ý
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ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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81-3434516
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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1678 S. Pioneer Road,
Salt Lake City, Utah
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84104
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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—
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Name of each exchange on which registered
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Common stock, par value $0.01 per share
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—
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NASDAQ Global Select Market
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•
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properly identify customer needs or long-term customer demands;
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•
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prove the feasibility of new products;
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•
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limit the time required from proof of feasibility to routine production;
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•
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timely and efficiently comply with internal quality assurance systems and processes;
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•
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limit the timing and cost of regulatory approvals;
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•
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accurately predict and control costs associated with inventory overruns caused by the phase-in of new products and the phase-out of old products;
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•
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price its products competitively and profitably, which can be particularly difficult with a strong U.S. Dollar;
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•
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manufacture, deliver, and install its products in sufficient volumes on time and accurately predict and control costs associated with manufacturing installation, warranty, and maintenance of the products;
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•
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appropriately manage its supply chain;
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•
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manage customer acceptance and payment for products; and
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•
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anticipate, respond to, and compete successfully with competitors.
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•
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the inability of the acquired business to increase product sales;
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•
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unfavorable customer reaction to the transaction or Varex’s products following the closing;
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•
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competitive factors, including technological advances attained by competitors or the decision of certain companies currently engaged in the industrial sector to compete in the medical imaging sector;
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•
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the failure of key markets for Varex’s products to develop to the extent or as rapidly as currently expected;
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•
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changes in technology that require Varex to make significant capital expenditures to develop competitive products;
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•
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employment laws or regulations or other limitations in foreign jurisdictions, or other operational issues, that could have an impact on the timing or amount of synergies; and
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•
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the failure to retain key employees.
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•
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consolidating and rationalizing corporate information technology, engineering and administrative infrastructures;
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•
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integrating product offerings;
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•
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coordinating sales and marketing efforts;
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•
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coordinating and integrating the manufacturing activities of the acquired business; and
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•
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coordinating and rationalizing research and development activities to enhance introduction of new products and technologies with reduced cost.
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•
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the introduction and timing of announcement of new products or product enhancements by Varex and its competitors;
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•
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change in its or its competitors’ pricing or discount levels;
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•
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changes in foreign currency exchange rates and other economic uncertainty;
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•
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changes in the relative portion of its revenues represented by its various products, including the relative mix between higher margin and lower-margin products;
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•
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changes in the relative portion of its revenues represented by its international region as a whole and by regions within the overall region, as well as by individual countries (notably, those in emerging markets);
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•
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fluctuation in its effective tax rate, which may or may not be known to Varex in advance;
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•
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the availability of economic stimulus packages or other government funding, or reductions thereof;
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•
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disruptions in the supply or changes in the costs of raw materials, labor, product components or transportation services;
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•
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changes to its organizational structure, which may result in restructuring or other charges;
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•
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disruptions in its operations, including its ability to manufacture products, caused by events such as earthquakes, fires, floods, terrorist attacks or the outbreak of epidemic diseases;
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•
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the unfavorable outcome of any litigation or administrative proceeding or inquiry, as well as ongoing costs associated with legal proceedings; and,
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•
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accounting changes and adoption of new accounting pronouncements.
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•
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requiring that a portion of Varex’s cash flow from operations be used to make principal and interest payments on this debt, which would reduce cash flow available for other corporate purposes;
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•
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increasing Varex’s vulnerability to shifts in interest rates and to general adverse economic and industry conditions;
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•
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limiting Varex’s flexibility in planning for, or reacting to, changes in its business and the industry; and,
|
•
|
limiting Varex’s ability to borrow additional funds as needed or increasing the costs of any such borrowing.
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•
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currency fluctuations, and in particular the strength of the U.S. Dollar relative to many currencies, which have and may in the future adversely affect Varex’s financial results and cause some customers to delay purchasing decisions or move to in-sourcing supply or migrate to lower cost alternatives or ask for additional discounts;
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•
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the longer payment cycles associated with many customers located outside the United States;
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•
|
difficulties in interpreting or enforcing agreements and collecting receivables through many foreign countries’ legal systems;
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•
|
changes in restrictions on trade between the United States and other countries or unstable regional political and economic conditions, such as those that may result from the Trump administration;
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•
|
changes in the political, regulatory, safety or economic conditions in a country or region, including as a result of the United Kingdom’s June 2016 vote and formal notice in March 2017 to leave the European Union (“Brexit”) or the change in the U.S. administration;
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•
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the imposition by governments of additional taxes, tariffs, global economic sanctions programs, or other restrictions on foreign trade;
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•
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any inability to obtain required export or import licenses or approvals;
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•
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failure to comply with export laws and requirements, which may result in civil or criminal penalties and restrictions on Varex’s ability to export its products, particularly its industrial linear accelerator products;
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•
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risks unique to the Chinese market, including import barriers and preferences for local manufacturers;
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•
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failure to obtain proper business licenses or other documentation or to otherwise comply with local laws and requirements regarding marketing, sales, service, or any other business Varex conducts in a foreign jurisdiction, which may result in civil or criminal penalties and restrictions on its ability to conduct business in that jurisdiction; and,
|
•
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the possibility that it may be more difficult to protect Varex’s intellectual property in foreign countries.
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•
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adverse publicity affecting both Varex and its customers;
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•
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increased pressures from competitors;
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•
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investigations by governmental authorities;
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•
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fines, injunctions, civil penalties, and criminal prosecution;
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•
|
partial suspension or total shutdown of production facilities or the imposition of operating restrictions;
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•
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increased difficulty in obtaining required clearances or approvals or losses of clearances or approvals already granted;
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•
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seizures or recalls of Varex products or those of its customers;
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•
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delays in purchasing decisions by customers or cancellation of existing orders;
|
•
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the inability to sell Varex products; and,
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•
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difficulty in obtaining product liability or operating insurance at a reasonable cost, or at all.
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•
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difficulties in staffing and managing employee relations and foreign operations, particularly in attracting and retaining personnel qualified to design, sell, test, and support its products;
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•
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fluctuations in currency exchange rates;
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•
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difficulties in coordinating its operations globally and in maintaining uniform standards, controls, procedures, and policies across its operations;
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•
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difficulties in enforcing contracts and protecting intellectual property;
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•
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diversion of management attention;
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•
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imposition of burdensome governmental regulations, including changing laws and regulations with respect to collection and maintenance of personally identifiable data;
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•
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regional and country-specific political and economic instability, as discussed in greater detail below; and
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•
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inadequacy of the local infrastructure to support its operations.
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•
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the inability of Varex’s stockholders to call a special meeting;
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•
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the inability of Varex’s stockholders to act without a meeting of stockholders;
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•
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rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;
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•
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the right of Varex’s board of directors to issue preferred stock without stockholder approval;
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•
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the division of Varex’s board of directors into three classes of directors, with each class serving a staggered three-year term, and this classified board provision could have the effect of making the replacement of incumbent directors more time-consuming and difficult, until the 2022 annual meeting of stockholders, after which directors will be elected annually;
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•
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a provision that stockholders may only remove directors with cause while the board is classified;
|
•
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the ability of Varex’s directors, and not stockholders, to fill vacancies on Varex’s board of directors; and,
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•
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the requirement that the affirmative vote of stockholders holding at least 66 2/3% of Varex’s voting stock is required to amend certain provisions in Varex’s amended and restated certificate of incorporation (relating to the term and removal of its directors, the filling of its board vacancies, the calling of special meetings of stockholders, stockholder action by written consent, the elimination of liability of directors to the extent permitted by Delaware law and indemnification of directors and officers); provided, however, that the provisions of the amended and restated certificate of incorporation relating to the 66 2/3% voting threshold will be of no force and effect effective as of the completion of the 2021 annual meeting of stockholders, and the amended and restated certificate of incorporation may thereafter be amended by the affirmative vote of the holders of at least a majority of the outstanding voting stock.
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•
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Prior to the separation, Varex’s business was operated by Varian as part of its broader corporate organization, rather than as an independent company. Varian or one of its affiliates performed various corporate functions for Varex such as accounting, legal, human resources, information technology, treasury, tax, facilities, research and development, insurance, and other corporate and infrastructure services. Varex’s historical financial results reflect allocations of corporate expenses from Varian for such functions and are likely to be less than the expenses Varex would have incurred had it operated as a separate publicly-traded company. Following the separation, Varex’s costs related to such functions previously performed by Varian may therefore increase.
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•
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Prior to the separation, Varex’s business was integrated with the other businesses of Varian. Historically, Varex has shared economies of scope and scale in costs, employees, vendor relationships, and customer relationships. Although Varex entered into a Transition Services Agreement with Varian, the arrangements provided by such agreement may not fully capture the benefits that Varex enjoyed when integrated with Varian and may result in Varex paying higher charges than in the past for these services. This could have a material and adverse effect on Varex’s results of operations and financial condition.
|
•
|
Generally, Varex’s working capital requirements and capital for its general corporate purposes, including acquisitions and capital expenditures, have historically been satisfied as part of the corporate-wide cash management policies of Varian. Following the separation, Varex may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may or may not be available and may be more costly.
|
•
|
The cost of capital for Varex’s business is expected to be higher than Varian’s cost of capital prior to the separation.
|
•
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more effective pursuit of each company’s distinct operating priorities and strategies;
|
•
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more efficient allocation of capital for both Varian and Varex;
|
•
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direct access by Varex to the capital markets;
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•
|
facilitation of incentive compensation arrangements for employees more directly tied to the performance of the relevant company’s business, and potential enhancement of employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives, while at the same time creating an independent equity structure that will facilitate Varex’s ability to effect future acquisitions utilizing Varex common stock; and
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•
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a distinct investment identity of Varex, allowing investors to evaluate the merits, performance, and future prospects of Varex separately from Varian.
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•
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was insolvent;
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•
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was rendered insolvent by reason of the separation and distribution;
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•
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had remaining assets constituting unreasonably small capital; or,
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•
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intended to incur, or believed it would incur, debts beyond its ability to pay these debts as they matured,
|
Fiscal Year 2017
|
|
High
|
|
Low
|
||||
First Quarter
|
|
$
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—
|
|
|
$
|
—
|
|
Second Quarter (beginning January 30, 2017)
|
|
$
|
35.14
|
|
|
$
|
27.27
|
|
Third Quarter
|
|
$
|
36.04
|
|
|
$
|
32.77
|
|
Fourth Quarter
|
|
$
|
34.18
|
|
|
$
|
28.25
|
|
|
Fiscal Year 2017
|
||||||||||||||||||
(In millions, except per share amounts, unaudited)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Total Year
|
||||||||||
Total revenues
|
$
|
157.4
|
|
|
$
|
154.8
|
|
|
$
|
170.1
|
|
|
$
|
215.7
|
|
|
$
|
698.1
|
|
Gross Margin
|
$
|
58.8
|
|
|
$
|
57.6
|
|
|
$
|
59.5
|
|
|
$
|
77.8
|
|
|
$
|
253.5
|
|
Net earnings
|
$
|
11.2
|
|
|
$
|
15.0
|
|
|
$
|
10.7
|
|
|
$
|
15.1
|
|
|
$
|
52.0
|
|
Net earnings attributable to Varex
|
$
|
11.1
|
|
|
$
|
15.0
|
|
|
$
|
10.6
|
|
|
$
|
15.0
|
|
|
$
|
51.6
|
|
Net earnings per share - basic
|
$
|
0.30
|
|
|
$
|
0.40
|
|
|
$
|
0.28
|
|
|
$
|
0.40
|
|
|
$
|
1.37
|
|
Net earnings per share - diluted
|
$
|
0.29
|
|
|
$
|
0.40
|
|
|
$
|
0.28
|
|
|
$
|
0.39
|
|
|
$
|
1.36
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fiscal Year 2016
|
||||||||||||||||||
(In millions, except per share amounts, unaudited)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Total Year
|
||||||||||
Total revenues
|
$
|
146.8
|
|
|
$
|
149.8
|
|
|
$
|
151.4
|
|
|
$
|
172.1
|
|
|
$
|
620.1
|
|
Gross Margin
|
$
|
57.1
|
|
|
$
|
59.1
|
|
|
$
|
63.0
|
|
|
$
|
69.2
|
|
|
$
|
248.4
|
|
Net earnings
|
$
|
14.2
|
|
|
$
|
14.8
|
|
|
$
|
17.8
|
|
|
$
|
22.1
|
|
|
$
|
371.7
|
|
Net earnings attributable to Varex
|
$
|
14.1
|
|
|
$
|
14.7
|
|
|
$
|
17.6
|
|
|
$
|
21.9
|
|
|
$
|
68.5
|
|
Net earnings per share - basic
|
$
|
0.38
|
|
|
$
|
0.39
|
|
|
$
|
0.47
|
|
|
$
|
0.59
|
|
|
$
|
1.83
|
|
Net earnings per share - diluted
|
$
|
0.37
|
|
|
$
|
0.39
|
|
|
$
|
0.47
|
|
|
$
|
0.58
|
|
|
$
|
1.82
|
|
|
Fiscal Years
|
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||
Medical
|
556.9
|
|
|
505.8
|
|
|
51.1
|
|
|
10
|
%
|
Industrial
|
141.2
|
|
|
114.3
|
|
|
26.9
|
|
|
24
|
%
|
Total revenues
|
698.1
|
|
|
620.1
|
|
|
78.0
|
|
|
13
|
%
|
Medical as a percentage of total revenues
|
80
|
%
|
|
82
|
%
|
|
|
|
|
||
Industrial as a percentage of total revenues
|
20
|
%
|
|
18
|
%
|
|
|
|
|
|
Fiscal Years
|
|
|
|
|
|||||||||
(In millions)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Americas
|
$
|
239.8
|
|
|
$
|
224.7
|
|
|
$
|
15.1
|
|
|
7
|
%
|
EMEA
|
219.5
|
|
|
179.5
|
|
|
40.0
|
|
|
22
|
%
|
|||
APAC
|
238.8
|
|
|
215.9
|
|
|
22.9
|
|
|
11
|
%
|
|||
Total revenues
|
$
|
698.1
|
|
|
$
|
620.1
|
|
|
$
|
78.0
|
|
|
13
|
%
|
Americas as a percentage of total revenues
|
34
|
%
|
|
36
|
%
|
|
|
|
|
|||||
EMEA as a percentage of total revenues
|
31
|
%
|
|
29
|
%
|
|
|
|
|
|||||
APAC as a percentage of total revenues
|
34
|
%
|
|
35
|
%
|
|
|
|
|
|
Fiscal Years
|
|
|
|
|
|||||||||
(In millions)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Medical
|
$
|
193.6
|
|
|
$
|
195.8
|
|
|
$
|
(2.2
|
)
|
|
(1
|
)%
|
Industrial
|
59.9
|
|
|
52.6
|
|
|
7.3
|
|
|
14
|
%
|
|||
Total gross margin
|
$
|
253.5
|
|
|
$
|
248.4
|
|
|
$
|
5.1
|
|
|
2
|
%
|
Medical gross margin %
|
34.8
|
%
|
|
38.7
|
%
|
|
|
|
|
|||||
Industrial gross margin %
|
42.4
|
%
|
|
46.0
|
%
|
|
|
|
|
|||||
Total gross margin %
|
36.3
|
%
|
|
40.1
|
%
|
|
|
|
|
|
Fiscal Years
|
|
|
|
|
|||||||||
(In millions)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Research and development
(1)
|
$
|
67.3
|
|
|
$
|
53.5
|
|
|
$
|
13.8
|
|
|
26
|
%
|
As a percentage of total revenues
|
9.6
|
%
|
|
8.6
|
%
|
|
|
|
|
|||||
Selling, general and administrative
(2)
|
$
|
102.5
|
|
|
$
|
85.8
|
|
|
$
|
16.7
|
|
|
19
|
%
|
As a percentage of total revenues
|
14.7
|
%
|
|
13.8
|
%
|
|
|
|
|
|||||
Operating expenses
|
$
|
169.8
|
|
|
$
|
139.3
|
|
|
$
|
30.5
|
|
|
22
|
%
|
As a percentage of total revenues
|
24.3
|
%
|
|
22.5
|
%
|
|
|
|
|
|
Fiscal Years
|
|
|
||||||||
(In millions)
|
2017
|
|
2016
|
|
$ Change
|
||||||
Interest income
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
$
|
(0.1
|
)
|
Interest expense
|
(12.3
|
)
|
|
(1.9
|
)
|
|
(10.4
|
)
|
|||
Other
|
3.2
|
|
|
(2.5
|
)
|
|
5.7
|
|
|||
Interest and other income (expense), net
|
$
|
(8.9
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
(4.8
|
)
|
|
Fiscal Years
|
||||
|
2017
|
|
2016
|
||
Effective tax rate
|
30.5
|
%
|
|
34.3
|
%
|
|
Fiscal Years
|
|
|
|
|
|||||||||
(In millions)
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Medical
|
$
|
505.8
|
|
|
$
|
534.3
|
|
|
$
|
(28.5
|
)
|
|
(5
|
)%
|
Industrial
|
114.3
|
|
|
98.0
|
|
|
16.3
|
|
|
17
|
%
|
|||
Total revenues
|
$
|
620.1
|
|
|
$
|
632.3
|
|
|
$
|
(12.2
|
)
|
|
(2
|
)%
|
Medical as a percentage of total revenues
|
82
|
%
|
|
85
|
%
|
|
|
|
|
|||||
Industrial as a percentage of total revenues
|
18
|
%
|
|
15
|
%
|
|
|
|
|
|
Fiscal Years
|
|
|
|
|
|||||||||
(In millions)
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Americas
|
$
|
224.7
|
|
|
$
|
249.2
|
|
|
$
|
(24.5
|
)
|
|
(10
|
)%
|
EMEA
|
179.5
|
|
|
153.0
|
|
|
26.5
|
|
|
17
|
%
|
|||
APAC
|
215.9
|
|
|
230.1
|
|
|
(14.2
|
)
|
|
(6
|
)%
|
|||
Total revenues
|
$
|
620.1
|
|
|
$
|
632.3
|
|
|
$
|
(12.2
|
)
|
|
(2
|
)%
|
Americas as a percentage of total revenues
|
36
|
%
|
|
39
|
%
|
|
|
|
|
|||||
EMEA as a percentage of total revenues
|
29
|
%
|
|
24
|
%
|
|
|
|
|
|||||
APAC as a percentage of total revenues
|
35
|
%
|
|
36
|
%
|
|
|
|
|
|
Fiscal Years
|
|
|
|
|
|||||||||
(In millions)
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Medical
|
$
|
195.8
|
|
|
$
|
207.1
|
|
|
$
|
(11.3
|
)
|
|
(5
|
)%
|
Industrial
|
52.6
|
|
|
43.5
|
|
|
9.1
|
|
|
21
|
%
|
|||
Total gross margin
|
$
|
248.4
|
|
|
$
|
250.6
|
|
|
$
|
(2.2
|
)
|
|
(1
|
)%
|
Medical gross margin %
|
38.7
|
%
|
|
38.8
|
%
|
|
|
|
|
|||||
Industrial gross margin %
|
46.0
|
%
|
|
44.4
|
%
|
|
|
|
|
|||||
Total gross margin %
|
40.1
|
%
|
|
39.6
|
%
|
|
|
|
|
|
Fiscal Years
|
|
|
|
|
|||||||||
(In millions)
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Research and development
(1)
|
$
|
53.5
|
|
|
$
|
50.4
|
|
|
$
|
3.1
|
|
|
6
|
%
|
As a percentage of total revenues
|
8.6
|
%
|
|
8.0
|
%
|
|
|
|
|
|||||
Selling, general and administrative
(2)
|
$
|
85.8
|
|
|
$
|
72.7
|
|
|
$
|
13.1
|
|
|
18
|
%
|
As a percentage of total revenues
|
13.8
|
%
|
|
11.5
|
%
|
|
|
|
|
|||||
Operating expenses
|
$
|
139.3
|
|
|
$
|
123.1
|
|
|
$
|
16.2
|
|
|
13
|
%
|
As a percentage of total revenues
|
22.5
|
%
|
|
19.5
|
%
|
|
|
|
|
|
Fiscal Years
|
|
|
||||||||
(In millions)
|
2016
|
|
2015
|
|
$ Change
|
||||||
Interest income
|
$
|
0.3
|
|
|
$
|
0.5
|
|
|
$
|
(0.2
|
)
|
Interest expense
|
(1.9
|
)
|
|
(1.2
|
)
|
|
(0.7
|
)
|
|||
Other
|
(2.5
|
)
|
|
0.8
|
|
|
(3.3
|
)
|
|||
Interest and other income (expense), net
|
$
|
(4.1
|
)
|
|
$
|
0.1
|
|
|
$
|
(4.2
|
)
|
|
Fiscal Years
|
||||
|
2016
|
|
2015
|
||
Effective tax rate
|
34.3
|
%
|
|
36.7
|
%
|
(In millions)
|
September 29, 2017
|
|
September 30, 2016
|
|
$ Change
|
|
% Change
|
|||||||
Cash and cash equivalents
|
$
|
83.3
|
|
|
$
|
36.5
|
|
|
$
|
46.8
|
|
|
128
|
%
|
|
Fiscal Years
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash flow provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
74.6
|
|
|
$
|
74.2
|
|
|
$
|
85.2
|
|
Investing activities
|
(292.0
|
)
|
|
(21.6
|
)
|
|
(102.1
|
)
|
|||
Financing activities
|
263.3
|
|
|
(36.8
|
)
|
|
36.7
|
|
|||
Effects of exchange rate changes on cash and cash equivalents
|
0.9
|
|
|
0.1
|
|
|
0.3
|
|
|||
Net increase in cash and cash equivalents
|
$
|
46.8
|
|
|
$
|
15.9
|
|
|
$
|
20.1
|
|
|
Payments Due by Period
|
||||||||||||||||||
(In millions)
|
Total
|
|
Fiscal Year 2018
|
|
Fiscal Years 2019-2020
|
|
Fiscal Years 2021-2022
|
|
Beyond
|
||||||||||
Operating lease obligations
|
$
|
16.4
|
|
|
$
|
4.0
|
|
|
$
|
6.3
|
|
|
$
|
5.2
|
|
|
$
|
0.9
|
|
Principal payments on borrowings
|
494.0
|
|
|
20.0
|
|
|
55.0
|
|
|
419.0
|
|
|
—
|
|
|||||
Total
|
$
|
510.4
|
|
|
$
|
24.0
|
|
|
$
|
61.3
|
|
|
$
|
424.2
|
|
|
$
|
0.9
|
|
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-10K.
|
2.
|
Financial Statement Schedules and Other.
All financial statement schedules have been omitted because they are not applicable, 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
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.3
|
|
|
|
|
|
2.4
|
|
|
|
|
|
2.5
|
|
|
|
|
|
3.1*
|
|
|
|
|
|
3.2
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6++
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8†
|
|
|
|
|
|
10.9†
|
|
|
|
|
|
10.10†
|
|
|
|
|
|
10.11†
|
|
|
|
|
|
10.12†
|
|
|
|
|
|
10.13†
|
|
|
|
|
|
10.14†
|
|
|
|
|
|
10.15†
|
|
|
|
|
|
10.16†
|
|
|
|
|
|
10.17*†
|
|
|
|
|
|
21.1*
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
32.2*
|
|
|
|
|
|
101.INS
|
|
XBRL Instance 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
|
|
|
|
*
|
|
Filed herewith
|
|
|
|
†
|
|
Management contract or compensatory agreement.
|
|
|
|
++
|
|
Portions of this exhibit have been omitted pursuant to a confidential treatment request filed pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
VAREX IMAGING CORPORATION
|
|
|
|
|
Date:
|
December 12, 2017
|
By:
|
/s/ CLARENCE R. VERHOEF
|
|
|
|
Clarence R. Verhoef
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
Signature
|
|
Capacity
|
|
Date
|
/s/ SUNNY S. SANYAL
|
|
President and Chief Executive Officer and Director
(Principal Executive Officer)
|
|
December 12, 2017
|
Sunny S. Sanyal
|
|
|
|
|
|
|
|
|
|
/s/ CLARENCE R. VERHOEF
|
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
December 12, 2017
|
Clarence R. Verhoef
|
|
|
|
|
|
|
|
|
|
/s/ KEVIN B. YANKTON
|
|
Corporate Controller and Chief Accounting Officer
(Principal Accounting Officer)
|
|
December 12, 2017
|
Kevin B. Yankton
|
|
|
|
|
|
|
|
|
|
/s/ RUEDIGER NAUMANN-ETIENNE
|
|
Chairman of the Board
|
|
December 12, 2017
|
Ruediger Naumann-Etienne
|
|
|
|
|
|
|
|
|
|
/s/ JOCELYN D. CHERTOFF
|
|
Director
|
|
December 12, 2017
|
Jocelyn D. Chertoff
|
|
|
|
|
|
|
|
|
|
/s/ CHRISTINE A. TSINGOS
|
|
Director
|
|
December 12, 2017
|
Christine A. Tsingos
|
|
|
|
|
|
|
|
|
|
/s/ JAY K. KUNKEL
|
|
Director
|
|
December 12, 2017
|
Jay K. Kunkel
|
|
|
|
|
|
|
|
|
|
/s/ ERICH R. REINHARDT
|
|
Director
|
|
December 12, 2017
|
Erich R. Reinhardt
|
|
|
|
|
|
|
|
|
|
/s/ DOW R. WILSON
|
|
Director
|
|
December 12, 2017
|
Dow R. Wilson
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
Fiscal Years
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
$
|
698.1
|
|
|
$
|
620.1
|
|
|
$
|
632.3
|
|
Cost of revenues
|
444.6
|
|
|
371.7
|
|
|
381.7
|
|
|||
Gross margin
|
253.5
|
|
|
248.4
|
|
|
250.6
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
67.3
|
|
|
53.5
|
|
|
50.4
|
|
|||
Selling, general and administrative
|
102.5
|
|
|
85.8
|
|
|
72.7
|
|
|||
Total operating expenses
|
169.8
|
|
|
139.3
|
|
|
123.1
|
|
|||
Operating earnings
|
83.7
|
|
|
109.1
|
|
|
127.5
|
|
|||
Interest income
|
0.2
|
|
|
0.3
|
|
|
0.5
|
|
|||
Interest expense
|
(12.3
|
)
|
|
(1.9
|
)
|
|
(1.2
|
)
|
|||
Other income (expense), net
|
3.2
|
|
|
(2.5
|
)
|
|
0.8
|
|
|||
Interest and other income (expenses), net
|
(8.9
|
)
|
|
(4.1
|
)
|
|
0.1
|
|
|||
Earnings before taxes
|
74.8
|
|
|
105.0
|
|
|
127.6
|
|
|||
Taxes on earnings
|
22.8
|
|
|
36.0
|
|
|
46.8
|
|
|||
Net earnings
|
52.0
|
|
|
69.0
|
|
|
80.8
|
|
|||
Less: Net earnings attributable to noncontrolling interests
|
0.4
|
|
|
0.5
|
|
|
0.8
|
|
|||
Net earnings attributable to Varex
|
$
|
51.6
|
|
|
$
|
68.5
|
|
|
$
|
80.0
|
|
Net earnings per common share attributable to Varex
|
|
|
|
|
|
||||||
Basic
|
$
|
1.37
|
|
|
$
|
1.83
|
|
|
$
|
2.14
|
|
Diluted
|
$
|
1.36
|
|
|
$
|
1.82
|
|
|
$
|
2.12
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
||||||
Basic
|
37.6
|
|
|
37.4
|
|
|
37.4
|
|
|||
Diluted
|
38.0
|
|
|
37.7
|
|
|
37.7
|
|
|
Fiscal Years
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Net earnings
|
$
|
52.0
|
|
|
$
|
69.0
|
|
|
$
|
80.8
|
|
Other comprehensive earnings (loss), net of tax:
|
|
|
|
|
|
||||||
Unrealized gain on interest rate swap contracts, net of tax
|
0.6
|
|
|
—
|
|
|
—
|
|
|||
Unrealized gain on defined benefit obligations, net of tax
|
0.2
|
|
|
—
|
|
|
—
|
|
|||
Available-for-sale securities:
|
|
|
|
|
|
||||||
Change in unrealized loss, net of tax
|
—
|
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|||
Reclassification adjustments, net of tax
|
—
|
|
|
0.4
|
|
|
—
|
|
|||
Other comprehensive earnings (loss), net of tax
|
0.8
|
|
|
0.1
|
|
|
(0.1
|
)
|
|||
Comprehensive earnings
|
52.8
|
|
|
69.1
|
|
|
80.7
|
|
|||
Less: Comprehensive earnings attributable to noncontrolling interests
|
0.4
|
|
|
0.5
|
|
|
0.8
|
|
|||
Comprehensive earnings attributable to Varex
|
$
|
52.4
|
|
|
$
|
68.6
|
|
|
$
|
79.9
|
|
(In millions, except per share amounts)
|
September 29, 2017
|
|
September 30, 2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
83.3
|
|
|
$
|
36.5
|
|
Accounts receivable, net of allowance for doubtful accounts of $0.4 and $0.2 at September 29, 2017 and September 30, 2016, respectively
|
163.6
|
|
|
122.2
|
|
||
Inventories, net
|
234.5
|
|
|
197.4
|
|
||
Prepaid expenses and other current assets
|
13.9
|
|
|
3.8
|
|
||
Total current assets
|
$
|
495.3
|
|
|
$
|
359.9
|
|
Property, plant and equipment, net
|
148.3
|
|
|
108.9
|
|
||
Goodwill
|
241.9
|
|
|
74.7
|
|
||
Intangibles assets
|
91.3
|
|
|
20.7
|
|
||
Investments in privately-held companies
|
52.3
|
|
|
49.3
|
|
||
Deferred tax assets
|
—
|
|
|
5.5
|
|
||
Other assets
|
11.0
|
|
|
3.4
|
|
||
Total assets
|
$
|
1,040.1
|
|
|
$
|
622.4
|
|
Liabilities, Redeemable Noncontrolling Interests and Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
58.9
|
|
|
$
|
41.9
|
|
Accrued liabilities
|
62.4
|
|
|
23.9
|
|
||
Current maturities of long-term debt
|
20.0
|
|
|
—
|
|
||
Deferred revenues
|
10.5
|
|
|
12.0
|
|
||
Total current liabilities
|
$
|
151.8
|
|
|
$
|
77.8
|
|
Long-term debt
|
463.9
|
|
|
—
|
|
||
Deferred tax liabilities
|
29.5
|
|
|
3.0
|
|
||
Other long-term liabilities
|
4.7
|
|
|
5.3
|
|
||
Total liabilities
|
$
|
649.9
|
|
|
$
|
86.1
|
|
Commitments and contingencies (Note 10)
|
|
|
|
||||
Redeemable noncontrolling interests
|
11.2
|
|
|
10.3
|
|
||
Equity:
|
|
|
|
||||
Preferred stock, $.01 par value: 20,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value:
|
|
|
|
||||
Authorized shares - 150,000,000
|
|
|
|
||||
Issued shares - 37,633,747 and 0
|
|
|
|
||||
Outstanding shares - 37,633,747 and 0
|
0.4
|
|
|
—
|
|
||
Net parent investment
|
—
|
|
|
526.0
|
|
||
Additional paid-in capital
|
342.7
|
|
|
—
|
|
||
Accumulated other comprehensive loss
|
0.8
|
|
|
—
|
|
||
Retained earnings
|
35.1
|
|
|
—
|
|
||
Total stockholders' equity
|
$
|
379.0
|
|
|
$
|
526.0
|
|
Total liabilities, redeemable noncontrolling interests and Varex stockholders' equity
|
$
|
1,040.1
|
|
|
$
|
622.4
|
|
|
Fiscal Years
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net earnings
|
$
|
52.0
|
|
|
$
|
69.0
|
|
|
$
|
80.8
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Share-based compensation expense
|
8.4
|
|
|
9.5
|
|
|
9.6
|
|
|||
Excess tax benefits from share-based compensation
|
—
|
|
|
0.1
|
|
|
(1.7
|
)
|
|||
Depreciation
|
16.9
|
|
|
9.8
|
|
|
9.6
|
|
|||
Amortization of intangible assets
|
10.5
|
|
|
5.5
|
|
|
2.7
|
|
|||
Deferred taxes
|
(8.9
|
)
|
|
4.2
|
|
|
(0.8
|
)
|
|||
(Income) loss from equity method investments
|
(1.3
|
)
|
|
1.6
|
|
|
(0.3
|
)
|
|||
Amortization of deferred loan costs
|
1.8
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
1.8
|
|
|
0.7
|
|
|
0.4
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(23.1
|
)
|
|
(4.6
|
)
|
|
19.3
|
|
|||
Inventories
|
(4.2
|
)
|
|
(23.5
|
)
|
|
(25.9
|
)
|
|||
Prepaid expenses and other assets
|
(10.7
|
)
|
|
(0.9
|
)
|
|
0.3
|
|
|||
Accounts payable
|
4.9
|
|
|
(1.9
|
)
|
|
(4.3
|
)
|
|||
Accrued operating liabilities and other long-term operating liabilities
|
28.1
|
|
|
2.8
|
|
|
(7.2
|
)
|
|||
Deferred revenues
|
(1.6
|
)
|
|
1.9
|
|
|
2.7
|
|
|||
Net cash provided by operating activities
|
74.6
|
|
|
74.2
|
|
|
85.2
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(20.2
|
)
|
|
(28.9
|
)
|
|
(34.3
|
)
|
|||
Sale of available-for-sale securities
|
—
|
|
|
8.6
|
|
|
—
|
|
|||
Acquisitions of businesses, net of cash acquired
|
(271.8
|
)
|
|
(1.2
|
)
|
|
(67.9
|
)
|
|||
Other
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
|||
Net cash used in investing activities
|
(292.0
|
)
|
|
(21.6
|
)
|
|
(102.1
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net transfers from (to) parent
|
5.0
|
|
|
(36.7
|
)
|
|
35.8
|
|
|||
Distributions to Varian Medical Systems, Inc.
|
(227.1
|
)
|
|
—
|
|
|
—
|
|
|||
Taxes related to net share settlement of equity awards
|
(1.9
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings under credit agreements
|
749.0
|
|
|
—
|
|
|
—
|
|
|||
Repayments of borrowing under credit agreements
|
(255.0
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
2.8
|
|
|
—
|
|
|
—
|
|
|||
Excess tax benefits from share-based compensation
|
2.4
|
|
|
(0.1
|
)
|
|
1.7
|
|
|||
Payment of debt issuance costs
|
(11.9
|
)
|
|
—
|
|
|
—
|
|
|||
Other financing activities
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|||
Net cash provided by (used in) financing activities
|
263.3
|
|
|
(36.8
|
)
|
|
36.7
|
|
|||
Effects of exchange rate changes on cash and cash equivalents
|
0.9
|
|
|
0.1
|
|
|
0.3
|
|
|||
Net increase in cash and cash equivalents
|
46.8
|
|
|
15.9
|
|
|
20.1
|
|
|||
Cash and cash equivalents at beginning of period
|
36.5
|
|
|
20.6
|
|
|
0.5
|
|
|||
Cash and cash equivalents at end of period
|
$
|
83.3
|
|
|
$
|
36.5
|
|
|
$
|
20.6
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
9.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid for income tax
|
6.0
|
|
|
—
|
|
|
—
|
|
|||
Supplemental non-cash activities:
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment financed through accounts payable
|
$
|
4.0
|
|
|
$
|
3.1
|
|
|
$
|
9.0
|
|
Transfers of property, plant and equipment from Varian Medical Systems, Inc.
|
15.0
|
|
|
—
|
|
|
—
|
|
|||
Other non-cash transfers to Varian Medical Systems, Inc.
|
1.6
|
|
|
—
|
|
|
—
|
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Net Parent Investment
|
|
|
|
Retained Earnings
|
|
|
|
|
|
Total Stockholders' Equity
|
|||||||||||||||||||
(In millions)
|
|
Shares
|
|
Amount
|
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
Total Varex Equity
|
|
Non-controlling Interests
|
|
|||||||||||||||||||||
September 26, 2014
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
359.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
359.3
|
|
|
$
|
—
|
|
|
$
|
359.3
|
|
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80.0
|
|
|
—
|
|
|
—
|
|
|
80.0
|
|
|
0.8
|
|
|
80.8
|
|
||||||||
Net transfers from parent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45.4
|
|
|
—
|
|
|
—
|
|
|
45.4
|
|
|
—
|
|
|
45.4
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||||||
Acquisition of MeVis Medical Solutions AG
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.2
|
|
|
10.2
|
|
||||||||
October 2, 2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
484.7
|
|
|
(0.1
|
)
|
|
—
|
|
|
484.6
|
|
|
11.0
|
|
|
495.6
|
|
||||||||
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68.5
|
|
|
—
|
|
|
—
|
|
|
68.5
|
|
|
—
|
|
|
68.5
|
|
||||||||
Net transfers to parent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27.2
|
)
|
|
0.1
|
|
|
—
|
|
|
(27.1
|
)
|
|
—
|
|
|
(27.1
|
)
|
||||||||
Reclassification of non-controlling interests in MeVis Medical Solutions AG to redeemable non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.4
|
)
|
|
(10.4
|
)
|
||||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
||||||||
September 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
526.0
|
|
|
—
|
|
|
—
|
|
|
526.0
|
|
|
—
|
|
|
526.0
|
|
||||||||
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.5
|
|
|
—
|
|
|
35.1
|
|
|
51.6
|
|
|
—
|
|
|
51.6
|
|
||||||||
Net transfers from parent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18.4
|
|
|
—
|
|
|
—
|
|
|
18.4
|
|
|
—
|
|
|
18.4
|
|
||||||||
Distribution to Varian Medical Systems
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(227.1
|
)
|
|
—
|
|
|
—
|
|
|
(227.1
|
)
|
|
—
|
|
|
(227.1
|
)
|
||||||||
Conversion of net parent investment into common stock
|
|
37.4
|
|
|
0.4
|
|
|
333.4
|
|
|
(333.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Exercise of stock options
|
|
0.1
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
2.8
|
|
||||||||
Common stock issued upon vesting of restricted shares
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Shares withheld on vesting of restricted stock
|
|
(0.1
|
)
|
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|
(1.9
|
)
|
||||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
6.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
|
—
|
|
|
6.2
|
|
||||||||
Unrealized gain on interest rate swap contracts, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||||||
Unrealized gain on defined benefit obligations, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||||
Tax impacts to APIC related to share-based award activity
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
2.4
|
|
||||||||
Other
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||||||
September 29, 2017
|
|
37.6
|
|
|
$
|
0.4
|
|
|
$
|
342.7
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
35.1
|
|
|
$
|
379.0
|
|
|
$
|
—
|
|
|
$
|
379.0
|
|
(In millions)
|
September 29, 2017
|
|
September 30, 2016
|
||||
Land and land improvements
|
$
|
5.1
|
|
|
$
|
2.9
|
|
Buildings and leasehold improvements
|
132.2
|
|
|
103.3
|
|
||
Machinery
|
153.9
|
|
|
121.0
|
|
||
Construction in progress
|
24.3
|
|
|
18.3
|
|
||
|
$
|
315.5
|
|
|
$
|
245.5
|
|
Accumulated depreciation and amortization
|
(167.2
|
)
|
|
(136.6
|
)
|
||
Property, plant, and equipment, net
|
$
|
148.3
|
|
|
$
|
108.9
|
|
|
Fiscal Years
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Accrued product warranty, at beginning of period
|
$
|
6.9
|
|
|
$
|
6.1
|
|
Product warranty for acquisitions during period
|
1.3
|
|
|
—
|
|
||
Charged to cost of revenues
|
10.7
|
|
|
13.1
|
|
||
Actual product warranty expenditures
|
(11.9
|
)
|
|
(12.3
|
)
|
||
Accrued product warranty, at end of period
|
$
|
7.0
|
|
|
$
|
6.9
|
|
|
Fiscal Years
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Allowance for doubtful accounts, at beginning of period
|
$
|
0.2
|
|
|
$
|
0.1
|
|
Charged to bad debt expense
|
0.4
|
|
|
0.1
|
|
||
Write-offs charged to allowance
|
(0.2
|
)
|
|
—
|
|
||
Allowance for doubtful accounts, at end of period
|
$
|
0.4
|
|
|
$
|
0.2
|
|
(In millions)
|
Fair Value
|
||
Total cash consideration
|
$
|
273.2
|
|
Allocation of the purchase consideration:
|
|
||
Cash
|
1.4
|
|
|
Accounts Receivable
|
18.7
|
|
|
Inventory
|
34.7
|
|
|
Prepaids and other current assets
|
0.6
|
|
|
Property, plant, and equipment
|
21.4
|
|
|
Other assets, non-current
|
2.0
|
|
|
Intangibles
|
81.1
|
|
|
Goodwill
|
167.3
|
|
|
Total assets acquired
|
327.2
|
|
|
|
|
||
Current liabilities
|
(17.2
|
)
|
|
Other liabilities, non-current
|
(36.8
|
)
|
|
Total liabilities assumed
|
(54.0
|
)
|
|
Net assets acquired
|
$
|
273.2
|
|
(In millions)
|
Fair Value
|
|
Estimated
Useful Life (In Years) |
||
Favorable leasehold interests
|
$
|
3.8
|
|
|
16
|
Backlog
|
1.2
|
|
|
1
|
|
Trade names
|
1.4
|
|
|
5
|
|
Developed technology
|
37.7
|
|
|
7
|
|
In-process research and development
|
4.0
|
|
|
indefinite
|
|
Customer relationships
|
33.0
|
|
|
7
|
|
Total intangible assets acquired
|
$
|
81.1
|
|
|
|
(In millions)
|
May 1, 2017 through September 29, 2017
|
||
Acquired Detector Business
|
|
||
Medical
|
$
|
41.1
|
|
Industrial
|
20.2
|
|
|
Total Acquired Detector Business revenues
|
$
|
61.3
|
|
|
Fiscal Year
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Revenue
|
$
|
777.8
|
|
|
$
|
766.3
|
|
Operating earnings
|
$
|
84.7
|
|
|
$
|
115.9
|
|
Net earnings
|
$
|
43.1
|
|
|
$
|
64.8
|
|
Net earnings per share, basic
|
$
|
1.15
|
|
|
$
|
1.73
|
|
Net earnings per share, diluted
|
$
|
1.13
|
|
|
$
|
1.72
|
|
|
Fiscal Year
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Selling, general and administrative
|
$
|
12.4
|
|
|
$
|
37.7
|
|
|
$
|
38.0
|
|
Research and development
|
—
|
|
|
1.2
|
|
|
1.4
|
|
|||
Interest expense, net of interest income
|
0.5
|
|
|
1.6
|
|
|
0.7
|
|
(In millions)
|
September 29, 2017
|
|
September 30, 2016
|
||||
Accrued compensation and benefits
|
$
|
26.0
|
|
|
$
|
13.6
|
|
Product warranty
|
7.0
|
|
|
6.9
|
|
||
Income taxes payable
|
13.2
|
|
|
0.2
|
|
||
Payable to Varian Medical Systems
|
7.9
|
|
|
—
|
|
||
Other
|
8.3
|
|
|
3.2
|
|
||
Total accrued liabilities
|
$
|
62.4
|
|
|
$
|
23.9
|
|
(In millions)
|
September 29, 2017
|
|
September 30, 2016
|
||||
Long-term income tax payable
|
$
|
—
|
|
|
$
|
4.9
|
|
Environment liabilities
|
$
|
1.3
|
|
|
$
|
0.3
|
|
Defined benefit obligation liability
|
3.2
|
|
|
—
|
|
||
Other
|
0.2
|
|
|
0.1
|
|
||
Total other long-term liabilities
|
$
|
4.7
|
|
|
$
|
5.3
|
|
|
Fiscal Years
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Income (loss) from equity method investments
|
$
|
1.3
|
|
|
$
|
(1.6
|
)
|
|
$
|
0.3
|
|
Realized income (loss) on foreign currencies
|
1.9
|
|
|
(0.9
|
)
|
|
0.5
|
|
|||
Total other income (expense), net
|
$
|
3.2
|
|
|
$
|
(2.5
|
)
|
|
$
|
0.8
|
|
|
Fiscal Year
|
||||||||||
(In millions, except per share amounts)
|
2017
|
|
2016
(1)
|
|
2015
(1)
|
||||||
Net earnings attributable to Varex
|
$
|
51.6
|
|
|
$
|
68.5
|
|
|
$
|
80.0
|
|
Weighted average shares outstanding - basic
|
37.6
|
|
|
37.4
|
|
|
37.4
|
|
|||
Dilutive effect of potential common shares
|
0.4
|
|
|
0.3
|
|
|
0.3
|
|
|||
Weighted average shares outstanding - diluted
|
38.0
|
|
|
37.7
|
|
|
37.7
|
|
|||
Net earnings per share attributable to Varex - basic
|
$
|
1.37
|
|
|
$
|
1.83
|
|
|
$
|
2.14
|
|
Net earnings per share attributable to Varex - diluted
|
$
|
1.36
|
|
|
$
|
1.82
|
|
|
$
|
2.12
|
|
Anti-dilutive employee shared based awards, excluded
|
1.0
|
|
|
0.7
|
|
|
0.7
|
|
(In millions, except for number of instruments)
|
Number of Instruments
|
|
Notional Value
|
||
Interest Rate Swap Contracts
|
6
|
|
$
|
292.5
|
|
|
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Fiscal Year Ended
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
|
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Fiscal Year Ended
|
|
Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
|
|
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
Fiscal Year Ended |
||||||||||||||||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||
Interest Rate Swap Contracts
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest expense
|
|
$
|
(0.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||
(In millions)
|
|
|
September 29, 2017
|
|
September 30, 2016
|
|
|
|
September 29, 2017
|
|
September 30, 2016
|
||||||||
Derivatives designated as cash flow hedges
|
Balance sheet location
|
|
|
|
|
|
Balance sheet location
|
|
|
|
|
||||||||
Interest rate swap contracts
|
Other non-current assets
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
Other non-current assets
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap contracts
|
Other current liabilities
|
|
—
|
|
|
—
|
|
|
Other current liabilities
|
|
(0.6
|
)
|
|
—
|
|
||||
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
(In millions)
|
Fair Value Measurements at September 29, 2017
|
||||||||||||||
|
Quoted Prices in Active Markets for Identical Assets and Liabilities
(Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents - Money market funds
|
$
|
—
|
|
|
$
|
11.4
|
|
|
$
|
—
|
|
|
$
|
11.4
|
|
Interest rate swap contracts
|
—
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
||||
Total assets measured at fair value
|
$
|
—
|
|
|
$
|
13.0
|
|
|
$
|
—
|
|
|
$
|
13.0
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
(In millions)
|
Medical
|
|
Industrial
|
|
Total
|
|||
Balance at September 30, 2016
|
55.7
|
|
|
19.0
|
|
|
74.7
|
|
Business combinations - PerkinElmer Medical Imaging Business
|
91.3
|
|
|
76.0
|
|
|
167.3
|
|
Disposition of business
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
Balance at 2017
|
146.9
|
|
|
95.0
|
|
|
241.9
|
|
|
Fiscal Years
|
||||||||||
|
2017
|
|
2016
|
||||||||
(In millions)
|
Redeemable
Noncontrolling Interests |
|
Noncontrolling
Interests |
|
Redeemable
Noncontrolling Interests |
||||||
Balance at beginning of period
|
$
|
10.3
|
|
|
$
|
11.0
|
|
|
$
|
—
|
|
Net earnings attributable to noncontrolling interests
|
0.4
|
|
|
—
|
|
|
0.5
|
|
|||
Reclassification of noncontrolling interests in MeVis to redeemable noncontrolling interests
|
—
|
|
|
(10.4
|
)
|
|
10.4
|
|
|||
Other
|
0.5
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||
Balance at end of period
|
$
|
11.2
|
|
|
$
|
—
|
|
|
$
|
10.3
|
|
|
Fiscal Year
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Cost of revenues
|
$
|
0.9
|
|
|
$
|
1.0
|
|
|
$
|
1.3
|
|
Research and development
|
1.5
|
|
|
1.4
|
|
|
1.4
|
|
|||
Selling, general and administrative
(1)
|
6.0
|
|
|
7.1
|
|
|
6.9
|
|
|||
Total share-based compensation expense
|
$
|
8.4
|
|
|
$
|
9.5
|
|
|
$
|
9.6
|
|
|
Employee Stock Option Plan
|
|
Employee Stock Purchase Plans
|
||
|
Fiscal Year
|
|
Fiscal Year
|
||
|
2017
|
|
2017
|
||
Expected term (in years)
|
4.2
|
|
|
0.5
|
|
Risk-free interest rate
|
1.6
|
%
|
|
1.0
|
%
|
Expected volatility
|
23.6
|
%
|
|
28.0
|
%
|
Expected dividend
|
0.0
|
%
|
|
0.0
|
%
|
Weighted average fair value at grant date
|
$8.08
|
|
$7.81
|
(In thousands, except per share amounts and the remaining term)
|
Options Outstanding
|
|
Price range
|
|
Weighted Average
Exercise Price |
|
Weighted Average Remaining Term (in years)
|
|
Aggregate Intrinsic Value (2)
|
||||
Balance at September 30, 2016
(1)
|
1,015
|
|
$17.53 - $30.74
|
|
$
|
26.14
|
|
|
|
|
|
||
Granted
|
1,052
|
|
$31.08 - $34.13
|
|
31.20
|
|
|
|
|
|
|||
Canceled, expired or forfeited
|
(18)
|
|
$25.17 - $30.74
|
|
27.85
|
|
|
|
|
|
|||
Exercised
|
(123)
|
|
$17.53 - $30.74
|
|
22.61
|
|
|
|
|
|
|||
Balance at September 29, 2017
|
1,926
|
|
$19.21 - $34.13
|
|
$
|
29.11
|
|
|
5.3
|
|
$
|
9,118.1
|
|
Exercisable at September 29, 2017
|
709
|
|
$19.21 - $34.13
|
|
$
|
26.74
|
|
|
3.7
|
|
$
|
5,032.1
|
|
(In thousands, except per share amounts)
|
Number of Shares
|
|
Weighted Average
Grant-Date Fair Value |
||
Balance at September 30, 2016
(1)
|
385
|
|
$
|
27.42
|
|
Granted
|
337
|
|
31.33
|
|
|
Vested
|
(189)
|
|
27.90
|
|
|
Canceled or expired
|
(8)
|
|
26.71
|
|
|
Balance at September 29, 2017
|
525
|
|
$
|
29.54
|
|
|
Fiscal Years
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Current provision:
|
|
|
|
|
|
||||||
Federal
|
$
|
24.8
|
|
|
$
|
26.4
|
|
|
$
|
40.2
|
|
State and local
|
1.6
|
|
|
3.9
|
|
|
4.9
|
|
|||
Foreign
|
5.3
|
|
|
2.0
|
|
|
2.5
|
|
|||
Total current
|
31.7
|
|
|
32.3
|
|
|
47.6
|
|
|||
Deferred provision (benefit):
|
|
|
|
|
|
||||||
Federal
|
(7.0
|
)
|
|
3.6
|
|
|
(1.4
|
)
|
|||
State and local
|
(1.0
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Foreign
|
(0.9
|
)
|
|
0.1
|
|
|
0.7
|
|
|||
Total deferred
|
(8.9
|
)
|
|
3.7
|
|
|
(0.8
|
)
|
|||
Taxes on earnings
|
$
|
22.8
|
|
|
$
|
36.0
|
|
|
$
|
46.8
|
|
|
Fiscal Years
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
55.5
|
|
|
$
|
105.6
|
|
|
$
|
122.9
|
|
Foreign
|
19.3
|
|
|
(0.6
|
)
|
|
4.7
|
|
|||
Earnings before taxes
|
$
|
74.8
|
|
|
$
|
105.0
|
|
|
$
|
127.6
|
|
|
Fiscal Years
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Federal statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and local taxes, net of federal tax benefit
|
1.3
|
%
|
|
2.4
|
%
|
|
2.5
|
%
|
Domestic production activities deduction
|
(2.4
|
)%
|
|
(2.2
|
)%
|
|
(2.3
|
)%
|
Research and development credit
|
(2.6
|
)%
|
|
(2.2
|
)%
|
|
(0.6
|
)%
|
Foreign deferred tax adjustments
|
(4.0
|
)%
|
|
—
|
%
|
|
—
|
%
|
Change in valuation allowance
|
3.8
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
(0.6
|
)%
|
|
1.3
|
%
|
|
2.1
|
%
|
Effective tax rate
|
30.5
|
%
|
|
34.3
|
%
|
|
36.7
|
%
|
(In millions)
|
September 29, 2017
|
|
September 30, 2016
|
||||
Deferred Tax Assets:
|
|
|
|
||||
Inventory adjustments
|
$
|
15.0
|
|
|
$
|
13.3
|
|
Share-based compensation
|
1.9
|
|
|
2.8
|
|
||
Product warranty
|
2.2
|
|
|
2.3
|
|
||
Deferred compensation
|
1.3
|
|
|
1.2
|
|
||
Net operating loss carryforwards
|
2.4
|
|
|
7.7
|
|
||
Accrued vacation
|
2.1
|
|
|
—
|
|
||
Excess foreign tax credits
|
1.9
|
|
|
—
|
|
||
Other
|
2.2
|
|
|
6.0
|
|
||
|
29.0
|
|
|
33.3
|
|
||
Valuation allowance
|
(4.3
|
)
|
|
(6.4
|
)
|
||
Total deferred tax assets
|
24.7
|
|
|
26.9
|
|
||
Deferred Tax Liabilities:
|
|
|
|
||||
Acquired intangibles
|
(26.4
|
)
|
|
(6.5
|
)
|
||
Property, plant and equipment
|
(19.9
|
)
|
|
(10.1
|
)
|
||
Investments in privately held companies
|
(6.9
|
)
|
|
(6.7
|
)
|
||
Other
|
(1
|
)
|
|
(1.1
|
)
|
||
Total deferred tax liabilities
|
(54.2
|
)
|
|
(24.4
|
)
|
||
Net deferred tax (liabilities) assets
|
$
|
(29.5
|
)
|
|
$
|
2.5
|
|
Reported As:
|
|
|
|
||||
Deferred tax assets
|
$
|
25.3
|
|
|
$
|
5.5
|
|
Deferred tax liabilities
|
(54.8
|
)
|
|
(3.0
|
)
|
||
Net deferred tax (liabilities) assets
|
$
|
(29.5
|
)
|
|
$
|
2.5
|
|
|
Fiscal Years
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Unrecognized tax benefits balance–beginning of fiscal year
|
$
|
4.4
|
|
|
$
|
4.5
|
|
|
$
|
4.5
|
|
Additions based on tax positions related to a prior year
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Additions based on tax positions related to the current year
|
0.5
|
|
|
1.0
|
|
|
1.0
|
|
|||
Reductions resulting from the expiration of the applicable statute of limitations
|
—
|
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|||
Adjustments resulting from current year separation
|
(4.4
|
)
|
|
—
|
|
|
—
|
|
|||
Unrecognized tax benefits balance—end of fiscal year
|
$
|
0.5
|
|
|
$
|
4.4
|
|
|
$
|
4.5
|
|
|
Fiscal Year
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
|
|
|
|
|
||||||
Medical
|
$
|
556.9
|
|
|
$
|
505.8
|
|
|
$
|
534.3
|
|
Industrial
|
141.2
|
|
|
114.3
|
|
|
98.0
|
|
|||
Total revenues
|
698.1
|
|
|
620.1
|
|
|
632.3
|
|
|||
Gross margin
|
|
|
|
|
|
||||||
Medical
|
193.6
|
|
|
195.8
|
|
|
207.1
|
|
|||
Industrial
|
59.9
|
|
|
52.6
|
|
|
43.5
|
|
|||
Total gross margin
|
253.5
|
|
|
248.4
|
|
|
250.6
|
|
|||
Total operating expenses
|
169.8
|
|
|
139.3
|
|
|
123.1
|
|
|||
Interest and other income (expenses), net
|
(8.9
|
)
|
|
(4.1
|
)
|
|
0.1
|
|
|||
Earnings before taxes
|
74.8
|
|
|
105.0
|
|
|
127.6
|
|
|||
Taxes on earnings
|
22.8
|
|
|
36.0
|
|
|
46.8
|
|
|||
Net earnings
|
52.0
|
|
|
69.0
|
|
|
80.8
|
|
|||
Less: Net earnings attributable to noncontrolling interests
|
0.4
|
|
|
0.5
|
|
|
0.8
|
|
|||
Net earnings attributable to Varex
|
$
|
51.6
|
|
|
$
|
68.5
|
|
|
$
|
80.0
|
|
(In millions)
|
September 29, 2017
|
|
September 30, 2016
|
||||
Identifiable assets:
|
|
|
|
||||
Medical
|
$
|
832.1
|
|
|
$
|
481.4
|
|
Industrial
|
208.0
|
|
|
134.7
|
|
||
Total reportable segments
|
$
|
1,040.1
|
|
|
$
|
616.1
|
|
Unallocated corporate assets
|
—
|
|
|
6.3
|
|
||
Total combined assets
|
$
|
1,040.1
|
|
|
$
|
622.4
|
|
|
Revenues
|
|
Property, plant and equipment, net
|
||||||||||||||||
|
Fiscal Year
|
|
Fiscal Years
|
||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
||||||||||
Americas
|
$
|
239.8
|
|
|
$
|
224.7
|
|
|
$
|
249.2
|
|
|
$
|
132.1
|
|
|
$
|
98.0
|
|
EMEA
|
219.5
|
|
|
179.5
|
|
|
153.0
|
|
|
8.4
|
|
|
2.5
|
|
|||||
APAC
|
238.8
|
|
|
215.9
|
|
|
230.1
|
|
|
7.8
|
|
|
8.4
|
|
|||||
Total company
|
$
|
698.1
|
|
|
$
|
620.1
|
|
|
$
|
632.3
|
|
|
$
|
148.3
|
|
|
$
|
108.9
|
|
1.
|
The name of the Corporation is Varex Imaging Corporation.
|
2.
|
An Amended and Restated Certificate of Incorporation (the “
Restated Certificate
”) was filed with the Secretary of State of the State of Delaware on January 27, 2017, and said Restated Certificate requires correction as permitted by Section 103 of the General Corporation Law of the State of Delaware.
|
3.
|
The inaccuracy or defect of said Restated Certificate to be corrected is that in Article IV, Section 1, the Restated Certificate recites and certifies that the Corporation has the authority to issue 20,000,000 shares of Common Stock and 150,000,000 shares of Preferred Stock, rather than 150,000,000 shares of Common Stock and 20,000,000 shares of Preferred Stock.
|
4.
|
Article IV, Section 1 of the Restated Certificate is corrected to read as follows:
|
5.
|
The corrected Restated Certificate is attached as
Exhibit A
to this Certificate of Correction.
|
1.
|
The name of the Corporation is Varex Imaging Corporation. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 18, 2016.
|
2.
|
This Amended and Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware (as amended, the “DGCL”) and by the written consent of its sole stockholder in accordance with Section 228 of the DGCL, and is to become effective as of 2:59 a.m. Eastern time, on January 28, 2017.
|
3.
|
This Amended and Restated Certificate of Incorporation restates, integrates and amends the provisions of the currently existing Certificate of Incorporation of the Corporation, including as amended or supplemented heretofore. As so restated, integrated and amended, the Amended and Restated Certificate of Incorporation reads as follows:
|
(a)
|
the designation of the series, which may be by distinguishing number, letter or title;
|
(b)
|
the number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding);
|
(c)
|
the amounts payable on, and the preferences, if any, of shares of the series in respect of dividends, and whether such dividends, if any, shall be cumulative or noncumulative;
|
(d)
|
dates at which dividends, if any, shall be payable;
|
(e)
|
the redemption rights and price or prices, if any, for shares of the series;
|
(f)
|
the terms and amount of any sinking fund provided for the purchase or redemption of shares of the series;
|
(g)
|
the amounts payable on, and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation;
|
(h)
|
whether the shares of the series shall be convertible into or exchangeable for shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series or such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made;
|
(i)
|
restrictions on the issuance of shares of the same series or of any other class or series; and
|
(j)
|
the voting rights, if any, of the holders of shares of the series.
|
a.
|
The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors.
|
b.
|
Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, the number of directors shall be fixed from time to time exclusively
|
c.
|
The directors, other than those who may be elected by the holders of any series of Preferred Stock under specified circumstances, shall be divided, with respect to the time for which they severally hold office, into three classes (designated as Class I, Class II and Class III), as nearly equal in number as is reasonably possible, each with a term of office to expire at the third succeeding annual meeting of stockholders after his or her election, with each director to hold office until his or her successor shall have been duly elected and qualified;
provided
, that the first term of office of the Class I directors shall expire at the 2018 annual meeting of stockholders, the first term of office of the Class II directors shall expire at the 2019 annual meeting of stockholders and the first term of office of the Class III directors shall expire at the 2020 annual meeting of stockholders, with each director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, commencing with the 2018 annual meeting of stockholders, (i) directors elected to succeed those directors whose terms then expire shall be elected to hold office for a three-year term and until the election and qualification of their respective successors in office, and (ii) if authorized by a resolution of the Board, directors may be elected to fill any vacancy on the Board, regardless of how such vacancy shall have been created.
|
d.
|
Unless otherwise required by law, any vacancy on the Board or newly created directorship may be filled only by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been appointed expires and until their successors are duly elected and qualified, or until their earlier death, resignation, removal or departure from the Board for other cause.
|
e.
|
Notwithstanding the foregoing, whenever the holders of outstanding shares of one or more series of Preferred Stock are entitled to elect a director or directors of the Corporation separately as a series or together with one or more other series pursuant to a resolution of the Board providing for the establishment of such series, such director or directors shall not be subject to the foregoing provisions of this Article V, and the election, term of office, removal and filling of vacancies in respect of such director or directors shall be governed by the resolution of the Board so providing for the establishment of such series and by applicable law.
|
a.
|
The Board is expressly authorized to make, amend, alter, change, add to or repeal the Bylaws, without any action on the part of the stockholders, by resolution passed by a majority of the Whole Board or by written consent, subject to the power of the stockholders of the Corporation to amend, alter, change, add to or repeal any Bylaws made by the Board by the affirmative vote of the holders of at least a majority
of the voting power of all of the then-outstanding shares of the capital
|
b.
|
Notwithstanding anything herein to the contrary, following the 2019 annual meeting of the stockholders of the Corporation, (i) each of the Class III directors shall be elected at the 2020 annual meeting of the stockholders of the Corporation to a two-year term, with the directors being divided, with respect to the time for which they severally hold office, into two classes following such meeting, (ii) each of the Class I directors shall be elected at the 2021 annual meeting of the stockholders of the Corporation to a one-year term, with the directors being divided, with respect to the time for which they severally hold office, into one class following such meeting and (iii) beginning at the 2022 annual meeting of the stockholders of the Corporation, each of the directors shall be elected to a one-year term with a term of office to expire at the next annual meeting of stockholders after his or her election, with each director to hold office until his or her successor shall have been duly elected and qualified. Subject to the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, following the 2022 annual meeting of the stockholders of the Corporation, any director, or the entire Board, may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority
of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
|
European Union
|
Data Privacy.
The following supplements Section 13 of the Agreement:
The Director understands that Data will be held only as long as is necessary to implement, administer and manage the Director’s participation in the Plan. The Director understands that he or she may, at any time, view his or her Data, request additional information about the storage and processing of Data, require any necessary amendments to Data without cost or refuse or withdraw the consents herein by contacting in writing the Director’s local human resources representative.
|
|
|
|
Name
|
|
Jurisdiction of Incorporation
|
Varex Imaging Equipment (China) Co., Ltd.
|
|
China
|
MeVis Medical Solutions AG
|
|
Germany
|
Varex Imagens Brasil Holdings, Ltda.
|
|
Brazil
|
Varex Imaging Corporation
|
|
Delaware, USA
|
Varex Imaging Holdings, Inc.
|
|
Delaware, USA
|
Varex Imaging France SARL
|
|
France
|
Varex Imaging Deutschland AG
|
|
Germany
|
Varex Imaging Italia Srl
|
|
Italy
|
Varex Imaging Investments B.V.
|
|
Netherlands
|
Varex Imaging International Holdings B.V.
|
|
Netherlands
|
Varex Imaging UK Limited
|
|
United Kingdom
|
Claymount Technologies Group B.V.
|
|
Netherlands
|
Claymount Switzerland AG
|
|
Switzerland
|
Clayberg International B.V.
|
|
Netherlands
|
Claymount Assemblies Philippines, Inc.
|
|
Philippines
|
Claymount High Voltage Technologies (Beijing) Co. Ltd.
|
|
China
|
Claymount Assemblies B.V.
|
|
Netherlands
|
Claymount Americas Corporation
|
|
Illinois, USA
|
Varex Imaging International AG
|
|
Switzerland
|
Varex Imaging West Holdings, Inc.
|
|
Delaware, USA
|
Varex Imaging West, LLC
|
|
Delaware, USA
|
Varex Imaging Mexico, S. de R.L. de C.V.
|
|
Mexico
|
3901 Carnation Street, LLC
|
|
Delaware, USA
|
Varex Imaging Japan, K.K.
|
|
Japan
|
dpiX, LLC (40% JV)
|
|
USA
|
Dexela Limited
|
|
United Kingdom
|
Varex Imaging Investments B.V., Belgium Branch
|
|
Belgium
|
Varex Imaging Investments B.V., Korea Branch
|
|
South Korea
|
Varex Imaging Equipment (China) Co., Ltd., Beijing Branch
|
|
China
|
Dated:
|
December 12, 2017
|
By:
|
/s/ Sunny S. Sanyal
|
|
|
|
Sunny S. Sanyal
|
|
|
|
President, Chief Executive Officer
|
|
|
|
|
Dated:
|
December 12, 2017
|
By:
|
/s/ Clarence R. Verhoef
|
|
|
|
Clarence R. Verhoef
|
|
|
|
Senior Vice President, Chief Financial Officer
|
|
|
|
|
1.
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
December 12, 2017
|
By:
|
/s/ Sunny S. Sanyal
|
|
|
|
Sunny S. Sanyal
|
|
|
|
President, Chief Executive Officer
|
|
|
|
|
1.
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
December 12, 2017
|
By:
|
/s/ Clarence R. Verhoef
|
|
|
|
Clarence R. Verhoef
|
|
|
|
Senior Vice President, Chief Financial Officer
|
|
|
|
|