Varex Imaging Corp
For the period ended Jul 4, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 4, 2025 · Filed Aug 7, 2025
VREX$18.440.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-04-04; filed 2025-05-08.
0001681622-25-000063
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-07-04; filed 2025-08-07.
0001681622-25-000084
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 125 current paragraphs.
69 unchanged; 37 reworded; 18 added; 10 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
We continue to monitor potential changes in customer procurement decisions resulting from the current trade climate, along with other tariff-related actions, investigations and other activities that might negatively affect our costs or otherwise impact our business and results of operations. Furthermore, if international customers’ negative perceptions of the actions of the United States Administration influence their buying decisions, our business and results of operations could be negatively impacted.
Current report
Impairments
Current report
During the three months ended July 4, 2025, we recognized a goodwill impairment charge of $93.9 million, representing a partial impairment related to our Medical reporting unit. The impairment charges are a result of macroeconomic challenges, such as tariffs and the MOFCOM Investigations announcements, sustained declines in the Company's stock price and market capitalization, and a downward revision in the Company's longer-term forecast. For further details refer to Note 8, Goodwill and Intangible Assets, of the Notes to the Condensed Consolidated Financial Statements of this report.
Current report
Revenue by Region
Current report
Overall revenue during the three months ended July 4, 2025 decreased as compared to the three months ended June 28, 2024. During the three months ended July 4, 2025 compared to the three months ended June 28, 2024. Americas revenue increased by $0.8 million due to increased security inspection products sales of $7.0 million, partially offset by decreased sales of digital detectors of $4.7 million and software of $1.4 million. EMEA revenues decreased $1.3 million due to decreased security inspection products sales of $5.0 million, partially offset by increased sales of X-ray tubes of $1.8 million, digital detectors of $1.4 million and other products of $0.9 million. APAC revenues decreased $5.6 million primarily due to decreased X-ray tubes sales.
Current report
The increase in Industrial segment gross profit was also minimal during the three months ended July 4, 2025 compared to the three months ended June 28, 2024.
Current report
Selling, general, and administrative expenses for the third quarter of fiscal year 2025 decreased $2.7 million, primarily due to a decrease in environmental remediation costs of $1.8 million and a decrease in amortization of intangibles of $0.4 million.
Current report
Impairment of Goodwill
Current report
During the third quarter of fiscal year 2025, we recognized a goodwill impairment charge of $93.9 million, following a determination that the fair value of the Medical reporting unit was below its carrying value. See Note 8, Goodwill and Intangible Assets, of the Notes to the Condensed Consolidated Financial Statements of this report for further details.
Current report
Taxes on (Loss) income
Current report
Revenues, net
Current report
Revenue by Region
Current report
Overall revenue during the nine months ended July 4, 2025 increased as compared to the nine months ended June 28, 2024. During the nine months ended July 4, 2025 compared to the nine months ended June 28, 2024 Americas revenues increased $4.0 million due to increased security inspection products sales of $10.7 million and increased X-ray tubes sales of $3.4 million, partially offset by decreased sales of software of $5.8 million and digital detector sales of $4.5 million. EMEA revenues decreased $6.9 million due to decreased security inspection products sales of $10.6 million, X-ray tubes sales of $2.6 million, and software of $1.1 million, partially offset by increased digital detector sales of $5.3 million and other product sales of $2.0 million. APAC revenues increased $13.3 million due to increased X-ray tubes sales of $10.4 million and security inspection products sales of $3.2 million.
Current report
Research and development costs remained relatively unchanged at 10.9% of total revenue during the nine months ended July 4, 2025 compared to the nine months ended June 28, 2024.
Current report
Impairment of Goodwill
Current report
During the third quarter of fiscal year 2025, we recognized a goodwill impairment charge of $93.9 million, following a determination that the fair value of the Medical reporting unit was below its carrying value. See Note 8, Goodwill and Intangible Assets, of the Notes to the Condensed Consolidated Financial Statements of this report for further details.
Current report
Taxes on (Loss) income
Current report
•Non-cash increases of $102.6 million primarily due to the add backs related to the goodwill impairment charge of $93.9 million and $11.1 million in deferred tax assets due to the higher net income position during the nine months ended July 4, 2025.
Removed paragraphs (10)
Previous report
Beyond China, the United States Administration has announced tariffs against a number of other countries, which are currently paused until July 8, 2025, to allow for negotiations. At this time, it is unclear how these previously announced tariffs may be implemented and their potential impact to our business, results of operations and financial condition.
Previous report
Risk and Uncertainties
Previous report
As of April 4, 2025, the carrying values of goodwill for our Medical and Industrial reporting units were $172.6 million and $117.7 million, respectively. We perform our annual goodwill impairment test as of 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. Refer to Note 1, Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K, which was filed with the SEC on November 19, 2024, for further details concerning our annual goodwill impairment evaluation. During the three months ended April 4, 2025, macroeconomic challenges, such as tariffs and the MOFCOM Investigation announcements, and declines in the Company's stock price and market capitalization increased the risk that the fair value of our Medical and Industrial reporting units may fall below their carrying value in future periods. In our most recent quantitative impairment test, performed in the beginning of the fourth quarter of fiscal year 2024, the fair value of the Medical and Industrial reporting units each substantially exceeded their respective carrying value and neither of the reporting units was at risk of failing the goodwill impairment test. The Company performed a qualitative factor assessment as of April 4, 2025 and determined that it was not more likely than not that the fair value of its reporting units was less than its carrying amount. However, significant assumptions, including projected revenue growth and operating margins, are subject to uncertainty. A decline in forecasted cash flows or adverse changes in market conditions could reduce the fair value below the carrying value, resulting in a material goodwill impairment charge. We will continue to monitor for potential triggering events, such as further deterioration in economic conditions, the impact of tariffs and the MOFCOM Investigation, loss of key customers, or reduced orders from existing customers. Such events could lead to a goodwill impairment charge, which would adversely affect our reported earnings and financial position.
Previous report
Taxes on Income
Previous report
The Organization for Economic Cooperation and Development enacted model rules for a 15% global minimum tax framework ("Pillar Two") which became effective for us in fiscal year 2025. There remains uncertainty as to the final Pillar Two model rules. We are continuing to evaluate the Pillar Two rules and their potential impact on future periods, but we do not expect the rules to have a material impact on our effective tax rate.
Previous report
Revenues
Previous report
Research and development costs increased to 11.0% of total revenues primarily due to increased compensation and material costs.
Previous report
Selling, general, and administrative expenses for the six months ended April 4, 2025 decreased to 16.1% of total revenues primarily due to immaterial changes in intangible amortization and compensation costs.
Previous report
Taxes on Income
Previous report
•Non-cash increase of $0.2 million in deferred tax assets due to the higher net income position during the six months ended April 4, 2025 compared to non-cash decrease of $6.6 million in deferred tax assets due to lower net income during the six months ended March 29, 2024.
Reworded paragraphs (37)
Previous wording
This Quarterly Report contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, which provides a “safe harbor” for statements about future events, products, and future financial performance that are based on the beliefs of, estimates made by, and information currently available to the management of Varex. Actual results and the outcome or timing of certain events described in these forward-looking statements are subject to risk and uncertainties and may differ significantly from those described. Important factors that could cause our actual results and financial condition to differ significantly from those projections or expectations include, among other things, the following:
Current wording
This Quarterly Report contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, which provides a “safe harbor” for statements about future events, products, and future financial performance that are based on the beliefs of, estimates made by, and information currently available to the management of Varex. Actual results and the outcome or timing of certain events described in these forward-looking statements are subject to risks and uncertainties and may differ significantly from those described. Important factors that could cause our actual results and financial condition to differ significantly from those projections or expectations include, among other things, the following:
Previous wording
•global, regional, and country-specific economic instability, shifting political environments, changing tax treatment, import/export regulatory, tariff, and trade policy regimes, and other risks associated with international manufacturing, operations, and sales;
Current wording
•global, regional, and country-specific economic instability, shifting political environments, changing tax treatment, tariffs, trade wars, and other risks associated with international manufacturing, operations, and sales;
Previous wording
Statements concerning legislative, tariff, and trade policy reforms, responsive retaliatory actions by affected countries, government investigations, and the uncertainty resulting therefrom; geopolitical tensions; supply chain and logistics challenges; cost increases and expense management; changes in U.S. and worldwide economic conditions, such as the impact of inflation, and fluctuations in foreign currency exchange rates; industry or business segment outlook; customer acceptance of or transition to new products or technologies such as advanced X-ray tube and digital flat panel detector products; growth drivers; future orders, revenues, market share, backlog, earnings or other financial results; and any statements using the terms “believe,” “expect,” “anticipate,” “can,” “should,” “would,” “could,” “estimate,” “expand,” “drive”, “may,” “intend,” “potential,” and “possible” or similar statements are forward-looking statements that involve risks and uncertainties that could cause our actual results and the outcome and timing of certain events to differ materially from those projected or management’s current expectations.
Current wording
Statements concerning legislative, tariff, and trade wars and trade policy reforms, responsive retaliatory actions by affected countries, government investigations, and the uncertainty resulting therefrom; geopolitical tensions; supply chain and logistics challenges; cost increases and expense management; changes in U.S. and worldwide economic conditions, such as the impact of inflation, and fluctuations in foreign currency exchange rates; industry or business segment outlook; customer acceptance of or transition to new products or technologies such as advanced X-ray tube and digital flat panel detector products; growth drivers; future orders, revenues, market share, backlog, earnings or other financial results; and any statements using the terms “believe,” “expect,” “anticipate,” “can,” “should,” “would,” “could,” “estimate,” “expand,” “drive”, “may,” “intend,” “potential,” and “possible” or similar statements are forward-looking statements that involve risks and uncertainties that could cause our actual results and the outcome and timing of certain events to differ materially from those projected or management’s current expectations.
Previous wording
On February 1, 2025, the United States Administration imposed 10% tariffs on China and 25% on Mexico and Canada. China retaliated by imposing its own tariffs. After a series of additional tariffs and retaliatory steps, on April 9, 2025, the United States raised tariffs to at least 145% on Chinese imports. On April 11, 2025, China increased its retaliatory tariffs on United States imports to 125%. Sales to China represented approximately 15% of our total revenue in fiscal 2024. As a result, absent a de-escalation in the current trade war between the United States and China, the current tariffs could make our products less competitive with similar products not imported from the United States, which would have a material adverse impact on our business. We remain committed to working with our customers to minimize the impact from tariffs. In this regard, we are actively working to implement a number of options that could reduce the impact, including pursuing commonly utilized mitigation practices and localizing more manufacturing activity in the region. Considering the mitigation efforts we have in flight at this point, we are not currently planning to do any restructuring in China.
Current wording
During the calendar year 2025, the United States Administration has announced and/or imposed a variety of new tariffs on imports from other countries. In response, a number of those impacted or potentially impacted countries have announced and/or imposed retaliatory tariffs on United States imports. This situation is ongoing and remains fluid. These actions impacted our results of operations and profitability during the current fiscal year, particularly the bilateral United States and Chinese tariffs. Absent a de-escalation in the current trade wars, particularly the trade war between the United States and China, these tariffs could make our products less competitive with similar product not imported from the United States, which has had and could in the future have a material adverse impact on our business and financial results. Additional new tariffs, trade restrictions or other retaliatory actions aimed at specific industries, such as X-ray imaging products, could also materially impact our business. We remain committed to working with our customers to minimize the effects of the tariffs. In this regard, we are actively working to implement a number of options that could reduce the impact, including pursuing commonly utilized mitigation practices and localizing more manufacturing in the region. At this time, however, we do not anticipate these efforts will allow us to fully offset the additional costs or other negative impacts resulting from such tariffs. Considering the mitigation efforts we have in flight at this point, we are not currently planning to do any restructuring in China.
Previous wording
The China Ministry of Commerce (“MOFCOM”) recently initiated two investigations related to medical products imported into China (the “MOFCOM Investigations”). One investigation relates to the impact of imports of X-ray tubes on the domestic industry and its competitiveness, and another relates to imports into China of certain medical CT X-ray tubes and tube inserts for CT devices (collectively “CT Tubes and Inserts”) originating from the United States and India. We produce CT Tubes and Inserts in the United States and export them to China, but we do not produce CT Tubes and Inserts in India. Total sales of medical X-ray tubes we import into China represented approximately 10% of our total revenue in fiscal year 2024. While we are actively monitoring the situation and cooperating in the proceedings, the outcome of the MOFCOM Investigations remains uncertain. We are committed to complying with all applicable regulations. We anticipate that the MOFCOM Investigations may take approximately one year to resolve.
Current wording
In April 2025, the China Ministry of Commerce initiated two investigations related to medical products imported into China. One investigation relates to the impact of imports of X-ray tubes on the domestic industry and its competitiveness, and another relates to imports into China of certain medical CT X-ray tubes and tube inserts for CT devices (collectively “CT Tubes and Inserts”) originating from the United States and India. We produce CT Tubes and Inserts in the United States and export them to China, but we do not produce CT Tubes and Inserts in India. Total sales of medical X-ray tubes we import into China represented approximately 10% of our total revenue in fiscal year 2024. While we are actively monitoring the situation and cooperating in the proceedings, the outcome of the MOFCOM Investigations remains uncertain. We are committed to complying with all applicable regulations. Currently, both investigations have been paused since mid-May 2025. If recommenced, we anticipate that the MOFCOM Investigations may take approximately one year to resolve.
Previous wording
In China, the government has continued its efforts to broaden the availability of healthcare services. In the past 20 years, the number of medical institutions and diagnostic radiology equipment per million population in China has increased substantially. We are developing CT X-ray tubes and related subsystems for Chinese OEMs as they introduce new systems in China. Over the long-term, our objective is to become the partner of choice both for new systems and for replacement components in existing systems as CT systems continue to be more widely adopted throughout China.
Current wording
In China, the government has continued its efforts to broaden the availability of healthcare services. In the past 20 years, the number of medical institutions and diagnostic radiology equipment per million of population in China has increased substantially. We are developing CT X-ray tubes and related subsystems for Chinese OEMs as they introduce new systems in China. Over the long-term, our objective is to become the partner of choice both for new systems and for replacement components in existing systems as CT systems continue to be more widely adopted throughout China.
Previous wording
We periodically review our accounting policies, estimates, and assumptions and make adjustments when facts and circumstances dictate. Refer to our Annual Report on Form 10-K for the fiscal year ended September 27, 2024 filed with the SEC on November 19, 2024 and Note 1, Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements of this report for further details. Our critical accounting policies that are affected by accounting estimates include valuation of inventories, assessment of recoverability of goodwill and intangible assets, and income taxes. There have been no material changes to the Company’s significant accounting policies, compared to the accounting policies described in Note 1, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for fiscal year 2024.
Current wording
We periodically review our accounting policies, estimates, and assumptions and make adjustments when facts and circumstances dictate. Refer to our Annual Report on Form 10-K for the fiscal year ended September 27, 2024 filed with the SEC on November 19, 2024 and Note 1, Summary of Significant Accounting Policies, of the Notes to the Condensed Consolidated Financial Statements of this report for further details. Our critical accounting policies that are affected by accounting estimates include valuation of inventories, assessment of recoverability of goodwill and intangible assets, and income taxes. There have been no material changes to the Company’s significant accounting policies, compared to the accounting policies described in Note 1, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for fiscal year 2024.
Previous wording
The fiscal years of the Company as reported are the 52 or 53-week periods ending on the Friday nearest September 30. Fiscal year 2025 is the 53-week period ending October 3, 2025. Fiscal year 2024 was the 52-week period that ended on September 27, 2024. The fiscal quarters ended April 4, 2025 and March 29, 2024 were both 13-week periods. The six-month fiscal periods ended April 4, 2025 and March 29, 2024 were a 27-week period and a 26-week period, respectively.
Current wording
The fiscal years of the Company as reported are the 52 or 53-week periods ending on the Friday nearest September 30. Fiscal year 2025 is the 53-week period ending October 3, 2025. Fiscal year 2024 was the 52-week period that ended on September 27, 2024. The fiscal quarters ended July 4, 2025 and June 28, 2024 were both 13-week periods. The nine-month fiscal periods ended July 4, 2025 and June 28, 2024 were a 40-week period and a 39-week period, respectively.
Previous wording
Medical revenues increased $5.0 million, primarily due to increased sales of CT and oncology modalities of $6.5 million, partially offset by decreased sales of other medical modalities including radiography and veterinary of $1.5 million.
Current wording
Medical revenues decreased $6.5 million, primarily due to decreased sales of CT, fluoroscopy and radiography modalities of $9.0 million, partially offset by increased sales of other medical modalities including mammography and oncology of $3.0 million.
Previous wording
Industrial revenues increased $1.7 million primarily due to immaterial increases in sales across various products in our Industrial portfolio.
Current wording
Industrial revenues increased $0.4 million primarily due to immaterial increases in sales across various products in our Industrial portfolio.
Previous wording
See Note 2, Revenue Recognition, to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by geographic region and country.
Current wording
See Note 2, Revenue Recognition, to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country.
Previous wording
The change in our Industrial segment gross profit was minimal during the three months ended April 4, 2025 compared to the three months ended March 29, 2024.
Current wording
The increase in Medical segment gross profit was minimal during the three months ended July 4, 2025 compared to the three months ended June 28, 2024.
Previous wording
We are committed to investing in the business to support long-term growth and believe long-term research and development expenses of approximately 8% to 10% of annual revenues is the appropriate range that will allow us to innovate and bring new products to market for our global OEM customers. Research and development costs decreased to 10.3% of revenues for the second quarter of fiscal year 2025. The decrease was primarily due to higher revenue in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024, and a milestone payment for the Micro-X technology transfer of $1.0 million in the second quarter of fiscal year 2024 that did not repeat in the second quarter of fiscal year 2025.
Current wording
We are committed to investing in the business to support long-term growth and believe long-term research and development expenses of approximately 8% to 10% of annual revenues is the appropriate range that will allow us to innovate and bring new products to market for our global OEM customers. Research and development costs was 10.5% of revenues for the third quarter of fiscal year 2025, in-line with research and development costs in the prior year period.
Previous wording
Interest expense increased primarily due to interest costs in connection with the additional Senior Secured Notes issued during the first quarter of fiscal year 2025 and the Revolving Credit Facility established during the final week of the second quarter of fiscal year 2024.
Current wording
Interest expense increased primarily due to interest costs in connection with the additional Senior Secured Notes issued during the first quarter of fiscal year 2025.
Previous wording
Other (expense) income, net decreased primarily due to increased losses in certain investments in privately-held companies and equity investments of $3.9 million, increased foreign exchange expense of $1.8 million, and a decreased gain on business acquisitions of $2.1 million.
Current wording
Other income (expense), net increased primarily due to gains and decreased losses in certain investments in privately-held companies and equity investments of $2.8 million, increased foreign exchange gain of $0.4 million, and a gain on sale of fixed assets of $0.6 million.
Previous wording
For the three months ended April 4, 2025, we recognized income tax expense of $3.7 million on $10.8 million of pre-tax income. For the three months ended March 29, 2024, we recognized income tax expense of $0.7 million on $2.3 million of pre-tax income. Our tax expense increased for the three months ended April 4, 2025, primarily due to increased pre-tax income in certain jurisdictions, valuation allowance positions in the U.S. on deferred tax assets, and losses in certain foreign jurisdictions for which no benefit can be recorded.
Current wording
For the three months ended July 4, 2025, we recognized income tax expense of $2.5 million on $86.6 million of pre-tax loss. For the three months ended June 28, 2024, we recognized income tax benefit of $0.7 million on $0.8 million of pre-tax income. Our tax expense increased for the three months ended July 4, 2025, primarily due to the non-tax deductible $93.9 million goodwill impairment, increased pre-tax income in certain jurisdictions, valuation allowance positions in the U.S. on deferred tax assets and losses in certain foreign jurisdictions for which no benefit can be recorded.
Previous wording
Discussion of Results of Operations for the Six Months Ended April 4, 2025 Compared to the Six Months Ended March 29, 2024
Current wording
Discussion of Results of Operations for the Nine Months Ended July 4, 2025 Compared to the Nine Months Ended June 28, 2024
Previous wording
Medical revenues increased $9.7 million, primarily due to increased sales of CT, oncology, and fluoroscopy modalities of $20.6 million, partially offset by decreased sales in radiography, dental, mammography, and veterinary modalities of $9.5 million.
Current wording
Medical revenues increased $3.2 million, primarily due to increased sales of CT and oncology of $17.1 million, partially offset by decreased sales in radiography, fluoroscopic, dental, and veterinary modalities of $13.2 million.
Previous wording
Industrial revenues increased $6.8 million, primarily due to increased sales of security inspection products and X-ray tubes of $3.6 million, digital detectors of $2.0 million and other components of $1.2 million.
Current wording
Industrial revenues increased $7.2 million, primarily due to increased sales of security inspection products and X-ray tubes of $3.7 million, digital detectors of $1.9 million and other components of $1.8 million.
Previous wording
The increase in Medical segment gross profit was primarily due to improved productivity and lower material costs of $8.6 million and increased sales volume and favorable product mix of $2.6 million.
Current wording
The increase in Medical segment gross profit was primarily due to improved productivity and lower material costs of $16.4 million and increased sales volume and favorable product mix of $5.8 million.
Previous wording
The change in our Industrial segment gross profit was minimal during the six months ended April 4, 2025 compared to the six months ended March 29, 2024.
Current wording
The increase in Industrial segment gross profit was minimal during the nine months ended July 4, 2025 compared to the nine months ended June 28, 2024.
Previous wording
Selling, general, and administrative expenses for the second quarter of fiscal year 2025 decreased $2.9 million, primarily due to a decrease in fixed cost commitments to a supplier of $1.6 million and amortization of intangibles of $1.3 million.
Current wording
Selling, general, and administrative expenses for the nine months ended July 4, 2025 were lower primarily due to a decrease in fixed cost commitments to a supplier of $0.8 million and amortization of intangibles of $3.0 million.
Previous wording
Interest income increased primarily due to an increase in cash and cash equivalents being held in interest bearing deposit accounts.
Current wording
Interest income increased primarily due to an increase in the average cash and cash equivalents balance being held in interest bearing deposit accounts.
Previous wording
Other (expense) income, net decreased primarily due to increased losses in certain investments in privately-held companies and equity investments of $2.9 million and increased foreign exchange expense of $1.4 million.
Current wording
Other income (expense), net increased primarily due to decreased gains on business acquisitions of $2.1 million, increased foreign exchange expense of $1.5 million, increased losses in certain investments in privately-held companies and equity investments of $1.1 million, and a loss related to lease impairments of $0.3 million, partially offset by a gain on sale of fixed assets of $0.6 million.
Previous wording
For the six months ended April 4, 2025, we recognized income tax expense of $6.3 million on $13.3 million of pre-tax income. For the six months ended March 29, 2024, the Company recognized income tax expense of $0.5 million on $1.7 million of pre-tax income. Our tax expense increased for the six months ended April 4, 2025, primarily due to increased pre-tax income in certain jurisdictions, valuation allowance positions in the U.S. on deferred tax assets, and losses in certain foreign jurisdictions for which no benefit can be recorded.
Current wording
For the nine months ended July 4, 2025, we recognized income tax expense of $8.8 million on $73.3 million of pre-tax loss. For the nine months ended June 28, 2024, the Company recognized income tax benefit of $0.2 million on $2.5 million of pre-tax income. Our tax expense increased for the nine months ended July 4, 2025, primarily due to the non-tax deductible $93.9 million goodwill impairment, increased pre-tax income in certain jurisdictions, valuation allowance positions in the U.S. on deferred tax assets, and losses in certain foreign jurisdictions for which no benefit can be recorded.
Previous wording
We assess our liquidity in terms of our ability to generate cash to fund our operations, including working capital and investing activities. We believe that our operating cash flow, cash on our balance sheet, availability under our Revolving Credit Facility, and our ability to access the credit and capital markets are sufficient to meet our anticipated operating activities and cash commitments for at least the next 12 months and will be sufficient to allow us to continue to invest in our existing businesses, consummate strategic acquisitions, and manage our capital structure on a short-term and long-term basis. We are currently not aware of any trends or demands, commitments, events, or uncertainties that will result in or that are reasonably likely to result in a material change to our liquidity needs during or beyond the next 12 months, except for $200.0 million of our Convertible Notes that become due in June 2025 that we currently anticipate repaying using some combination of future borrowings under our Revolving Credit Facility, net proceeds from the Senior Secured Notes Add On, and cash. As of April 4, 2025, restricted cash from the Senior Secured Notes Add On available for the repurchase prior to maturity or repayment at maturity of our Convertible Notes was $125.4 million, and the availability under our Revolving Credit Facility was $154.8 million. At April 4, 2025, we had total debt of $567.2 million, net of deferred issuance costs of $3.2 million.
Current wording
We assess our liquidity in terms of our ability to generate cash to fund our operations, including working capital and investing activities. We believe that our operating cash flow, cash on our balance sheet, availability under our Revolving Credit Facility, and our ability to access the credit and capital markets are sufficient to meet our anticipated operating activities and cash commitments for at least the next 12 months and will be sufficient to allow us to continue to invest in our existing businesses, consummate strategic acquisitions, and manage our capital structure on a short-term and long-term basis. We are currently not aware of any trends or demands, commitments, events, or uncertainties that will result in or that are reasonably likely to result in a material change to our liquidity needs during or beyond the next 12 months. As of July 4, 2025, the availability under our Revolving Credit Facility was $154.8 million, and we had total debt of $367.5 million, net of deferred issuance costs of $2.7 million.
Previous wording
(1)This amount has been excluded from current liabilities as it is supported by the Revolving Credit Facility and restricted cash from the proceeds of the Senior Secured Notes Add On (as defined below), which are expected to remain outstanding for an uninterrupted period extending beyond one year from the balance sheet date.
Current wording
(1)This amount has been excluded from current liabilities as it is supported by the Revolving Credit Facility and restricted cash from the proceeds of the Senior Secured Notes Add On (as defined in Note 9, Borrowings), which are expected to remain outstanding for an uninterrupted period extending beyond one year from the balance sheet date.
Previous wording
Net cash provided by operating activities. Cash provided by operating activities was $26.1 million and $13.4 million for the six months ended April 4, 2025 and March 29, 2024, respectively. Net cash provided by operating activities increased $12.7 million for the six months ended April 4, 2025 compared to the six months ended March 29, 2024. Significant changes in operating assets and liabilities affecting cash flows during these periods included:
Current wording
Net cash provided by operating activities. Cash provided by operating activities was $33.8 million and $21.4 million for the nine months ended July 4, 2025 and June 28, 2024, respectively. Net cash provided by operating activities increased $12.4 million for the nine months ended July 4, 2025 compared to the nine months ended June 28, 2024. Significant changes in operating assets and liabilities affecting cash flows during these periods included:
Previous wording
•Net income was $7.0 million for the six months ended April 4, 2025 compared to net income of $1.2 million for the six months ended March 29, 2024, due primarily to higher sales of $16.5 million in the six months ended April 4, 2025 compared to the six months ended March 29, 2024 and $8.1 million of higher other (expense) income, net in the six months ended April 4, 2025 compared to the six months ended March 29, 2024.
Current wording
•Net loss was $82.1 million for the nine months ended July 4, 2025 compared to net income of $2.7 million for the nine months ended June 28, 2024. The change from net income to net loss was primarily due to a goodwill impairment charge of $93.9 million in the nine months ended July 4, 2025, partially offset by $10.4 million of higher sales compared to the nine months ended June 28, 2024 and $4.2 million of higher other income (expense), net in the nine months ended July 4, 2025 compared to the nine months ended June 28, 2024.
Previous wording
•Cash used for inventories was $9.3 million higher in the six months ended April 4, 2025, compared to the six months ended March 29, 2024, primarily due to an increase in inventory for anticipated future demand.
Current wording
•Cash used for inventories was $29.6 million higher in the nine months ended July 4, 2025, compared to the nine months ended June 28, 2024, primarily due to an increase in inventory for anticipated future demand.
Previous wording
•Cash used for accrued liabilities and other current and other long-term liabilities decreased by $5.5 million due to increased interest costs primarily related to the issuance of the Senior Secure Notes Add On and the timing of certain payroll costs.
Current wording
•Cash used for accrued liabilities and other current and other long-term liabilities decreased by $7.8 million due to increased interest costs primarily related to the issuance of the Senior Secure Notes Add On and the timing of certain payroll costs.
Previous wording
Net cash provided by (used in) investing activities. Cash provided by (used in) investing activities was $11.7 million and $(21.2) million for the six months ended April 4, 2025 and March 29, 2024, respectively. Net cash provided by investing activities increased $32.9 million for the six months ended April 4, 2025, compared to the six months ended March 29, 2024. The increase in cash provided by investing activities was primarily due to the implementation of an investment strategy to increase the Company’s cash balance to pay down the outstanding Convertible Notes which become due during the third quarter of fiscal year 2025. This strategy resulted in increased proceeds from maturities and sales of marketable debt securities of $20.8 million, lower purchases of short-term marketable securities of $4.5 million and lower purchases of property, plant, and equipment of $5.2 million.
Current wording
Net cash provided by (used in) investing activities. Cash provided by investing activities during the nine months ended July 4, 2025 was $11.0 million compared to net cash used in investing activities of $13.5 million for the nine months ended June 28, 2024. The increase in cash provided by investing activities was primarily due to the implementation of an investment strategy to increase the Company’s cash balance to pay down the outstanding Convertible Notes that matured and were repaid in full during the third quarter of fiscal year 2025. This strategy resulted in increased proceeds from maturities and sales of marketable debt securities of $10.6 million, lower purchases of short-term marketable securities of $6.5 million and lower purchases of property, plant, and equipment of $3.6 million.
Previous wording
Net cash provided by (used in) financing activities. Net cash provided by (used in) financing activities was $124.2 million and $(3.0) million for the six months ended April 4, 2025 and March 29, 2024, respectively. The increase in cash provided by in financing activities was primarily due to the issuance of the Senior Secured Notes Add On during the first quarter of fiscal year 2025.
Current wording
Net cash used in financing activities. Net cash used in financing activities was $77.0 million and $4.1 million for the nine months ended July 4, 2025 and June 28, 2024, respectively. The increase in cash used in financing activities was primarily due to the repayment in full of the Convertible Notes of $200.0 million, partially offset by the issuance of the Senior Secured Notes Add On of $126.9 million during the first quarter of fiscal year 2025.
Previous wording
In October 2013, we entered into an amended agreement with dpiX and other parties that, among other things, provides us with the right to 50% of dpiX’s total manufacturing capacity produced after January 1, 2014. The amended agreement requires us to pay for 50% of the fixed costs (as defined in the amended agreement), as determined at the beginning of each calendar year. In January 2025, the Company's fixed cost commitment was determined to be $13.7 million for calendar year 2025. As of April 4, 2025, the Company estimated it has $10.2 million related to this fixed cost commitment remaining for calendar year 2025. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement).
Current wording
In October 2013, we entered into an amended agreement with dpiX and other parties that, among other things, provides us with the right to 50% of dpiX’s total manufacturing capacity produced after January 1, 2014. The amended agreement requires us to pay for 50% of the fixed costs (as defined in the amended agreement), as determined at the beginning of each calendar year. In January 2025, the Company's fixed cost commitment was determined to be $13.7 million for calendar year 2025. As of July 4, 2025, the Company estimated it has $6.8 million related to this fixed cost commitment remaining for calendar year 2025. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement).
Previous wording
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. As of April 4, 2025, our non-cancellable supplier purchase obligations totaled $4.6 million.
Current wording
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. As of July 4, 2025, our non-cancellable supplier purchase obligations totaled $3.6 million.
Previous wording
Trade accounts receivable days sales outstanding (“DSO”) was 62 days at April 4, 2025 and 70 days at September 27, 2024. Our accounts receivable and DSO are impacted by a number of factors, including the timing of product shipments, collections performance, payment terms, the mix of revenues from different regions and the effects of economic instability.
Current wording
Trade accounts receivable days sales outstanding (“DSO”) was 61 days at July 4, 2025 and 70 days at September 27, 2024. Our accounts receivable and DSO are impacted by a number of factors, including the timing of product shipments, collections performance, payment terms, the mix of revenues from different regions and the effects of economic instability.
Previous wording
Backlog is the accumulation of all orders for which revenues have not been recognized and are still considered valid. Backlog also includes a small portion of billed service contracts that are included in deferred revenue. Our estimated total backlog at April 4, 2025 was approximately $316 million.
Current wording
Backlog is the accumulation of all orders for which revenues have not been recognized and are still considered valid. Backlog also includes a small portion of billed service contracts that are included in deferred revenue. Our estimated total backlog at July 4, 2025 was approximately $284 million.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
See Note 2, Revenue Recognition, to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The increase in Medical segment gross profit was primarily due to improved productivity and lower material costs of $15.6 million and increased sales volume and favorable product mix of $6.2 million.