What changed in this filing

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Item 1. Business

2025-11-18 compared with 2024-11-19 · 42 added, 46 removed, 305 unchanged (22% of the section changed)

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Medical and Industrial.

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

In our Medical segment, we design, manufacture, sell and service X-ray imaging components, including X-ray tubes, flat panel and photon counting detectors and accessories, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, and coolers.

The segments align our products and services offerings with customer use in medical and industrial imaging.

In our Medical segment, we design, manufacture, sell and service X-ray imaging components, including X-ray tubes, flat panel and photon counting detectors and accessories, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, automatic exposure control devices, generators, and coolers.

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

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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 one of the largest independent global manufacturers of X-ray imaging components, and each year, we produce approximately 27,000 X-ray tubes and 20,000 X-ray detectors.

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.

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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.

Dental radiology equipment increased nine-fold, and mammography and CT scanners showed a nearly five-fold increase.

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.

In March 2024, China introduced a new stimulus program that includes the healthcare industry.

We believe the stimulus program has led to customers delaying purchasing decisions in the short-term as they wait to understand the details of the program before making significant purchasing decisions, but are optimistic that it will result in increased opportunities for our business in the longer-term.

As described in more detail under the heading “ Competition and Trade Compliance Laws ” of this Item 1, our business in China has been, is currently being, and may in the future be, impacted by trade wars between the United States and China.

Based on the results of the recent U.S.

elections, there is significant concern that trade relations between the United States and China could worsen in the future, which could materially negatively impact our business moving forward.

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

Our Industrial products include Linatron® X-ray linear accelerators, X-ray tubes, flat panel and photon counting detectors, computed radiography scanners, high voltage connectors, and coolers.

We also manufacture and sell our own X-ray imaging systems for industrial applications.

Our Industrial products include Linatron® X-ray linear accelerators, non-intrusive cargo inspection systems, X-ray tubes, flat panel and photon counting detectors, computed radiography scanners, high voltage connectors, and coolers.

In addition, we license proprietary image-processing and detection software designed to work with other Varex products to provide packaged sub-assembly solutions to our Industrial customers.

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In addition, our Industrial business benefits from our long-term service agreements for our Linatron® products.

Security applications primarily consists of cargo security for the screening of trucks, trains, and cargo containers at ports and borders as well as airport security for checked baggage and palletized cargo.

Security applications primarily consist of cargo security for the screening of trucks, trains, and cargo containers at ports and borders as well as airport security for 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.

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Our customers are primarily large OEMs.

Our top five customers, measured by revenue, are Canon Medical Systems Corporation (“Canon”), United Imaging Healthcare, General Electric Company, Rapiscan Systems, Inc., and Siemens Healthineers AG, which collectively accounted for approximately 41% of total revenue in fiscal year 2024.

Our top five customers, measured by revenue, are Canon Medical Systems Corporation ("Canon"), United Imaging Healthcare, General Electric Company, Siemens Healthineers AG ("Siemens"), and Rapiscan Systems, Inc., which collectively accounted for approximately 40% of total revenue in fiscal year 2025.

Our largest customer, Canon, accounted for approximately 18%, 18%, and 17% of our total revenue for fiscal years 2025, 2024, and 2023, respectively, while our ten largest customers as a group accounted for approximately 52%, 53%, and 51% of our revenue for fiscal years 2025, 2024, and 2023, respectively.

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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, as well as emerging X-ray tube manufacturers in China.

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, as well as emerging X-ray tube

manufacturers.

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.

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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 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 our digital flat panel detector business, 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 sector of our Industrial segment, we compete with other OEM suppliers, such as iRay, Teledyne, and Comet AG.

In the low-energy sector of our Industrial segment, we compete with other OEM suppliers, such as iRay, Teledyne, and Comet AG, as well as those described above for Medical digital detectors.

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 sector, 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.

In the high-energy sector, we compete against technologies from Nuctech Company Limited, Siemens, 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.

Like medical, we sell our high energy products to OEMs and may also compete with those OEMs for cargo system sales.

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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.

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.

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.

products and criminal and civil fines.

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In 2023, China launched a national anti-corruption campaign directed at the healthcare industry, designed to rectify unethical practices related to services and procurement in the Chinese healthcare industry.

The anti-corruption campaign has had a broad-based impact on the healthcare industry in China and contributed to lower sales in our Medical business during fiscal year 2024.

While the anti-corruption campaign negatively impacted Medical sales during fiscal year 2024, we remain optimistic about China in the longer-term and support efforts to eradicate corruption.

Transparency International’s 2023 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 over 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, which strongly indicates

they have significant corruption issues.

The anti-corruption campaign had a broad-based impact on the healthcare industry in China and contributed to lower sales in our Medical business during fiscal year 2024.

During fiscal year 2025, we had stronger sales in our Medical business in China.

Transparency International’s 2024 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 over 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, which strongly indicates they have significant corruption issues.

We currently operate in many countries where the public sector is perceived as being more or highly corrupt and our strategic business plans include expanding our business in regions and countries that are rated as higher risk for corruption activity by Transparency International.

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In recent years, our business, particularly in China, has been impacted by the United States-China trade war in the following ways, among others:

(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 United States manufactured products into China has become more difficult and expensive and (4) increasing competitive pressures domestically and globally versus our Asian- and European-based competitors who may not have been as impacted by the trade war.

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.

(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, (3) importing finished United States manufactured products into China has become more difficult and expensive, and (4) increasing competitive pressures domestically and globally versus our Asian- and European-based competitors who may not have been as impacted by the trade war.

While the governments of both the United States and China have, in the past, granted tariff exclusions that temporarily eliminate certain 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, and the U.S.

tariff exclusions are set to expire on May 31, 2025, unless extended.

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.

tariff exclusions are set to expire on November 10, 2026, unless extended.

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.

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, the Philippines and India.

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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.

Our mitigation efforts could prove less effective than anticipated if, as a result of the recent U.S.

elections, the United States or China impose higher tariffs on one another or other events, such as increasing tensions between China and Taiwan, lead to worsening trade relations between China and the United States.

In addition, while we have been working to implement other tariff mitigation measures, such as free trade zones, bonded mechanisms, and drawback programs, we cannot provide any guarantee that we will be able to effectively implement such measures.

Intellectual Property

We place considerable importance on obtaining and maintaining patent, copyright and trade secret protection for significant new technologies, products and processes, because of the length of time and expense associated with bringing new products through the development process and to the marketplace.

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 September 27, 2024, we own approximately 230 patents issued in the United States, approximately 410 patents issued throughout the rest of the world and have approximately 160 patent applications pending with various patent agencies worldwide.

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 3, 2025, we own approximately 240 patents issued in the United States, approximately 420 patents issued throughout the rest of the world and have approximately 210 patent applications pending with various patent agencies worldwide.

The patents issued expire between 2025 and 2044.

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These licenses generally can only be terminated for breach.

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

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

Varian was subsequently acquired by Siemens in April 2021.

Environmental Matters

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We anticipate that we will be obligated to reimburse Varian for 20% of the liabilities of Varian related to these CERCLA sites (after adjusting for any insurance proceeds).

As of September 27, 2024, we had an existing environmental liability of approximately $3.9 million, net of expected insurance proceeds, related to the CERCLA sites.

As of October 3, 2025, we had an existing environmental liability of approximately $3.2 million, net of expected insurance proceeds, related to the CERCLA sites.

Working Capital

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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, wage inflation, and availability of qualified individuals.

As of September 27, 2024, we had approximately 2,300 full-time equivalent 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, and availability of qualified individuals.

As of October 3, 2025, we had approximately 2,400 full-time equivalent employees worldwide.

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

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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.

Diversity and Inclusion

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

Equity and Inclusion

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

Some of our initiatives include establishing a global employee resource group to drive advocacy and inclusion;

providing internships with a focus on building 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.

We have policies that forbid discrimination and harassment, and we expect our teams to conduct themselves ethically at all times in accordance with Varex’s Code of Conduct.

providing internships with a focus on building science, technology, engineering, and mathematics ("STEM") programs;

and regularly analyzing pay equity.

We expect our teams to conduct themselves ethically at all times in accordance with Varex’s Code of Conduct.

Information Available to Investors

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

Honeysett, 53, 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.

Prior to joining Varian in 2005, Kim served as group director, legal affairs at Siebel Systems, Inc., an enterprise software company, and as an associate with the law firm Brobeck, Phleger & Harrison LLP.

Kim holds a juris doctor degree from Cornell Law School and a bachelor’s degree in communications from the University of California, Los Angeles.

Matthew Martinez, 44 , has served as Chief Legal Officer and Corporate Secretary since October 2025.

Prior to rejoining Varex, Matt served as general counsel of Energy Exemplar, a global provider of energy market simulation software.

He originally joined Varex in September 2017 as senior corporate counsel and served as assistant general counsel and assistant corporate secretary from October 2020 until his departure for Energy Exemplar in April 2022.

Matt has significant international experience, having previously served as senior legal counsel for Apache Corporation in Argentina and Canada.

In addition to his in-house experience, Matt practiced at the law firms of Akin Gump Strauss Hauer and Feld LLP and Stoel Rives LLP where he focused on securities compliance, mergers and acquisitions, and other transactional matters.

Matt holds a juris doctor from Vanderbilt University of Law School and a bachelor's degree in political science from Brigham Young University.

Karen Aranki , 51 , has served as Chief Human Resources Officer since March 2023.

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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