What the changes say
- Varex faced major risks from Chinese trade investigations, tariffs, and a $93.9 million goodwill impairment charge in fiscal 2025.
What changed since the prior 10-K
New
- NewRisks Relating to Our Business
Furthermore, if international customers' negative perceptions of the actions of the United States Administration influence their buying decisions, our business and results of operations could be negatively impacted
Negative international perceptions of the US administration and Chinese policies of reducing dependence on foreign technology could reduce demand for products.
- NewRisks Relating to Our Business
China, but do not produce CT Tubes and Inserts in India. Total sales of medical X-ray tubes we imported into China represented approximately 10% of our total revenue in fiscal year 2025
Indefinitely suspended MOFCOM investigations into CT tubes and inserts exported to China could resume, threatening pricing competitiveness and requiring restructuring.
- NewRisks Relating to Our Business
could result in delays that could affect our ability to attract and retain customers or cause customers to delay or cancel orders, which would materially and adversely affect our revenues and operating results
Over half of revenue is generated outside the US, exposing the company to global economic instability, tariffs, and trade wars.
- NewRisks Relating to our Information Systems and Intellectual Property
position against competitors. We also jointly develop intellectual property with third parties and seek to protect our rights to such intellectual property through licenses and other contractual arrangements
Unauthorized access, misappropriation of trade secrets, or loss of licensed third-party technologies could materially harm financial results.
- NewGeneral Risks
Failure to maintain effective internal controls and procedures and changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters, could negatively impact us
Failure to maintain effective internal controls could lead to inaccurate financial statements and a negative reaction in financial markets affecting stock price.
- NewGeneral Risks
We have incurred, and may in the future incur, impairment charges related to our goodwill, which could have an adverse effect on our financial condition and results of operations
Sustained decreases in stock price and downward earnings forecasts led to a $93.9 million goodwill impairment charge for the Medical reporting unit.
Dropped
- DroppedRisks Relating to Our Indebtedness
We entered into certain hedging positions that may affect the value of the Convertible Notes and the volatility and value of our common stock
- DroppedRisks Relating to Our Common Stock
The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results
- DroppedGeneral Risks
Failure to maintain effective internal controls and procedures could negatively impact us
Reworded
- 92% rewrittenRisks Relating to Our Business
Our business has in the past been, is currently being, and in the future may be, negatively impacted by changes in import/export regulatory regimes, tariffs, trade wars, and national policies, including exemptions thereto
Expanded to specify that Varex is both a global importer of raw materials and an exporter of finished goods facing trade investigations.
Was: Changes in import/export regulatory regimes, tariffs, and national policies have in the past and could continue to negatively impact our business
- 90% rewrittenRisks Relating to our Information Systems and Intellectual Property
Our 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
Shortened by removing specific mentions of joint developments and contractual arrangements in the heading description.
- 77% rewrittenGeneral Risks
Our business is subject to evolving matters relating to environmental, social and governance and/or our reporting of such matters that could expose us to numerous risks
Updated to cover evolving, conflicting ESG regulations and increasing divergent stakeholder views and criticisms regarding sustainability disclosures.
Was: Our business is subject to evolving Environmental, Social, and Governance (“ESG”) requirements and stakeholder expectations that could expose us to numerous risks
- 67% rewrittenRisks Relating to Our Business
Our success depends on the successful development, introduction, and commercialization of new generations of products and enhancements to or simplifications of existing product lines
Removed joint ventures from the sentence discussing potential issues with recovering investments in new product development.
- 42% rewrittenRisks Relating to Our Business
We 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
Added fiscal year 2025 figures showing one customer accounted for 18% of revenue and 14% of accounts receivable.
- 39% rewrittenRisks Relating to Our Business
Legal proceedings may materially and adversely affect our business, results of operations, or cash flows
Retained standard legal proceedings boilerplate without material textual alterations.
- 38% rewrittenRisks Relating to Our Business
Customer-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
Added specific references to 2025 US tariffs, retaliatory actions, and indefinitely suspended MOFCOM investigations.
- 30% rewrittenRisks Relating to Our Legal and Regulatory Environment
A change in the percentage of our total earnings from international sales, changes in our international activities, or additional changes in tax laws could increase our effective tax rate
Added internal shifts in manufacturing and research and development locations as a potential cause for an increased effective tax rate.
Was: A change in the percentage of our total earnings from international sales or additional changes in tax laws could increase our effective tax rate
- 28% rewrittenRisks Relating to Our Legal and Regulatory Environment
Environmental laws impose compliance costs on our business and may also result in liability
- 21% rewrittenRisks Relating to the Manufacture of our Products
Our operations are vulnerable to interruption or loss due to natural or other disasters, the adverse effects of climate change, power loss, strikes, and other events beyond our control
Was: Our 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
All 31 risk factors
Headings as the filing states them, in filing order.
Risks Relating to Our Business
- 01Our business has in the past been, is currently being, and in the future may be, negatively impacted by changes in import/export regulatory regimes, tariffs, trade wars, and national policies, including exemptions thereto92% rewritten
- 02Furthermore, if international customers' negative perceptions of the actions of the United States Administration influence their buying decisions, our business and results of operations could be negatively impactedNew
- 03China, but do not produce CT Tubes and Inserts in India. Total sales of medical X-ray tubes we imported into China represented approximately 10% of our total revenue in fiscal year 2025New
- 04We 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 sales42% rewritten
- 05Customer-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 products38% rewritten
- 06We 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
- 07Our success depends on meeting our customers' needs and demands
- 08Our success depends on the successful development, introduction, and commercialization of new generations of products and enhancements to or simplifications of existing product lines67% rewritten
- 09could result in delays that could affect our ability to attract and retain customers or cause customers to delay or cancel orders, which would materially and adversely affect our revenues and operating resultsNew
- 10We 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
- 11Legal proceedings may materially and adversely affect our business, results of operations, or cash flows39% rewritten
- 12Product 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
- 13Supply 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
- 14Our operations are vulnerable to interruption or loss due to natural or other disasters, the adverse effects of climate change, power loss, strikes, and other events beyond our control21% rewritten
- 15If we are not able to match our manufacturing capacity with demand for our products, our financial results may suffer
- 16Demand for our security, industrial, and inspection products tend to be unpredictable, leading to volatility in our revenues and earnings
Risks Relating to our Information Systems and Intellectual Property
- 17Disruption of critical information systems or material breaches in the security of our systems may materially and adversely affect our business and customer relations
- 18Our 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 costly90% rewritten
- 19position against competitors. We also jointly develop intellectual property with third parties and seek to protect our rights to such intellectual property through licenses and other contractual arrangementsNew
Risks Relating to Our Legal and Regulatory Environment
- 20Compliance 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
- 21Compliance 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
- 22We 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
- 23A change in the percentage of our total earnings from international sales, changes in our international activities, or additional changes in tax laws could increase our effective tax rate30% rewritten
- 24We 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
- 25Existing and future healthcare reforms and changes to reimbursement rates may indirectly have a material adverse effect on our business and results of operations
- 26Certain 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
- 27Environmental laws impose compliance costs on our business and may also result in liability28% rewritten
General Risks
- 28Failure to maintain effective internal controls and procedures and changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters, could negatively impact usNew
- 29We have incurred, and may in the future incur, impairment charges related to our goodwill, which could have an adverse effect on our financial condition and results of operationsNew
- 30If 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
- 31Our business is subject to evolving matters relating to environmental, social and governance and/or our reporting of such matters that could expose us to numerous risks77% rewritten
Other Varex Imaging 10-Ks
- FY2024 10-K risk factors28 risks
Customer concentration creates significant revenue risk with one OEM accounting for 18% of sales. Regulatory compliance across FDA, NRC, and international bodies heavily impacts operations. Capital structure features convertible notes and related hedging instruments affecting stock volatility.
Filed Nov 19, 2024
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.