VREX - Earnings call 1 2024 | Varex Imaging Corporation

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Operator

Greetings, and welcome to the Varex Q1 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Christopher Belfiore, Director of Investor Relations. Thank you, Chris.

You may begin.

Christopher Belfiore

to quarter Corporation's of welcome for conference and first the fiscal afternoon, Varex earnings Imaging call Good year XXXX. are our today and me Sunny President our With and Sam Maheshwari, CFO. Sanyal, CEO; webcast Please note supplemental presentation at can that this website call accessed Varex includes slide at of be vareximaging.com. that a conference live the XXXX. our quarter and stated, year all otherwise supplemental be are The of unless the presentation webcast quarter archived on to the discussion, will slide Varex's for first website.To simplify references fiscal

the from addition, quarterly fiscal from of XXXX of In stated, prior the first is to we quarter quarters We year year-over-year the results sequentially. in otherwise that are made we to This have unless Factors filings, Form date, including largely our to this information comparisons our in first and change SEC XXXX. impacts believe, The speaks is quarter differ this no XA, of year anticipated fiscal COVID compared forward-looking concerning where COVID stated.Please cause or that year, in accordance fiscal will non-GAAP measures. the to a XX-Q forward-looking are earnings to is are measure us.Finally, the Risk on from of compared the contained non-GAAP year Form update now and of about comparable and the factors results better a to they to each obligation could with, as statements in will predictions our all references the directly XX-K. cause are financial given GAAP release forward, since be measures. revise representation which behind we substitute statements or of going presented call, be future statements, a on otherwise will year are certain that on our report making to risks release, this which are projections could not earnings nor calendar financial turn during in are with discussion materially this non-GAAP website.I our of actual reconciliation current that to for measures call, to These financial actual not annual business Risks anticipated. subject Sunny. results results discuss will in we expectations differ posted on that uncertainties events. today's to based the our a call assume filings financial unless GAAP quarterly relating be and and are and materially today's most information quarterly These our SEC.Additional measure discussion.On those our our provided reports described over assumptions We press Item are those advised

Sunny Sanyal

of quarter Chris. earnings first Revenue XXXX Lower our first Good volumes segments expectations. afternoon, and thank profitability. fiscal you for our call. Thanks, million for the in mix quarter was Medical of and in impacted in us both everyone, Industrial joining and $XXX with unfavorable line

the by into up the million $XX EBITDA compared some give last Revenue in XX%, was share first down with points the quarter $X.XX.Revenue year-over-year. the marketable and sales equivalents Medical $X.XX.We EPS balance year.Adjusted you million on sheet, which decreased XXX was while margin gross to was below and X-quarter to result, modalities compared will securities were quarter of and a XXXX.Let quarter cash, in softer the gross respective cash trend. a the the margin in $XXX trend. weaker Industrial CT in earnings trends. below below refer million usual XX%, first their in to expectations tubes were first modalities contributed in In these $XX mix global the As was quarter down the modality increased was and in year-over-year, sales in quarter, XX% above for quarter slightly basis sales in but segment and first volumes solid non-GAAP and segment of The unfavorable our quarter the the fiscal and first were worth we XX% segment, in the were the ended below quarter me revenue below trend.Global per seasonally year-over-year.Non-GAAP X% non-GAAP same of remained its approximately was Medical.Dental quarter detailed quarter, trend of insights non-GAAP sales average, while compared lower the to than in sales sales in the its to sales be with below our quarter Mammography its as continued Medical solid, revenues sales the quarter. Fluoroscopy industrial the was which oncology improved sales trend. our radiographic sales the its the but to products quarter trend was X

general matters with were the RSNA nearly the our last our portfolio, attended lower-than-expected prospects, systems. margin us. where We in business we're We product we cargo, softness markets, and prototype several The at quarter.At customers including of and dominated was years end continue displayed November, strong meetings our to cargo experiencing with see entire for all productive -- X-ray counting Industrial imaging-focused show, professionals and particularly development supply to in [ gross products discussed development, event North across new XXX this including our We contributed momentum world's mammography, had and automotive in the revenue Industrial business. agenda, CT, which it attended Outside for on lower chain-related electronics. over module event new our inspection interventional semiconductor, photon in in Radiological ].Unlike Society radiology largest and the of our detector by the discussions customers focused end and couple and the imaging diagnostic of surgery, of very is America of companies a globally.

has to our incorporate interest to global technology happy the to others and OEMs We photon a I'm also their into technologies with and expressed discussions. CT scanners. counting counting with front at and new of next in our generation applications.Photon of benefit would are our be say AZURE detectors many met their photon that novel software from with several OEM major center that counting ongoing. Discussions our continued

prospects that, With the behind and imaging has call excited products we supply customers' and Sam. have photon discussions the be over introductions for to bringing position the support so them.In to like focus me continue new counting, systems acute our in to our problems CT market.With customers summary, about hand them, to product new with our our to chain unique innovative let returned

Shubham Maheshwari

hello, Thanks, Sunny, and everyone.

us. first As the quarter a is a reminder, seasonally for low quarter generally

midpoint guidance we midpoint.During and than Medical guidance, seasonally Industrial and product experienced mix was the the lower revenues of in EPS segments, at gross below unfavorable margin the while low quarter, was guided range Our with were non-GAAP both along volumes. the

revenues XX%. were revenues quarter EMEA revenues our at Non-GAAP compared quarter margin was were of was Further, XXXX. million. fiscal the revenues Industrial to non-GAAP $XXX operating were first and revenues quarter XX% result, APAC Medical $X.XX. XX%, Medical while increased decreased revenues total cash 'XX, X% first flows Americas compared quarter.Looking of the for XX% $XXX million. were decreased a quarter.First EPS the gross and $XX and of to for X% revenues $XX revenues As were decreased region. the were million Industrial and X% fiscal by million

overall into China As sales first declined system. the for in basis. revenues government's period compared XX% APAC now our China to GAAP result last in quarter, anticorruption approximately a of the to me business quarter, in even accounted campaign health decline the China the on its in highlighted was the due primarily cover of same XX% last year.Let care though our results lower sales

margin compared points or $X Operating on expense lower first Generally, $X.X shares.Moving down million. quarter income $XX year. based compared of to in revenue of of fiscal First net were per to spending 'XX. quarter flat quarter million, GAAP XX% million the of the of down pre-tax SG&A to line Gross year. of million compared fiscal compared $X basis of $X gross quarter 'XX.Tax income on share fully million the and first to our 'XX. the year-over-year. expenses to was income the XXX loss was XXX R&D the first approximately to 'XX, quarter were operating compared Operating quarter was was Overall, was target for XXXX. last quarter of first the of XX%, quarter. $XX $X million, $X.XX compared of prior R&D million results revenues. XX% were of of to first about margin or a EPS was loss XX% XX% $XX of million margin X% up expectation. million, was diluted fiscal $X fiscal to and XX% with is million, to XX% $X $XX was annual $XX was in was was points Operating $X Overall, fiscal non-GAAP revenues. up revenues million, expenses expenses basis. million, XX an first or on basis revenues.Operating SG&A X% down the million overall was of compared XX% million in operating our same X% quarter

million.Adjusted well shares XX% We in finished the fiscal lower days payables of higher the cash moving quarter. million, goods to XX $X.XX debt $X for from outstanding increased Average of due days of X full prior in 'XX million cash of and flow result $XXX XX% as quarter inventory the million shown of $XX to Inventory at basis.Now compared flow balance of include result primarily were and was decreased first quarter ended 'XX, a of the to by Net outstanding the materials deposit the continue year million and first was cash, payable by $XX balance with for equivalents compared share, higher increased million or certificates.Gross of We $XX XX increased on subsequent million for the by fiscal marketable quarter. and marketable inventory on million and tax million Accounts XX% primarily the an or the equivalents was quarter $XX securities the marketable This expect earnings to million the $XXX cash net $XXX year of end sheet. Net Please was quarter XXXX. in ahead sales down the the a increased higher sales Days in turning increase diluted diluted and to securities and days. sheet, sales. cash was $XX of held quarter operations $XX as $X million days. information. increased million million and $XXX from million of non-GAAP QX receivable note XX expected year-end. up raw quarter $XX of to cash sequentially cash flat debt million days.Now collections. to the million to and securities that days were days quarters debt of of in of to to XXX sales year-over-year. $XXX Accounts per during rate $XXX $X.XX fiscal $X EBITDA

months EBITDA expected and leverage million second between the XX approximately Xx was are ratio $X.XX. and quarter to on Our non-GAAP and $XXX $XXX $X.XX fiscal Revenues trailing XX-month adjusted for debt earnings our million, expected basis.Now of million moving 'XX. per between diluted was on are outlook a trailing and $XXX net share

call we'll $XX expectations about count based about second million now XX%. rate XX non-GAAP of that, of in share your quarter and the of the to million shares.With non-GAAP the Our expenses for XX% gross are in million, operating open of the to Non-GAAP questions. on margin range XX% diluted for range $XX tax

Operator

Sidoti question Company. [Operator first Instructions] Sidoti the with line & Our from of James comes

James Sidoti

$XX Just quarter China, year this million the a ago. for revenue with right? Does million compared sound a to about quarter want like over little to about a sounds -- over it little $XX confirm, that was

Shubham Maheshwari

Yes.

yes, last So, like Larry, ], $XX slightly something this million, And were quarter, million. they $XX above [ $XX year they about million, were mid-XXs then that.

James Sidoti

decline was previous was less the in the it like than sounds It quarter.

you see things are to So off starting there? level

Shubham Maheshwari

to here campaign to it the because going So anticorruption soft there. due But as in anticorruption hearing kind situation you're million is reasons: $X that province we're But another. soft. there. from variation, see China quarter-to-quarter, well $X just some And the macroeconomic talking -- continues the to remain are X or Jim, moves to from as also, we overall, or million one of campaign China;

But continuing be to is variation around China So that. low. you're fluctuation or going see still some to some overall,

James Sidoti

you give some then, products nonorganic [ ] update I cannabis? about talked of sorry, how or infection on initiatives call, like quarter's similar for guess, it And Can an was, you organic I'm going? and products, some products. things last us that's

Sunny Sanyal

irradiation. applications forward. showing of we've -- product, customers for well, a on the first we Yes, product and Jim, so and it, is cannabis that launch did that's it's going one moving was our few The got and in of irradiation well.

James Sidoti

get you're that's I to think expecting the look guidance, in -- to in be second at down if the largely Do assume and you So, due by situation the revenue China. I time that year? quarter, again to the trends you you start second growth do the line half to second back those get top the the think to of you of the reverse year, revenue half and in

Shubham Maheshwari

Jim. Yes,

well in As prepared we in now. expecting rebound China half we remarks, pickup the of are somewhat segment rebound half. is dependent as Industrial a coming a gated second The it's mentioned in back as or second in upon right

related of in applications softness our non-cargo We Industrial, in and Industrial electronics sold segment. in where a domains is are automotive seeing product particularly semiconductors, the

that drive pick at them in of both rebound this and should us. for time, expecting are we to So half second up

that expecting we are at what So this point. is

James Sidoti

product side, to a and customers to about take long real talked talk the starting product for on are you revenue that. And does Medical turn about Varex? How new that real launches into

Sunny Sanyal

going So bring the fairly a -- be lot Those to the a usually a scanners. conversations next a around market, in Those window. tend he's someone that's to cycle. -- X in has within products. are CT to [ got X-year short If successor scanner ] the CT of

are want the -- that markets having term next that after. next for Those that and next a conversations vein And modality the new. go years. or be newer platforms, of course, tend times -- cycle brand modality the lot longer X-plus of tier of the of nano photon in were tubes version So like in we're the longer and counting anything then, to the to they

-- Although photon time. been talking some about we've it is counting for

So it's getting closer.

Operator

of Petrone Our the with next Mizuho Anthony from Group. question comes line

Anthony Petrone

Maybe China. revert back to

questions there. couple a of Just

when it anything is the just could can completed? You Or there assume mentioned, be one, also economy. midyear? to anticorruption but hearing completed you're couple talk anticorruption, underlying be most as that it Is the OEM you And a Is partners headwind, something follow-ups. underlying the program by one. to about on new you're And that can region extend further it then into the just ground On hearing year? when the there? safe recently in I'll that's a of pressures, from economic that have

Sunny Sanyal

is X X after started to always Post-COVID their situations. a money are on. policy. add Anthony, -- spent Sam provinces. and Sunny. One is the have there could is general in provinces. the substantial -- it's get through is off -- is that the chime they the to backdrop. the of And audit's was just it'll monies going our along don't manage that half.Now, Sam sort government made now how that the And there. of still new is start understanding are the the What end on. -- monitor taper system. It's for public we're Chinese to that lot we this the there stop So parallel health of purchasing always slowness audits the the as it's to -- the attribute second I'll hospital necessarily let then the said, was way it and me There -- provinces on and however, sensing handled moving X a the in a audit due were of health direct towards in progress. That COVID by the expectation But the audit economic

general, sensing I'd up say, what we're the environment. So I of think, loosening in a slight, is

that's up should see half continue believe be China. we in able the expect to still why And things so that to pick to we second

Shubham Maheshwari

is or that that no deadlines or sharp from perceive hear no there, is Anthony, Yes. It our and are force. that, we there announcements generally as specific dates And you add I cutoff know announced. there sales are is can just

provide general, care So to its things need money and does the we be government and are just that to because various to can better services to in be there infrastructure citizens. open the But health thinking, spend and want will interpretations. on facilities improve we

positive along long-term care the there of the care taking is goodness with, system. system would there pressure of the we for the So health say,

positive for way, also that the long-term. in that's So

Anthony Petrone

the a slightly in a -- behind would time there checks on then the process And quick are balances the maybe there. background? just guess, on may before I deals Or assume to is longer be deal upfront because kind here like and continuously lead I on is in safe mechanics there helpful. closed, the maybe audit be this just major mean, certain coastal going the it whether of that's is new one what's cities? provinces or Just scenes the of going

Sunny Sanyal

that But buying, -- their visibility of completed, audits. to it very middle hospital we because hospitals you. accurately point we audits I answer in once hospital normal But mechanisms. have were at user the is, purchasing see Since don't stopped the of can't go the just end direct are way the some to the operating they for the back

the was would times us, whatever those times, what deal back come then that hospitals.And would that, be particular we so, lead times. lead for come And back the for traditional anticipate cycle normal to

as So factory we have forecasts start orders, to and might And as they that's may the or start I'm build OEMs X X-month vendors take get for indicators would have cycles. sorry, our taking orders, delivery -- then our they the for -- when to hospitals component. the start

gets anything it the in extended were. on, it just things think comes don't I So way on once turns back

signs start at trickling question it's to in. a time, of the early we're bit all And not of little happening. seeing the same So is, it's going that

Anthony Petrone

in, on hop an just on update side. detector CT me, for back one is last photon the counting And I'll

counting for out demand over where couple that conversions in how you're the we next in -- are of years? the on maybe what expect play photon of into you Just hearing and terms to cycle,

Sunny Sanyal

Yes.

in around technology to viable that of say us broad-based there's a photon sense picked up the the on safe stay, the for technology noise technology is the community the radiology has and to the them. So itself, exciting vendors like the here -- OEMs and that outside clinically making as counting it's

in seeing we their technologies.From be to incorporate market targeting products the need more type it's to CT the were are we that incorporate to -- are towards about end So of photon And broad-based. spectrum in need are medical a more our desire are more high here not in that to the are be market initial that be a the from introductions future OEMs products end, we ultra-high and would their believe the talk but to that geared counting perspective, available. the the CTs, things our the stay. general that perspective, beginning is And segment at broadly for it of would that tiers, of CTs in that but way and super

Operator

Our of the from next comes Suraj Kalia question Oppenheimer. line with

Shaymus Contorno

This is Shaymus for Suraj. on

terms Just provide And the of much those looking geographic the outside you of then, color what well, well? as you noted in equipment of kind I more as down EMEA flat. kind any as seeing specifically, what's and I there was in think mix, regions was capital could are of guess, happening China, you the pretty environment? Americas in to

Shubham Maheshwari

nursing has is profitability perception manpower generally we're our standpoint, structure, gotten better, cost up hospitals are are as and costs tied hospital labor better. a in and the U.S. and that our the picking -- so it So is they're environment from managing they to clinicians and better doing they're -- our what

improved. profitability there's So

availability well bodes diagnostic for generally for capital imaging. that So

are or, Japan. So -- in X our market. haven't Europe any U.S. we difference measurable feel that, Outside we are about regions. noticed Those positive of say, let's biggest we the

to to think still Europe U.S. be strong. -- continues I is Japan be is seen. So and

Shaymus Contorno

was health guess, spots soft about looking down to would the should little maybe where to think describe quarters? then the a we it, X at I how relative over And bit. X the segment next need you And Medical that be monitored? any

Shubham Maheshwari

seasonally in say QX, quarter. which at is Medical generally I So would you're looking softer a

CT, prepared somewhat to might a comparing little QX, softer. see you in seeing did bit down. and QX, in we trends remarks it's -- So we that oncology cetera, our are indicate et in when But you're was saw which that we

CT, growing years So in what been is now row. would for we've I X a say that continuously

well. So bit also and that doing impacted It's business China. little is a by a then just quarterly situation,

major come ], is the So to we are expect that. up.Other than really other that we there that, than takeaway China isn't anything which up Shaym CT seeing, here, as comes [

of about issues. how I we think choked the due environments to our chain been quarters, -- have last supply in couple manufacturing customers' talked environment,

they And stocked are so they had had up. down. -- in some of modalities They these

inventory to part bounce saw come CT starts as adjustments back. softness. also happen CT will -- hence So China back we of some and the And

Shaymus Contorno

and And us, one last from then I'll queue. one back hop in

potentially looking latest the had how be any debt, address you're going the Just if And I you'd guess, to it? what's structure convertible you for? thoughts that your on optimal choice,

Shubham Maheshwari

Yes. Sure.

So to all debt XXXX. we share want And debt. with we when we are of will the a currently approaches as decision, of next that is to make June maturing refinance just and convertible to be considering remind June, various sure which is the you. I

convertible bond update So an the on side. that's

running Secondly, Right the in based down or gross are that structure, we to at below. be I to carrying, we to is adjusted debt terms overall like we now, maintain EBITDA X.X and the X.X. overall around debt ratio that like would leverage bring would net see company overall of

refinancing our cash and and the an that we are are the we comfortable with purposes purposely company excess leverage excess some to the bring down. debt overall fairly of are that for also cash we gross So currently overall for situation.I say sheet the balance carrying would on deploy situation, in

Operator

from Our line Larry the comes Solow next with of CJS. question

Lawrence Solow

down would because say today And we down of they I only double-digits that side, it I just first right? I sales, guess, China I touched XX%. were like to and you close too, the only XX%. Medical because the on I know, alone, ex-China, XX%, or a in most you into thought Medical, Medical it ex-China on are more but be just think little it bit, looks guess, were -- question, like

I the was was the within well, to quarter, XX% bit is called down down trying in Industrial maybe Industrial a actually just out up sort was you've the below the it forward, some little more also of mix of figure to but but trying was What sequentially, -- to being be that know the kind like -- Medical I I'm looks out, margin that your of -- driver? of year-over-year. gross and this quarter out mix? going weakness kind to was know XX%. Industrial it that So as down figure was And supposed XX%

rebounding in that's revenue, Now QX was is thought of which kind looks but to like you're what in gross your you going line below be. with projections, margin original still

you maybe So a us that more makes on sense? color can little give that, if

Shubham Maheshwari

Yes, the I first, Larry. gross can start off margin with

we that QX, margin in business in did at the volume softness unexpected overall see industry gross So largely -- driven volume Overall, softness $XXX gross the in company. the by margin for segment. is in was quite Industrial low -- and for million full

is our Medical. Industrial in in there both So and factories under-absorption

gross overall seeing the drove would are mix unfavorable down. Industrial it in not to not then in also QX strong, also margins the segment volume. And is is the lower be. now, and like And mix that volume there's So in right as we where we Industrial

we and the the gross bringing remind So and are between second meâ€¦ which expecting mix half, right what then that's we Industrial now. or to And expect rebound on the down, in recover Industrial is the China margins and

Lawrence Solow

than it like of Medical, Industrial than Industrial the sounds mix Industrial -- a outside within More of it's more [indiscernible]...? an --

Shubham Maheshwari

yes, right. of the terms In --

Shubham Maheshwari

-- you first repeat question? the piece question first And other the part or of your could then the

Lawrence Solow

just -- I'll was My it, other guess. I kind and question rephrase of

at I think if full year you I'm think still this ex-China said, down at would that? the Medical to X% think Do mistaken, gave guidance, kind thought not last of of revenue year X% flat the had I of end -- the or and start you when the you to up. you be

Shubham Maheshwari

range to as -- down, of it of guide I end think the X% more meaning to would I range, around outlook X% lower X% X%. the higher to the would at be between or point, than when to to more comes that X% we say the to this end X% the closer point the at opposed this

was were performance not continues about, that for So China that over macroeconomic to bit a Medical area on we little us, Industrial products sure CT expecting a as some -- talked really I if -- X things because growth of commented strong still there. ex-China. segment. And but am situation there better is our the other be initially a from pretty China outside we we there and as well It's come China will the does big somewhat for is the beginning end will situation at expect anticorruption, unknown back overall China we depend determine just -- year And back. an to back the come of really, us. does upon, full come for Larry, timing factor Or of the Medical the us. QX QX, it towards of and a Medical that in way that

Lawrence Solow

you Again, actually last year. go year great don't I by had a And then know but segment, piece. on the Industrial you just

you're but -- next bit mixed sounds it that into a this up does segment that? think grow building does -- year. you'll for Do grow that you start half still Is to This Do little in comps, -- -- or last Or it sounds place you ] lapping much sequentially too. see your you even like the do sequentially. like still was expectations? this like can difficult you're million you quarter. down you did -- you And certainly, $XXX that you quarter, too, said, [ a I that obviously, year-over-year? now XX%, we think as year? somewhat think it Do overall get -- there, back Or good but sounds more

Shubham Maheshwari

things few on little going of there. bit Yes. A a

that, Larry. explain me Let

year. in very We comps last grew become the yes, are going well XXXX. Industrial, So XX% to we -- year-over-year grew

linear seeing we are yes, So $XXX year X say that's our you big upon growth Industrial. of why what in of or the still it clearly hardware very higher. had we cities. we gross is a million In ship tale out, shipping of there. lower.Our we strong linacs, accelerators is last are Industrial, industrial rightly these piece cargo call very the where the I pointed service hardware inspection the kind lot margin on these shipment or or or a much a we on did industrial, gross system is And we like in strong And When is area, In linacs. margin that this. systems

when softness Industrial, more we quite and between within right ex-cargo. our now, is we that. systems systems overall, look cargo, distribution So because service at a lot towards have bit the you are skewed a shipping of And

the the segment. brings that It's good eventuallyâ€¦ will for down generate margin overall So gross it because a thing

Lawrence Solow

[indiscernible].

Shubham Maheshwari

Yes, exactly.

the on Industrial happening side. that's So

of overall we rest again, for of XXXX. hopeful year-over-year we Industrial, in for of would not a growth inspection comes timing volume to provided good Industrial still are terms or able of it back. growth repeat In have we visibility The the in But levels cargo having the percentage business, Industrial, the when factor the obviously, be sales year.

need Industrial then see be it we it develops. overall than If year sooner non-cargo the sure. the business, for comes how later, back to On growth will year, a

we monitoring, that that something and where are So are. is that's we

Lawrence Solow

is right? right, [indiscernible]...? -- like like me, of cargo, the remind that that's -- security X/X, or X/X Is too, it plus then everything is that segment, the And the includes I ballpark else just like Am about And that's minus?

Shubham Maheshwari

is around inspection security Yes. that range. in So

we're shipping Sometimes go higher, quarters certain Larry, when -- right?... can it in quite

Lawrence Solow

a your And to could in one question. like Would you particular stages Just I and you if last And guess, I extent, of of technology maybe or answer some this, photon existing cannibalize the is question, the broader not know mentioned just customer technologies? technology? -- guess, today existing this in guys it I a adopted customer you -- OEM. we're early more don't adoption. being just the on sounds some

Shubham Maheshwari

go not XX% XX%. counting cargo to just to segment, this around is correct we I before of Larry, want question, related photon the that

Shubham Maheshwari

And counting And the with that -- Yes. counting, -- was But to Sunny photon I'll in what then on Sunny ask here. general general, for in about specifically CT. not talked comment photon

not we market is participating today. So that that are a

market, really no new So cannibalization. there us. business new is That's for development

Sunny Sanyal

high-speed with a applications. flat a type area the in someone counting a a photon of imaging, will use go or dynamic detector they particularly and Larry, And into or different Yes. need they a large everyone, flat of new counting in detectors. performance, panel type where go a whole type they'll different and of detector, imaging detectors general, panel Where photon needs

panel not or are this between So stage counting. flat detectors we photon we cannibalization expect at don't seeing and cannibalization

thing. So that's one

customers, existing products. new is be course, a then, new market. applications, space, new said, of as these And within addressable Sam So would the CT brand-new

Operator

line Our of Toomey with Michael comes the next from question Jefferies.

Michael Toomey

of the think from stabilizing, X China? revenue kind longer Toomey ask talking that's that Xuyang but pricing please. the questions could next in costs or X, you Michael covering answered, this just my When here or on you'd or of do side Can start have your to follow-up on been from anything a counting. photon Jefferies you years Li. Most contributing for we guys? in easing either Are And or for globally the term? highlight whether I

Sunny Sanyal

This is part the the catch second didn't question. I of Sunny.

answer let me the So first one.

Sunny Sanyal

I come me cost to think let question. [indiscernible[ back that. We'll this

counting. photon So

we -- the bit being cycles for -- to -- talked this these of about -- are are counting our CT. more in there is duration technology, Those of -- a photon applications longer -- to about a are typical and projects addition years new on types a -- X type X-year more quite That side. that's there's project. CT X-ish for So

our been for However, of about customers couple we've years. now working with a

low shipments.There photon our revenue detectors you'll A sold inspection imaging cycle. Industrial other applications and are into contemplated. but within within counting being be be are window, that prototypes modest. are and And X-year are also amounts a photon other those say. also to Industrial. to type about chunk we to to large will measurable will detectors growth counting of of being horizon contribution near when we for of expect the start Industrial to see the that at applications then and counting our applications, a high-speed, larger continuously, for modalities. contribute X-year food photon some in term. looking counting other now X happening detectors for are Those we're of are of our proportion of CT short Between any Those are in real-time counting volume, so in -- contributing there the Those and see volumes on we're So to going photon

Michael Toomey

on question, was -- pressure cost? if change reiterate just, that you're pricing and And the any just charging, to in on there's the anything changes any second price significant

Shubham Maheshwari

across-the-board largely on has perspective, rather would other freight been And we case new than this issues, and at time. raw picks months material that increases completed. we talked That what chain-driven are of the which -- type At in at we we need from But center embarking for that up planning, of price a begun on ago. not And us. or address XX, a campaign different it price point. I behind increases. they manageable this spot do. are a largely price-related time. the we where would price cost this But about at XX more basis, price are stabilized the at normalize inflation work to are this much round is this not campaign We situations point. here at upon increase any situation would time, supply is then front certain to increases say through and initiatives, we quite there looking And about of things have than they're

Operator

the call over Thank like at questions to remarks. further back closing you. Chris are time. I'd for this There to no turn

Christopher Belfiore

turn final some over Great. call for Thank you. I'll to the now comments. Sunny

Sunny Sanyal

and successes every technologies our hard I'm employees Thank to our forward with new product customers looking as they you, success incorporating support very We're work forward looking our closing, Chris. as launches. In to of year also to of all customer work this always, with proud globally the day. our their

interest to Varex. time and join the your taking us for continued for you in thank today So

Christopher Belfiore

conference slide of Thank be XX Relations. will call and and earnings at on the your and and replay you, Thank you, in presentation vareximaging.com/Investor supplemental can our available webcast Sunny, goodbye. today. February be you, be through found for conference our A The thank questions website. will participating and archived call all, quarterly

Operator

today's concludes teleconference. This

at You participation. you Thank may for disconnect your time. your this lines

Varex Imaging (VREX) 6 Feb 242024 Q1 Earnings call transcript