Varex Imaging Corp 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act are designed to provide reasonable assurance that information required to be disclosed in our periodic reports that we file or submit under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed, and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have concluded that our disclosure controls and procedures were effective as of October 3, 2025. Management's Annual Report on Internal Control Over Financial Reporting Management, under the supervision of our CEO and CFO, is responsible for establishing and maintaining adequate internal control over our financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management evaluated the design and operating effectiveness of our internal control over financial reporting based on the criteria established in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the "COSO framework" (2013)). All internal control systems, no matter how well designed, have inherent limitations. Accordingly, even effective internal controls and procedures can provide only reasonable assurance with respect to financial statement preparation and presentation. Under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of October 3, 2025. Based on this evaluation, our management concluded that we maintained effective internal control over financial reporting as of October 3, 2025. 40 Table of Contents The effectiveness of our internal control over financial reporting as of October 3, 2025 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation report, which appears below in this Item 9A. Changes in Internal Control Over Financial Reporting There were no changes to our internal control over financial reporting during the quarter ended October 3, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) under the Exchange Act). 41 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Varex Imaging Corporation Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Varex Imaging Corporation and subsidiaries (the “Company”) as of October 3, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 3, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended October 3, 2025, of the Company and our report dated November 18, 2025, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Salt Lake City, Utah November 18, 2025 42 Table of Contents Item 9B. Other Information Revision of Prior Period Financial Statements As disclosed in more detail in “Revision to Prior Period Financial Statements” in Note 1 to the Consolidated Financial Statements included in this Annual Report on Form 10-K, the financial statements include the correction of an error to previously issued financial statements that required a recovery analysis of incentive-based compensation received by our executive officers under the Varex Imaging Corporation Compensation Recovery Policy filed as Exhibit 97 to this Annual Report. We have determined that no recovery of incentive-based compensation is required as the correction resulted in no changes to the performance metrics used to determine incentive-based compensation for executive officers during any of the applicable completed fiscal years. Insider Trading Arrangements During the three months ended October 3, 2025, none of our directors or officers informed us of the adoption, modification or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 43 Table of Contents PART III Except as otherwise disclosed below, the information required by Items 10, 11, 12, 13 and 14 is incorporated by reference from our definitive proxy statement for the 2026 Annual Meeting of Stockholders. Our definitive proxy statement for the 2026 Annual Meeting of Stockholders ("Proxy Statement") will be filed with the SEC no later than 120 days after October 3, 2025. Item 10. Directors, Executive Officers and Corporate Governance. Directors and Executive Officers The information required by this Item 10 with respect to our executive officers is set forth in Item 1 " Business " of this Annual Report on Form 10-K and information relating to the availability of our code of conduct for executive officers and directors is set out below. Code of Conduct We have adopted a Code of Conduct that applies to all our executive officers and directors. The Code of Conduct is available on our website at http://www.vareximaging.com. In the event of an amendment to, or waiver from, a provision of the Code of Conduct that applies to our principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions, we intend to comply with the disclosure requirements of Item 5.05(c) of Form 8-k by posting such information on our website, specified above. We will provide disclosure of delinquent Section 16(a) reports, if any, in our Proxy Statement, and such disclosure, if any, is incorporated herein by reference. Insider Trading Policy We have an Insider Trading Policy applicable to our directors, officers, employees and certain persons and entities that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and Nasdaq listing standards applicable to our Company. The foregoing summary of our Insider Trading Policy is not complete and is qualified in its entirety by reference to the full text of our Insider Trading Policy, which is filed as Exhibit 19.1 to this Annual Report on Form 10-K. Item 11. Executive Compensation The information required by this Item 11 is incorporated by reference from our Proxy Statement under the caption “Executive Compensation.” 44 Table of Contents Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Equity Compensation Plan Information The following table provides information as of October 3, 2025 with respect to the shares of our common stock that may be issued under our existing equity compensation plans. Plan Category (amounts in thousands except per share data) Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) (a) Weighted average exercise price of outstanding options, warrants, and rights (2) (b) Number of securities remaining available for future issuance under equity compensation plans (3) (excluding securities reflected in columns (a) and (b)) Equity compensation plans approved by security holders 3,775 $ 25.61 5,279 (1) Consists of stock options, restricted stock units ("RSUs"), performance stock units ("PSUs") and deferred stock units ("DSUs") granted under the Varex Imaging Corporation 2017 Omnibus Stock Plan and the 2020 Omnibus Stock Plan, as Amended and Restated (the "2020 Stock Plan"). Excludes purchase rights under the ESPP. (2) The weighted average exercise price does not take into account the shares issuable upon vesting of outstanding RSUs, PSUs, and DSUs, which have no exercise price. (3) Includes 4,456 thousand shares available for future issuance under the 2020 Stock Plan, and also includes 823 thousand shares available for future issuance under the ESPP. Shares available for issuance under the ESPP, including shares subject to purchase during the current purchase period, which commenced on September 2, 2025 (the exact number of which will not be known until the purchase date on February 27, 2026). Subject to the number of shares remaining in the share reserve, the maximum number of shares purchasable by any participant on any one purchase date for any purchase period, including the current purchase period, may not exceed 2,000 shares. The information required by this Item 12 with respect to the security ownership of certain beneficial owners and the security ownership of directors and executive officers is incorporated by reference from our Proxy Statement under the caption “Stock Ownership—Beneficial Ownership of Certain Stockholders, Directors and Executive Officers.” Item 13. Certain Relationships and Related Transactions and Director Independence. The information required by this Item 13 with respect to certain relationships and related transactions is incorporated by reference from our Proxy Statement under the caption “Certain Relationships and Related Transactions.” The information required by this item with respect to director and committee member independence is incorporated by reference from our Proxy Statement under the caption “Proposal - Election of Directors.” Item 14. Principal Accountant Fees and Services. The information required by this Item 14 is incorporated by reference from our Proxy Statement under the caption “Proposal - Ratification of the Appointment of Our Independent Registered Public Accounting Firm.” 45 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules. Documents filed as part of this annual report include: 1. Consolidated Financial Statements. We have filed the consolidated financial statements listed in the Index to Consolidated Financial Statements, Schedules and Exhibits on page F-1 as part of this annual report on Form 10-K. 2. Financial Statement Schedules and Other. All financial statement schedules have been omitted because they are not applicable, or not material or the required information is shown in the consolidated financial statements or the notes thereto. 3. Exhibits. The exhibits listed below are filed as part of this annual report on Form 10-K. Exhibit Number Description 2.1* Separation and Distribution Agreement, dated as of January 27, 2017, by and between Varian and (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed January 30, 2017). 3.1* Amended and Restated Certificate of Incorporation, dated January 27, 2017 (as corrected December 11, 2017) (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed December 13, 2017). 3.2* Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Varex Imaging Corporation, effective as of February 13, 2025 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed February 1 4, 2025.) 3.3* Amended and Restated Bylaws of the Company, as amended February 11, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed February 16, 2021). 4.1 Information required by Item 202(a) through (d) and (f) of Regulation S-K for each class of Company securities that is registered under Section 12 of the Exchange Act. 4.2* Senior Secured Notes Indenture, dated as of September 30, 2020, by and among Varex Imaging Corporation, the Guarantors party thereto and Wells Fargo Bank, National Association, as trustee and collateral agent, including the form of 7.875% Senior Secured Notes due 2027 as Exhibit A (incorporated by reference to Exhibit 4.3 to the Company’s Current Annual Report on Form 10-K filed November 30, 2020). 4.3* First Supplemental Indenture, dated as of December 20, 2024, by and among Varex Imaging Corporation, the Guarantors party thereto and Computershare Trust Company, N.A., in its capacity as successor trustee and successor notes collateral agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed December 23, 2024). 10.1* Tax Matters Agreement, dated as of January 27, 2017 by and between Varian and Company (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed January 30, 2017). 10.2* Intellectual Property Matters Agreement, dated as of January 27, 2017, by and between Varian and Company (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed January 30, 2017). 10.3* Trademark License Agreement, dated as of January 27, 2017, by and between Varian and Company (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed January 30, 2017). 10.4*† Varex Imaging Corporation 2017 Omnibus Stock Plan (incorporated by reference to Exhibit 99.1 to the Company’s Form S-8, filed January 27, 2017). 10.5*† Form of Nonqualified Stock Option Agreement under the 2017 Omnibus Stock Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 16, 2017). 10.6*† Form of Restricted Stock Unit Award Agreement under the 2017 Omnibus Stock Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed February 16, 2017). 46 Table of Contents 10.7*† Varex Imaging Corporation 2017 Employee Stock Purchase Plan, as Amended (incorporated by reference to Appendix A to the proxy statement filed by the Registrant on December 30, 2024). 10.8*† Varex Imaging Corporation Management Incentive Plan (incorporated by reference to Exhibit 10.9 of the Company's Current Report on Form 8-K filed January 30, 2017). 10.9*† Form of Change in Control Agreement (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed November 19, 2021) . 10.10*† Form of Indemnification Agreement (incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed January 30, 2017). 10.11*† Varex Imaging Corporation 2016 Deferred Compensation Plan (incorporated by reference to Exhibit 10.6 to Amendment No. 2 to Form 10 filed by the Company on December 8, 2016). 10.12*† Varex Imaging Corporation Frozen Deferred Compensation Plan (incorporated by reference to Exhibit 10.7 to Amendment No. 2 to Form 10 filed by the Company on December 8, 2016). 10.13*† Form of Grant Agreement for Deferred Stock Units under the 2017 Omnibus Stock Plan (incorporated by reference to Exhibit 10.18 to the Company's Annual Report on Form 10-K filed December 20, 2019). 10.14*† Form of Nonqualified Stock Option Agreement, Form of Restricted Stock Unit Agreement and Form of Grant Agreement – Deferred Stock Units under the Varex Imaging Corporation 2020 Omnibus Stock Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 14, 2020). 10.15*† Form of Performance Unit Agreement under the 2020 Omnibus Stock Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed November 17, 2023). 10.16*† Varex Imaging Corporation 2020 Omnibus Stock Plan, as Amended and Restated (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 9, 2024). 10.17* Credit Agreement dated as of March 26, 2024, by and among Varex Imaging Corporation, Varex Imaging West, LLC, Varex Imaging Deutschland AG, the Guarantors party thereto and Zions Bancorporation, N.A. DBA Zions First National bank, as administrative and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 27, 2024). 10.18* Amendment No. 1 to Revolving Credit and Guarantee Agreement, dated August 30, 2024, made and entered into by and among Varex Imaging Corporation, Varex Imaging West, LLC, Varex Imaging Deutschland AG, the other Loan Parties party thereto and Zions Bancorporation, N.A. DBA Zions First National Bank, as administrative and collateral agent for the lenders party thereto (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K filed November 19, 2024). 10.19* Amendment No. 2 to Revolving Credit and Guaranty Agreement among the Company, Varex Imaging West, LLC, Varex Imaging Deutschland AG, the other Loan Parties party thereto and Zions Bancorporation, N.A. DBA Zions First National Bank (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 17, 2024). 10.20† Executive Transition, Separation and Release Agreement, dated as of September 5, 2025, by and between Varex Imaging Corporation and Kimberley E. Honeysett. 19.1* Varex Imaging Corporation Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Company’s Annual Report on Form 10-K filed November 19, 2024). 21.1 List of Subsidiaries as of October 3, 2025 23.1 Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm 31.1 Chief Executive Officer Certification Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act. 31.2 Chief Financial Officer Certification Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act. 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 47 Table of Contents 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1* Varex Imaging Corporation Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed November 19, 2024). 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101). * Incorporated herein by reference † Management contract or compensatory agreement. Item 16. Form 10-K Summary None 48 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VAREX IMAGING CORPORATION Date: November 18, 2025 By: /s/ Shubham Maheshwari Shubham Maheshwari Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Capacity Date /s/ SUNNY S. SANYAL President and Chief Executive Officer and Director (Principal Executive Officer) November 18, 2025 Sunny S. Sanyal /s/ SHUBHAM MAHESHWARI Chief Financial Officer (Principal Financial and Accounting Officer) November 18, 2025 Shubham Maheshwari /s/ WALTER M ROSEBROUGH, JR. Chair of the Board November 18, 2025 Walter M Rosebrough, Jr. /s/ KATHLEEN L. BARDWELL Director November 18, 2025 Kathleen L. Bardwell /s/ JOCELYN D. CHERTOFF Director November 18, 2025 Jocelyn D. Chertoff /s/ TIMOTHY E. GUERTIN Director November 18, 2025 Timothy E. Guertin /s/ JAY K. KUNKEL Director November 18, 2025 Jay K. Kunkel /s/ CHRISTINE A. TSINGOS Director November 18, 2025 Christine A. Tsingos 49 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F-1 Consolidated Statements of Operations for the fiscal years en ded 2025 , 2024 , and 2023 F-4 Consolidated Statements of Comp rehensive (Loss) Income for th e fiscal ye ars ended 2025 , 2024 , and 2023 F-5 Consolidated Balance Sheets as of the end of fiscal years 2025 and 2024 F-6 Consolidated Statements of Stockholders' Equity for the fiscal years 2025 , 2024 , and 2023 F-7 Consolidated Statements of Cash Flows for the fiscal years ended 2025 , 2024 , and 2023 F-8 Notes to the Consolidated Financial Statements F-9 50 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Varex Imaging Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Varex Imaging Corporation and subsidiaries (the "Company") as of October 3, 2025 and September 27, 2024, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity, and cash flows, for each of the three years in the period ended October 3, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 3, 2025 and September 27, 2024, and the results of its operations and its cash flows for each of the three years in the period ended October 3, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of October 3, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 18, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Inventories – Valuation of Excess and Obsolete Inventories — Refer to Note 1 to the financial statements Critical Audit Matter Description Inventories are valued at the lower of cost or net realizable value. The Company evaluates the carrying value of its inventories taking into consideration such factors as historical sales and anticipated future sales compared to quantities on hand and the prices the Company expects to obtain for products in its various markets. The Company adjusts excess and obsolete inventories to net realizable value, and write-downs of excess and obsolete inventories are recorded as a component of cost of revenues. Estimating the amount of excess and obsolete inventories involves significant judgment and estimates. We identified the valuation of excess and obsolete inventories as a critical audit matter because of management’s significant judgment related to its estimates of anticipated future sales in determining the valuation of excess and obsolete inventories. This required a high degree of auditor judgment and an increased extent of effort. F-1 Table of Contents How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to management’s estimates of the valuation of excess and obsolete inventories included the following, among others: • We tested the effectiveness of controls over the valuation of excess and obsolete inventories. The controls we tested included those over the calculation and the accuracy and completeness of underlying data used in the calculation, including historical sales and anticipated future sales by product, product quantities on hand, and applicable prices. • We evaluated management’s ability to accurately estimate the valuation of excess and obsolete inventories by comparing actual inventory write-downs to management’s historical estimates. • We performed procedures to evaluate the reasonableness of management’s methods, assumptions, and judgments used in developing their estimate of the valuation of excess and obsolete inventories, which included consideration of historical sales, anticipated future sales, and information obtained from production planning and supply chain employees. • We tested the accuracy and completeness of the underlying data used in the Company’s calculations of the valuation of excess and obsolete inventories, including historical usage, anticipated future sales, quantities on hand, and pricing. • We assessed the reasonableness of the assumptions used in estimating the valuation of excess and obsolete inventories by considering the anticipated future sales information obtained from production planning and supply chain employees, and developing an independent expectation which was then compared to the results of the Company’s calculations. • We tested the mathematical accuracy of the Company’s calculations of excess and obsolete inventories. Goodwill – Medical Reporting Unit – Refer to Notes 1 and 12 of the financial statements Critical Audit Matter Description The Company evaluates goodwill for impairment at least annually or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The evaluation includes consideration of qualitative factors including industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit. As a result of various changes in circumstances, the Company performed a quantitative impairment analysis to determine the fair value of its reporting units during the fiscal quarter ended July 4, 2025. The Company used both an income approach utilizing the discounted cash flow method and a market approach utilizing the public company market multiple method. As a result of the impairment test, the Company determined that the carrying amount of the Medical reporting unit was below its fair value, and the Company recorded a $93.9 million goodwill impairment charge to its Medical reporting unit. We identified the valuation of the Medical reporting unit performed as of July 4, 2025 as a critical audit matter because of the significant judgments and estimates management made to determine the fair value of the reporting unit. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to selection of the discount rate and forecasts of future revenues used in determining the fair value of the Medical reporting unit, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to management’s estimates and assumptions for selection of the discount rate and forecasts of future revenues in determining the fair value of the Medical reporting unit as of July 4, 2025 included the following, among others: • We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the Medical reporting unit, such as controls related to management’s estimates and assumptions for the selection of the discount rate and forecasts of future revenues. • We evaluated the reasonableness of management’s revenue forecast estimates by comparing key assumptions to historical results, current industry and peer trends, and information from sales and marketing personnel of the Company. • With the assistance of fair value specialists, we evaluated the reasonableness of the discount rate by: ◦ Testing the source information underlying the determination of the discount rate and testing the mathematical accuracy of the calculation. ◦ Developing a range of independent estimates for the discount rate and comparing those to the discount rate selected by management. • We evaluated whether the revenue forecast estimates were consistent with evidence obtained in other areas of the audit. F-2 Table of Contents /s/ Deloitte & Touche LLP Salt Lake City, Utah November 18, 2025 We have served as the Company’s auditor since 2021. F-3 Table of Contents VAREX IMAGING CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Years (In millions, except per share amounts) 2025 2024 2023 Revenues, net $ 844.6 $ 811.0 $ 893.4 Cost of revenues 554.1 554.1 603.1 Gross profit 290.5 256.9 290.3 Operating expenses: Research and development 91.1 87.0 84.8 Selling, general, and administrative 133.3 137.8 128.4 Impairment of goodwill 93.9 — — Total operating expenses 318.3 224.8 213.2 Operating (loss) income ( 27.8 ) 32.1 77.1 Interest income 8.5 7.3 3.7 Interest expense ( 35.5 ) ( 30.2 ) ( 29.3 ) Other expense, net ( 4.4 ) ( 4.2 ) ( 20.2 ) Interest and other expense, net ( 31.4 ) ( 27.1 ) ( 45.8 ) (Loss) income before taxes ( 59.2 ) 5.0 31.3 Income tax expense (benefit) 10.7 53.3 ( 16.6 ) Net (loss) income ( 69.9 ) ( 48.3 ) 47.9 Less: Net income attributable to noncontrolling interests 0.4 0.5 0.5 Net (loss) income attributable to Varex $ ( 70.3 ) $ ( 48.8 ) $ 47.4 Net (loss) income per common share attributable to Varex Basic $ ( 1.70 ) $ ( 1.20 ) $ 1.18 Diluted $ ( 1.70 ) $ ( 1.20 ) $ 1.07 Weighted average common shares outstanding Basic 41.4 40.8 40.3 Diluted 41.4 40.8 50.3 See accompanying Notes to the Consolidated Financial Statements. F-4 Table of Contents VAREX IMAGING CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME Fiscal Years (In millions) 2025 2024 2023 Net (loss) income $ ( 69.9 ) $ ( 48.3 ) $ 47.9 Other comprehensive loss Unrealized loss on defined benefit obligations — — ( 1.0 ) Gain on forward contracts 0.1 0.1 0.1 Unrealized (loss) gain on available-for-sale securities ( 0.1 ) 0.1 0.1 Foreign currency translation adjustments ( 2.3 ) ( 1.9 ) ( 0.5 ) Total comprehensive (loss) income ( 72.2 ) ( 50.0 ) 46.6 Less: Comprehensive income attributable to noncontrolling interests 0.4 0.5 0.5 Comprehensive (loss) income attributable to Varex $ ( 72.6 ) $ ( 50.5 ) $ 46.1 See accompanying Notes to the Consolidated Financial Statements. F-5 Table of Contents VAREX IMAGING CORPORATION CONSOLIDATED BALANCE SHEETS (In millions, except share and per share amounts) October 3, 2025 September 27, 2024 Assets Current assets: Cash and cash equivalents $ 145.0 $ 168.7 Marketable securities 10.1 31.8 Accounts receivable, net of allowance for credit losses of $ 2.1 million and $ 1.0 million at October 3, 2025 and September 27, 2024, respectively 156.6 157.7 Inventories, net 299.4 264.8 Prepaid expenses and other current assets 30.7 26.9 Total current assets 641.8 649.9 Property, plant, and equipment, net 157.8 153.4 Goodwill 198.4 291.0 Intangible assets, net 14.0 16.1 Investments in privately-held companies 24.5 26.8 Deferred tax assets 2.9 1.3 Operating lease assets 29.4 28.3 Other assets 38.6 46.8 Total assets $ 1,107.4 $ 1,213.6 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 69.9 $ 59.1 Accrued liabilities and other current liabilities 98.4 78.6 Current operating lease liabilities 4.4 4.0 Current maturities of long-term debt, net 1.5 46.3 Deferred revenues 13.0 7.9 Total current liabilities 187.2 195.9 Long-term debt, net 366.0 397.1 Deferred tax liabilities 5.5 4.0 Operating lease liabilities 24.0 23.0 Other long-term liabilities 38.1 50.4 Total liabilities 620.8 670.4 Stockholders' equity: Preferred stock, $ 0.01 par value: 20,000,000 shares authorized, none issued — — Common stock, $ 0.01 par value: 150,000,000 shares authorized Shares issued and outstanding: 41,689,672 and 41,094,179 at October 3, 2025 and September 27, 2024, respectively 0.4 0.4 Additional paid-in capital 483.3 467.2 Accumulated other comprehensive loss ( 5.2 ) ( 2.9 ) (Accumulated deficit) retained earnings ( 5.9 ) 64.4 Total Varex stockholders' equity 472.6 529.1 Noncontrolling interests 14.0 14.1 Total stockholders' equity 486.6 543.2 Total liabilities and stockholders' equity $ 1,107.4 $ 1,213.6 See accompanying Notes to the Consolidated Financial Statements. F-6 Table of Contents VAREX IMAGING CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Common Stock Additional Paid-in Capital Accumulated Other Comprehensive income (loss) Retained Earnings (Accumulated Deficit) Total Varex Equity Noncontrolling Interests Total Stockholders' Equity (In millions) Shares Amount September 30, 2022 40.1 $ 0.4 $ 469.1 $ 0.1 $ 59.7 $ 529.3 $ 13.3 $ 542.6 Net income — — — — 47.4 47.4 0.5 47.9 Cumulative effect of accounting change — — ( 34.6 ) — 6.1 ( 28.5 ) — ( 28.5 ) Exercise of stock options — — 0.2 — — 0.2 — 0.2 Common stock issued upon vesting of restricted shares 0.2 — — — — — — — Shares withheld on vesting of restricted stock ( 0.1 ) — ( 1.4 ) — — ( 1.4 ) — ( 1.4 ) Common stock issued under employee stock purchase plan 0.3 — 3.9 — — 3.9 — 3.9 Share-based compensation — — 13.5 — — 13.5 — 13.5 Realized gain on forward contracts — — — 0.1 — 0.1 — 0.1 Unrealized gain on change in fair value of available-for-sale securities — — — 0.1 — 0.1 — 0.1 Unrealized loss on defined benefit obligations, net of tax — — — ( 1.0 ) — ( 1.0 ) — ( 1.0 ) Foreign currency translation adjustments — — — ( 0.5 ) — ( 0.5 ) — ( 0.5 ) Other — — ( 0.3 ) — — ( 0.3 ) ( 0.5 ) ( 0.8 ) September 29, 2023 40.5 $ 0.4 $ 450.4 $ ( 1.2 ) $ 113.2 $ 562.8 $ 13.3 $ 576.1 Net (loss) income — — — — ( 48.8 ) ( 48.8 ) 0.5 ( 48.3 ) Common stock issued upon vesting of restricted shares 0.4 — — — — — — — Shares withheld on vesting of restricted stock ( 0.1 ) — ( 2.2 ) — — ( 2.2 ) — ( 2.2 ) Common stock issued under employee stock purchase plan 0.3 — 3.8 — — 3.8 — 3.8 Share-based compensation — — 15.2 — — 15.2 — 15.2 Realized gain on forward contracts — — — 0.1 — 0.1 — 0.1 Unrealized gain on change in fair value of available-for-sale securities — — — 0.1 — 0.1 — 0.1 Foreign currency translation adjustments — — — ( 1.9 ) — ( 1.9 ) — ( 1.9 ) Business acquisitions — — — — — — 0.7 0.7 Other — — — — — — ( 0.4 ) ( 0.4 ) September 27, 2024 41.1 $ 0.4 $ 467.2 $ ( 2.9 ) $ 64.4 $ 529.1 $ 14.1 $ 543.2 Net (loss) income — — — — ( 70.3 ) ( 70.3 ) 0.4 ( 69.9 ) Common stock issued upon vesting of restricted shares 0.4 — — — — — — — Shares withheld on vesting of restricted stock ( 0.1 ) — ( 1.9 ) — — ( 1.9 ) — ( 1.9 ) Common stock issued under employee stock purchase plan 0.3 — 3.3 — — 3.3 — 3.3 Share-based compensation — — 14.8 — — 14.8 — 14.8 Realized gain on forward contracts — — — 0.1 — 0.1 — 0.1 Unrealized loss on change in fair value of available-for-sale securities — — — ( 0.1 ) — ( 0.1 ) — ( 0.1 ) Foreign currency translation adjustments — — — ( 2.3 ) — ( 2.3 ) — ( 2.3 ) Other — — ( 0.1 ) — — ( 0.1 ) ( 0.5 ) ( 0.6 ) October 3, 2025 41.7 $ 0.4 $ 483.3 $ ( 5.2 ) $ ( 5.9 ) $ 472.6 $ 14.0 $ 486.6 See accompanying Notes to the Consolidated Financial Statements F-7 Table of Contents VAREX IMAGING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Years (In millions) 2025 2024 2023 Cash flows from operating activities: Net (loss) income $ ( 69.9 ) $ ( 48.3 ) $ 47.9 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Share-based compensation expense 15.0 15.3 13.5 Depreciation 23.2 21.2 19.5 Amortization of intangible assets 4.0 9.9 13.7 Deferred taxes ( 0.5 ) 38.1 ( 38.7 ) Loss from equity method investments 2.7 2.0 1.6 Impairment of equity method investment — — 16.4 Amortization of deferred loan costs 2.7 2.8 2.6 Gain on purchase of business — ( 2.1 ) — Impairment of goodwill 93.9 — — Inventory write-down 3.8 4.9 5.6 Other, net ( 1.8 ) 1.5 3.0 Changes in assets and liabilities: Accounts receivable 0.1 6.7 9.8 Inventories, net ( 39.9 ) 6.6 20.2 Prepaid expenses and other assets ( 3.6 ) 3.3 7.0 Accounts payable 6.2 ( 3.2 ) ( 15.0 ) Accrued liabilities and other current and long-term liabilities 0.1 ( 9.1 ) ( 1.0 ) Deferred revenues 5.7 ( 2.3 ) 2.3 Net cash provided by operating activities 41.7 47.3 108.4 Cash flows from investing activities: Purchases of property, plant, and equipment ( 22.9 ) ( 26.9 ) ( 20.7 ) Loss on settlement of cash flow hedge — — ( 0.2 ) Proceeds from sales of marketable debt securities 11.5 — — Proceeds from maturities of marketable debt securities 50.5 58.8 28.3 Purchase of marketable debt securities ( 30.6 ) ( 56.6 ) ( 52.2 ) Purchase of marketable equity securities — ( 0.2 ) ( 2.7 ) Purchase of certificates of deposit — ( 4.2 ) ( 1.0 ) Proceeds from maturities of certificates of deposit 3.4 1.8 — Settlement of net investment hedge ( 0.8 ) — 7.0 Acquisitions of businesses, net of cash acquired — 0.9 ( 1.0 ) Other, net ( 0.8 ) ( 1.1 ) ( 2.4 ) Net cash provided by (used in) investing activities 10.3 ( 27.5 ) ( 44.9 ) Cash flows from financing activities: Taxes related to net share settlement of equity awards ( 1.9 ) ( 2.2 ) ( 1.4 ) Proceeds from issuance of senior secured notes 126.9 — — Repayments of borrowings ( 201.9 ) ( 1.6 ) ( 2.4 ) Proceeds from exercise of stock options — — 0.2 Payment of debt issuance costs ( 1.2 ) ( 2.3 ) — Proceeds from shares issued under employee stock purchase plan 3.3 3.8 3.9 Other, net ( 1.1 ) ( 1.0 ) ( 0.5 ) Net cash used in financing activities ( 75.9 ) ( 3.3 ) ( 0.2 ) Effects of exchange rate changes on cash and cash equivalents and restricted cash 0.6 ( 0.1 ) 0.1 Net (decrease) increase in cash and cash equivalents and restricted cash ( 23.3 ) 16.4 63.4 Cash and cash equivalents and restricted cash at beginning of period 170.4 154.0 90.6 Cash and cash equivalents and restricted cash at end of period $ 147.1 $ 170.4 $ 154.0 Supplemental cash flow information: Cash paid for interest $ 31.3 $ 27.6 $ 27.4 Income taxes paid, net of refunds 18.6 20.2 16.7 Supplemental non-cash activities: Purchases of property, plant, and equipment financed through accounts payable $ 5.4 $ 1.0 $ 2.7 See accompanying Notes to the Consolidated Financial Statements. F-8 Table of Contents VAREX IMAGING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Varex Imaging Corporation (the “Company” or “Varex”) designs, manufactures, sells, and services a broad range of medical products, which include X-ray imaging components including X-ray tubes, flat panel and photon counting detectors and accessories, ionization chambers, high voltage connectors, image processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, and heat exchangers. The Company sells its products to imaging system original equipment manufacturer (“OEM”) customers for incorporation into new medical diagnostic, radiation therapy, dental, and veterinary equipment, as well as to independent service companies and distributors, and directly to end-users for replacement purposes. The Company also designs, manufactures, sells and services industrial products, which include Linatron® X-ray linear accelerators, X-ray tubes, digital detectors, high voltage connectors, coolers, imaging processing software and image detection products for security and inspection purposes, such as cargo screening at ports and borders and nondestructive examination in a variety of applications. The Company generally sells security and inspection products to OEM customers who incorporate Varex’s products into their inspection or irradiation systems and processes. The Company also manufactures and sells its own X-ray imaging systems for industrial applications. The Company conducts an active research and development program to focus on new technologies and applications in both medical and industrial X-ray imaging. Basis of Presentation The accompanying Consolidated Financial Statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and in accordance with accounting principles generally accepted in the United States ("GAAP"). The Company has consolidated all its majority owned subsidiaries and entities over which it has control. All intercompany balances and transactions have been eliminated in consolidation. Revision of Prior Period Financial Statements During the third quarter of 2025, the Company identified an accounting error related to its deferred tax assets and liabilities and income tax expense calculations in prior periods. The Company has revised its prior period Consolidated Statements of Operations, Consolidated Statements of Comprehensive (Loss) Income, Consolidated Balance Sheets, Consolidated Statements of Stockholders' Equity, and Consolidated Statements of Cash Flows to correct this error. The Company evaluated the effect of the error on the previously issued Consolidated Financial Statements and determined that the related impacts were not material, individually or in aggregate. However, correcting the cumulative effect of the errors as out-of-period adjustments would be material for the current year. As such the Company has corrected these errors in the Consolidated Financial Statements for all prior periods presented herein. The following tables provide a reconciliation of the revisions for the previously reported Consolidated Statements of Operations, Consolidated Statements of Comprehensive (Loss) Income, Consolidated Statements of Stockholders' Equity, and Consolidated Statements of Cash Flows as of the fiscal years ended September 27, 2024 and September 29, 2023 and the revisions for the previously reported Consolidated Balance Sheets as of the fiscal year ended September 27, 2024. F-9 Table of Contents CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Years 2024 2023 (In millions, except per share amounts) As Previously Reported Revision As Revised As Previously Reported Revision As Revised Income tax expense (benefit) $ 52.2 $ 1.1 $ 53.3 $ ( 17.4 ) $ 0.8 $ ( 16.6 ) Net (loss) income ( 47.2 ) ( 1.1 ) ( 48.3 ) 48.7 ( 0.8 ) 47.9 Net (loss) income attributable to Varex ( 47.7 ) ( 1.1 ) ( 48.8 ) 48.2 ( 0.8 ) 47.4 Net (loss) income per common share attributable to Varex Basic $ ( 1.17 ) $ ( 0.03 ) $ ( 1.20 ) $ 1.20 $ ( 0.02 ) $ 1.18 Diluted $ ( 1.17 ) $ ( 0.03 ) $ ( 1.20 ) $ 1.08 $ ( 0.01 ) $ 1.07 CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME Fiscal Years 2024 2023 (In millions) As Previously Reported Revision As Revised As Previously Reported Revision As Revised Net (loss) income $ ( 47.2 ) $ ( 1.1 ) $ ( 48.3 ) $ 48.7 $ ( 0.8 ) $ 47.9 Total comprehensive (loss) income ( 48.9 ) ( 1.1 ) ( 50.0 ) 47.4 ( 0.8 ) 46.6 Comprehensive (loss) income attributable to Varex ( 49.4 ) ( 1.1 ) ( 50.5 ) 46.9 ( 0.8 ) 46.1 CONSOLIDATED BALANCE SHEETS September 27, 2024 (In millions) As Previously Reported Revision As Revised Deferred tax assets $ 4.7 $ ( 3.4 ) $ 1.3 Total assets 1,217.0 ( 3.4 ) 1,213.6 Deferred tax liabilities 1.4 2.6 4.0 Total liabilities 667.8 2.6 670.4 Retained earnings 70.4 ( 6.0 ) 64.4 Total Varex stockholders' equity 535.1 ( 6.0 ) 529.1 Total stockholders' equity 549.2 ( 6.0 ) 543.2 Total liabilities and stockholders' equity 1,217.0 ( 3.4 ) 1,213.6 F-10 Table of Contents CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In millions) Retained Earnings Total Varex Equity Total Stockholders' Equity As Previously Reported For the Year Ended September 29, 2023 Balance at September 30, 2022 $ 63.8 $ 533.4 $ 546.7 Net income 48.2 48.2 48.7 Balance at September 29, 2023 $ 118.1 $ 567.7 $ 581.0 Revision For the Year Ended September 29, 2023 Balance at September 30, 2022 $ ( 4.1 ) $ ( 4.1 ) $ ( 4.1 ) Net loss ( 0.8 ) ( 0.8 ) ( 0.8 ) Balance at September 29, 2023 $ ( 4.9 ) $ ( 4.9 ) $ ( 4.9 ) As Revised For the Year Ended September 29, 2023 Balance at September 30, 2022 $ 59.7 $ 529.3 $ 542.6 Net income 47.4 47.4 47.9 Balance at September 29, 2023 $ 113.2 $ 562.8 $ 576.1 (In millions) Retained Earnings Total Varex Equity Total Stockholders' Equity As Previously Reported For the Year Ended September 27, 2024 Balance at September 29, 2023 $ 118.1 $ 567.7 $ 581.0 Net loss ( 47.7 ) ( 47.7 ) ( 47.2 ) Balance at September 27, 2024 $ 70.4 $ 535.1 $ 549.2 Revision For the Year Ended September 27, 2024 Balance at September 29, 2023 $ ( 4.9 ) $ ( 4.9 ) $ ( 4.9 ) Net loss ( 1.1 ) ( 1.1 ) ( 1.1 ) Balance at September 27, 2024 $ ( 6.0 ) $ ( 6.0 ) $ ( 6.0 ) As Revised For the Year Ended September 27, 2024 Balance at September 29, 2023 $ 113.2 $ 562.8 $ 576.1 Net loss ( 48.8 ) ( 48.8 ) ( 48.3 ) Balance at September 27, 2024 $ 64.4 $ 529.1 $ 543.2 F-11 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Years 2024 2023 (In millions) As Previously Reported Revision As Revised As Previously Reported Revision As Revised Cash flows from operating activities: Net (loss) income $ ( 47.2 ) $ ( 1.1 ) $ ( 48.3 ) $ 48.7 $ ( 0.8 ) $ 47.9 Deferred taxes 37.0 1.1 38.1 ( 39.5 ) 0.8 ( 38.7 ) These revisions had no impact on gross profit, operating expenses, or operating income in any of the fiscal periods. Segment Reporting The Company has two reportable operating segments; (i) Medical and (ii) Industrial. See Note 13, Segment Information, included in this report, for further information on the Company’s segments. Fiscal Year 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 was the 53-week period that ended October 3, 2025, fiscal year 2024 was the 52-week period that ended September 27, 2024, and fiscal year 2023 was the 52-week period that ended September 29, 2023. Variable Interest Entities For entities in which the Company has variable interests, the Company focuses on identifying which entity has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which entity has the obligation to absorb losses or the right to receive residual returns from the variable interest entity. If the Company is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity will be included in the Company’s consolidated financial statements. As of October 3, 2025, the Company had variable interests in two entities, neither of which were consolidated by the Company. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include the valuation of inventories, valuation of goodwill and intangible assets, receivables, warranties, refund liabilities, long-lived asset valuations, impairment of investments, valuation of financial instruments, and taxes on income. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers unrestricted currency on hand, demand deposits, time deposits, and all highly-liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. Restricted Cash Restricted cash primarily consists of cash collateral related to certain leases and inventory arrangements. Restricted cash is included in other assets on the Company's Consolidated Balance Sheets. Cash and cash equivalents and restricted cash as reported within the Consolidated Statements of Cash Flows consisted of the following: October 3, 2025 September 27, 2024 (In millions) Beginning of Period End of Period Beginning of Period End of Period Cash and cash equivalents $ 168.7 $ 145.0 $ 152.6 $ 168.7 Restricted cash 1.7 2.1 1.4 1.7 Total as presented in the Consolidated Statements of Cash Flows $ 170.4 $ 147.1 $ 154.0 $ 170.4 F-12 Table of Contents Fair Value Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There is a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or, other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Derivative Instruments and Hedging Activities The Company records all derivatives on the Consolidated Balance Sheets at fair value as of the reporting date. For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income or loss and reclassified from Accumulated other comprehensive loss ("OCI") into earnings when the hedged transaction affects earnings. For derivatives that are designated and qualify as net investment hedges, the gain or loss on the derivative is reported as a component of other comprehensive income or loss until the hedged item is sold. The portion of the change in fair value of the Company's net investment hedges (or cross currency swaps) related to the cross-currency basis spread is an excluded component in the assessment of the effectiveness of these net investment hedges (or cross currency swaps). A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective, in which case, a quantitative assessment of hedge effectiveness is performed. Concentration of Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash, cash equivalents, marketable securities, certificates of deposit, and trade accounts receivable. Cash held with financial institutions may exceed the Federal Deposit Insurance Corporation insurance limits or similar limits in foreign jurisdictions. To date, the Company has not realized any losses on its deposits of cash and cash equivalents. The Company performs ongoing credit evaluations of its customers and, except for government tenders, group purchases, and orders with a letter of credit, its industrial customers often provide a down payment. The Company maintains an allowance for credit losses based upon the expected collectability of all accounts receivable. The Company obtains some of the components in its products from a limited group of suppliers or from a single-source supplier. When these suppliers are unable to meet the Company's supply needs, the Company's production is negatively impacted. Credit is extended to customers based on an evaluation of the customer’s financial condition, and collateral is not required. In certain circumstances, a customer may be required to prepay all or a portion of the contract price prior to transfer of control. During the periods presented, one of the Company's customers accounted for a significant portion of revenues, as set forth below: Fiscal Years 2025 2024 2023 Canon Medical Systems Corporation 18.0 % 17.6 % 16.5 % Canon Medical Systems Corporation accounted for 14.0 % and 9.5 % of the Company’s accounts receivable as of October 3, 2025 and September 27, 2024, respectively. Inventories, net Inventory is valued at the lower of cost or net realizable value. Costs include materials, labor, external service, and manufacturing overhead and is computed on a first-in-first-out basis. The Company evaluates the carrying value of its inventories taking into consideration such factors as historical and anticipated future sales compared to quantities on hand and the prices the Company expects to obtain for products. The Company adjusts excess and obsolete inventories to net realizable value and write-downs of excess and obsolete inventories are recorded as a component of cost of revenues. F-13 Table of Contents The following table summarizes the Company’s inventories, net : (In millions) October 3, 2025 September 27, 2024 Raw materials and parts $ 228.1 $ 214.5 Work-in-process 31.3 16.2 Finished goods 40.0 34.1 Total inventories, net $ 299.4 $ 264.8 The Company recorded inventory write-downs of $ 3.8 million, $ 4.9 million, and $ 5.6 million in fiscal years ended 2025, 2024, and 2023, respectively. Property, Plant and Equipment, net Property, plant and equipment are stated at cost, net of accumulated depreciation. Major improvements are capitalized, while repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or remaining lease term. Land is not subject to depreciation, but land improvements are depreciated over fifteen years . Land leasehold rights and leasehold improvements are depreciated over the lesser of their estimated useful lives or remaining lease terms. Buildings are depreciated up to thirty years . Machinery and equipment are depreciated over a range from three to seven years . Assets subject to lease are depreciated over the lesser of their estimated useful lives or remaining lease terms. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted, and an impairment assessment may be performed on the recoverability of the carrying amounts. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are removed from the accounts. The following table summarizes the Company’s property, plant, and equipment, net : (In millions) October 3, 2025 September 27, 2024 Land $ 8.6 $ 8.6 Buildings and leasehold improvements 166.3 165.5 Machinery and equipment 217.0 206.5 Construction in progress 36.9 25.0 Gross property, plant, and equipment $ 428.8 $ 405.6 Less: Accumulated depreciation and amortization ( 271.0 ) ( 252.2 ) Total property, plant, and equipment, net $ 157.8 $ 153.4 The Company recorded depreciation expense of $ 23.2 million, $ 21.2 million, and $ 19.5 million in fiscal years 2025, 2024 and 2023, respectively. Equity Method Investments The Company accounts for its equity investments in privately-held companies under the equity method of accounting if the Company has the ability to exercise significant influence in, but not control of, these investments. The Company records impairment losses on its equity method investments if an impairment exists and is deemed to be other-than-temporary, which is based on various factors, including but not limited to, the length of time the fair value of the investment is below the carrying value, the absence of an ability to recover the carrying amount of the investment, and the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. During fiscal year 2023, the Company recorded a before-tax impairment charge totaling $ 16.4 million, which is included in other expense, net in the Company's Consolidated Statements of Operations. There was no impairment recorded during fiscal years 2025 and 2024. Marketable Securities The Company's marketable securities consist primarily of financial instruments such as United States treasury securities, United States agency obligations, corporate bonds, commercial paper, money market funds, and equity securities. F-14 Table of Contents Marketable Debt Securities The Company's marketable debt securities are classified as available-for-sale. Classification of marketable debt securities is determined at the time of purchase, and the Company reevaluates such classification as of each balance sheet date. Marketable debt securities are recorded at estimated fair value and included in cash and cash equivalents, marketable securities, and other assets within the Consolidated Balance Sheets. Any unrealized gains or losses are included in accumulated other comprehensive loss within the Consolidated Balance Sheets. When the fair value of a marketable debt security declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in the Consolidated Statements of Operations. When the fair value of a marketable debt security declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in other comprehensive loss and are recognized in the Consolidated Statements of Operations only if the Company sells or intends to sell the security before recovery of its cost basis. There were no impairments related to marketable debt securities recorded during fiscal years 2025 and 2024. Marketable Equity Securities Marketable equity securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date and included in other assets within the Consolidated Balance Sheets. All unrealized gains and losses on marketable equity securities are recorded as part of other expense, net in the Company's Consolidated Statements of Operations. See Note 4, Fair Value , for further details. Goodwill and Intangible Assets Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net identified tangible and intangible assets acquired. Purchased intangible assets are carried at cost, net of accumulated amortization, and are included in intangible assets, net in the Company's Consolidated Balance Sheets. Intangible assets with finite lives are amortized over their estimated useful lives of primarily two to seven years using the straight-line method. Impairment of Long-lived Assets, Intangible Assets, and Goodwill The Company reviews long-lived assets and identifiable intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company assesses these assets for impairment based on their estimated undiscounted future cash flows. If the carrying value of the assets exceeds the estimated future undiscounted cash flows, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. The Company evaluates goodwill for impairment at least annually at the beginning of the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The evaluation includes consideration of qualitative factors including industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit. If the Company determines that a quantitative analysis is necessary, the Company performs a step one analysis, which consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit. In fiscal years 2024 and 2023 the Company performed the annual goodwill qualitative impairment test for our two reporting units and determined that, at those dates, it was not more likely than not that the fair values of the reporting units were less than their carrying amount and accordingly recorded no impairment. During fiscal year 2025, changes in facts and circumstances related to a sustained decrease in the Company's stock price, a decrease in its market capitalization, and downward revisions in its longer term forecast received during the quarter, which included the impact of tariffs and the China Ministry of Commerce ("MOFCOM") initiating two investigations related to medical products imported into China (the "MOFCOM Investigations"), which were temporarily suspended in May 2025 and August 2025 and indefinitely suspended in November 2025, resulted in the Company determining that an indicator of possible impairment existed within its reporting units. Accordingly, in connection with the preparation of its financial statements for the three months ended July 4, 2025, the Company performed a quantitative impairment analysis to determine the fair values of those reporting units, using both an income approach utilizing the discounted cash flow method and a market approach utilizing the public company market multiple method. Based on the output of the analysis, the Company determined that the carrying of its Medical reporting unit exceeded its fair value. Accordingly, the Company recorded $ 93.9 million of impairment charge to its Medical reporting unit within impairment of goodwill in the Consolidated Statements of Operations. See Note 5 Goodwill and Intangible Assets, for further details. Loss Contingencies From time to time, the Company is involved in legal proceedings, claims, and government inspections or investigations, customs and duties audits, and other contingency matters, both inside and outside the United States, arising in the ordinary course of F-15 Table of Contents its business or otherwise. The Company accrues amounts for probable losses, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss (including, among other things, probable settlement value). A loss or a range of loss is disclosed when it is reasonably possible that a material loss will be incurred and can be estimated or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision. When a loss contingency is probable but not reasonably estimable, the nature of the contingency and the fact that an estimate cannot be made is disclosed. Supplier Finance Programs The Company participates in voluntary supply chain finance programs with a financial intermediary which provide participating suppliers the option to be paid by the intermediary earlier than the original invoice due date. The Company’s responsibility is limited to making payments on the terms originally negotiated with the suppliers, regardless of whether the intermediary pays the supplier in advance of the original due date. As part of participating in these arrangements, the Company generally receives more favorable payment terms from its suppliers. The Company does not receive fees, payments, extended payment terms, or other direct economic benefits from the intermediary. The following table presents the change in the direct supplier financing obligation: (In millions) October 3, 2025 September 27, 2024 Confirmed obligations outstanding at the beginning of the period $ 2.6 $ 4.2 Invoices confirmed during the period 27.9 31.3 Confirmed invoices paid during the period ( 27.6 ) ( 32.9 ) Confirmed obligations outstanding at the end of the period $ 2.9 $ 2.6 Environmental Obligations The Company's operations and facilities, past and present, are subject to environmental laws, including laws that regulate the handling, storage, transport, and disposal of hazardous substances. Certain of those laws impose cleanup liabilities under certain circumstances. In connection with those laws and certain of our past and present operations and facilities, the Company is obligated to indemnify Varian for the cleanup liabilities related to prior corporate restructuring activities. The Company anticipates that it will be obligated to reimburse Varian for 20 % of the liabilities of Varian related to these sites (after adjusting for any insurance proceeds or tax benefits received by Varian). As of October 3, 2025 and September 27, 2024, the Company's estimated environmental liability for these sites was $ 3.2 million and $ 3.9 million, net of expected insurance proceeds, respectively. Product Warranty The Company warrants most of its products for a specific period of time, usually 12 to 27 months from delivery or acceptance, against material defects. The Company provides for the estimated future costs of warranty obligations in cost of revenues when the related revenues are recognized. The accrued warranty costs represent the best estimate at the time of sale of the total costs that the Company will incur to repair or replace product parts that fail while still under warranty. The amount of the accrued estimated warranty costs obligation for established products is primarily based on historical experience of product failures, adjusted for current information on repair costs. For new products, estimates include the historical experience of similar products, as well as a reasonable allowance for warranty expenses associated with new products. On a quarterly basis, the Company reviews the accrued warranty costs and updates the historical warranty cost trends, if required. The following table reflects the changes in the Company’s accrued product warranty: (In millions) October 3, 2025 September 27, 2024 Accrued product warranty, at beginning of period $ 10.8 $ 7.7 New accruals charged to cost of revenues 13.0 21.0 Product warranty expenditures ( 15.3 ) ( 17.9 ) Accrued product warranty, at end of period $ 8.5 $ 10.8 Leases The Company determines if an arrangement is or contains a lease at the inception of an arrangement. The Company's operating lease right-of-use ("ROU") assets represent the right to use an underlying asset over the lease term and lease liabilities F-16 Table of Contents represent its obligation to make lease payments arising from the lease. ROU assets may also include initial direct costs incurred and prepaid lease payments, less lease incentives. Lease liabilities and their corresponding ROU assets are recognized based on the present value of lease payments over the lease term, discounted using the Company's incremental borrowing rate. The Company recognizes operating leases with lease terms of more than twelve months in operating lease assets, current operating lease liabilities, and operating lease liabilities on its Consolidated Balance Sheets. The Company recognizes finance leases with lease terms of more than twelve months in property, plant, and equipment, net, accrued liabilities and other current liabilities, and other long-term liabilities on its Consolidated Balance Sheets. For purposes of calculating lease liabilities and the corresponding ROU assets, the Company's lease term may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Revenue Recognition The Company’s revenues are derived primarily from the sale of hardware and services. The Company recognizes its revenues net of any value-added or sales tax and net of sales discounts. The Company sells a high proportion of its X-ray products to a limited number of OEM customers. X-ray imaging components including X-ray tubes, digital detectors and image-processing tools, and security and inspection products are generally sold on a stand-alone basis. However, the Company occasionally sells its digital detectors, X-ray tubes and imaging processing tools as a package that is optimized for digital X-ray imaging and sells its Linatron® X-ray linear accelerators together with its image processing software and image detection products to OEM customers that incorporate them into their inspection or irradiation systems and processes. Service contracts are often sold with certain security and inspection products and computer-aided detection products. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, a performance obligation is satisfied Contracts and Performance Obligations The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of the consideration is probable. The Company's performance obligations consist mainly of transferring control of products and services identified in the contracts or purchase orders. For each contract, the Company considers the obligation to transfer products and services to the customer, which are distinct, to be performance obligations. Transaction Price and Allocation to Performance Obligations Transaction prices of products or services are typically based on contracted rates. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method when there is a large number of transactions with similar characteristics or the most likely amount method when there are two possible outcomes, depending on the circumstances of the transaction, to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current, and forecasted) that is reasonably available. The Company allows customers to return specific parts of purchased X-ray tubes for a partial refund credit, which is identified as variable consideration. For sales with a right of return, revenue is reduced and a liability is recorded for expected returns, and an asset is recorded for the right to recover products from customers on settling the liability. The Company recognizes a reduction to revenue and cost of sales at the time of sale and a corresponding refund liability and right of return asset. The Company records this estimate based on the historical volume of product returns and adjusts the estimate on a quarterly basis based on the current quarter sales and current quarter returns. If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation could be sold separately. F-17 Table of Contents Recognition of Revenue Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. Product revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Service revenue is generally recognized over the term of the service contract. Services are expected to be transferred to the customer throughout the term of the contract, and the Company believes recognizing revenue ratably over the term of the contract best depicts the transfer of value to the customer. Disaggregation of Revenue Revenue is disaggregated from contracts between geography and by reportable operating segment, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. Refer to Note 13, Segment Information , for the disaggregation of the Company’s revenue based on reportable operating segments and Note 2, Revenue , for the disaggregation of revenue by geographic region and country. Contract Balances Contract liabilities are included within the deferred revenues, and other long-term liabilities balances in the Consolidated Balance Sheets. The Company does not have any material contract assets. Deferred revenue represents the Company's obligation to transfer goods or services to its customers for which it has already received consideration (or the amount is due) from the customer. The Company's deferred revenue balance primarily relates to contract advances and billings for warranty contracts. Deferred revenue that is estimated to be recognized during the following twelve-month period is recorded as deferred revenues and the remaining portion is recorded as other long-term liabilities in the Consolidated Balance Sheets. Costs to Obtain or Fulfill a Customer Contract The Company has certain costs to obtain and fulfill a customer contract, such as commissions and shipping costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Incremental costs of obtaining contracts that would be recognized over greater than one year are not material. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. These costs are included as a component of cost of revenues. Allowance for Credit Losses The Company evaluates the creditworthiness of customers prior to authorizing shipment for all major sale transactions. On a quarterly basis, the Company considers historical trends, current information and any reasonable and supportable forecasts to determine if an amount should be included in the allowance for credit losses. The Company had an allowance for credit losses of $ 2.1 million and $ 1.0 million as of October 3, 2025 and September 27, 2024, respectively. Share-Based Compensation Expense The Company has an equity-based incentive plan that provides for the grant of nonqualified stock options, restricted stock units, and performance stock units to directors, officers, and other employees. The Company also permits employees to purchase shares under the Varex employee stock purchase plan. The Company values stock options granted and the option component of the shares of common stock purchased under the equity-based incentive plans and stock purchased under the employee stock purchase plan using the Black-Scholes option-pricing model. Share-based compensation expense for restricted stock units is measured using the fair value of the Company’s stock on the date of grant and is amortized over the award’s respective service period. The Black-Scholes option-pricing model requires the input of certain assumptions, and changes in the assumptions can materially affect the fair value estimates of share-based payment awards. The Company measures and recognizes expense for all share-based payment awards based on their fair values. Share-based compensation expense recognized in the Consolidated Statements of Operations includes compensation expense for the share-based payment awards based on the grant date fair value estimated in accordance with the guidance on share-based compensation. The F-18 Table of Contents Company records forfeitures as they occur. The Company attributes the value of share-based compensation to expense using the straight-line method. The Company considers only the direct tax impacts of share-based compensation awards when calculating the amount of tax windfalls or shortfalls. Vesting of certain performance stock units is linked to the achievement of performance goals based on Adjusted EBITDA margin. Share-based compensation expense for these performance stock units are recognized over the performance period based on the probability of achieving the performance targets. Certain performance stock units include a market condition based on our relative total shareholder return over the performance period compared to a predetermined peer group. The fair value of these awards is determined using a Monte Carlo simulation as of the date of the grant and share-based compensation expense will not be adjusted should the target awards vary from actual awards. For additional information, see Note 11, Employee Stock Plans , included in this report. Software Development Costs Costs for the development of new software products and substantial enhancements to existing software products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. No costs associated with the development of software have been capitalized as the Company believes its current software development process is essentially completed concurrent with the establishment of technological feasibility. Research and Development Research and development costs are expensed as incurred. These costs primarily include employees’ compensation, consulting fees, and material costs. Taxes on Income Current income tax expense or benefit is the amount of income taxes expected to be payable or receivable for the current year. Deferred income tax liabilities or assets are established for the expected future tax consequences resulting from the differences in financial reporting and tax bases of assets and liabilities. Future changes in tax regulation can have a material impact, including tax rate changes or the realization of deferred tax assets. In addition, we provide reserves for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by the authoritative guidance for accounting for income taxes. A portion of the U.S. general business tax credits for research outside of the financial statement line for research and development ("R&D") have a small degree of uncertainty. A reasonable reserve is maintained on the uncertain portion until either the Internal Revenue Service chooses to audit or the statute of limitation expires. A reserve for R&D is typical for companies that calculate and utilize this general business credit. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. We regularly evaluate the realizability of our deferred tax assets based on the weight of all available evidence, both positive and negative, including the history of recent earnings and expected future taxable income on a jurisdictional basis and our ability to generate sufficient taxable income in the future to realize the net deferred tax assets. The 2017 Tax Cuts and Jobs Act ("TCJA") included a provision requiring research and development expenditures to be capitalized for tax years beginning after December 31, 2021, which was effective for the Company starting in fiscal year 2023. With the 2025 One Big Beautiful Bill Act ("OBBBA"), this provision will be repealed starting in fiscal year 2026. As a result of this repeal, U.S. taxable income and cash taxes are expected to be lower over the next several years. Foreign Currency Remeasurement and Translation The Company uses the U.S. Dollar predominately as the functional currency of its foreign operations. Gains and losses from remeasurement of foreign currency balances into U.S. Dollars are included in the Consolidated Statements of Operations in other expense, net . For the foreign subsidiaries where the local currency is the functional currency, translation adjustments of foreign currency financial statements into U.S. Dollars are recorded to a separate component of accumulated other comprehensive loss. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within the segment measure of profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM. ASU 2023-07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal F-19 Table of Contents years beginning after December 31, 2024. The Company adopted this guidance beginning with this annual report and this guidance will be applied to interim periods starting in fiscal year 2026 on a retrospective basis. Refer to Note 13, Segment Information, for our segment reporting disclosures. Recent Accounting Standards or Updates Not Yet Effective In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard responds to investor input by requiring public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to the financial statements. This standard is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, but early adoption is permitted. The Company is currently evaluating the impact of this standard on our disclosures. In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires public companies to annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 will be effective for the annual reporting periods in fiscal years beginning after December 15, 2024. The Company is currently evaluating ASU 2023-09 and does not expect it to have a material effect on its consolidated financial statements. 2. REVENUE Disaggregation of Revenue Revenue is disaggregated from contracts by geographic region, country, and by reportable operating segment, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. The Company operates various manufacturing and marketing operations outside the United States. The Company's 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. The following table disaggregates the Company’s revenue by geographic region: Fiscal Years (In millions) 2025 2024 2023 Americas $ 276.5 $ 266.5 $ 281.8 EMEA 284.8 280.3 290.7 APAC 283.3 264.2 320.9 Total revenues, net $ 844.6 $ 811.0 $ 893.4 The following table disaggregates the Company’s revenue by country: Fiscal Years (In millions) 2025 2024 2023 United States $ 254.9 $ 257.7 $ 275.1 Japan 143.5 118.1 156.6 China 128.3 118.0 146.8 Other (1) 317.9 317.2 314.9 Total revenues, net $ 844.6 $ 811.0 $ 893.4 (1) No individual country included in the Other category generated more than 10% of total revenues, net. Refer to Note 13, Segment Information, for the disaggregation of the Company's revenue based on reportable operating segments. F-20 Table of Contents Right of Return Assets and Refund Liabilities Right of return assets are included within the prepaid expenses and other current assets, and other assets in the Consolidated Balance Sheets. Refund liabilities are included within the accrued liabilities and other current liabilities and other long-term liabilities in the Consolidated Balance Sheets. The following tables summarize the changes in the right of return assets and refund liabilities for the fiscal years ended October 3, 2025 and September 27, 2024: (In millions) Right of Return Assets Balance at September 29, 2023 $ 26.0 Costs recovered from product returns during the period ( 7.2 ) Right of return assets from shipments of products subject to return during the period 5.6 Adjustment for actual vs. reserved product returns 0.8 Balance at September 27, 2024 $ 25.2 Costs recovered from product returns during the period ( 6.7 ) Right of return assets from shipments of products subject to return during the period 6.4 Balance at October 3, 2025 $ 24.9 (In millions) Refund Liabilities Balance at September 29, 2023 $ 28.9 Release of refund liability included in beginning of year refund liability ( 8.0 ) Additions to refund liabilities 6.2 Adjustment for actual vs. reserved product returns 0.9 Balance at September 27, 2024 $ 28.0 Release of refund liability included in beginning of year refund liability ( 7.5 ) Additions to refund liabilities 7.1 Adjustment for actual vs. reserved product returns 0.1 Balance at October 3, 2025 $ 27.7 During fiscal year 2025, the Company recognized revenue of $ 7.9 million related to deferred revenue which existed at September 27, 2024. During fiscal year 2024, the Company recognized revenue of $ 9.9 million related to deferred revenue which existed at September 29, 2023. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which revenue has not yet been recognized, which are primarily related to contracts where control will be transferred to customers over the next 12 months. See Note 1, Summary of Significant Accounting Policies, for details on the nature of the remaining performance obligations within these contracts and how they will be resolved. 3. RELATED-PARTY TRANSACTIONS Investment in Privately-Held Companies The Company has a 40 % ownership interest in dpiX Holding Company LLC ("dpiX Holding"), a holding company that has a 100 % ownership interest in dpiX LLC ("dpiX"), a supplier of amorphous silicon-based thin film transistor arrays for flat panels used in the Company's digital image detectors. In accordance with the dpiX Holding operating agreement, net profits or losses are allocated to the members in accordance with their ownership interests. The investment in dpiX Holding is accounted for under the equity method of accounting. When the Company recognizes its share of net profits or losses of dpiX Holding, profits or losses in inventory purchased from dpiX are eliminated. In fiscal years 2025, 2024, and 2023, the Company recorded a loss on the equity investment in dpiX Holding of $ 2.3 million, $ 1.0 million, and $ 0.2 million, respectively. The loss on the equity investment in dpiX Holding is included in other expense, net in the Consolidated Statements of Operations. The carrying value of the equity investment in dpiX Holding was $ 22.5 million and $ 24.8 million at October 3, 2025 and September 27, 2024, respectively. F-21 Table of Contents During fiscal year 2023, the Company recorded an impairment of its investment in dpiX Holding of $ 16.4 million. See Note 1, Summary of Significant Accounting Policies, for details on the nature of the impairment. There were no impairments recorded during fiscal year 2025 or 2024. In fiscal years 2025, 2024 and 2023, the Company purchased glass transistor arrays from dpiX totaling $ 19.8 million, $ 18.0 million, and $ 18.7 million, respectively. These purchases of glass transistor arrays are included as a component of inventories, net on the Consolidated Balance Sheets or cost of revenues in the Consolidated Statements of Operations. As of October 3, 2025 and September 27, 2024, the Company had accounts payable to dpiX totaling $ 1.9 million and $ 3.0 million, respectively. In October 2013, the Company entered into an amended agreement with dpiX and other parties that, among other things, provides it with the right to 50 % of dpiX’s total manufacturing capacity. In addition, the Company is required to pay for 50 % of dpiX's fixed costs, as determined at the beginning of each calendar year. In January 2025, the Company's fixed cost commitment was determined and approved by the dpiX board of directors to be $ 13.7 million for calendar year 2025. As of October 3, 2025, the Company estimated it has fixed cost commitments of $ 3.4 million related to the amended agreement with dpiX through the remainder of the calendar year 2025. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement). The Company has determined that dpiX Holding is a variable interest entity because the at-risk equity holders, as a group, lack the characteristics of a controlling financial interest. Majority votes are required to direct the manufacturing activities, legal operations and other activities that most significantly affect dpiX’s economic performance. The Company does not have majority voting rights and no power to unilaterally direct the activities of dpiX Holding, and therefore, is not the primary beneficiary of dpiX Holding. The Company’s exposure to loss as a result of its involvement with dpiX Holding is limited to the carrying value of the Company’s investment of $ 22.5 million and fixed cost commitments. In November 2018, the Company (through one of its wholly-owned subsidiaries) and CETTEEN GmbH (“CETTEEN”), formed a German limited liability company that governs the affairs and conduct of the business of VEC Imaging GmbH & Co. KG (“VEC”), a joint venture formed to develop technology for use in X-ray imaging components. In accordance with the VEC agreement, net profits or losses are allocated to the members in accordance with their ownership interest. The Company's investment in VEC is accounted for under the equity method of accounting. The Company has determined that VEC is a variable interest entity. In fiscal years 2025, 2024, and 2023, the Company recorded a loss on the equity investment in VEC of $ 0.0 million, $ 0.1 million, and $ 0.4 million respectively. The Company's investment in VEC was $ 2.0 million and $ 2.0 million as of October 3, 2025 and September 27, 2024, respectively. In fiscal years 2025 and 2024, the Company had loans and other receivables from VEC of $ 0.8 million and $ 0.7 million, respectively, which are recorded in prepaid expenses and other current assets in the Consolidated Balance Sheets. 4. FAIR VALUE Assets and Liabilities Measured at Fair Value on a Recurring Basis The fair values of certain of the Company’s financial instruments, including bank deposits included in cash and cash equivalents, accounts receivable, net and accounts payable, approximate their fair values due to their short maturities. The fair values of the Company’s Senior Secured Notes, as defined in Note 6, Borrowings and measured using Level 1 inputs, and as of October 3, 2025 and September 27, 2024 was $ 375.8 million and $ 247.6 million respectively. The Company has elected to use the income approach to value its derivative instruments using standard valuation techniques and Level 2 inputs, such as currency spot rates, forward points and credit default swap spreads. F-22 Table of Contents In the tables below, the Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. Fair Value at October 3, 2025 (In millions) Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Commercial paper $ — $ 2.0 $ — $ 2.0 Corporate notes/bonds — 4.0 — 4.0 Government agencies — 2.0 — 2.0 U.S. treasury bills — 15.8 — 15.8 Deferred compensation plan (1) 8.4 — — 8.4 Marketable equity securities 3.6 — — 3.6 Total assets measured at fair value $ 12.0 $ 23.8 $ — $ 35.8 Liabilities: Derivative liabilities $ — $ 10.4 $ — $ 10.4 Total liabilities measured at fair value $ — $ 10.4 $ — $ 10.4 (1) The assets held under the Company’s deferred compensation plan are classified in Level 1, as they relate primarily to publicly traded mutual funds for which there are observable market prices in active markets. Fair Value at September 27, 2024 (In millions) Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Money market funds $ — $ 24.4 $ — $ 24.4 Corporate notes/bonds — 16.5 — 16.5 Government agencies — 18.3 — 18.3 U.S. treasury bills — 6.1 — 6.1 Certificates of deposit — 0.9 — 0.9 Derivative assets — 1.0 — 1.0 Deferred compensation plan (1) 7.5 — — 7.5 Marketable equity securities 2.6 — — 2.6 Total assets measured at fair value $ 10.1 $ 67.2 $ — $ 77.3 Liabilities: Derivative liabilities $ — $ 8.6 $ — $ 8.6 Total liabilities measured at fair value $ — $ 8.6 $ — $ 8.6 (1) The assets held under the Company’s deferred compensation plan are classified in Level 1, as they relate primarily to publicly traded mutual funds for which there are observable market prices in active markets. Nonrecurring Fair Value Measurements During fiscal year 2025, the Company assessed its goodwill for impairment and concluded that the carrying value of the Medical reporting unit was greater than its fair value. The nonrecurring fair value measurements used by the Company to determine the impairment of the Medical reporting unit goodwill was calculated by equal weighting of the income approach based on estimated discounted future cash flows and the market approach based on comparable publicly traded companies in similar lines of businesses. Under the income approach, fair value is determined based on a discounted cash flow technique that uses estimates of cash flows discounted to present value using rates commensurate with the risks associated with those cash flows. Under the market approach, a market-based value is derived by relating multiples of revenue for a group of comparable public companies to the same measure for F-23 Table of Contents each reporting unit to estimate fair value. This valuation resulted in a Level 3 nonrecurring fair value measurement. See Note 5, Goodwill and Intangible Assets , for further information on the nature of the impairment. Marketable Debt Securities The following is a summary of marketable debt securities, which are included within the cash and cash equivalents, marketable securities, and other assets balances on the Consolidated Balance Sheets. October 3, 2025 (In millions) Amortized Costs Unrealized Losses Fair Value Commercial paper $ 2.0 $ — $ 2.0 Corporate notes/bonds 4.1 ( 0.1 ) 4.0 U.S. treasury bills 15.8 — 15.8 Government agencies 2.0 — 2.0 Total marketable debt securities $ 23.9 $ ( 0.1 ) $ 23.8 September 27, 2024 (In millions) Amortized Costs Unrealized Gains Fair Value Corporate notes/bonds $ 16.4 $ 0.1 $ 16.5 U.S. treasury bills 6.1 — 6.1 Government agencies 18.3 — 18.3 Certificates of deposit 0.9 — 0.9 Total marketable debt securities $ 41.7 $ 0.1 $ 41.8 The contractual maturities of marketable debt securities as of October 3, 2025, are shown in the table below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations. October 3, 2025 (In millions) Amortized Costs Fair Value Contractual maturities: Due within one year $ 23.9 $ 23.8 Total marketable debt securities $ 23.9 $ 23.8 During the fiscal year ended October 3, 2025, there were no gross realized gains or losses from the sale of certain marketable debt securities that were reclassified out of accumulated other comprehensive loss. The following tables summarize the balance sheet locations for marketable debt securities: October 3, 2025 (In millions) Commercial Paper Corporate Notes/Bonds Government Agencies Treasury Bills Total Cash and cash equivalents $ — $ — $ — $ 13.7 $ 13.7 Marketable securities 2.0 4.0 2.0 2.1 10.1 Total marketable debt securities $ 2.0 $ 4.0 $ 2.0 $ 15.8 $ 23.8 September 27, 2024 (In millions) Corporate Notes/Bonds Government Agencies Treasury Bills Certificates of Deposit Total Cash and cash equivalents $ — $ — $ 1.0 $ — $ 1.0 Marketable securities 10.5 16.3 4.1 0.9 31.8 Other assets 6.0 2.0 1.0 — 9.0 Total marketable debt securities $ 16.5 $ 18.3 $ 6.1 $ 0.9 $ 41.8 F-24 Table of Contents 5. GOODWILL AND INTANGIBLE ASSETS The following table reflects goodwill by reportable operating segment: (In millions) Medical Industrial Total Balance at September 27, 2024 $ 173.0 $ 118.0 $ 291.0 Impairment of goodwill ( 93.9 ) — ( 93.9 ) Foreign currency translation adjustments 0.7 0.6 1.3 Balance at October 3, 2025 $ 79.8 $ 118.6 $ 198.4 Medical Industrial Total Balance at October 3, 2025 Goodwill $ 173.7 $ 118.6 $ 292.3 Accumulated impairment losses ( 93.9 ) — ( 93.9 ) Total goodwill $ 79.8 $ 118.6 $ 198.4 The Company performs its annual goodwill impairment test as of the beginning of the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Refer to Note 1, Summary of Significant Accounting Policies, for further details concerning our annual goodwill impairment evaluation. During the three months ended July 4, 2025, the Company identified triggering events in its Industrial and Medical reporting units due to a sustained decline in its market capitalization, a sustained decline in its stock price, and downward revisions in its longer-term forecast received during the quarter, which included the impact of tariffs and MOFCOM Investigations announcements. As a result, in connection with the preparation of its financial statements for the three months ended July 4, 2025, the Company performed a quantitative impairment analysis for goodwill related to its Medical and Industrial reporting units. The fair value of the reporting units were determined using both an income approach utilizing the discounted cash flow method and market approach utilizing the public company market multiple method. Based on this analysis, the Company determined that the carrying amount of the Medical reporting unit exceeded fair value, and recorded a goodwill impairment charge of $ 93.9 million to its Medical reporting unit within impairment of goodwill in the Consolidated Statements of Operations. Additionally, based on the output of the analysis, the Company determined that the fair value of the Industrial reporting unit exceeded its carrying amount. Accordingly, no impairment charge was recorded relating to its Industrial reporting unit. The goodwill within the Medical reporting unit remains susceptible to future impairment charges. Any significant adverse change in the Company's near- or long-term projections or macroeconomic conditions would result in future impairment charges for the Medical reporting unit. The following table reflects the gross carrying amount and accumulated amortization of the Company’s finite-lived intangible assets included in intangible assets, net in the Consolidated Balance Sheets: October 3, 2025 September 27, 2024 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 74.9 $ ( 65.5 ) $ 9.4 $ 73.8 $ ( 63.5 ) $ 10.3 Patents, licenses and other 6.2 ( 6.2 ) — 12.6 ( 12.6 ) — Customer contracts and supplier relationship 52.3 ( 47.7 ) 4.6 52.8 ( 47.0 ) 5.8 Total intangible assets $ 133.4 $ ( 119.4 ) $ 14.0 $ 139.2 $ ( 123.1 ) $ 16.1 Amortization expense for intangible assets was $ 4.0 million, $ 9.9 million, and $ 13.7 million in fiscal years 2025, 2024, and 2023, respectively. F-25 Table of Contents As of October 3, 2025 , the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal Years: 2026 $ 4.1 2027 3.8 2028 3.7 2029 1.9 2030 0.2 Thereafter 0.3 Total $ 14.0 6. BORROWINGS The following table summarizes the Company’s short-term and long-term debt: October 3, 2025 September 27, 2024 (In millions, except for percentages) Amount Amount Contractual Interest Rate Effective Interest Rate Current maturities of long-term debt: Convertible Senior Unsecured Notes $ — $ 45.0 4.0 % 4.8 % Other debt 1.5 1.5 Total current maturities of long-term debt $ 1.5 $ 46.5 Non-current maturities of long-term debt: Convertible Senior Unsecured Notes (1) $ — $ 155.0 4.0 % 4.8 % Senior Secured Notes 368.0 243.0 7.9 % 8.2 % Other debt 0.4 2.1 Total non-current maturities of long-term debt $ 368.4 $ 400.1 Unamortized issuance costs and debt discounts: Unamortized issuance costs - Convertible Notes $ — $ ( 1.0 ) Unamortized issuance costs, net of debt premium - Senior Secured Notes ( 2.4 ) ( 2.2 ) Total unamortized issuance costs and debt discounts ( 2.4 ) ( 3.2 ) Total debt outstanding, net $ 367.5 $ 443.4 (1) This amount has been excluded from current liabilities as it is supported by the Revolving Credit Facility and restricted cash from the proceeds of the Senior Secured Notes Add On (as defined below), which are expected to remain outstanding for an uninterrupted period extending beyond one year from the balance sheet date. F-26 Table of Contents Future principal payments of long-term debt outstanding as of October 3, 2025 are as follows: (In millions) Fiscal Years: 2026 $ 1.5 2027 368.4 2028 — 2029 — 2030 — Thereafter — Total debt outstanding $ 369.9 Less: current maturities of long-term debt ( 1.5 ) Non-current portion of long-term debt $ 368.4 The following table summarizes the Company’s interest expense: Fiscal Years (In millions) 2025 2024 2023 Contractual interest coupon and other $ 32.7 $ 26.8 $ 26.7 Amortization of debt issuance costs 2.8 3.4 2.6 Total interest expense $ 35.5 $ 30.2 $ 29.3 Senior Secured Revolving Credit Facility On March 26, 2024, the Company entered into a senior secured revolving credit agreement (the "Credit Agreement") providing for a senior secured revolving credit facility of up to $ 155.0 million (the “Revolving Credit Facility”). Simultaneous with its entry into the Revolving Credit Facility, the Company terminated its $ 100.0 million asset-based loan revolving credit facility (the "ABL Facility"), dated as of September 30, 2020. As of October 3, 2025, the Revolving Credit Facility remains undrawn. The maximum availability under the Revolving Credit Facility is $ 155.0 million, which is available to the Company for revolving loans in U.S. dollars and for the issuance of letters of credit. As of October 3, 2025, the amount available under the Revolving Credit Facility was $ 154.8 million. The Company may make and repay borrowings from time to time until the maturity of the Revolving Credit Facility. Borrowings under the Revolving Credit Facility will mature, and lending commitments thereunder will terminate, on September 26, 2027. The interest rate for Revolving Credit Facility borrowings is the Secured Overnight Financing Rate (“SOFR”) (subject to a floor of 0.00 %) plus a margin of 2.00 % to 2.75 %, depending on the consolidated total net leverage ratio of the Company (as defined in the Credit Agreement). Alternatively, the Company has the option of selecting a base rate equal to the highest of (a) the prime rate, (b) the Federal Funds Rate plus 0.50 % and (c) the one-month SOFR (subject to a floor of 0.00 %) plus a margin of 1.00 %. A Base Rate Loan also has an additional margin of 1.00 % to 1.75 %. depending on the consolidated total net leverage ratio of the Company at that time. An unused commitment fee of 0.375 % per annum was payable from March 26, 2024 until June 28, 2024, and thereafter an unused commitment fee of between 0.30 % to 0.40 % per annum is payable quarterly on the actual daily unused portion of the Revolving Credit Facility, depending on the consolidated total net leverage ratio of the Company. Debt issuance costs, including unamortized deferred costs for continuing lenders under the previously existing ABL Facility, of $ 2.3 million were capitalized and are included within other assets on the Consolidated Balance Sheets. These costs will be amortized over the term of the new agreement and will be recorded within interest expense in the Consolidated Statements of Operations. The Credit Agreement contains customary covenants restricting the Company’s activities, as well as those of its subsidiaries, including limitations on the ability to sell assets, engage in mergers, or other fundamental changes, enter into capital leases or certain leases not in the ordinary course of business, enter into transactions involving related parties or derivatives, incur or prepay indebtedness, grant liens or negative pledges on its assets, make loans or other investments, pay dividends or repurchase stock or other securities, guarantee third-party obligations, engage in sale leasebacks, and make changes in its corporate structure, though there are certain exceptions and carveouts related to these restrictions. One such covenant involves maintaining compensating cash balances. The Company must maintain with the Cash Management Banks (as defined in the Credit Agreement) one or more accounts and/or Bank Products (as defined in the Credit Agreement) at least 80 % of its U.S. cash availability. The compensating balances may be F-27 Table of Contents withdrawn but the availability of the Revolving Credit Facility is dependent upon maintenance of such compensating balances. In addition, the Credit Agreement includes financial covenants related to the Company’s consolidated total net leverage ratio and its consolidated fixed charge coverage ratio. The Company’s obligations under the Revolving Credit Facility are guaranteed by the Company and a number of Company subsidiaries. These guarantees are secured on a first lien basis by specified assets, including inventory, accounts receivable, cash, intercompany accounts and loans, and certain real property. In addition, the Revolving Credit Facility is secured by second liens on certain assets securing the Company’s 7.875 % Senior Secured Notes due 2027. An intercreditor agreement governs how the collateral securing the respective debt obligations will be treated among the secured parties. Equipment Credit Agreement On April 26, 2024, the Company entered into a secured delayed draw term loan credit agreement (the “Equipment Credit Agreement”), providing for a secured equipment credit facility of up to $ 20.0 million (the “Equipment Credit Facility”). On December 20, 2024, the Company terminated the Equipment Credit Agreement and recognized $ 0.1 million of the remaining unamortized issuance costs in interest expense in the Consolidated Statements of Operations. There was no principal balance outstanding under the Equipment Credit Facility when it was terminated. Convertible Senior Unsecured Notes On June 9, 2020, Varex issued $ 200.0 million in aggregate principal amount of 4.00 % Convertible Senior Unsecured Notes due 2025 (“Convertible Notes”). The net proceeds from the issuance of the Convertible Notes, after deducting transaction fees and offering expense payable by the Company, were approximately $ 193.1 million. The Convertible Notes bore interest at the annual rate of 4.00 %, payable semiannually on June 1 and December 1 of each year. On June 1, 2025, the Convertible Notes matured and were settled using $ 200.0 million in cash. Call Spread On June 4, 2020 and June 5, 2020, Varex entered into privately negotiated warrant transactions (collectively, the “Warrant Transactions”), whereby the Company sold warrants at a higher strike price relating to the same number of shares of Varex common stock that initially underlie the Convertible Notes, subject to customary anti-dilution adjustments. The initial strike price of the warrants is $ 24.975 per share (subject to adjustment under the terms of the Warrant Transactions), which was 50 % above the last reported sale price of Varex common stock on June 4, 2020. The Warrant Transactions could have a dilutive effect to the Company's stockholders to the extent that the market price per share of Varex common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants. The number of shares underlying the Warrant Transactions is 9.6 million. The number of warrants outstanding as of October 3, 2025 was 9.6 million. The warrants expire after a 90 day trading period (as described in the warrant agreements) that begins on September 2, 2025. Senior Secured Notes Varex issued $ 300.0 million aggregate principal amount of 7.875 % Senior Secured Notes due 2027 (the "Senior Secured Notes") pursuant to an indenture dated September 30, 2020. Interest payments are paid semiannually on April 15 and October 15 of each year, beginning on April 15, 2021. The Senior Secured Notes will mature on October 15, 2027, unless earlier redeemed or repurchased by Varex. On July 15, 2021, we redeemed $ 30.0 million, and on March 18, 2022, we redeemed $ 27.0 million of the Senior Secured Notes. On December 20, 2024, the Company issued an additional $ 125.0 million of Senior Secured Notes (the "Senior Secured Notes Add On") pursuant to the Base Indenture, as supplemented by a supplemental indenture, dated December 20, 2024. The net proceeds from the Senior Secured Notes Add On after initial purchasers’ premium, commissions, estimated fees, accrued interest in arrears, and expenses of $ 1.1 million, were approximately $ 123.9 million. The Company used the proceeds from the offering to repay a portion of the Convertible Notes on their maturity date of June 1, 2025. As of October 3, 2025, the aggregate principal amount of the outstanding Senior Secured Notes was $ 368.0 million. The Senior Secured Notes are secured by a first priority lien on substantially all of the assets of Varex and the assets and capital stock of its subsidiary guarantors (subject to exceptions), except for assets for which a first priority security interest is pledged for the Revolving Credit Facility, in which the Senior Secured Notes have a second lien security interest. The Senior Secured Notes include negative covenants, subject to certain exceptions, restricting or limiting Varex's ability and the ability of its restricted subsidiaries to, among other things, incur liens on collateral; sell certain assets; incur additional indebtedness; pay dividends; issue preferred shares; consolidate, merge, or sell all or substantially all of its assets; and enter into certain transactions with their affiliates. F-28 Table of Contents 7. NET (LOSS) INCOME PER SHARE Basic net (loss) income per common share is computed by dividing the net (loss) income for the period by the weighted average number of shares of common stock outstanding during the reporting period. Diluted net (loss) income per common share reflects the effects of potentially dilutive securities, which is computed by dividing the sum of net (loss) income and any adjustments to net income by the sum of the weighted average number of common shares outstanding and dilutive common shares. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net (loss) income per common share is as follows: Fiscal Years (In millions, except per share amounts) 2025 2024 2023 Net (loss) income per share - basic Net (loss) income attributable to Varex $ ( 70.3 ) $ ( 48.8 ) $ 47.4 Basic weighted average shares outstanding 41.4 40.8 40.3 Basic net (loss) income per share attributable to Varex $ ( 1.70 ) $ ( 1.20 ) $ 1.18 Net (loss) income per share - diluted Net (loss) income attributable to Varex $ ( 70.3 ) $ ( 48.8 ) $ 47.4 Interest expense on Convertible Notes, net of tax — — 6.2 Diluted net (loss) income $ ( 70.3 ) $ ( 48.8 ) $ 53.6 Basic weighted average shares outstanding 41.4 40.8 40.3 Dilutive effect of Convertible Notes — — 9.6 Dilutive effect of share-based awards and other — — 0.4 Diluted weighted average shares outstanding 41.4 40.8 50.3 Diluted net (loss) income per share attributable to Varex $ ( 1.70 ) $ ( 1.20 ) $ 1.07 Anti-dilutive share summary Share-based awards and other 3.4 3.3 2.7 Convertible notes — 9.6 — Warrants 9.6 9.6 9.6 Total anti-dilutive shares 13.0 22.5 12.3 Potentially dilutive shares, which are based on the weighted-average shares of common stock underlying stock options, unvested stock awards, purchase rights granted under the employee stock purchase plan, warrants, and Convertible Notes using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted net (loss) income per share attributable to Varex when their effect is dilutive. 8 . LEASES The Company has operating and finance leases for office space, warehouse and manufacturing space, vehicles, and certain equipment. The Company's lease agreements do not contain any material residual value guarantees, variable lease costs, bargain purchase options or restrictive covenants. The Company does not have any lease transactions with related parties. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet and expense for these leases is recognized on a straight-line basis over the lease term. The Company's leases have remaining lease terms of less than one year to approximately ninety-three years , some of which may include options to extend the leases for up to five years and some include options to terminate early. These options have been included in the determination of the lease liability when it is reasonably certain that the option will be exercised. Right-of-use assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease contract. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of fixed lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company's incremental borrowing rate is based on a credit-adjusted risk-free rate, which best approximates a secured rate over a similar term of lease. F-29 Table of Contents The following table presents supplemental balance sheet information related to the Company's operating and finance leases: (In millions) Balance Sheet Location October 3, 2025 September 27, 2024 Assets Operating lease right-of-use assets Operating lease assets $ 29.4 $ 28.3 Finance lease right-of-use assets Property, plant, and equipment, net 5.7 6.6 Liabilities Operating lease liabilities (current) Current operating lease liabilities 4.4 4.0 Finance lease liabilities (current) Accrued liabilities and other current liabilities 0.4 0.4 Operating lease liabilities (non-current) Operating lease liabilities 24.0 23.0 Finance lease liabilities (non-current) Other long-term liabilities 5.6 5.9 The following table presents the weighted average remaining lease term and discount rate information related to the Company's operating and finance leases: October 3, 2025 September 27, 2024 Operating lease weighted average remaining lease term (in years) 7.7 7.9 Operating lease weighted average discount rate 7.2 % 8.0 % Finance lease weighted average remaining lease term (in years) 13.2 13.9 Finance lease weighted average discount rate 6.1 % 6.1 % The following table provides information related to the Company’s operating and finance leases: (In millions) 2025 2024 2023 Total operating lease costs (1) $ 6.2 $ 6.3 $ 5.8 Amortization of right-of-use assets $ 1.0 $ 0.3 $ 0.2 Interest on lease liabilities 0.4 — — Total finance lease costs $ 1.4 $ 0.3 $ 0.2 Operating cash flows from operating leases $ 6.1 $ 5.9 $ 7.8 Operating cash flows from finance leases 0.4 — — Financing cash flows from finance leases 0.6 0.5 0.3 Total cash paid for amounts included in the measurement of lease liabilities $ 7.1 $ 6.4 $ 8.1 Noncash operating right-of-use assets obtained in exchange for new lease liabilities $ 8.1 $ 5.4 $ 10.6 Noncash finance right-of-use assets obtained in exchange for new lease liabilities 0.2 6.5 0.2 Total right-of-use assets obtained in exchange for new lease liabilities $ 8.3 $ 11.9 $ 10.8 (1) Includes variable and short-term lease expense, which were immaterial for fiscal years 2025, 2024, and 2023. F-30 Table of Contents As of October 3, 2025, maturities of operating lease and finance lease liabilities for each of the following five years and a total thereafter were as follows: (In millions) Fiscal years: Operating Leases Finance Leases 2026 $ 6.2 $ 0.7 2027 5.5 0.7 2028 4.5 0.6 2029 3.7 0.6 2030 3.6 0.6 Thereafter 14.0 5.5 Total future lease payments $ 37.5 $ 8.7 Less: imputed interest ( 9.1 ) ( 2.7 ) Present value of lease liabilities $ 28.4 $ 6.0 As of October 3, 2025 , the Company had not entered into any material leases that have not yet commenced. 9. FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES As part of the Company’s overall risk management practices, the Company enters into financial derivatives to manage its financial exposures to foreign currency exchange rates and interest rates. The Company records all derivatives on the Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective, in which case the Company would test for effectiveness on a more frequent basis. The changes in fair value for all trades that are not designated for hedge accounting are recognized in current period income. The Company does not offset fair value amounts recognized for derivative instruments in its Consolidated Balance Sheets for presentation purposes. Credit risk related to derivative transactions reflect the risk that a party to the transaction could fail to meet its obligation under the derivative contracts. Therefore, the Company’s exposure to the counterparty’s credit risk is generally limited to the amounts, if any, by which the counterparty’s obligations to the Company exceed the Company’s obligations to the counterparty. The Company’s policy is to enter into contracts only with financial institutions that meet certain minimum credit ratings to help mitigate counterparty credit risk. Derivatives Designated as Hedging Instruments - Net Investment Hedges The Company uses cross currency swap contracts as net investment hedges to manage its risk of variability in foreign currency-denominated net investments in wholly-owned international operations. All changes in fair value of the derivatives designated as net investment hedges are reported in accumulated other comprehensive loss along with the foreign currency translation adjustments on those investments. During fiscal year 2023, the Company terminated all three of its previously outstanding cross currency swap contracts which resulted in cash received upon settlement of $ 7.3 million. The gain on the cross currency swap contracts was recorded in accumulated other comprehensive loss where it will remain until such time that substantial liquidation of the international operations should occur. Concurrent with the termination of the previous cross currency swap contracts, the Company entered into two new cross currency swap contracts which have been designated as net investment hedges. As of October 3, 2025, the Company had the following outstanding derivatives designated as net investment hedging instruments: (In millions, except number of instruments) Number of Instruments Notional Value Cross currency swap contracts 2 $ 51.8 F-31 Table of Contents The following table summarizes the amount of pre-tax income recognized from derivative instruments for the periods indicated and the line items in the accompanying Consolidated Statements of Operations where the results are recorded for net investment hedges: Amount of Loss Recognized in OCI on Derivatives Fiscal Year Ended Location of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Fiscal Year Ended (In millions) 2025 2024 2023 2025 2024 2023 Cross currency swap contracts $ ( 2.7 ) $ ( 3.9 ) $ ( 4.4 ) Interest expense $ 0.8 $ 0.9 $ 0.9 These derivative instruments are subject to master netting agreements giving effect to rights of offset with each counterparty. None of the balances were eligible for netting. The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying Consolidated Balance Sheets where the instruments are recorded: (In millions) Derivative Assets and Liabilities Derivatives Designated as Net Investment Hedges Balance Sheet Location October 3, 2025 September 27, 2024 Cross currency swap contracts Prepaid expenses and other current assets $ — $ 1.0 Cross currency swap contracts Accrued liabilities and other current liabilities 10.4 — Cross currency swap contracts Other long-term liabilities $ — $ 8.6 Derivatives not Designated as Hedging Instruments During the second quarter of fiscal year 2025, the Company elected to partially dedesignate $ 6.9 million of the cross currency swap contracts that ceased to meet the effectiveness criteria and hedge accounting was discontinued. At the time of dedesignation, the total amount recorded for the dedesignated portion as a cumulative fair value basis adjustment on the cross currency swap was a loss of $ 0.4 million. The loss on the cross currency swap dedesignation is recorded in accumulated other comprehensive loss where it will remain until such time that substantial liquidation of the international operations should occur. The dedesignated cross currency swap contract is considered an economic hedge of the Company's investments in wholly-owned international operations. As such, changes in the fair value of the dedesignated cross currency swap after the date of dedesignation have been reported in other expense, net in the Consolidated Statements of Operations. During the third quarter of fiscal year 2025, the Company unwound the dedesignated portion of its outstanding cross currency swap contract which resulted in cash paid upon settlement of $ 0.8 million. The Company recognized $ 0.1 million of loss on the unwinding of the dedesignated portion, which was reported in other expense, net in the Consolidated Statements of Operations. Balance Sheet Hedges The Company also enters into foreign currency forward contracts to hedge fluctuations associated with foreign currency-denominated monetary assets and liabilities, primarily cash, lease contracts, third-party accounts receivable and payable, and intercompany accounts receivable and payable. These forward contracts are generally entered into at the end of one fiscal period and expire by the end of the next fiscal period. These forward contracts are not designated for hedge accounting treatment; therefore, the change in fair value of these derivatives is recorded as a component of other expense, net in the Consolidated Statements of Operations and offsets the change in fair value of the foreign currency-denominated assets and liabilities, which are also recorded as a component of other expense, net . The Company has not and does not intend to use derivative financial instruments for speculative or trading purposes. F-32 Table of Contents The following table shows the notional amounts of outstanding foreign currency contracts as of October 3, 2025: Notional Value of Derivatives not Designated as Hedging Instruments: (In millions of equivalent USD) Buy Contracts Sell Contracts Australian Dollar $ — $ 2.9 Chinese Renminbi — 15.6 Euro — 27.8 Japanese Yen 7.3 — Mexican Peso — 1.3 Philippine Peso 16.3 — Swiss Franc 2.4 — Total notional value $ 26.0 $ 47.6 10. NONCONTROLLING INTERESTS In September 2018, the Company entered into a partnership in Saudi Arabia. The Company has majority voting rights with an approximate 75 % interest. Accordingly, the Company has consolidated the operations of the Saudi Arabia partnership in its Consolidated Balance Sheets and recorded the noncontrolling interests. The noncontrolling interest related to the partner’s 25 % interest is included in noncontrolling interests in the equity section of the Company’s Consolidated Balance Sheets. Income representing the noncontrolling partner's share of income from operations is included in the Company's Consolidated Statements of Operations. In April 2015, the Company acquired 73.5 % of the then outstanding shares of MeVis Medical , a publicly traded company based in Bremen, Germany that provides image processing software and services for cancer screening. In August 2015, the Company, through one of its German subsidiaries, entered into a Domination and Profit and Loss Transfer Agreement (the “DPLTA”) with MeVis Medical. In fiscal years 2017 and 2018, the Company purchased an additional 0.2 % of outstanding shares such that the Company now owns 73.7 % of the outstanding shares of common stock of MeVis Medical. Under the DPLTA, MeVis Medical subordinates its management to the Company and undertakes to transfer all its annual profits and losses to the Company. In return, the DPLTA grants the noncontrolling shareholders of MeVis Medical, an annual recurring net compensation of € 0.95 per MeVis Medical share. At October 3, 2025, noncontrolling shareholders together held approximately 0.5 million shares of MeVis Medical, representing 26.3 % of the outstanding shares. During the first quarter of fiscal year 2024, the Company acquired a controlling interest in MeVis Breastcare, in which the Company now holds an 87.1 % ownership interest. In connection with this acquisition, the Company recorded an associated noncontrolling interest of $ 0.7 million. The c hanges in noncontrolling interests were as follows: Fiscal Years (In millions) 2025 2024 Noncontrolling interests, at beginning of period $ 14.1 $ 13.3 Net income attributable to noncontrolling interests 0.4 0.5 Business acquisitions — 0.7 Other ( 0.5 ) ( 0.4 ) Noncontrolling interests, at end of period $ 14.0 $ 14.1 11. EMPLOYEE STOCK PLANS Employee Stock Plans Certain of the Company's employees participate in the Varex Imaging Corporation 2020 Omnibus Stock Plan, as Amended and Restated (the “2020 Stock Plan”), the 2017 Omnibus Stock Plan (the “2017 Stock Plan”), and the Varex Imaging Corporation 2017 Employee Stock Purchase Plan (the “2017 ESPP”) which allow the grants of stock options, restricted stock units and performance shares among other types of awards to eligible employees. F-33 Table of Contents In January 2017, Varex stockholders approved the 2017 ESPP, which provides eligible employees with an opportunity to purchase shares of Varex common stock at 85 % of the lower of its fair market value at the start and end of a six-month purchase period. During fiscal year 2025, the Company's Board of Directors approved an increase in the number of shares available for issuance under the 2017 ESPP of 0.9 million shares. As of October 3, 2025 the 2017 ESPP provides for the purchase of up to 2.7 million shares of Varex common stock. Share-Based Compensation Expense Share-based compensation expense recognized in the Consolidated Statements of Operations is based on awards ultimately expected to vest. Share-based compensation expense includes expenses related to the Company’s direct employees. The table below summarizes the effect of recording share-based compensation expense and the option value of the employee stock purchase plan shares: Fiscal Years (In millions) 2025 2024 2023 Cost of revenues $ 2.0 $ 1.8 $ 1.7 Research and development 3.2 3.4 3.3 Selling, general, and administrative 9.8 10.1 8.5 Total share-based compensation expense $ 15.0 $ 15.3 $ 13.5 The unrecognized share-based compensation cost as of October 3, 2025 was $ 20.3 million, and is expected to be recognized over a weighted average period of 2.1 years. As of October 3, 2025, there were approximately 4.5 million and 0.8 million shares of common stock available for future issuances under the 2020 Stock Plan and the 2017 ESPP, respectively. The Company utilized the Black-Scholes valuation model for estimating the fair value of stock options granted and the option component of ESPP grants. The Company calculated the fair value of option grants and the option component of ESPP grants on the respective dates of grant using the following weighted average assumptions: Employee Stock Option Plan Employee Stock Purchase Plans Fiscal Years Fiscal Years 2025 2024 2023 2025 2024 2023 Expected term (in years) — 6.1 6.9 0.5 0.5 0.5 Risk-free interest rate — % 3.8 % 3.6 % 4.4 % 5.2 % 4.8 % Expected volatility — % 45.7 % 43.9 % 57.3 % 34.2 % 34.8 % Expected dividend — % — % — % — % — % — % Weighted average fair value at grant date $ — $ 5.85 $ 9.75 $ 3.79 $ 3.97 $ 4.96 Option valuation methods, including Black-Scholes, require the input of subjective assumptions, which are discussed below. Risk-Free Interest Rate The interest rates used are based on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. Expected Term Options granted generally vest over a period of 48 months and expire 7 to 10 years from the date of grant. Employee stock purchase plan offering periods are typically 6 months and provide eligible employees with an opportunity to purchase shares of Varex common stock at 85 % of the lower of its fair market value at the start or end of a six-month purchase period. The Company has elected to use the simplified method in calculating the expected term of its options due to a lack of sufficient historical information. Expected Dividend Yield The dividend rate used is zero as the Company has never paid any cash dividends on its common stock and does not anticipate doing so in the foreseeable future. The Company is also restricted from paying dividends on common stock under its debt facilities. F-34 Table of Contents Expected Volatility Authoritative accounting guidance on stock-based compensation indicates that companies should consider volatility over a period generally commensurate with the expected or contractual term of the stock option. The expected volatility is based on the historical volatility of the Company's common stock. Stock Option Activity The following table summarizes the activity for stock options under Varex’s employee incentive plans for the Company’s employees: (In thousands, except per share amounts and the remaining term) Options Price Range Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) Outstanding at September 27, 2024 2,097 $ 13.61 - $ 37.60 $ 26.79 5.5 $ — Canceled, expired or forfeited ( 267 ) $ 22.13 - $ 37.60 34.84 — — Outstanding at October 3, 2025 1,830 $ 13.61 - $ 31.42 $ 25.61 5.1 $ — Exercisable at October 3, 2025 1,675 $ 13.61 - $ 31.42 $ 25.89 4.9 $ — (1) The aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the exercise price and the closing price of Varex common stock of $ 11.94 as of October 3, 2025, the last trading date of the Company's respective fiscal years, and which represents the amount that would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise as of that date. The grant-date fair value of options granted during fiscal years 2025, 2024, and 2023 was $ 0.0 million , $ 0.1 million and $ 4.0 million, respectively. The total intrinsic value of the options exercised during the years ended October 3, 2025, September 27, 2024, and September 29, 2023 was $ 0.0 million , $ 0.0 million and $ 0.1 million, respectively. Restricted Stock Units, Performance Stock Units, Restricted Stock Awards and Deferred Stock Units The Company issues performance stock units ("PSUs") to certain officers and key employees in connection with our long-term incentive program. Each PSU represents the right to receive one share of our common stock, provided that the applicable performance and vesting conditions are satisfied. The fair value of PSUs are linked to the achievement of financial performance metrics or a market condition based on our relative total shareholder return over the performance period compared to a predetermined peer group. The following table summarizes the activity for restricted stock units, performance stock units, restricted stock awards and deferred stock units under the 2020 Stock Plan: (In thousands, except per share amounts) Number of Shares Weighted Average Grant-Date Fair Value Outstanding at September 27, 2024 1,670 $ 20.74 Granted 776 14.95 Vested ( 407 ) 21.30 Canceled or expired ( 93 ) 20.40 Outstanding at October 3, 2025 1,946 $ 18.35 The total grant-date fair value of shares granted was $ 11.6 million, $ 17.2 million, and $ 11.3 million for fiscal years 2025, 2024, and 2023, respectively. Shares outstanding at October 3, 2025, September 27, 2024, and September 29, 2023 had an estimated market value of $ 23.2 million, $ 20.0 million, and $ 24.0 million, respectively. 12. TAXES ON INCOME (LOSS) Income tax expense or benefit is based on reported income or loss before income taxes. Deferred income taxes reflect the effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws. Valuation allowances are recognized to reduce deferred tax assets to the amount that is more likely than not to be realized. F-35 Table of Contents The income tax expense (benefit) was as follows: Fiscal Years (In millions) 2025 2024 2023 Current income tax expense: Federal $ 4.6 $ 9.7 $ 9.8 State and local 0.5 0.6 0.3 Foreign 6.3 4.6 12.6 Total current $ 11.4 $ 14.9 $ 22.7 Deferred i ncome tax (benefit) expense : Federal $ — $ 38.5 $ ( 37.9 ) State and local ( 0.2 ) ( 1.1 ) ( 0.2 ) Foreign ( 0.5 ) 1.0 ( 1.2 ) Total deferred ( 0.7 ) 38.4 ( 39.3 ) Income tax expense (benefit) $ 10.7 $ 53.3 $ ( 16.6 ) The (loss) income before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2025 2024 2023 United States $ ( 25.8 ) $ ( 15.1 ) $ ( 6.2 ) Foreign ( 33.4 ) 20.1 37.5 (Loss) income before taxes $ ( 59.2 ) $ 5.0 $ 31.3 The effective tax rate differs from the U.S. federal statutory tax rate as a result of the following: Fiscal Years 2025 2024 2023 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State and local taxes, net of federal tax benefit ( 0.4 ) ( 7.5 ) 0.3 Impairment of goodwill ( 33.3 ) — — Statutory rate change impact on prior year deferreds — ( 0.3 ) — Return to provision 1.3 ( 30.9 ) ( 4.7 ) Research and development credit 5.0 ( 41.9 ) ( 8.4 ) Foreign rate difference ( 3.0 ) ( 1.6 ) 6.3 Share-based compensation ( 2.7 ) 43.6 3.8 Change in valuation allowance ( 7.1 ) 1,101.1 ( 65.7 ) U.S. tax reform - international provisions 2.1 ( 32.0 ) ( 9.2 ) Other ( 1.0 ) 14.5 3.6 Effective tax rate ( 18.1 ) % 1,066.0 % ( 53.0 ) % During fiscal year 2025, the Company's effective tax rate varied from the U.S. federal statutory rate of 21% primarily due to the goodwill impairment that took place in the third quarter of fiscal year 2025, the unfavorable impact of U.S. deferred tax attributes and losses in certain foreign jurisdictions for which a valuation allowance is provided, as well as profit in foreign jurisdictions with statutory tax rates greater than 21%. These unfavorable items were partially offset by the favorable impact of U.S. tax reform regarding international provision, R&D credits, and return to provision adjustments. The Organization for Economic Cooperation and Development enacted model rules for Pillar Two, which became effective for the Company in fiscal year 2025. However, on June 28, 2025, the G7 released a joint statement that it had reached an understanding with the United States for a side-by-side system based on certain accepted principles, including that U.S.-parented groups, such as ours, would be exempted from certain provisions of Pillar Two. As a result, there remains a great deal of uncertainty F-36 Table of Contents as to the final Pillar Two model rules applicable to our Company and its subsidiaries. The Company has estimated its fiscal year 2025 Pillar Two tax expense, and has included these amounts in the calculation of the fiscal year 2025 tax provision. On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions, including the option to claim 100% accelerated depreciation deductions and qualified property, with retrospective application beginning January 20, 2025. The legislation has multiple effective dates, with the 100% accelerated depreciation deduction starting to be effective during the fiscal year ended October 3, 2025, and others implemented through future years. During fiscal year 2024, the Company’s effective tax rate varied from the U.S. federal statutory rate of 21% primarily due to the unfavorable impact of U.S. deferred tax attributes and losses in certain foreign jurisdictions for which a valuation allowance is provided, as well as profit in foreign jurisdictions with statutory tax rates greater than 21%. These unfavorable items were partially offset by the favorable impact of U.S. tax reform regarding international provision, R&D credits, and return to provision adjustments. During fiscal year 2023, the Company’s effective tax rate varied from the U.S. federal statutory rate of 21% primarily due to the favorable impact of the release of the U.S. valuation allowance, U.S. tax reform regarding international provisions, R&D credits, and return to provision adjustments. These favorable items were partially offset by the unfavorable impact of profit in foreign jurisdictions with statutory tax rates greater than 21%. F-37 Table of Contents The s ignificant components of deferred tax assets and liabilities are as follows: (In millions) October 3, 2025 September 27, 2024 Deferred tax assets: Inventory adjustments $ 4.4 $ 4.7 Share-based compensation 6.8 6.3 Product warranty 1.6 2.0 Unrealized exchange gain 3.7 3.0 Deferred compensation 2.0 1.7 Net operating loss carryforwards 18.6 18.9 Accrued vacation 0.6 0.6 Accrued incentives 0.9 0.3 Credit carryforwards 4.2 3.6 Deferred financing fees 0.1 2.5 Interest expense limitation 1.1 — Capitalized interest 1.0 1.1 Lease liabilities 6.4 7.5 Investments in privately held companies 4.2 4.0 Royalty advance 1.5 6.6 Research and experimentation capitalization 37.8 30.8 Other DTA 5.2 3.9 $ 100.1 $ 97.5 Less: Valuation allowance ( 79.4 ) ( 74.7 ) Total deferred tax assets $ 20.7 $ 22.8 Deferred tax liabilities: Acquired intangibles $ ( 3.4 ) $ ( 3.9 ) Property, plant and equipment ( 5.7 ) ( 7.1 ) Goodwill amortization — ( 6.0 ) Operating lease assets ( 6.1 ) ( 7.3 ) Other DTL ( 8.1 ) ( 1.2 ) Total deferred tax liabilities ( 23.3 ) ( 25.5 ) Net deferred tax liabilities $ ( 2.6 ) $ ( 2.7 ) Reported As: Deferred tax assets $ 20.7 $ 22.8 Deferred tax liabilities ( 23.3 ) ( 25.5 ) Net deferred tax liabilities $ ( 2.6 ) $ ( 2.7 ) The Company is maintaining its reinvestment assertion with respect to foreign earnings for the year ended October 3, 2025, which is that all earnings prior to fiscal year 2018 are permanently reinvested for all countries, and that all earnings for Varex Imaging Sweden and Oy Varex Imaging Finland, are also indefinitely reinvested in those countries, but post fiscal year 2017 earnings in all other countries are not permanently reinvested. Due to the level of earnings available for repatriation, the treaty benefits applicable to jurisdictions in which those earnings are located, and the now favorable U.S. tax treatment of repatriated foreign earnings, the amount of deferred tax liability recorded related to the potential repatriation is approximately $ 0.1 million. This estimated liability is for U.S. state income taxes and foreign withholding taxes that would apply if the foreign earnings were repatriated in the form of a dividend. As of October 3, 2025, the Company had foreign net operating loss carryforwards ("NOL") of approximately $ 89.6 million carried forward indefinitely. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. Also, net operating loss carryforwards in jurisdictions with current losses provide uncertainty for realization. As of October 3, 2025, F-38 Table of Contents based on the Company’s assessment of the realizability of net deferred tax assets, it reached the conclusion that it was more likely than not that one of its Indian subsidiaries' deferred tax assets are not realizable. As a result, a valuation allowance was placed against the subsidiaries' Indian deferred tax assets. The Company also maintains full valuation allowances against the net deferred tax assets in Sweden, the United Kingdom, the United States, and Saudi Arabia, due to recent historical losses and/or the uncertainty of future taxable income to realize those net operating losses. The valuation allowance increased by $ 4.7 million during fiscal year 2025 and increased by $ 56.0 million during fiscal year 2024. The c hanges in the Company's valuation allowance for deferred tax assets were as follows: Fiscal Years (In millions) 2025 2024 2023 Valuation allowance balance–beginning of fiscal year $ 74.7 $ 18.7 $ 32.2 Other increases 4.7 56.0 — Other decreases — — ( 13.5 ) Valuation allowance balance—end of fiscal year $ 79.4 $ 74.7 $ 18.7 The Company accounts for uncertainty in income taxes following a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether the weight of available evidence indicates that it is more likely than not that, based on the technical merits, the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The c hanges in the Company’s unrecognized tax benefits were as follows: Fiscal Years (In millions) 2025 2024 Unrecognized tax benefits balance–beginning of fiscal year $ 1.6 $ 1.4 Additions based on tax positions related to the current year 0.2 0.2 Reductions resulting from the expiration of the applicable statute of limitations ( 0.5 ) — Unrecognized tax benefits balance—end of fiscal year $ 1.3 $ 1.6 As of October 3, 2025 and September 27, 2024, the total amount of gross unrecognized tax benefits was $ 1.3 million and $ 1.6 million, respectively, all of which would affect the effective tax rate if recognized. The Company includes interest and penalties related to income taxes within income tax expense (benefit) on the Consolidated Statements of Operations. Interest and penalties of $ 0.1 million, $ 0.2 million, and $ 0.2 million were included for the fiscal periods ended October 3, 2025, September 27, 2024, and September 29, 2023, respectively. The Company files U.S. federal and state income tax returns and non-U.S. income tax returns in various jurisdictions. All of these returns are subject to examination by their respective taxing jurisdictions from the date of filing through each applicable statute of limitation period. Other periods for entities acquired are still open and subject to examination. Generally, periods prior to 2015 are no longer subject to examination. 13. SEGMENT INFORMATION The Company has two reportable operating segments: Medical and Industrial, which aligns with how its CEO, who is the Company's Chief Operating Decision Maker (“CODM”) reviews the Company’s performance. The segments align the Company’s products and service offerings with customer use in medical and industrial markets and are consistent with how the Company’s CEO evaluates the business for the allocation of resources. The CODM allocates resources to and evaluates the financial performance of each operating segment primarily based on revenues and gross profit. The operating and reportable segment structure provides alignment between business strategies and operating results. Description of Segments The Medical segment designs, manufactures, sells, and services X-ray imaging components, including X-ray tubes, digital detectors and accessories, ionization chambers, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, automatic exposure control devices, generators, and heat exchangers. F-39 Table of Contents These components are used in a range of medical imaging applications including CT, mammography, oncology, cardiac, surgery, dental, and other diagnostic radiography uses. The Industrial segment designs, develops, manufactures, sells and services 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, irradiation, and inspection applications used in a number of other vertical markets, as well as X-ray imaging systems for industrial applications. The Company's industrial products include Linatron® X-ray linear accelerators, non-intrusive cargo inspection systems, X-ray tubes, digital detectors, high voltage connectors, and coolers. In addition, the Company licenses proprietary image-processing and detection software designed to work with other Varex products to provide packaged sub-assembly solutions to industrial customers. Accordingly, the following information is provided for purposes of achieving an understanding of operations, but it may not be indicative of the financial results of the reported segments were they independent organizations. In addition, comparisons of the Company’s operations to similar operations of other companies may not be meaningful. Information related to the Company’s segments is as follows: Fiscal Years (In millions) 2025 2024 2023 Revenues, net Medical $ 592.6 $ 581.7 $ 673.3 Industrial 252.0 229.3 220.1 Total revenues 844.6 811.0 893.4 Cost of revenues Medical 392.5 405.0 467.8 Industrial 161.6 149.1 135.3 Total cost of revenues 554.1 554.1 603.1 Gross profit Medical 200.1 176.7 205.5 Industrial 90.4 80.2 84.8 Total gross profit 290.5 256.9 290.3 Total operating expenses 318.3 224.8 213.2 Interest and other expense, net ( 31.4 ) ( 27.1 ) ( 45.8 ) (Loss) income before taxes ( 59.2 ) 5.0 31.3 Income tax expense (benefit) 10.7 53.3 ( 16.6 ) Net (loss) income ( 69.9 ) ( 48.3 ) 47.9 Less: Net income attributable to noncontrolling interests 0.4 0.5 0.5 Net (loss) income attributable to Varex $ ( 70.3 ) $ ( 48.8 ) $ 47.4 The Company does not disclose total assets by segment as this information is not provided to the CODM. Geographic Information The following table summarizes the Company’s long-lived assets by geographic region: (In millions) October 3, 2025 September 27, 2024 Americas $ 102.7 $ 109.2 EMEA 40.9 27.6 APAC 14.2 16.6 Total property, plant, and equipment, net $ 157.8 $ 153.4 See Note 2, Revenue, for disaggregation of revenue by geographic region and country. F-40 Table of Contents 14. OTHER FINANCIAL INFORMATION The following table summarizes the Company’s accrued liabilities and other current liabilities : (In millions) October 3, 2025 September 27, 2024 Accrued compensation and benefits $ 43.4 $ 30.0 Product warranty 8.5 10.8 Taxes payable 5.3 8.1 Refund liability 7.7 7.5 Derivative liability 10.4 — Accrued interest 13.5 11.7 Other 9.6 10.5 Total accrued liabilities and other current liabilities $ 98.4 $ 78.6 The following table summarizes the Company’s other long-term liabilities : (In millions) October 3, 2025 September 27, 2024 Long-term income tax payable $ 2.3 $ 4.0 Environmental liabilities 2.4 3.0 Defined benefit obligation liability 6.2 5.9 Long-term refund liability 20.0 20.5 Derivative liability — 8.6 Long-term other 7.2 8.4 Total other long-term liabilities $ 38.1 $ 50.4 The following table summarizes the Company’s other expense, net : Fiscal Years (In millions) 2025 2024 2023 Loss from equity method investments $ ( 2.3 ) $ ( 1.0 ) $ ( 1.4 ) Gain on purchase of business — 2.1 — Impairment of equity method investment — — ( 16.4 ) Realized losses on foreign currencies, net ( 3.0 ) ( 2.3 ) ( 1.0 ) Other 0.9 ( 3.0 ) ( 1.4 ) Total other expense, net $ ( 4.4 ) $ ( 4.2 ) $ ( 20.2 ) 15. BUSINESS COMBINATIONS As of September 29, 2023, the Company, through two of its consolidated subsidiaries, Varex Imaging Deutschland AG and MeVis Medical Solutions AG ("MeVis Medical"), held a combined ownership interest in MeVis BreastCare GmbH and MeVis BreastCare Gmbh & Co KG (referred to in combination as "MeVis Breastcare") of 37.6 %. Because the Company had the ability to exercise significant influence in, but not control, over MeVis Breastcare, it was historically accounted for as an equity method investment. During the first quarter of fiscal year 2024, the Company increased its ownership in MeVis Breastcare to 87.1 % for a purchase price of $ 0.9 million, resulting in the Company now holding a controlling interest in MeVis Breastcare. The purchase of this additional ownership interest was accounted for as a business combination achieved in stages, or step acquisition. As a result, the previously held equity interest was remeasured to its acquisition-date fair value, with a gain of $ 0.9 million recognized in other expense, net in the Consolidated Statements of Operations. The assets and liabilities of MeVis Breastcare were then recorded on the Company's balance sheet at their fair values in accordance with ASC 805, and a gain on bargain purchase of $ 1.2 million was recorded during the first quarter of fiscal year 2024 in other expense, net in the Consolidated Statements of Operations. Because the purchase price did not give consideration to the other assets of the business, the fair value of the ownership interest acquired exceeded the price paid to the third party partial owner and this resulted in a gain on bargain purchase. F-41 Table of Contents The following table summarizes the consideration paid for MeVis Breastcare and the amounts of the assets acquired and liabilities assumed recognized at their estimated acquisition date fair values, as well as the estimated fair value at the acquisition date of the noncontrolling interest in MeVis Breastcare: USD (in millions) Consideration paid Cash $ 0.9 Fair value of total consideration transferred 0.9 Remeasurement of previous equity interest Carrying value of previous equity interest before acquisition 1.1 Fair value of previous equity interest at acquisition date 2.0 Remeasurement gain recorded on previous equity interest 0.9 Total of consideration paid and fair value of previous equity interest $ 2.9 Recognized amounts of identifiable assets acquired and liabilities assumed Cash and cash equivalents $ 1.8 Accounts receivable, net 1.2 Intangible assets, net 2.6 Accounts payable ( 0.1 ) Accrued liabilities and other current liabilities ( 0.6 ) Other long-term liabilities ( 0.1 ) Total identifiable net assets 4.8 Noncontrolling interest in MeVis Breastcare ( 0.7 ) Bargain purchase gain ( 1.2 ) Total $ 2.9 16. COMMITMENTS AND CONTINGENCIES Lease Commitments See Note 8 , Leases, for additional information about the Company's lease commitments. Other Commitments See Note 3, Related-Party Transactions, for additional information about the Company’s commitments to dpiX. See Note 10 , Noncontrolling Interests, for additional information about the Company’s commitment to the noncontrolling shareholders of MeVis. The Company has an environmental liability of approximately $ 3.2 million as of October 3, 2025. See Note 1, Summary of Significant Accounting Policies, for additional information. 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. The Company has non-cancellable supplier purchase obligations of approximately $ 3.0 million as of October 3, 2025. Contingencies The Company did not have any material contingent liabilities as of October 3, 2025 and September 27, 2024. Legal expenses are expensed as incurred. F-42 Table of Contents 17. EMPLOYEE BENEFIT PLANS Varex’s 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code and intended for all full-time employees in the United States. This plan allows employees to contribute a portion of their pretax salary up to the maximum dollar limitation prescribed by the Internal Revenue Service. The Company made matching contributions to the plan totaling $ 4.4 million, $ 4.6 million, and $ 4.9 million in fiscal years 2025, 2024, and 2023, respectively. The Company also maintains defined benefit plans for certain employees located outside the United States. The net pension liability is included in other long-term liabilities on the Company's Consolidated Balance Sheets and totaled $ 6.2 million and $ 5.9 million as of October 3, 2025 and September 27, 2024, respectively. The Company’s net periodic benefit costs for the Company’s defined benefit plans were not material for fiscal years 2025, 2024, and 2023. 18. ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables present the changes in the accumulated balances for each component of accumulated other comprehensive loss: (In millions) Gain on Forward Contracts Unrealized Loss on Defined Benefit Obligations CTA, Including Impact of Net Investment Hedge Unrealized (Loss) Gain on Available-For-Sale Securities Accumulated Other Comprehensive Loss Balance at September 29, 2023 $ ( 0.5 ) $ ( 0.4 ) $ ( 0.3 ) $ — $ ( 1.2 ) Other comprehensive (loss) income before reclassifications — — ( 3.9 ) 0.1 ( 3.8 ) Adjustments reclassified out of accumulated other comprehensive loss 0.1 — — — 0.1 Foreign currency translation adjustment — — 2.0 — 2.0 Balance at September 27, 2024 $ ( 0.4 ) $ ( 0.4 ) $ ( 2.2 ) $ 0.1 $ ( 2.9 ) Other comprehensive income (loss) before reclassifications — 0.1 ( 2.7 ) ( 0.1 ) ( 2.7 ) Adjustments reclassified out of accumulated other comprehensive loss 0.1 — — — 0.1 Income tax impact — ( 0.1 ) — — ( 0.1 ) Foreign currency translation adjustment — — 0.4 — 0.4 Balance at October 3, 2025 $ ( 0.3 ) $ ( 0.4 ) $ ( 4.5 ) $ — $ ( 5.2 ) 19. SUBSEQUENT EVENTS On October 14, 2025, the Company purchased certain equipment, inventory, and other assets to be used in the Company’s operations. The Company anticipates accounting for the transaction as an asset acquisition in accordance with U.S. GAAP. The purchase price for the asset acquisition was $ 3.6 million. F-43