Varex Imaging Corp

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 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:

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, and 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:

Previous wording

•disruption of critical information systems or material breaches in the security of our systems;

Current wording

•disruption of critical information systems or material breaches in the security of our systems or systems of third parties upon which we rely;

Previous wording

•inability to maintain or defend our intellectual property rights, and high cost of protecting and defending such rights and defending against infringement claims;

Current wording

•inability to maintain or defend our intellectual property rights, and costs associated with protecting our intellectual property and defending such rights and defending against infringement claims;

Previous 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.

Current wording

Statements concerning legislative, tariff, and trade wars and trade policy reforms, 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, changes in interest rates, 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,” “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

Any forward-looking statement made in this Quarterly Report (including in any exhibits or documents incorporated by reference) is based only on information currently available to Varex and its management and speaks only as of the date on which it is made. We have not assumed any obligation to, and you should not expect us to, update or revise those statements because of new information, future events or otherwise.

Current wording

Any forward-looking statement made in this Quarterly Report (including in any exhibits or documents incorporated by reference) is based on information currently available to Varex and its management and speaks only as of the date on which it is made. We have not assumed any obligation to, and you should not expect us to, update or revise those statements because of new information, future events or otherwise.

Previous wording

Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components including X-ray tubes, flat panel and photon counting detectors and accessories, linear accelerators, image software processing solutions, and stand-alone X-ray based systems in select application areas. Our components are used in medical diagnostic imaging, security inspection systems, and industrial quality inspection systems, as well as for analysis and measurement applications in industrial manufacturing applications. Global OEMs incorporate our X-ray imaging components into their systems to detect, diagnose, protect, irradiate, and inspect. Varex has approximately 2,300 full-time equivalent employees, located at engineering, manufacturing, and service center sites in North America, Europe, and Asia.

Current wording

Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components including X-ray tubes, flat panel and photon counting detectors and accessories, linear accelerators, image software processing solutions, and stand-alone X-ray based systems in select application areas. Our components are used in medical diagnostic imaging, security inspection systems, and industrial quality inspection systems, as well as for analysis and measurement applications in industrial manufacturing applications. Global OEMs incorporate our X-ray imaging components into their systems to detect, diagnose, protect, irradiate, and inspect. Varex has approximately 2,400 full-time equivalent employees, located at engineering, manufacturing, and service center sites in North America, Europe, and Asia.

Previous wording

Our products are sold in three geographic regions: the Americas, EMEA, and APAC. The Americas includes North America (primarily the United States) and Latin America. EMEA includes Europe, the Middle East, India, and Africa. APAC includes Asia (other than India) and Australia. Revenues by region and country are based on the known final destination of products sold.

Current wording

Our products are sold in three geographic regions: the Americas, EMEA, and APAC. The Americas includes North America (primarily the United States) and Latin America. EMEA includes Europe, the Middle East, India, and Africa. APAC includes Asia (other than India) and Australia. Revenues by region are based on the known final destination of products sold.

Previous wording

The current economic and trade environment remains dynamic and unpredictable. The uncertain outcome and effect of tariffs and reciprocal actions between the United States and other countries and its impact on the economic and geopolitical environment, supply chain and logistic challenges, and geopolitical tensions and local conflicts have contributed to, and may continue to contribute to, delayed customer purchasing decisions, increased tariff costs, higher inflation, higher interest rates and capital costs, supply chain disruption, increased costs of labor and materials, exchange rate volatility, increased shipping costs, and other similar effects.

Current wording

The current economic and trade environment remains dynamic and unpredictable. The uncertain outcome and effect of tariffs and reciprocal actions between the United States and other countries and its impact on the economic and geopolitical environment, supply chain and logistic challenges, as well as geopolitical tensions and local conflicts have contributed to, and may continue to contribute to, delayed customer purchasing decisions, increased tariff costs, higher inflation, fluctuations in interest rates and capital costs, supply chain disruption, increased costs of labor and materials, exchange rate volatility, increased shipping costs, and other similar effects. Additionally, a sustained United States government shutdown could negatively impact the global economy and in turn our financial condition and results of operations.

Previous 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.

Current wording

Changes to tariff policies in 2025 by the United States and other countries, particularly the bilateral United States and Chinese tariffs, impacted our results of operations and profitability in fiscal year 2025 and in the first quarter fiscal year 2026. Absent a de-escalation in the current trade environment, these tariffs are expected to continue to make our products less competitive with similar products not imported from the United States, which has had and in the future is expected to have a negative impact on our business and financial results. Increases to existing or 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

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 wording

We continue to monitor potential changes in customer procurement decisions resulting from the current trade climate, along with other tariff-related actions, investigations and 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.

Previous wording

We have two reportable operating segments: Medical and Industrial. The segments align our products and service offerings with customer use in medical and industrial imaging.

Current wording

We have two reportable operating segments: Medical and Industrial. The segments align our products and services offerings with customer use in medical and industrial imaging.

Previous wording

We are one of the largest independent global manufacturers of X-ray imaging components, and each year, we produce over 27,000 X-ray tubes and 20,000 X-ray detectors. We estimate that our world-wide installed base of products includes more than 160,000 X-ray tubes, 170,000 X-ray detectors, 600,000 connect and control components, and 16,500 software instances. Replacement and service of our existing installed base makes up a significant portion of our revenue. Many of our components need to be replaced regularly, depending upon usage and other factors. For example, CT X-ray tubes generally need to be replaced every 2 to 6 years, in comparison to a general radiography tube which can last up to 10 years, depending on utilization. In China, the replacement cycle for CT X-ray tubes currently can be as frequent as every 10 to 20 months due to high utilization of imaging equipment. Other products such as X-ray detectors have a useful life of as much as 7 years or more but can require more frequent service and repairs during their useful life. In addition, our detector customers often elect to upgrade products to newer technology before the end of a current product’s useful life. X-ray imaging software is a relatively small part of our business and includes maintenance revenue for software licenses.

Current wording

We are one of the largest independent global manufacturers of X-ray imaging components, and each year, we produce over 27,000 X-ray tubes and 20,000 X-ray detectors. We estimate that our world-wide installed base of products includes more than 170,000 X-ray tubes, 170,000 X-ray detectors, 600,000 connect and control components, and 16,800 software instances. Replacement and service of our existing installed base makes up a significant portion of our revenue. Many of our components need to be replaced regularly, depending upon usage and other factors. For example, CT X-ray tubes generally need to be replaced every 2 to 6 years, in comparison to a general radiography tube which can last up to 10 years, depending on utilization. In China, the replacement cycle for CT X-ray tubes currently can be as frequent as every 10 to 20 months due to high utilization of imaging equipment. Other products such as X-ray detectors have a useful life of as much as 7 years or more but can require more frequent service and repairs during their useful life. In addition, our detector customers often elect to upgrade products to newer technology before the end of a current product’s useful life. X-ray imaging software is a relatively small part of our business and includes maintenance revenue for software licenses.

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 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.

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 October 3, 2025 filed with the SEC on November 18, 2025 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. Except for the changes in certain policies upon adoption of the accounting standard described in Note 1, Summary of Significant Accounting Policiesof the Notes to the Condensed Consolidated Financial Statements of this report, 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 2025.

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 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.

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 2026 is the 52-week period ending October 2, 2026. Fiscal year 2025 was the 53-week period that ended on October 3, 2025. The fiscal quarters ended January 2, 2026 and January 3, 2025 were a 13-week period and a 14-week period, respectively.

Previous 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.

Current wording

Industrial revenues increased $9.6 million, primarily due to increased sales of inspection products of $8.2 million and digital detectors of $2.0 million, partially offset by decreased sales of other components of $0.6 million.

Previous wording

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 wording

Overall revenue during the three months ended January 2, 2026 increased as compared to the three months ended January 3, 2025. Americas revenue increased by $10.9 million due to increased sales of security inspection products of $8.6 million, digital detectors of $2.0 million, X-ray tubes of $1.0 million, and other product sales of $0.6 million, partially offset by decreased veterinary sales of $1.3 million. EMEA revenues increased $4.0 million due to increased sales of X-ray tubes of $2.4 million, security inspection products of $1.1 million, and other products of $0.5 million. APAC revenues decreased $5.1 million primarily due to decreased sales of X-ray tubes of $2.2 million, digital detectors of $2.1 million, and security inspection products of $1.5 million, partially offset by increased sales of other products of $0.7 million.

Previous wording

See Note 2, Revenue Recognition, to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country.

Current wording

See Note 2, Revenue, to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country.

Previous 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.

Current wording

The Medical segment gross profit decreased $3.5 million during the three months ended January 2, 2026 compared to three months ended January 3, 2025, primarily due to increased material costs of $6.8 million, partially offset by improved productivity, increased sales volume, and a favorable shift in product sales mix of $3.4 million.

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 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.

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 decreased to 10.4% of revenues for the first quarter of fiscal year 2026, due to increased revenue, decreased costs, and the final Micro-X technology transfer payment made during the first quarter of fiscal year 2025.

Previous 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.

Current wording

Other expense, net increased due to increased losses in certain investments in privately-held companies and equity investments of $2.0 million and other expenses of $0.6 million, partially offset by decreased foreign exchange expense of $1.1 million.

Previous 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.

Current wording

For the three months ended January 2, 2026, we recognized income tax expense of $1.4 million on $3.8 million of pre-tax income. For the three months ended January 3, 2025, we recognized income tax expense of $2.6 million on $2.5 million of pre-tax income. Our tax expense decreased for the three months ended January 2, 2026, primarily due to higher pre-tax income in certain jurisdictions for which a valuation allowance on deferred tax assets applies and favorable impacts of international tax provisions and tax credits in the U.S., partially offset by 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. 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.

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 the next 12 months. Beyond the next 12 months, our Senior Secured Notes mature in October 2027, which we currently expect to refinance in fiscal year 2026. As of January 2, 2026, the availability under our Revolving Credit Facility was $154.8 million, and we had total debt of $367.6 million, net of deferred issuance costs of $2.1 million.

Previous 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:

Current wording

Net cash (used in) provided by operating activities. Cash (used in) provided by operating activities was $(16.1) million and $9.5 million for the three months ended January 2, 2026 and January 3, 2025, respectively. Significant changes in operating assets and liabilities affecting cash flows during these periods included:

Previous 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.

Current wording

•Cash used for inventories was $14.5 million higher in the three months ended January 2, 2026, compared to the three months ended January 3, 2025, primarily due to an increase in quantity of inventory for anticipated future demand.

Previous 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.

Current wording

Net cash used in investing activities. Cash used in investing activities was $7.7 million and $3.0 million for the three months ended January 2, 2026 and January 3, 2025, respectively. The increase in cash used in investing activities was primarily due to an increase in purchases of property, plant, and equipment of $6.5 million, partially offset by net cash increases related to marketable debt securities and certificates of deposits activity of $1.9 million in the three months ended January 2, 2026, compared to the three months ended January 3, 2025.

Previous 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.

Current wording

Net cash (used in) provided by financing activities. Net cash (used in) provided by financing activities was $(1.6) million and $124.9 million for the three months ended January 2, 2026 and January 3, 2025, respectively. The change in cash (used in) provided by financing activities was primarily due to the issuance of $126.9 million of the Senior Secured Notes Add On 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 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).

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 and approved by the dpiX board of directors at the beginning of each calendar year. In January 2026, the Company's fixed cost commitment was determined to be $13.7 million for calendar year 2026. 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 July 4, 2025, our non-cancellable supplier purchase obligations totaled $3.6 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 January 2, 2026, our non-cancellable supplier purchase obligations totaled $2.8 million.

Previous 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.

Current wording

Trade accounts receivable days sales outstanding (“DSO”) was 64 days and 62 days at January 2, 2026 and October 3, 2025, respectively. 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 July 4, 2025 was approximately $284 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 January 2, 2026 was approximately $264 million.