What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-11-18 compared with 2021-11-19 · 89 added, 90 removed, 288 unchanged (38% of the section changed)

Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray tubes, digital detectors, linear accelerators and other image software processing solutions, which are critical components in a variety of X-ray based imaging equipment.

Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray components including tubes, digital detectors, 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 in their systems to detect, diagnose, protect and inspect.

Global OEMs incorporate our X-ray imaging components in their systems to detect, diagnose, protect, irradiate and inspect.

Varex has approximately 2,300 full-time employees located at engineering, manufacturing and service center sites in North America, Europe, and Asia.

Our products are sold worldwide in three geographic regions:

Our products are sold in three geographic regions:

the Americas, EMEA, and APAC.

The Americas includes North America and South America.

The Americas includes North America (primarily the United States) and Latin America.

EMEA includes Europe, Russia, the Middle East, India and Africa.

APAC includes Asia (other than India) and Australia.

Revenues by region are based on the destination of products being sold.

Revenues by region are based on the known final destination of products sold.

Our success depends, among other things, on our ability to anticipate and respond to changes in our markets, the direction of technological innovation and the demand from our customers.

6 unchanged sentences

The segments align our products and service offerings with customer use in medical and industrial markets.

In our Medical segment, we design, manufacture, sell and service X-ray imaging components, including X-ray tubes, digital detectors, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, heat exchangers, ionization chambers and buckys.

These components are used in a range of medical imaging applications including CT, mammography, oncology, cardiac, surgery, dental, and other diagnostic radiography uses.

6 unchanged sentences

Once our components are designed into our customers' equipment, our customers will typically continue to buy from us for any replacement components and for service and support for that equipment.

Some of our products are also included in product registrations for our customers' equipment that require regulatory approval to change.

Some of our products are also included in product

registrations for our customers' equipment that require regulatory approval to change.

In addition to sales to OEM customers, we sell our products to independent service companies and distributors as well as directly to end-users for replacement purposes.

We are on e of the largest global manufacturers of X-ray components and each year we produce over 27,000 X-ray tubes and 20,000 X-ray detectors.

We are on e of the largest global manufacturers of X-ray imaging components and each year we produce over 28,000 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 16,000 software instances.

2 unchanged sentences

For example, CT X-ray tubes gen erally need to be replaced every 2 to 6 years.

In China, the replacement cycle for CT X-ray tubes can be as frequent as every 6 to 12 months due to high utilization of imaging equipment.

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.

6 unchanged sentences

The Company has experienced growth in demand for its products as health systems globally have continued to address healthcare services gaps.

However, the Company is not able to convert all the demand into sales due to on-going supply chain related interruptions and uncertainties, particularly with the availability of semiconductor and other electronic components.

As a result, uncertainty in overall sales volume is expected to continue into calendar year 2022.

However, the Company has not been able to convert all the demand into sales due to on-going supply chain related interruptions and uncertainties, particularly with the availability of micro-controller chips and other electronic components.

As a result, uncertainty in overall sales volume is expected to continue at least through the fiscal year 2023.

In China, the government is broadening the availability of healthcare services.

2 unchanged sentences

Over the long-term, our objective is to become the partner of choice both for OEMs and in the replacement market as CT systems become more widely adopted throughout the Chinese market.

In China, despite a COVID-19 related slowdown in the beginning of the year, demand for our products has returned, and full fiscal year 2021 results for China exceeded our pre-pandemic expectations.

In recent years our business in China has been impacted by the trade war with the United States in three principal ways:

(1) imports of raw materials from China to the U.S.

have become more expensive, (2) imports of raw materials and sub-assemblies from the U.S.

to China have become more expensive, and (3) importing finished U.S.

manufactured products into China have become more difficult and expensive.

(1) importing raw materials from China to the United States has become more expensive, (2) importing raw materials and sub-assemblies from the United States to China has become more expensive, and (3) importing finished U.S.

manufactured products into China has become more difficult and expensive.

While the governments of both the United States and China have granted tariff exclusions that temporarily eliminate the additional duties payable for specific commodities, providing partial relief, these exclusions are temporary and/or must be solicited and approved on a shipment-by-shipment basis.

There is no guarantee that such exclusions will be granted or extended by either government.

In order to mitigate the impact of tariffs on materials imported from China, we have implemented changes to secure more non-China sources of materials used to manufacture our X-ray imaging products.

With respect to imports into China, the additional tariffs imposed by the Chinese government have led to a decrease in sales of radiographic detector manufactured in the U.S.

To help address these issues, and to be closer to our global customer base, we continue to expand manufacturing capabilities at our facilities in China, Germany and the Philippines.

To help mitigate the impact of tariffs on materials imported to China, and to be closer to our global customer base, we continue to expand manufacturing capabilities at our facilities in China, Germany, the Netherlands and the Philippines.

We have also implemented local sourcing strategies to offer local content.

This local-for-local strategy has been well received by both our local customers as well as global OEMs, and acts as a natural hedge against trade wars and other potential supply chain disruptions.

In our Industrial segment, we design, develop, manufacture, sell and service X-ray imaging products for use in a number of markets, including security applications for cargo screening at ports and borders, baggage screening at airports, and nondestructive testing and inspection applications used in a number of other markets.

In our Industrial segment, we design, develop, manufacture, sell and service X-ray imaging products for use in a number of markets, including security applications for cargo screening at ports and borders and baggage screening at airports, and nondestructive testing, irradiation and inspection applications used in a number of other vertical markets.

Our industrial products include Linatron® X-ray linear accelerators, X-ray tubes, digital detectors and high voltage connectors.

4 unchanged sentences

The security market primarily consists of cargo security for the screening of trucks, trains, and cargo containers at ports and borders as well as airport security for carry-on baggage, checked baggage and palletized cargo.

The end customers for border

protection systems are typically government agencies, many of which are in oil-based economies and war zones where there can be significant variation in buying patterns.

Non-destructive testing and inspection markets utilize X-ray imaging to scan items for inspection of manufacturing defects and product integrity in a wide range of industries including the aerospace, automotive, electronics, oil and gas, food packaging, metal castings and 3D printing industries.

The end customers for border protection systems are typically government agencies, many of which are in oil-based economies and war zones where there can be significant variation in buying patterns.

Non-destructive testing and inspection verticals utilize X-ray imaging to scan items for inspection of manufacturing defects and product integrity in a wide range of industries including the aerospace, automotive, electronics, oil and gas, food packaging, metal castings and 3D printing industries.

In addition, new applications for X-ray sources are being developed, such as sterilization of food and its packaging.

We provide X-ray sources, digital detectors, high voltage connectors and image processing software to OEM

customers, system integrators and manufacturers in a variety of these markets.

We believe that the nondestructive testing market represents a significant growth opportunity for our business, and we are actively pursuing new potential applications for our products.

We provide X-ray sources, digital detectors, high voltage connectors and image processing software to OEM customers, system integrators and manufacturers in a variety of these verticals.

We believe that the non-destructive testing market represents a significant growth opportunity for our business, and we are actively pursuing new potential applications for our products.

The economic downturn triggered by the COVID-19 pandemic reduced the demand for X-ray imaging equipment utilized in the non-destructive testing market as manufacturers focused on cash preservation and reduced spending for capital equipment.

During the twelve months ended October 1, 2021, we have continued to see improved conditions in this market.

Separately, the unprecedented decrease in passenger air traffic led to a decrease in demand in the security market for carry-on baggage and checked baggage.

However, we have seen improved conditions in this market, which continued during the twelve months ended September 30, 2022.

Our customers are primarily large OEMs.

Our top five customers, measured by revenue, are Canon Medical Systems Corporation (“Canon”), General Electric Company, Elekta AB, United Imaging Healthcare and Varian Medical Systems, Inc., which collectively accounted for approximately 39% of total revenue in fiscal year 2021.

Our top five customers, measured by revenue, are Canon Medical Systems Corporation (“Canon”), United Imaging Healthcare, General Electric Company, Siemens Healthineers AG, and Elekta AB, which collectively accounted for approximately 40% of total revenue in fiscal year 2022.

Our largest customer, Canon, accounted for approximately 17%, 18% and 21% of our total revenue for fiscal years 2022, 2021, and 2020, respectively, while our ten largest customers as a group accounted for approximately 52%, 51% and 52% of our revenue for fiscal years 2022, 2021 and 2020, respectively.

6 unchanged sentences

We often compete with the in-house X-ray tube manufacturing operations of major diagnostic imaging systems companies, which are the primary OEM customers for our Medical products.

To effectively compete with these in-house capabilities, we must have a competitive advantage in one or more significant areas, such as innovative technology and greater product performance, better product quality or lower product price.

We sell a significant volume of our X-ray tubes to OEM customers that have in-house X-ray tube production capability.

In addition, we compete with some OEM customers, such as Canon, Philips Healthcare and other companies who sell X-ray tubes to smaller OEMs and other manufacturers, such as Industria Applicazioni Elettroniche S.p.A, as well as emerging X-ray tube manufacturers in China.

High capital costs and mastery of complex manufacturing processes that drive production yield and product life are significant characteristics of the X-ray tubes business.

High capital costs and mastery of complex manufacturing processes that drive production yield and product life are significant characteristics of the X-ray tube business.

The market for digital detectors is highly competitive.

We sell our digital detectors to a number of OEM customers that incorporate our detectors into their medical diagnostic, oncology, 3D dental and veterinary imaging systems.

Our amorphous silicon based digital detector technology, our photon counting technology and our complementary metal-oxide-semiconductor technology competes with other detector technologies, such as amorphous selenium, charge-coupled devices and variations of amorphous silicon scintillators.

Our amorphous silicon based digital detector technology, our photon counting technology and our complementary metal-oxide-semiconductor technology compete with other detector technologies, such as amorphous selenium, charge-coupled devices and variations of amorphous silicon scintillators.

We believe that our products provide a competitive advantage due to product quality and performance and lower total cost of ownership over the product lifecycle.

In the digital flat panel detector market, we primarily compete against Trixell S.A.S., Canon, Vieworks Co., Ltd., Hamamatsu Corporation, iRay Technology (Shanghai) Limited and Jiangsu CareRay Medical Systems Co., Ltd.

In the low-energy market of the Industrial segment, we compete with other OEM suppliers, such as iRay, Teledyne, Nuctech Company Limited (“Nuctech”) and Comet AG.

While there are other manufacturers of low-energy X-ray tubes and digital detectors

for specialized and niche industrial applications, our products are designed for a broad range of applications in inspection, analysis, and non-destructive testing.

In the high-energy market, we compete against technologies from Nuctech, Siemens AG, ETM Electromatic Inc., and Foton Ltd., whose X-ray sources are used in applications that include cargo and container scanning, border security, aerospace applications, castings and pressure vessel inspections.

In the low-energy market of the Industrial segment, we compete with other OEM suppliers, such as iRay, Teledyne and Comet AG.

While there are other manufacturers of low-energy X-ray tubes and digital detectors for specialized and niche industrial applications, our products are designed for a broad range of applications in inspection, analysis, and non-destructive testing.

In the high-energy market, we compete against technologies from Nuctech Company Limited, Siemens AG, ETM Electromatic Inc., and PMB Alcen, whose X-ray sources are used in applications that include cargo and container scanning, border security, aerospace applications, castings and pressure vessel inspections.

Customer Services and Support

We generally warranty our products for 12 to 24 months.

We generally warrant our products for 12 to 24 months.

In certain cases, the warranty is specified by usage metrics such as number of scans.

1 unchanged sentence

offices in Utah, California, Nevada, New York and Illinois;

and internationally in the Philippines, China, the Netherlands, Germany, France, Sweden, Switzerland, the United Kingdom, Italy and Japan.

and internationally in the Philippines, China, the Netherlands, Germany, France, Sweden, Switzerland, Finland, the United Kingdom, Italy and Japan.

Our application specialists and engineers make recommendations to meet the customer’s technical requirements within the customer’s budgetary constraints.

11 unchanged sentences

These facilities employ state-of-the-art manufacturing techniques and several have been recognized by the press, governments and trade organizations for their commitment to quality improvement.

Each of these manufacturing facilities are certified by International Standards Organization (“ISO”) under ISO 9001 (for industrial products) or ISO 13485 (for medical devices).

Each of these manufacturing facilities are certified by the International Standards Organization (“ISO”) under ISO 9001 (for industrial products) or ISO 13485 (for medical devices).

In addition, we have a regional service center in Willich, Germany.

18 unchanged sentences

Liverpool, New York;

and Franklin Park, Illinois and internationally at our facilities in the Netherlands, UK, Sweden and Germany.

and Franklin Park, Illinois and internationally at our facilities in the Netherlands, UK, Sweden, Finland and Germany.

Our research and development activities are primarily focused on developing and improving imaging component technology.

1 unchanged sentence

Research in digital detector imaging technology is aimed at developing new panel technologies (such as photon counting) with better dose utilization, improved image quality and materials discrimination, lower product costs and new image processing tools for advanced applications.

Industrial products share some of the same base technology competencies and platforms as medical products and our medical and industrial development teams are therefore co-located in Salt Lake City, San Jose, Doetinchem, Danderyd and Walluf.

One of our competitive advantages is that some of the foundational technologies and software components developed for medical applications

may also be applicable in industrial components, and vice versa.

San Jose, California;

Doetinchem, Netherlands;

Danderyd, Sweden;

Espoo, Finland and Walluf, Germany.

One of our competitive advantages is that some of the foundational technologies and software components developed for medical applications may also be applicable in industrial components, and vice versa.

In addition to these product development synergies, we are also able to realize sourcing, production, service center, and logistics synergies across the different products and market sectors.

10 unchanged sentences

In the United States, as a manufacturer and seller of medical devices and devices emitting radiation or utilizing radioactive by-product material, we and some of our suppliers and distributors are subject to extensive regulation by federal governmental authorities, such as the U.S.

Food and Drug Administration (the “FDA”), the Nuclear Regulatory Commission (“NRC”), and state and local regulatory agencies, to ensure the devices are safe and effective and comply with laws governing products which emit, produce or control radiation.

Similar international regulations apply overseas.

4 unchanged sentences

Under the FDC Act, each medical device manufacturer must comply with quality system regulations that are strictly enforced by the FDA.

Unless an exception applies, the FDA requires that the manufacturer of a new medical device or a new indication for use of, or other significant change in, existing currently marketed medical device obtain 510(k) pre-market notification clearance before it can market or sell those products in the United States.

Unless an exception applies, the FDA requires that the manufacturer of a new medical device or a new indication for use of, or other significant change in, an existing currently marketed medical device obtain 510(k) pre-market notification clearance before it can market or sell those products in the United States.

The 510(k) clearance process is applicable when the device introduced into commercial distribution is substantially equivalent to a legally marketed device.

9 unchanged sentences

QSR compliance is necessary to receive and maintain FDA clearance or approval to market new and existing products.

The FDA makes announced and unannounced periodic and ongoing inspections of medical device manufacturers to determine compliance

with the QSR.

The FDA makes announced and unannounced periodic and ongoing inspections of medical device manufacturers to determine compliance with the QSR.

If in connection with these inspections the FDA believes the manufacturer has failed to comply with applicable regulations and/or procedures, it may issue observations that would necessitate prompt corrective action.

If FDA inspection observations are not addressed and/or corrective action is not taken in a timely manner and to the FDA’s satisfaction, the FDA may issue a warning letter (which would similarly necessitate prompt corrective action) and/or proceed directly to other forms of enforcement action.

enforcement action.

Failure to respond timely to FDA inspection observations, a warning letter or other notice of noncompliance and to promptly come into compliance could result in the FDA bringing enforcement action against us, which could include the total shutdown of our production facilities, denial of importation rights to the United States for products manufactured in overseas locations and denial of export rights for U.S.

10 unchanged sentences

regulations .

As a participant in the healthcare industry, we are also subject to extensive laws and regulations protecting the privacy and integrity of patient medical information that we receive, including the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), “fraud and abuse” laws and regulations, including physician self-referral prohibitions, and false claims laws.

As a participant in the healthcare industry, we are also subject to extensive laws and regulations protecting the privacy and integrity of patient medical information that we receive, including the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), new state privacy laws, “fraud and abuse” laws and regulations, including physician self-referral prohibitions, and false claims laws.

From time to time, these laws and regulations may be revised or interpreted in ways that could make it more difficult for our customers to conduct their businesses, such as recent proposed revisions to the laws prohibiting physician self-referrals, and such revisions could have an adverse effect on the demand for our products, and therefore our business and results of operations.

11 unchanged sentences

In addition, it is possible that changes in federal health care law and policy could result in additional proposals and/or changes to health care system legislation which could have a material adverse effect on our business.

created by healthcare reform complicates our customers’ decision-making process and, therefore, impacts our business, and may continue to do so.

Uncertainty created by healthcare reform complicates our customers’ decision-making process and, therefore, may impact our business.

The sale of medical devices, the referral of patients for diagnostic examinations and treatments utilizing such devices, and the submission of claims to third-party payors (including Medicare and Medicaid) seeking reimbursement for such services, are subject to various federal and state laws pertaining to healthcare “fraud and abuse.” Anti-kickback laws make it illegal to solicit, induce, offer, receive or pay any remuneration in exchange for the referral of business, including the purchase of medical devices from a particular manufacturer or the referral of patients to a particular supplier of diagnostic services utilizing such devices.

False claims laws prohibit anyone from knowingly and willfully presenting, or causing to be presented, claims for payment to third-party payors (including Medicare and Medicaid) that are false or fraudulent, for services not provided as claimed, or for medically unnecessary services.

False claims laws prohibit

anyone from knowingly and willfully presenting, or causing to be presented, claims for payment to third-party payors (including Medicare and Medicaid) that are false or fraudulent, for services not provided as claimed, or for medically unnecessary services.

The Office of the Inspector General prosecutes violations of fraud and abuse laws and any violation may result in criminal and/or civil sanctions, including, in some instances, imprisonment and exclusion from participation in federal healthcare programs such as Medicare and Medicaid, which may negatively impact the demand for our products.

5 unchanged sentences

We are required to affix the CE mark to our products to sell them in member countries of the European Union (“EU”).

The CE mark is an international symbol of adherence to certain essential principles of safety and effectiveness, which once affixed enables a product to be sold in member countries of the EEA.

The CE mark is also recognized in many countries outside the EU, such as Finland and Norway and can assist in the clearance process.

To receive permission to affix the CE mark to our medical devices products, we must obtain approvals and Quality System certification, e.g., ISO 13485, through an accredited Notified Body and must otherwise have a quality management system that complies with the EU Medical Device Directive superseded by the EU MDR-Medical Device Regulations in May 2021.

The CE mark is an international symbol of adherence to certain essential principles of safety and effectiveness, which once affixed enables a product to be sold in member countries of the European Economic Area ("EEA").

The CE mark is also recognized in many countries outside the EU and can assist in the clearance process.

To receive permission to affix the CE mark to our medical device products, we must obtain approvals and Quality System certification, e.g., ISO 13485, through an accredited Notified Body and must otherwise have a quality management system that complies with the EU Medical Device Directive, which was superseded by the EU MDR-Medical Device Regulations in May 2021.

The ISO promulgates standards for certification of quality assurance operations.

9 unchanged sentences

A number of countries, including the members of the EU, have implemented or are implementing regulations that would require manufacturers to dispose, or bear certain disposal costs, of products at the end of a product’s useful life and restrict the use of some hazardous substances in certain products sold in those countries.

While these regulations could impose a future cost on the Company, the compliance programs are in place to anticipate or establish best estimates of what the potential exposure of such costs could be should they arise.

While these regulations could impose a future cost on the Company, compliance programs are in place to anticipate or establish best estimates of what the potential exposure of such costs could be should they arise.

Manufacturing and selling a device internationally .

We are subject to laws and regulations outside the United States applicable to manufacturers of radiation-producing devices and products utilizing radioactive materials, and laws and regulations of general applicability relating to matters such as environmental protection, safe working conditions, manufacturing practices and other matters, in each case that are often comparable to, if not more stringent than, regulations in the United States.

In addition, our sales of products in foreign countries are subject to regulation of matters such as product standards, packaging requirements, labeling requirements, import restrictions, environmental and product recycling requirements, tariff regulations, duties and tax requirements.

In some countries, we rely on our foreign distributors and agents to assist us in complying with foreign regulatory requirements.

1 unchanged sentence

In addition to the U.S.

laws regarding the privacy and integrity of patient medical information, we are subject to similar laws and regulations in foreign countries covering data privacy and other protection of health and employee information.

Particularly within Europe, data protection legislation is comprehensive and complex and there has been a recent trend toward more stringent enforcement of requirements regarding protection and confidentiality of personal data, as well as

enactment of stricter legislation.

laws regarding the privacy and integrity of patient medical information, we are subject to similar or stricter laws and regulations in foreign countries covering data privacy and other protection of health and employee information.

We are also subject to international “fraud and abuse” laws and regulations, as well as false claims and misleading advertisement laws.

4 unchanged sentences

Bribery Act of 2010 and the law “On the Fundamentals of Health Protection in the Russian Federation”.

In general, there is a worldwide trend to strengthen anti-corruption laws and their enforcement, and the healthcare industry and medical equipment manufacturers have been particular targets of these investigation and enforcement efforts.

Any violation of these laws by us or our agents or distributors could create a substantial liability for us, subject our officers and directors to personal liability and also cause a loss of reputation in the market.

In general, there

is a worldwide trend to strengthen anti-corruption laws and their enforcement, and the healthcare industry and medical equipment manufacturers have been particular targets of these investigation and enforcement efforts.

Any violation of these laws by us or our agents or distributors could create substantial liability for us, subject our officers and directors to personal liability and also cause a loss of reputation in the market.

Transparency International’s 2021 Corruption Perceptions Index measured the degree to which public sector corruption is perceived to exist in 180 countries/territories around the world and found that two-thirds of the countries in the index, including many that we consider to be high-growth areas for our products, such as China and India, scored below 50, on a scale from 100 (very clean) to 0 (highly corrupt).

15 unchanged sentences

Orders and revenues for our security and inspection products have been and may continue to be unpredictable as governmental agencies may place large orders with us or with our customers over a short period of time and then may not place additional orders until complete deployment and installation of previously ordered products.

We have seen domestic and international governments postpone purchasing decisions and delay installations of products for security and inspection systems.

Furthermore, tender awards in this business may be subject to challenge by third parties, as we have previously encountered, which can make the conversion of orders to revenues unpredictable for some security and inspection products.

3 unchanged sentences

We generally rely on a combination of patents, copyrights, trademarks, trade secret and other laws, and contractual restrictions on disclosure, copying and transferring title, including confidentiality agreements with vendors, strategic partners, co-developers, employees, consultants and other third parties, to protect our proprietary rights in the developments, improvements and inventions that we have originated and which are incorporated in our products or that fall within our fields of interest.

As of October 1, 2021, we own over 275 patents issued in the United States, over 400 patents issued throughout the rest of the world and had approximately another 150 patent applications pending with various patent agencies worldwide.

The patents and patents issuing from the pending applications generally expire between 2021 and 2040.

As of September 30, 2022, we own approximately 260 patents issued in the United States, approximately 400 patents issued throughout the rest of the world and have approximately 130 patent applications pending with various patent agencies worldwide.

The patents issued or issuing from the pending applications generally expire between 2022 and 2040.

We intend to file additional patent applications as appropriate.

3 unchanged sentences

“Risk Factors - Risks Relating to our Intellectual Property and Information Systems.”

In conjunction with the January 2017 separation from Varian, we entered into an Intellectual Property Matters Agreement with Varian, pursuant to which, among other things, we each granted the other licenses to use certain intellectual property.

In conjunction with the January 2017 separation from Varian Medical Systems, Inc.

("Varian"), we entered into an Intellectual Property Matters Agreement with Varian, pursuant to which, among other things, we each granted the other licenses to use certain intellectual property.

Varian was subsequently acquired by Siemens in April of 2021.

Environmental Matters

6 unchanged sentences

In connection with the CERCLA sites, to date Varian has been required to pay only a small portion of the total cleanup costs and we anticipate that any reimbursement to Varian in the future will not be material.

As of October 1, 2021, we had an existing environmental liability of approximately $0.6 million, net of expected insurance proceeds, related to the CERCLA sites.

As of September 30, 2022, we had an existing environmental liability of approximately $1.1 million, net of expected insurance proceeds, related to the CERCLA sites.

Working Capital

7 unchanged sentences

Our business results depend on our ability to successfully manage our human capital resources, including attracting, identifying, and retaining key talent.

Factors that may affect our ability to attract and retain qualified employees include employee morale, our reputation, competition from other employers, and availability of qualified individuals.

As of October 1, 2021, we had approximately 2,100 full-time and part-time employees worldwide.

Factors that may affect our ability to attract and retain qualified employees include employee morale, our reputation, competition from other employers, wage inflation, the increasing trend towards hybrid work environments, and availability of qualified individuals.

As of September 30, 2022, we had approximately 2,300 full-time and part-time employees worldwide.

None of our employees based in the United States are unionized or subject to collective bargaining agreements.

2 unchanged sentences

As part of our people management strategy, we monitor employee morale and our market reputation.

To better understand how to measure the effectiveness of our people management strategy, and to establish a baseline understanding of employee loyalty and retention, we solicit feedback from our employees in the form of an employee net promoter survey.

The results of this survey are

aggregated, and we hold meetings with employees to share and discuss areas of improvement.

We believe this is an effective process to inform how future decisions are made in order to improve employee morale and engagement.

The results of these surveys are analyzed, and we hold meetings with employees to share and discuss areas of improvement.

We believe this is a useful process to inform how future decisions are made in order to improve employee morale and engagement.

Total Rewards

We invest in our workforce by offering a competitive total rewards package that includes a combination of salaries and wages, health and wellness benefits, equity incentives, retirement benefits, and educational benefits.

We strive to offer competitive total rewards package that is responsive to local needs.

We strive to offer a competitive total rewards package that is responsive to local markets.

In the United States, where our largest employee base resides, our benefits for eligible employees have included:

• Affordable health insurance coverage available to full-time employees;

• Health insurance coverage available to full-time employees;

• Tuition reimbursement up to a specified dollar amount on an annual basis;

3 unchanged sentences

Approximately 90% of our eligible employees participate in our 401(k) plan, which positions us as a top performer among similarly situated companies.

In addition, in an effort to further align the interests of our employees with our stockholders, we have an equity-based incentive plan that provides for the grant of nonqualified stock options and restricted stock units to directors, officers and other eligible employees.

In addition, in an effort to further align the interests of eligible employees with our stockholders, we have an equity-based incentive plan that provides for the grant of nonqualified stock options and restricted stock units to directors, officers and other eligible employees.

Additionally, to create performance incentives and to encourage share ownership by our employees, we have implemented an employee stock purchase plan, which enables eligible employees to purchase our common stock at a discount through payroll contributions.

6 unchanged sentences

We have experienced personnel on site at each of our manufacturing locations that are tasked with environmental, health and personal safety education and compliance and, in Salt Lake City, we have an onsite nurse practitioner available to our employees for medical needs.

Because our business involves the manufacture of physical products, many of our employees are unable to work from home.

In an effort to keep our employees safe and to maintain operations during the COVID-19 pandemic, we have implemented a number of new health-related measures, including social-distancing, restrictions on visitors to our facilities, limiting in-person meetings and other gatherings, and providing employees with additional time-off for COVID-19 related absences.

As COVID-19 vaccinations became available we incentivized our employees to become vaccinated, and then discontinued additional time-off programs in June 2021.

In September 2021, we made the decision to bring non-essential workers back to facilities in the U.S., at the time of the decision we estimated that 72% of the workforce had been vaccinated based on vaccine incentive payments.

In addition, we implemented a hybrid-office work program where non-essential employees could work a portion of the workweek from a home office if approved by their leadership to encourage social distancing.

The COVID-19 pandemic presented challenges for our workplace.

Because our business involves the manufacture of physical products, many of our employees were unable to work from home.

In an effort to keep our employees safe and to maintain operations during the COVID-19 pandemic, we implemented a number of health-related measures and incentivized our employees to become vaccinated.

In addition, we implemented a hybrid-office work program where certain employees could work a portion of the workweek from a home office if approved by their leadership.

Diversity and Inclusion

As one of our values states “we embrace equality,” and are committed to a diverse and inclusive workplace that is respectful to all.

As one of our values states, “we embrace equality,” and we are committed to a diverse and inclusive workplace that is respectful to all.

Some of our initiatives include providing scholarships to the Society of Women Engineers ("SWE") and science, technology, engineering, and mathematics ("STEM") programs, regularly analyzing pay equity, and engaging in on-campus events that increase our exposure to diverse populations to promote diversity in our hiring.

2 unchanged sentences

The Securities and Exchange Commission (“SEC”) maintains an internet site, www.sec.gov, that contains reports, proxy and information statements, and other information regarding the Company and other issuers that file electronically with the SEC.

as reasonably practicable after filing with or furnishing to the SEC, we also make the following reports and information available free of charge on the Investors page of our website www.vareximaging.com:

As soon as reasonably practicable after filing with or furnishing to the SEC, we also make the following reports and information available free of charge on the Investors page of our website www.vareximaging.com:

• our annual reports on Form 10-K;

2 unchanged sentences

• proxy statements;

• Section 16 ownership reports.

Additionally, our Code of Conduct, Corporate Governance Guidelines and the charters of the Audit Committee, Compensation and Management Development Committee, and Nominating and Corporate Governance Committee are also available on the Investors page of our website.

Investors and others should note that we announce material financial and operational information to our investors using our investor relations website (http://investors.vareximaging.com/), press releases, SEC filings and public conference calls and webcasts.

Investors and others should note that we announce material financial and operational information to our investors using our investor relations website (https://www.vareximaging.com/investors/), press releases, SEC filings and public conference calls and webcasts.

Please note that information on, or that can be accessed through, our website is not deemed “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

13 unchanged sentences

Sam holds an MBA in Finance from Wharton, and a bachelor’s degree in chemical engineering from the Indian Institute of Technology, Delhi.

Honeysett, 50, has served as Senior Vice President, General Counsel, and Corporate Secretary since January 2017.

Honeysett, 51, has served as Chief Legal Officer since February 2022 and as Senior Vice President, General Counsel, and Corporate Secretary since January 2017.

Prior to the separation of Varex from Varian, Kim served as vice president and assistant general counsel and assistant corporate secretary for Varian, where she advised Varian’s Board of Directors, executive management and corporate functions, including business development, investor relations, human resources, information technology and was responsible for corporate governance, general compliance matters, litigation and global subsidiary governance.

2 unchanged sentences

Giambattista, 63, has served as Senior Vice President, and General Manager - X-ray Detectors since May 2017 and joined Varex after the acquisition of the PerkinElmer Medical Imaging business.

He has nearly 30 years of experience in the industry, having held various management and engineering roles at PerkinElmer and General Electric Company, and received his doctorate degree in physics from the University of Virginia.

Jonaitis, 60, has served as Senior Vice President and General Manager - X-Ray Sources since January 2017.

Prior to the separation of Varex from Varian, Mark served in various management positions at Varian, including most recently vice president and general manager, X‑ray Tube Products and global manufacturing.

Mark joined Varian’s predecessor, Varian Associates, in 1983, where he served in various product and engineering positions.

Mark received his Bachelor of Science in physics from the University of Utah.

He has over 30 years of experience in the industry, having held various management and engineering roles at PerkinElmer and General Electric Company, and received his doctorate degree in physics from the University of Virginia.

Andrew Hartmann, 60, has served as Senior Vice President, Medical Sales & Marketing since July 2018.

Prior to joining Varex he worked for a number of leading OEMs in various leadership rolls, most recently as General Manager of the X-ray and Ultrasound Business for Carestream Health, Inc., a worldwide provider of X-ray imaging systems, from April 2012 to June 2018.

Prior to joining Varex he worked for a number of leading OEMs in various leadership roles, most recently as General Manager of the X-ray and Ultrasound Business for Carestream Health, Inc., a worldwide provider of X-ray imaging systems, from April 2012 to June 2018.

Prior to Carestream, Andrew worked for Siemens Medical Solutions USA, Inc.

(Siemens Healthineers), a leading medical technology company, in sales and marketing rolls both domestically in the United States and internationally for Siemens’ ultrasound business.

(Siemens Healthineers), a leading medical technology company, in sales and marketing roles both domestically in the United States and internationally for Siemens’ ultrasound business.

Prior to Siemens, he held leadership roles at Acuson Corp.

1 unchanged sentence

Andrew received a Master of Business Administration (“EMBA”) from Ashridge Business School in London, United Kingdom, and received a diploma in electronics from Sydney Technical College in Australia.

Jonaitis, 61, has served as Senior Vice President and General Manager - X-Ray Sources since January 2017.

Prior to the separation of Varex from Varian, Mark served in various management positions at Varian, including most recently as vice president and general manager, X‑ray Tube Products and global manufacturing.

Mark joined Varian’s predecessor, Varian Associates, in 1983, where he served in various product and engineering positions.

Mark received his Bachelor of Science in physics from the University of Utah.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business