Varex Imaging Corporation Reports $190 Million in Revenue for Q1 2024

Varex Imaging Corporation, a leading provider of imaging components and solutions, recently released its Q1 2024 earnings report. With revenue totaling $190 million, the company performed in line with expectations. However, the Medical segment experienced a 13% decrease in revenue compared to the previous year, while the Industrial segment saw a 10% increase. Profitability was impacted by lower volumes and an unfavorable mix in both segments. Despite these challenges, Varex Imaging Corporation remains optimistic about new product development and the potential to support customers in introducing innovative imaging systems to the market. Revenues for the upcoming second quarter are projected to be between $195 million and $215 million.

Q1 2024 Earnings Call

Varex Imaging Corporation (VREX) held its Q1 2024 Earnings Call on February 6, 2024, providing key information regarding the company’s financial performance and outlook. The following sections will delve into the details discussed during the call.

Date and Information

The Q1 2024 Earnings Call by Varex Imaging Corporation took place on February 6, 2024. The call provided valuable insights into the company’s financial performance, segment revenue comparison, and factors affecting profitability. Additionally, it shed light on the company’s cash position, segment sales, participation at the Radiological Society of North America Show, and the outlook for the second quarter of fiscal year 2024.

Key Highlights

Three key highlights emerged from the Q1 2024 Earnings Call by Varex Imaging Corporation. Firstly, the company’s revenue for the quarter was $190 million, which aligned with expectations. Secondly, the non-GAAP gross margin stood at 31%, and the non-GAAP earnings per share reached $0.06. Lastly, the revenue in the Medical segment decreased by 13% year-over-year, while the Industrial segment revenue increased by 10%. These highlights provide a foundation for understanding the financial performance of the company during the first quarter of 2024.

Revenue

Understanding the revenue generated by a company is crucial when assessing its financial health and profitability. Varex Imaging Corporation’s financial performance in terms of revenue can be examined through two subheadings: Total Revenue and Segment Revenue Comparison.

Total Revenue

Varex Imaging Corporation generated a total revenue of $190 million during the first quarter of 2024. This figure was in line with the expectations set by the company. Analyzing the total revenue provides a comprehensive overview of the company’s financial standing and its ability to generate income.

Segment Revenue Comparison

The Q1 2024 Earnings Call revealed a significant disparity in revenue growth between Varex Imaging Corporation’s Medical and Industrial segments. While the Medical segment witnessed a 13% decrease in revenue year-over-year, the Industrial segment experienced a 10% increase. Comparing the revenue performance of different segments sheds light on the dynamics within the company and highlights areas of strength and weakness.

Factors Affecting Profitability

The Q1 2024 Earnings Call identified lower volumes and unfavorable mix as factors that impacted the profitability of both the Medical and Industrial segments. Understanding the factors affecting profitability is crucial for strategic decision-making within the company and for ensuring sustained financial success.

Financial Performance

Analyzing the financial performance of Varex Imaging Corporation provides insights into its ability to generate profits and achieve sustainable growth. Two key financial performance indicators were discussed during the Q1 2024 Earnings Call: Non-GAAP Gross Margin and Non-GAAP Earnings Per Share.

Non-GAAP Gross Margin

Varex Imaging Corporation’s non-GAAP gross margin for the first quarter of 2024 was 31%. Non-GAAP gross margin is a measure of the company’s profitability and indicates the percentage of revenue left after deducting the cost of goods sold. Monitoring and evaluating the non-GAAP gross margin allows the company to assess its efficiency in controlling production costs and improving profitability.

Non-GAAP Earnings Per Share

The company reported non-GAAP earnings per share of $0.06 for the first quarter of 2024. Non-GAAP earnings per share is a measure of profitability and provides valuable information to investors and shareholders. Understanding the factors contributing to the non-GAAP earnings per share is crucial for assessing the financial success and potential valuation of the company.

Comparison to Expectations

The financial performance discussed during the Q1 2024 Earnings Call aligned with the expectations set by Varex Imaging Corporation. This alignment provides transparency and credibility for the company’s financial reporting and allows stakeholders to evaluate the accuracy and reliability of its forecasts and projections.

Segment Performance

Varex Imaging Corporation operates in two segments: Medical and Industrial. Analyzing the performance of these segments can provide insights into the specific dynamics within each market.

Medical Segment

The Medical segment of Varex Imaging Corporation experienced a 13% decrease in revenue year-over-year. Specific products impacted within the Medical segment included CT tubes, fluoroscopy, and oncology modalities. Understanding the reasons behind the soft sales in the Medical segment is crucial for addressing any challenges and developing strategies to drive growth and profitability.

Industrial Segment

In contrast to the Medical segment, the Industrial segment of Varex Imaging Corporation witnessed a 10% increase in revenue. Despite this positive outcome, the sales in the Industrial segment were below their sales trend for the quarter. Exploring the reasons behind this below-trend performance is important for identifying areas of improvement and taking strategic actions to drive sales and profitability.

Cash Position

Monitoring the cash position of a company allows for a thorough understanding of its liquidity and financial flexibility. Varex Imaging Corporation ended the first quarter of 2024 with $195 million in cash, cash equivalents, and marketable securities. This healthy cash position provides the company with the resources necessary for ongoing operations, potential investments, and strategic initiatives.

Ending Cash, Cash Equivalents, and Marketable Securities

The ending cash, cash equivalents, and marketable securities balance of $195 million demonstrates Varex Imaging Corporation’s ability to generate and maintain a robust cash flow. The liquidity provided by these assets allows the company to meet its financial obligations, invest in research and development, and pursue growth opportunities.

Medical Segment Sales

Analyzing the sales performance of Varex Imaging Corporation’s Medical segment is crucial for understanding the specific products impacted and the reasons behind any deviations from expectations.

Specific Products Impacted

During the first quarter of 2024, sales of CT tubes, fluoroscopy, and oncology modalities in the Medical segment were softer than usual. Identifying the specific products impacted provides valuable insights into the market dynamics and assists in developing strategies to address these challenges.

Reason for Soft Sales

Understanding the reasons behind the soft sales in the Medical segment is crucial for Varex Imaging Corporation to make informed decisions and identify potential areas for improvement. Factors such as changes in customer preferences, competition, or broader market trends can contribute to soft sales. Addressing these challenges is essential for driving revenue growth in the Medical segment.

Industrial Segment Sales

Analyzing the sales performance of Varex Imaging Corporation’s Industrial segment allows for an assessment of the overall performance and the reasons behind any deviations from expectations.

Overall Performance

The Industrial segment of Varex Imaging Corporation reported solid sales during the first quarter of 2024. However, these sales were below their sales trend for the quarter. Understanding the overall performance of the Industrial segment provides insights into the market dynamics and facilitates strategic decision-making to improve sales and profitability.

Reason for Below Trend Sales

Identifying the reasons behind the below-trend sales in the Industrial segment is crucial for Varex Imaging Corporation to address any challenges and implement strategies to drive future growth. Factors such as changes in customer demand, competitive landscape, or external market conditions may contribute to this below-trend performance. Addressing these factors is vital for achieving sustained success in the Industrial segment.

Participation at Radiological Society of North America Show

Varex Imaging Corporation’s participation at the Radiological Society of North America (RSNA) Show holds importance in terms of new product development and customer and partner interactions.

New Product Development

Participating in the RSNA Show offers Varex Imaging Corporation the opportunity to showcase their latest innovations and advancements in imaging technology. This platform allows the company to receive valuable feedback from industry professionals and potential customers, aiding in the development and refinement of new products.

Customer and Partner Interactions

Attending the RSNA Show enables Varex Imaging Corporation to engage with customers and partners, fostering relationships and gathering insights regarding market needs and trends. These interactions can lead to collaborative opportunities, strategic partnerships, and a deeper understanding of customer requirements, ultimately contributing to the growth and success of the company.

Momentum and Challenges

Examining the momentum and challenges faced by Varex Imaging Corporation provides insights into specific areas of strength and potential obstacles to overcome.

Cargo Inspection Business

Varex Imaging Corporation sees strong momentum in its cargo inspection business. This positive outlook demonstrates the company’s ability to leverage its expertise and technological capabilities in a growing market. The cargo inspection business presents an opportunity for revenue growth and diversification, positioning the company for long-term success.

Softness in Industrial End Markets

Despite positive performance in the cargo inspection business, Varex Imaging Corporation also experiences softness in industrial end markets, specifically in the semiconductor, automotive, and electronics sectors. Understanding the reasons behind this softness is crucial for adapting strategies, identifying potential growth areas, and addressing challenges to ensure sustained growth and profitability.

Second Quarter Fiscal Year 2024 Outlook

The outlook for the second quarter of fiscal year 2024 provides stakeholders with a forward-looking perspective of Varex Imaging Corporation’s financial performance. The outlook includes revenue forecast and earnings per diluted share forecast.

Revenue Forecast

The revenue forecast for the second quarter of fiscal year 2024 ranges between $195 million and $215 million. This forecast demonstrates the company’s efforts and expectations for continued growth and captures the potential within the market.

Earnings Per Diluted Share Forecast

The earnings per diluted share forecast for the second quarter of fiscal year 2024 is expected to range between $0.10 and $0.30. This forecast provides insights into the company’s expectations for profitability and allows stakeholders to evaluate the company’s ability to generate earnings per share.

In conclusion, Varex Imaging Corporation’s Q1 2024 Earnings Call provided valuable information about the company’s financial performance, segment breakdown, cash position, sales, and outlook. Analyzing these areas allows stakeholders to gain a comprehensive understanding of the company’s operations, challenges, and potential avenues for growth. Through careful evaluation and strategic decision-making, Varex Imaging Corporation aims to continue its journey towards sustained success in the imaging industry.