Varex Imaging (VREX) risk factors, FY2024 10-K

Risks Relating to Our Business

1. 01We sell our products and services to a limited number of OEM customers, many of which are also our competitors, and a delay in an order to a future period, as well as a reduction in or loss of business of one or more of these customers has in the past and may in the future materially reduce our sales
2. 02Customer-driven changes in order forecasts is a frequent occurrence that has created and continues to create challenges for us in accurately predicting the demand or delivery schedules for our products
3. 03We compete in highly competitive industries, and we are subject to pricing pressures and other factors that have in the past and may in the future result in margin erosion and loss of customers
4. 04Our success depends on meeting our customers' needs and demands
5. 05Our success depends on the successful development, introduction, and commercialization of new generations of products and enhancements to or simplifications of existing product lines
6. 06We may be unable to complete future acquisitions or joint ventures or realize expected benefits from acquisitions of or investments in new businesses and joint ventures, products, or technologies, which could harm our business
7. 07Legal proceedings may materially and adversely affect our business, results of operations, or cash flows
8. 08Product defects or misuse may result in material product or other liability or professional errors and omissions claims, litigation, investigation by regulatory authorities, or product recalls

Risks Relating to the Manufacture of our Products

1. 09Supply chain disruptions, including the loss of a supplier, and any inability to obtain raw materials or supplies of important components due to inflation have impacted our ability to manufacture products, have caused delays in our ability to deliver products, and have increased our costs and may continue to do so
2. 10If we are not able to match our manufacturing capacity with demand for our products, our financial results may suffer
3. 11Demand for our security, industrial, and inspection products tend to be unpredictable, leading to volatility in our revenues and earnings
4. 12Our operations are vulnerable to interruption or loss due to natural or other disasters, the effects of climate change, power loss, strikes, and other events beyond our control

Risks Relating to our Intellectual Property and Information Systems

1. 13Our competitive position would be harmed if we are not able to maintain or defend our intellectual property rights, and protecting our intellectual property and defending against infringement claims can be costly
2. 14Disruption of critical information systems or material breaches in the security of our systems may materially and adversely affect our business and customer relations

Risks Relating to Our Legal and Regulatory Environment

1. 15Changes in import/export regulatory regimes, tariffs, and national policies have in the past and could continue to negatively impact our business
2. 16A change in the percentage of our total earnings from international sales or additional changes in tax laws could increase our effective tax rate
3. 17Compliance with foreign laws and regulations applicable to the marketing, manufacturing, and distribution of our products may be costly, and failure to comply may result in unfavorable legal proceedings, in significant penalties and other harm to our business
4. 18Compliance with United States laws and regulations applicable to the marketing, manufacturing, and distribution of our products may be costly, and failure or delays in obtaining regulatory clearances or approvals, or failure to comply with applicable laws and regulations could harm our business
5. 19We sell certain X-ray tube products as replacements which are subject to medical device certification and product registration laws and regulations that vary by country and are subject to change, and we may be unable to receive registration approval or renewal of existing registrations
6. 20Existing and future healthcare reforms and changes to reimbursement rates, may indirectly have a material adverse effect on our business and results of operations
7. 21We are subject to federal, state, and foreign laws governing our business practices which, if violated, could result in substantial penalties. Additionally, challenges to or investigations into our practices could cause adverse publicity and be costly to respond to and thus could harm our business
8. 22Certain of our products are subject to regulations relating to use of radioactive material, compliance with which may be costly, and a failure to comply with these regulations may materially and adversely affect our business
9. 23Environmental laws impose compliance costs on our business and may also result in liability

Risks Relating to Our Indebtedness

1. 24We entered into certain hedging positions that may affect the value of the Convertible Notes and the volatility and value of our common stock

Risks Relating to Our Common Stock

1. 25The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results

General Risks

1. 26Failure to maintain effective internal controls and procedures could negatively impact us
2. 27Our business is subject to evolving Environmental, Social, and Governance (“ESG”) requirements and stakeholder expectations that could expose us to numerous risks
3. 28If we are unable to retain, attract, expand, integrate, and train our management team and other key personnel, we may not be able to maintain or expand our business