Varex Imaging Corporation designs, manufactures, and sells X-ray imaging components. The company operates through two segments, Medical and Industrial. The Medical segment designs, manufactures, sells, and services X-ray imaging components comprising X-ray tubes, digital detectors, high voltage connectors, image-processing software and workstations, 3D reconstruction and computer-aided diagnostic software, collimators, automatic exposure control devices, generators, heat exchangers, ionization chambers, and buckys. This segment's products are used in a range of applications, including radiographic and fluoroscopic imaging, mammography, computed tomography, oncology, CT, cardiac, surgery, dental, computer-aided detection, and other diagnostic radiography uses. The Industrial segment designs, manufactures, sells, and services Linatron X-ray accelerators, X-ray tubes, digital detectors, and high voltage connectors for use in security and inspection applications, such as airport security, cargo screening at ports and borders, and nondestructive testing and examination in various applications. The company sells its products through imaging system original equipment manufacturers, independent service companies, and distributors, as well as directly to end-users. It has operations in North America, South America, Europe, Russia, the Middle East, India, Africa, Asia, and Australia. Varex Imaging Corporation was incorporated in 2016 and is headquartered in Salt Lake City, Utah.

Varex Imaging Corporation

In trading on Wednesday, shares of Varex Imaging Corp (Symbol: VREX) crossed above their 200 day moving average of $14.64, changing hands as high as $15.90 per share. Varex Imaging Corp shares are currently trading up about 8.1% on the day. The chart below shows the one year performance of VREX shares, versus its 200 day moving average:
Looking at the chart above, VREX's low point in its 52 week range is $10.19 per share, with $21.50 as the 52 week high point — that compares with a last trade of $15.49.
Click here to find out which 9 other stocks recently crossed above their 200 day moving average »
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Varex Imaging (VREX) Shares Cross Above 200 DMA

In trading on Monday, shares of Varex Imaging Corp (Symbol: VREX) crossed above their 200 day moving average of $20.17, changing hands as high as $20.71 per share. Varex Imaging Corp shares are currently trading up about 5.2% on the day. The chart below shows the one year performance of VREX shares, versus its 200 day moving average:
Looking at the chart above, VREX's low point in its 52 week range is $17.05 per share, with $23.895 as the 52 week high point — that compares with a last trade of $20.56.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Varex Imaging Corp (VREX) Shares Cross Above 200 DMA

The following are today's upgrades for Validea's P/E/Growth Investor model based on the published strategy of Peter Lynch. This strategy looks for stocks trading at a reasonable price relative to earnings growth that also possess strong balance sheets.
VAREX IMAGING CORP (VREX) is a small-cap growth stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Varex Imaging Corporation is a designer and manufacturer of X-ray tubes, digital detectors and other image processing solutions. The Company operates through two segments: Medical and Industrial. The Medical segment designs, manufactures, sells and services X-ray imaging components, including X-ray tubes, digital detectors, ionization chambers and buckys, high voltage connectors, image-processing software and workstations, three-dimensional (3D) reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, and heat exchangers. These components are used in a range of medical imaging applications. 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 and baggage screening at airports, and nondestructive testing, irradiation and inspection applications used in various other markets.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of VAREX IMAGING CORP
SPIRE INC (SR) is a mid-cap growth stock in the Natural Gas Utilities industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Spire Inc. is the holding company for Spire Missouri Inc. (Spire Missouri), Spire Alabama Inc. (Spire Alabama), other gas utilities, and gas-related businesses. Its Gas Utility segment includes the regulated operations of Spire Missouri, Spire Alabama, Spire Gulf Inc. (Spire Gulf) and Spire Mississippi Inc. (Spire Mississippi). Spire Missouri is engaged in the purchase, retail distribution and sale of natural gas. Spire Alabama is engaged in the purchase, retail distribution and sale of natural gas principally in central and northern Alabama. Spire Gulf and Spire Mississippi are utilities engaged in the purchase, retail distribution and sale of natural gas in the Mobile, Alabama area and south-central Mississippi. Its Gas Marketing segment includes Spire Marketing Inc. (Spire Marketing), a wholly owned subsidiary providing natural gas marketing services. Its Midstream segment consists of three facilities Spire STL Pipeline, Spire Storage West, and Spire Storage Salt Plains.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of SPIRE INC
GOLUB CAPITAL BDC INC (GBDC) is a mid-cap value stock in the Misc. Financial Services industry. The rating according to our strategy based on Peter Lynch changed from 0% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Golub Capital BDC, Inc. is an externally managed, closed-end, non-diversified management investment company. The Company's investment objective is to generate current income and capital appreciation by investing primarily in senior secured and one-stop loans of United States middle-market companies. It makes investments primarily in a loan that combines characteristics of traditional first- lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle market lenders as unitranche loans and other senior secured loans of United States middle-market companies. The Company also selectively invests in second lien and subordinated (a loan that ranks senior only to a borrower's equity securities and ranks junior to all of such borrower's other indebtedness in priority of payment) loans of, and warrants and minority equity securities in, middle-market companies. The Company's investment adviser is GC Advisors LLC.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of GOLUB CAPITAL BDC INC
About Peter Lynch: Perhaps the greatest mutual fund manager of all-time, Lynch guided Fidelity Investment's Magellan Fund to a 29.2 percent average annual return from 1977 until his retirement in 1990, almost doubling the S&P 500's 15.8 percent yearly return over that time. Lynch's common sense approach and quick wit made him one of the most quoted investors on Wall Street. ("Go for a business that any idiot can run -- because sooner or later, any idiot probably is going to run it," is one of his many pearls of wisdom.) Lynch's bestseller One Up on Wall Street is something of a "stocks for the everyman/everywoman", breaking his approach down into easy-to-understand concepts.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Validea Peter Lynch Strategy Daily Upgrade Report - 11/28/2023

Varex Imaging Corporation (VREX) Q4 2023 Earnings Call Transcript
Varex Imaging Corporation (VREX)
Q4 2023 Earnings Conference Call
Company Participants
Christopher Belfiore – Director-Investor Relations
Sunny Sanyal – President and Chief Executive Officer
Sam Maheshwari – Chief Financial Officer
Conference Call Participants
James Sidoti – Sidoti & Company
Larry Solow – CJS
Suraj Kalia – Oppenheimer
Anthony Petrone – Mizuho
Presentation
Operator
Greetings, and welcome to the Varex Fourth Quarter and Fiscal Year 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
It is now my pleasure to introduce Christopher Belfiore, Director of Investor Relations. Thank you. You may begin.
Christopher Belfiore
Good afternoon, and welcome to Varex Imaging Corporation’s earnings conference call for the fourth quarter of fiscal year 2023. With me today are Sunny Sanyal, our President and CEO; and Sam Maheshwari, our CFO. Please note that the live webcast of this conference call includes a supplemental slide presentation that can be accessed at Varex’s website at vareximaging.com/news. The webcast and supplemental slide presentation will be archived on Varex’s website.
To simplify our discussion, unless otherwise stated, all references to the quarter are for the fourth quarter of fiscal year 2023. In addition, unless otherwise stated, quarterly comparisons are made sequentially from the fourth quarter of fiscal year 2023 to the third quarter of fiscal year 2023 rather than to the same quarter of the prior year. Finally, all references to the year are to the fiscal year and not calendar year unless otherwise stated.
Please be advised that during this call, we will be making forward-looking statements, which are predictions or projections about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Risks relating to our business are described in our quarterly earnings release and our filings with the SEC.
Additional information concerning factors that could cause actual results to materially differ from those anticipated is contained in our SEC filings, including Item 1A, Risk Factors of our quarterly reports on Form 10-Q and our Annual Report on Form 10-K. The information in this discussion speaks as of today’s date, and we assume no obligation to update or revise the forward-looking statements in this discussion.
On today’s call, we will discuss certain non-GAAP financial measures. These non-GAAP measures are not presented in accordance with, nor are they a substitute for GAAP financial measures. We provided a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure in our earnings press release, which is posted on our website.
I will now turn the call over to Sunny.
Sunny Sanyal
Thanks, Chris. Good afternoon, everyone, and thank you for joining us for our fourth quarter earnings call. I'm pleased to announce another solid quarter for Varex. Revenue of $227 million in the quarter was a result of strong performance in our Industrial segment offset by lower revenue in China in our Medical segment. Non-GAAP gross margin of 36% and non-GAAP earnings per share of $0.45 exceeded our expectations.
Revenue in the fourth quarter decreased 2%, both sequentially and year-over-year. Revenue in the Medical segment decreased 7% sequentially and 10% year-over-year, while Industrial segment revenue increased 12% sequentially and 27% year-over-year. Non-GAAP gross margin of 36% was solid in the fourth quarter and above the high end of our expectations. This is primarily due to a beneficial segment and product mix led by higher proportion of Industrial sales as well as further realization of results of our pricing initiatives.
Adjusted EBITDA in the fourth quarter were $38 million and non-GAAP EPS was $0.45. We ended the fourth quarter in the fiscal year with $195 million of cash, cash equivalents and marketable securities on the balance sheet, which was $42 million higher sequentially and $82 million from the fiscal 2022 year-end. The increase was primarily due to higher profitability and the reduction of inventory in the quarter and year.
Let me give you some insights into sales detail by modality in the quarter compared to a five quarter average, which we refer to as the sales trend. In our Medical segment, global sales of CT tubes remain flat compared to the trend in the quarter as the lower sales in China was offset by strength in the rest of the world.
Mammography remains strong with sales above the trend in the quarter. Oncology improved in the quarter was -- and was above its sales trend. Fluoroscopy remained flat while radiographic sales were below the trend in the quarter. Dental remained soft and was also below the sales trend in the quarter.
We saw strong performance in our Industrial segment with record revenue of $64 million in the quarter. Non-destructive inspection specifically cargo screening was a bright spot for the Industrial segment.
Similar to last quarter, we also continued to see increased adoption of photon counting detectors across various industrial verticals including food, battery, and electronics inspection. Our Medical segment finished the fiscal year at $673 million in revenue, which was flat year-over-year and represented approximately 75% of total Varex revenues for the year.
The global CT market continues to be a significant driver of overall sales accounting for nearly 40% of Medical sales in fiscal 2023. We expect CT to continue to be a key driver of our Medical sales as developing countries expand their healthcare services.
In addition to the new installations and upgrades, we expect replacement tubes sold into our extensive and growing installed base to provide solid baseline for future CT tube sales. Our photon counting technologies continues to gain OEM interest and we are working with several of our customers on a range of potential medical applications for photon counting, particularly where speed and high contrast imaging can make a difference.
We expect photon counting technologies to once again be a main focal point at RSNA show in a couple of weeks and we believe our position at the table is very strong. While there are many potential medical applications for photon counting technology, use of photon counting detectors in CT is a significant focus for our customers and we are actively engaged in their design discussions. We look forward to meeting with our customers and colleagues in Chicago at RSNA to discuss how we can enable their innovation and imaging.
Moving to our software business. I'm happy to say that our majority owned subsidiary MeVis Medical Solutions recently received U.S. FDA 510(k) clearance for an innovative new software product named MeVis Liver Suite. This is an AI-based software application, which enables physicians and radiologists to create detailed visualizations and volumetric quantification for evaluation of liver surgery strategies, treatment planning, and for post-procedure follow-up assessment. The innovative AI-based software technology and 3D medical visualization driven approach is applicable to both CT and MR imaging and can help daily workflow for liver surgery and post-procedure evaluation.
Let me turn now to our Industrial segment. In the recent quarters, the strength of our Industrial segment has been a highlight for Varex. In fiscal 2023, our Industrial segment grew to $220 million in revenue, up 19% year-over-year and accounted for approximately 25% of total Varex revenue. This growth has been due to broad-based strength in various non-destructive inspection verticals, driven by our investment in X-ray tubes, linear accelerators, as well as photon counting detectors.
In the past, we expressed intention to provide more integrated solutions including full systems to our customers across various industrial verticals. One of the verticals we highlighted was irradiation of consumer based facing goods like packaged foods or plant products.
Today, I'm excited to announce a new industrial irradiation system that we will offer directly to end customers that is a novel application of our X-ray technology. We expect system solutions to potentially add nearly $1 billion to our addressable market within five years. This new irradiation system XRpure offered by one of our subsidiaries can be used to reduce microbial loads in agricultural and other products.
One of the applications of this system is for decontaminating cannabis, which is becoming a significant market in the U.S. Across the United States, where cannabis is legal, state regulators have established limits on various types of microbial contamination in the interest of public health and safety. Cannabis growers are therefore required to submit a sample from each batch grown to be tested for microbial load before the product can be sold. This process is critical to growers as a failing cannabis lot can potentially lead to financial and reputational issues as well as patient's health and safety concerns.
There are many benefits of using X-ray irradiation to decontaminate an organic product. Traditional decontamination methods may use chemical or heat based technologies, which can degrade then product. In contrast, X-ray irradiation decontaminates the product by killing the microbes and pathogens without compromising the efficacy of the product. Cannabis cultivation for both medical and legal recreational uses has grown significantly in the United States over the last several years. With an estimated 13,000 growers nationwide, we believe the addressable market for cannabis irradiation using X-ray technology is approximately $225 million per year and growing at double digits. With a subscription model for XRpure, we expect to be able to reach a run rate of $25 million to $50 million in annual revenues in the next five years.
We believe our advanced X-ray technology can make XRpure a significant player in this space. In the coming weeks, our team will commercially launch the XRpure product at the 12th Annual MJBizCon Show, which is the largest cannabis conference and expo in the world. We are very excited at the potential of this new system and believe this is just one of the many applications where X-ray irradiation can be utilized. If you'd like to learn more about XRpure, please visit the website at www.xrpure.com.
In fiscal 2023, we made solid progress with innovation, strengthened our financial position and generated solid cash flow. As we look to fiscal 2024 and the future of Varex, we remain focused on executing on our existing and new initiatives to drive profitable growth and continued free cash flow generation. We are expanding investment in our Industrial segment, where new technology tends to be adopted at a much more rapid pace. Much like what we have done with our photon counting technologies, we believe we can leverage the more rapid adoption and feedback from industrial customers to accelerate development of new products in medical.
As we highlighted earlier, there are many applications of our X-ray technologies across the industrial landscape from non-destructive inspection to decontamination of organic products. Our intention is to invest in full systems in select industrial verticals that can create differentiated workflow solutions. In due course, we will share more with you as we continue to make progress on this initiative.
We intend to continue to invest in photon counting technology, which is gaining solid traction across our non-destructive inspection applications in our Industrial segment and expand its use in medical applications. Photon counting CT detectors is an example of an application that can become a potentially meaningful growth driver for us in the future....
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