |
Government agencies | Other assets | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 0 | |
US Treasury bills | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 28.6 | 10.2 |
US Treasury bills | Cash and cash equivalents | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | 2.2 | 3.3 |
US Treasury bills | Prepaid expenses and other current assets | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Total marketable debt securities | $ 26.4 | 6.4 |
US Treasury bills | Other assets | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
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. 29, 2023 USD ($) | |
Goodwill | |
Balance at September 30, 2022 | $ 284.5 |
Business combination | 0.5 |
Foreign currency translation adjustments | 3.5 |
Balance at September 29, 2023 | 288.5 |
Medical | |
Goodwill | |
Balance at September 30, 2022 | 169.4 |
Business combination | 0 |
Foreign currency translation adjustments | 2.1 |
Balance at September 29, 2023 | 171.5 |
Industrial | |
Goodwill | |
Balance at September 30, 2022 | 115.1 |
Business combination | 0.5 |
Foreign currency translation adjustments | 1.4 |
Balance at September 29, 2023 | $ 117 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 135.1 | $ 131.9 |
Accumulated Amortization | (112.7) | (98.3) |
Net Carrying Amount | 22.4 | 33.6 |
Acquired existing technology | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 72.3 | 70 |
Accumulated Amortization | (57.8) | (49.9) |
Net Carrying Amount | 14.5 | 20.1 |
Patents, licenses and other | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 12.5 | 12.3 |
Accumulated Amortization | (12.2) | (11.6) |
Net Carrying Amount | 0.3 | 0.7 |
Customer contracts and supplier relationship | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 50.3 | 49.6 |
Accumulated Amortization | (42.7) | (36.8) |
Net Carrying Amount | $ 7.6 | $ 12.8 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 13.7 | $ 14.6 | $ 16.8 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Amortization Schedule (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 |
Fiscal years: | ||
2024 | $ 9.1 | |
2025 | 3.1 | |
2026 | 3 | |
2027 | 2.8 | |
2028 | 2.7 | |
Thereafter | 1.7 | |
Net Carrying Amount | $ 22.4 | $ 33.6 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 29, 2023 | Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Environmental liability, current and noncurrent | $ 2.8 | $ 1.1 |
Environmental Loss Contingency Statement Of Financial Position Extensible Enumeration Not Disclosed Flag | Consolidated Financial Statements | |
Milestone payment amount potentially to be paid | 5 | |
Milestone payment made | $ 2 | $ 1 |
Purchase obligation | $ 7.3 |
NONCONTROLLING INTERESTS - Narr
NONCONTROLLING INTERESTS - Narrative (Details) - € / shares shares in Millions | 1 Months Ended | ||||||
Sep. 28, 2018 | Sep. 29, 2017 | Oct. 31, 2015 | Sep. 29, 2023 | Dec. 31, 2018 | 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% | ||||||
MeVis Medical Solutions AG (MeVis) | |||||||
Noncontrolling Interest [Line Items] | |||||||
Percentage of additional outstanding shares purchased | 0.20% | 0.20% | |||||
Cumulative percentage of voting interests acquired | 73.70% | ||||||
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 euro 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 - Sche
NONCONTROLLING INTERESTS - Schedule of Noncontrolling Interest (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Stockholders' Equity Attributable to Noncontrolling Interest | |||
Balance at beginning of period | $ 13.3 | $ 13.2 | |
Net income attributable to noncontrolling interests | 0.5 | 0.5 | $ 0.5 |
Other, including foreign currency remeasurement | (0.5) | (0.4) | |
Balance at end of period | $ 13.3 | $ 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. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Expected dividend | 0% | |||
Options, grants in period, grant date fair value | $ 4 | $ 3.9 | $ 3.7 | |
Options exercised, intrinsic value | 0.1 | 0.5 | 0 | |
Grant-date fair value of shares granted in the period | 11.3 | 10.8 | 8.9 | |
Shares outstanding, market value | $ 24 | $ 22.1 | $ 30.9 | |
Employee Stock Purchase Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Expected dividend | 0% | 0% | 0% | |
Employee Stock Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Compensation cost not yet recognized | $ 23.1 | |||
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 | ||||
Award vesting period (in months) | 36 months | |||
Award expiration period (in years) | 7 years | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
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 | ||||
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 | ||||
Number of shares available for grant (in shares) | 0.6 | |||
2020 Omnibus Stock Plan | Employee Stock Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Number of shares available for grant (in shares) | 2.2 |
EMPLOYEE STOCK PLANS - Share-ba
EMPLOYEE STOCK PLANS - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | |||
Allocated share-based compensation expense | $ 13.5 | $ 14 | $ 13.9 |
Cost of revenues | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | |||
Allocated share-based compensation expense | 1.7 | 1.6 | 1.4 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | |||
Allocated share-based compensation expense | 3.3 | 3.1 | 3 |
Selling, general and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | |||
Allocated share-based compensation expense | $ 8.5 | $ 9.3 | $ 9.5 |
EMPLOYEE STOCK PLANS - Valuatio
EMPLOYEE STOCK PLANS - Valuation Assumptions (Details) - $ / shares | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expected dividend | 0% | ||
Employee Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expected term (in years) | 6 years 10 months 24 days | 7 years | 7 years |
Risk-free interest rate | 3.60% | 1.40% | 1% |
Expected volatility | 43.90% | 42.70% | 41.50% |
Expected dividend | 0% | 0% | 0% |
Weighted average fair value at grant date (in USD per share) | $ 9.75 | $ 12.07 | $ 9.37 |
Employee Stock Purchase Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expected term (in years) | 6 months | 4 months 24 days | 6 months |
Risk-free interest rate | 4.80% | 1.60% | 0.10% |
Expected volatility | 34.80% | 33.60% | 68.40% |
Expected dividend | 0% | 0% | 0% |
Weighted average fair value at grant date (in USD per share) | $ 4.96 | $ 5.41 | $ 5.90 |
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. 29, 2023 | Sep. 30, 2022 | |
Options | ||
Options, outstanding, beginning balance (in shares) | 2,902 | |
Options, grants in period (in shares) | 415 | |
Options, forfeitures and expirations in period (in shares) | (442) | |
Options exercised in period (in shares) | (13) | |
Options, outstanding, ending balance (in shares) | 2,862 | 2,902 |
Options, exercisable (in shares) | 2,080 | |
Weighted Average Exercise Price | ||
Options, outstanding, weighted average exercise price, beginning (in USD per share) | $ 28.97 | |
Options, grants in period, weighted average exercise price (in USD per share) | 22.31 | |
Options, forfeitures and expirations in period, weighted average exercise price (in USD per share) | 28.92 | |
Options, exercises in period, weighted average exercise price (in USD per share) | 13.61 | |
Options, outstanding, weighted average exercise price, ending (in USD per share) | 28.08 | $ 28.97 |
Options, exercisable, weighted average exercise price (in USD per share) | $ 29.44 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures | ||
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2 | 4 years 9 months 18 days | 4 years 6 months |
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2 | 4 years 9 months 18 days | 4 years 6 months |
Options, outstanding, intrinsic value | $ 871.4 | $ 1,361.4 |
Options, exercisable, intrinsic value | $ 642.6 | |
Options, exercisable, weighted average remaining contractual term (in years) | 3 years 4 months 24 days | |
Share price (in usd per share) | $ 18.79 | |
Minimum | ||
Price Range | ||
Options, outstanding, price, beginning (in USD per share) | 13.61 | |
Options, grants in period, price (in USD per share) | 22.13 | |
Options, forfeitures and expirations in period, price (in USD per share) | 22.13 | |
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) | 24.55 | |
Options, forfeitures and expirations in period, price (in USD per share) | 37.10 | |
Options, exercises in period, price (in USD per share) | 13.61 | |
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. 29, 2023 $ / shares shares | |
Number of Shares | |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, nonvested, beginning balance (in shares) | shares | 1,045 |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, grants in period (in shares) | shares | 566 |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, vested in period (in shares) | shares | (255) |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, canceled, expired or forfeited in period (in shares) | shares | (79) |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, nonvested, ending balance (in shares) | shares | 1,277 |
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 | $ 24.35 |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, grants in period, weighted average grant date fair value (in USD per share) | $ / shares | 20 |
Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units, vested in period, weighted average grant date fair value (in USD per share) | $ / shares | 24.71 |
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 | 23.75 |
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 | $ 22.30 |
TAXES ON INCOME- Summary of Tax
TAXES ON INCOME- Summary of Taxes by Jurisdiction and Classification (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Current income tax expense | |||
Federal | $ 9.8 | $ 3.7 | $ 5.4 |
State and local | 0.3 | 0.2 | 1.4 |
Foreign | 12.6 | 10.3 | 6.8 |
Total current | 22.7 | 14.2 | 13.6 |
Deferred income tax (benefit) expense: | |||
Federal | (38) | 0.4 | 1.8 |
State and local | (0.2) | (0.9) | (1.3) |
Foreign | (1.9) | 0 | (3.4) |
Total deferred | (40.1) | (0.5) | (2.9) |
Income tax (benefit) expense | (17.4) | 13.7 | 10.7 |
United States | (6.2) | 16.4 | (4.1) |
Foreign | 37.5 | 28.1 | 32.7 |
Income before taxes | $ 31.3 | $ 44.5 | $ 28.6 |
TAXES ON INCOME - Income Tax Ra
TAXES ON INCOME - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21% | 21% | 21% |
State and local taxes, net of federal tax benefit | 0.30% | (1.40%) | 0.30% |
Statutory rate change impact on prior year deferreds | 0% | 1.10% | 0% |
Return to provision | (4.70%) | (2.10%) | 4.20% |
Research and development credit | (8.40%) | (0.90%) | (4.20%) |
Prior year research and development credit | 0% | 0% | (0.30%) |
Foreign rate difference | 6.30% | 6.50% | 1.70% |
Foreign research innovation box | 0% | 0% | (3.80%) |
Change in valuation allowance | (65.70%) | 6.30% | 8.40% |
U.S. tax reform - international provisions | (9.20%) | (4.60%) | (0.70%) |
U.S. net operating loss carryback | 0% | 0% | 5.20% |
Other | 4.80% | 4.90% | 5.60% |
Effective tax rate | (55.60%) | 30.80% | 37.40% |
TAXES ON INCOME - Deferred Tax
TAXES ON INCOME - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | Oct. 02, 2020 |
Deferred tax assets: | ||||
Inventory adjustments | $ 5.9 | $ 6.4 | ||
Share-based compensation | 6.7 | 6.3 | ||
Product warranty | 1.5 | 1.4 | ||
Unrealized exchange gain | 2.5 | 2.6 | ||
Deferred compensation | 1.4 | 1.3 | ||
Net operating loss carryforwards | 19.4 | 19.7 | ||
Accrued vacation | 0.3 | 0.9 | ||
Accrued incentives | 2 | 2.8 | ||
Credit carryforwards | 2.7 | 2.5 | ||
Deferred financing fees | 5.7 | 2.4 | ||
Interest expense limitation | 0 | 3.9 | ||
Capitalized interest | 1.1 | 0.9 | ||
Lease liabilities | 6.1 | 5.4 | ||
Investments in privately held companies | 3.2 | 0 | ||
Research and experimentation capitalization | 17.6 | 0 | ||
Other | 4.1 | 2.5 | ||
Deferred tax assets, gross | 80.2 | 59 | ||
Valuation allowance | (18.7) | (32.2) | $ (30.2) | $ (28.7) |
Total deferred tax assets | 61.5 | 26.8 | ||
Deferred tax liabilities: | ||||
Acquired intangibles | (5.3) | (7.9) | ||
Property, plant and equipment | (8) | (8.8) | ||
Investments in privately held companies | 0 | (1.4) | ||
Operating lease assets | (6) | (5.6) | ||
Other | (0.9) | (1.3) | ||
Total deferred tax liabilities | (20.2) | (25) | ||
Net deferred tax assets | $ 41.3 | $ 1.8 |
TAXES ON INCOME - Narrative (De
TAXES ON INCOME - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Operating Loss Carryforwards [Line Items] | |||
Deferred tax liabilities of undistributed foreign earnings | $ 0.1 | ||
Net operating loss carryforwards | 19.4 | $ 19.7 | |
Operating loss carryforwards, valuation allowance (decrease) increase | (13.5) | 2 | |
Unrecognized tax benefits | 1.4 | 1.2 | $ 1.1 |
Income tax penalties and interest expense | 0.2 | $ 0.2 | $ 0.2 |
Foreign Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 19.3 | ||
Operating loss carryforwards, that expire | 0.8 | ||
Operating loss carryforwards, that do not expire | $ 18.5 |
TAXES ON INCOME - Valuation All
TAXES ON INCOME - Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Deferred Tax Assets Valuation Allowance | |||
Valuation allowance balance–beginning of fiscal year | $ 32.2 | $ 30.2 | $ 28.7 |
Other increases | 0 | 6.9 | 5.4 |
Other decreases | (13.5) | (4.9) | (3.9) |
Valuation allowance balance—end of fiscal year | $ 18.7 | $ 32.2 | $ 30.2 |
TAXES ON INCOME - Income Tax Co
TAXES ON INCOME - Income Tax Contingency (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 29, 2023 | Sep. 30, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | ||
Unrecognized tax benefits balance–beginning of fiscal year | $ 1.2 | $ 1.1 |
Additions based on tax positions related to a prior year | 0 | 0.1 |
Additions based on tax positions related to the current year | 0.2 | 0 |
Unrecognized tax benefits balance—end of fiscal year | $ 1.4 | $ 1.2 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 12 Months Ended |
Sep. 29, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Income St
SEGMENT INFORMATION - Income Statement Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Segment Reporting Information | |||
Revenues, net | $ 893.4 | $ 859.4 | $ 818.1 |
Gross profit | 290.3 | 283.5 | 271.5 |
Total operating expenses | 213.2 | 195.3 | 197.4 |
Interest and other expense, net | (45.8) | (43.7) | (45.5) |
Income before taxes | 31.3 | 44.5 | 28.6 |
Income tax (benefit) expense | (17.4) | 13.7 | 10.7 |
Net income | 48.7 | 30.8 | 17.9 |
Less: Net income attributable to noncontrolling interests | 0.5 | 0.5 | 0.5 |
Net income attributable to Varex | 48.2 | 30.3 | 17.4 |
Medical | |||
Segment Reporting Information | |||
Revenues, net | 673.3 | 674.7 | 643.8 |
Gross profit | 205.5 | 210.5 | 203.2 |
Industrial | |||
Segment Reporting Information | |||
Revenues, net | 220.1 | 184.7 | 174.3 |
Gross profit | $ 84.8 | $ 73 | $ 68.3 |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Revenues from External Customers and Long-Lived Assets | |||
Revenues, net | $ 893.4 | $ 859.4 | $ 818.1 |
Property, plant and equipment, net | 143.6 | 141.3 | |
Americas | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenues, net | 281.8 | 273.3 | 268.5 |
Property, plant and equipment, net | 101.8 | 99.8 | |
United States | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenues, net | 275.1 | 263.7 | 262.3 |
EMEA | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenues, net | 290.7 | 280.8 | 276.3 |
Property, plant and equipment, net | 22.8 | 23.2 | |
APAC | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenues, net | 320.9 | 305.3 | $ 273.3 |
Property, plant and equipment, net | $ 19 | $ 18.3 |
EMPLOYEE BENEFIT PLANS - (Detai
EMPLOYEE BENEFIT PLANS - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Retirement Benefits [Abstract] | |||
Employer discretionary contribution amount | $ 4.9 | $ 4.4 | $ 2.8 |
Defined benefit pension plan liability | $ 5.2 | $ 3.3 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Oct. 01, 2021 | |
Changes In Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | $ 546.7 | $ 496.5 | $ 465.8 |
Other comprehensive (loss) income before reclassifications | (5.4) | 9.8 | |
Income tax impact | 0.2 | (0.8) | |
Foreign currency translation adjustments | (0.5) | (0.6) | (0.7) |
Balance at ending of period | 581 | 546.7 | 496.5 |
Accumulated Other Comprehensive Income (Loss) | |||
Changes In Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | 0.1 | 0 | |
Balance at ending of period | (1.2) | 0.1 | 0 |
(Loss) Income on Forward Contracts | |||
Changes In Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | (0.6) | 0 | |
Other comprehensive (loss) income before reclassifications | 0.1 | (0.8) | |
Income tax impact | 0 | 0.2 | |
Foreign currency translation adjustments | 0 | 0 | |
Balance at ending of period | (0.5) | (0.6) | 0 |
Unrealized (Loss) Gain on Defined Benefit Obligations | |||
Changes In Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | 0.6 | (0.8) | |
Other comprehensive (loss) income before reclassifications | (1.2) | 2 | |
Income tax impact | 0.2 | (0.6) | |
Foreign currency translation adjustments | 0 | 0 | |
Balance at ending of period | (0.4) | 0.6 | (0.8) |
CTA, Including Impact of Net Investment Hedge | |||
Changes In Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | 0.2 | 0.8 | |
Other comprehensive (loss) income before reclassifications | (4.4) | 8.7 | |
Income tax impact | 0 | (0.4) | |
Foreign currency translation adjustments | 3.9 | (8.9) | |
Balance at ending of period | (0.3) | 0.2 | 0.8 |
Unrealized (Loss) Income on Available-For-Sale Securities | |||
Changes In Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | (0.1) | 0 | |
Other comprehensive (loss) income before reclassifications | 0.1 | (0.1) | |
Income tax impact | 0 | 0 | |
Foreign currency translation adjustments | 0 | 0 | |
Balance at ending of period | $ 0 | $ (0.1) | $ 0 |