Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Nov. 03, 2020 | Apr. 03, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Oct. 2, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-37860 | ||
Entity Registrant Name | VAREX IMAGING CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-3434516 | ||
Entity Address, Address Line One | 1678 S. Pioneer Road | ||
Entity Address, City or Town | Salt Lake City | ||
Entity Address, State or Province | UT | ||
Entity Address, Postal Zip Code | 84104 | ||
City Area Code | (801) | ||
Local Phone Number | 972-5000 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | VREX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Smaller Reporting Company | false | ||
Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 597.5 | ||
Entity common stock, shares outstanding (in shares) | 39,200,000 | ||
Documents Incorporated by Reference | Documents Incorporated by Reference Portions of registrant’s proxy statement relating to registrant’s 2021 annual meeting of stockholders have been incorporated by reference in Part III of this annual report on Form 10-K. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001681622 | ||
Current Fiscal Year End Date | --10-02 |
CONSOLIDATED STATEMENTS OF (LOS
CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Income Statement [Abstract] | |||
Revenues, net | $ 738.3 | $ 780.6 | $ 773.4 |
Cost of revenues | 548.1 | 523.9 | 519.5 |
Gross profit | 190.2 | 256.7 | 253.9 |
Operating expenses: | |||
Research and development | 78.9 | 78.1 | 83 |
Selling, general and administrative | 142.2 | 128.1 | 123.4 |
Impairment of intangible assets | 2.8 | 4.8 | 3 |
Total operating expenses | 223.9 | 211 | 209.4 |
Operating (loss) earnings | (33.7) | 45.7 | 44.5 |
Interest income | 0.1 | 0.1 | 0.2 |
Interest expense | (31.4) | (21.1) | (21.7) |
Other (expense) income, net | (7.6) | (3.2) | 2.7 |
Interest and other expense, net | (38.9) | (24.2) | (18.8) |
(Loss) earnings before taxes | (72.6) | 21.5 | 25.7 |
Taxes (benefit) on earnings | (15.2) | 5.7 | (2.6) |
Net (loss) earnings | (57.4) | 15.8 | 28.3 |
Less: Net earnings attributable to noncontrolling interests | 0.5 | 0.3 | 0.8 |
Net (loss) earnings attributable to Varex | $ (57.9) | $ 15.5 | $ 27.5 |
(Loss) earnings per common share attributable to Varex | |||
Basic (in USD per share) | $ (1.49) | $ 0.41 | $ 0.73 |
Diluted (in USD per share) | $ (1.49) | $ 0.40 | $ 0.72 |
Weighted average common shares outstanding | |||
Basic (in shares) | 38.8 | 38.2 | 37.9 |
Diluted (in shares) | 38.8 | 38.6 | 38.4 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) EARNINGS - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) earnings | $ (57.4) | $ 15.8 | $ 28.3 |
Other comprehensive (loss) earnings, net of tax: | |||
Unrealized gain on interest rate swap contracts, net of tax | 0.4 | (6.2) | 5.2 |
Unrealized gain (loss) on defined benefit obligations | 0.6 | (1.3) | (0.2) |
Foreign currency translation adjustments | 1.5 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax, Total | 2.5 | (7.5) | 5 |
Comprehensive (loss) earnings | (54.9) | 8.3 | 33.3 |
Less: Comprehensive earnings attributable to noncontrolling interests | 0.5 | 0.3 | 0.8 |
Comprehensive (loss) earnings attributable to Varex | $ (55.4) | $ 8 | $ 32.5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 100.6 | $ 29.9 |
Accounts receivable, net of allowance for doubtful accounts of $0.3 million and $1.0 million at October 2, 2020 and September 27, 2019, respectively | 123.8 | 141 |
Inventories | 271.9 | 248.2 |
Prepaid expenses and other current assets | 25.7 | 19.3 |
Total current assets | 522 | 438.4 |
Property, plant, and equipment, and finance lease right-of-use asset, net | 145.2 | |
Property, plant and equipment, net | 142.3 | |
Goodwill | 293.1 | 290.8 |
Intangible assets, net | 67.5 | 86.3 |
Investments in privately-held companies | 51.3 | 53.6 |
Deferred tax assets | 0.5 | |
Operating lease assets | 27.7 | 0 |
Other assets | 32.2 | 27.5 |
Total assets | 1,139.5 | 1,038.9 |
Current liabilities: | ||
Accounts payable | 72.9 | 58.2 |
Accrued liabilities and other current liabilities | 70.5 | 75.7 |
Current operating lease liabilities | 6.1 | 0 |
Current maturities of long-term debt | 2.5 | 30.7 |
Deferred revenues | 8.6 | 10.5 |
Total current liabilities | 160.6 | 175.1 |
Long-term debt, net | 452.8 | 364.4 |
Deferred tax liabilities | 2.3 | 8.2 |
Operating lease liabilities | 23.1 | 0 |
Other long-term liabilities | 34.9 | 32.5 |
Total liabilities | 673.7 | 580.2 |
Commitments and contingencies (Note 13) | ||
Redeemable noncontrolling interests | 0 | 10.5 |
Stockholders' Equity: | ||
Preferred stock, $0.01 par value: 20,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $.01 par value: 150,000,000 shares authorized, shares issued and outstanding: 39,059,094 and 38,371,305 at October 2, 2020 and September 27, 2019, respectively | 0.4 | 0.4 |
Additional paid-in capital | 434.4 | 371.8 |
Accumulated other comprehensive loss | 0.8 | (1.7) |
Retained earnings | 16.1 | 74.4 |
Total Varex stockholders' equity | 451.7 | 444.9 |
Noncontrolling interests | 14.1 | 3.3 |
Total stockholders' equity | 465.8 | 448.2 |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ 1,139.5 | $ 1,038.9 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 0.3 | $ 1 |
Preferred stock, par value per share (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value per share (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares, issued (in shares) | 39,059,094 | 38,371,305 |
Common stock, shares, outstanding (in shares) | 39,059,094 | 38,371,305 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Cash flows from operating activities: | |||
Net (loss) earnings | $ (57.4) | $ 15.8 | $ 28.3 |
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: | |||
Share-based compensation expense | 13.4 | 11.7 | 10 |
Depreciation | 22.3 | 23.5 | 26 |
Amortization of intangible assets | 17.2 | 15.7 | 16.2 |
Intangible assets impairment | 2.8 | 4.8 | 3 |
Other assets impairment charges | 2.7 | 0 | 1.3 |
Inventory write-down | 18.1 | 3.1 | 3.1 |
Deferred taxes | (3.1) | (12.9) | (7.7) |
Amortization of deferred loan costs | 5.1 | 2.4 | 2.3 |
Loss (gain) from equity method investments, net of dividends received | 1.3 | 2.3 | (3.9) |
Other, net | 4.7 | 0.8 | 0.7 |
Changes in assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable | 17.7 | 14.8 | 9 |
Inventories | (42.7) | (11.1) | (2.4) |
Prepaid expenses and other assets | (9.3) | 4.3 | 2 |
Accounts payable | 14.3 | (9) | 5.2 |
Accrued operating liabilities and other long-term operating liabilities | 8.1 | 10.9 | (10.2) |
Deferred revenues | (2) | (5.2) | 2.4 |
Net cash provided by operating activities | 13.2 | 71.9 | 85.3 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (23.5) | (19.8) | (20.4) |
Acquisitions of businesses, net of cash acquired | (1.6) | (69.5) | (4.8) |
Investments in privately-held companies | (1.8) | (3.9) | 0 |
Net cash used in investing activities | (26.9) | (93.2) | (25.2) |
Cash flows from financing activities: | |||
Proceeds from issuance of debt | 593.8 | 85.4 | 10 |
Repayments of borrowings | (483.9) | (87) | (106) |
Payment of debt issuance costs | (16.7) | (0.5) | (0.4) |
Proceeds from issuance of warrant | 49.8 | 0 | 0 |
Purchases of hedges | (61) | 0 | 0 |
Proceeds from shares issued under employee stock purchase plan | 3.6 | 3.8 | 3.3 |
Proceeds from exercise of stock options | 1.5 | 0.8 | 3.8 |
Taxes related to net share settlement of equity awards | (1.8) | (2.1) | (2.3) |
Contributions from noncontrolling partner | 0 | 0 | 1.8 |
Other financing activities | (1.7) | (0.5) | (0.6) |
Net cash provided by (used in) financing activities | 83.6 | (0.1) | (90.4) |
Effects of exchange rate changes on cash and cash equivalents and restricted cash | 0.9 | (0.7) | (0.5) |
Net increase (decrease) in cash and cash equivalents and restricted cash | 70.8 | (22.1) | (30.8) |
Cash and cash equivalents and restricted cash at beginning of period | 31.3 | 53.4 | 84.2 |
Cash and cash equivalents and restricted cash at end of period | 102.1 | 31.3 | 53.4 |
Supplemental cash flow information: | |||
Cash paid for interest | 16.7 | 19.9 | 19.3 |
Cash paid for income tax, net of refunds | 4.2 | 8.2 | 13.8 |
Supplemental non-cash activities: | |||
Purchases of property, plant and equipment financed through accounts payable | $ 1.6 | $ 1.8 | $ 2 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Total Varex Equity | Total Varex EquityCumulative Effect, Period of Adoption, Adjustment | Noncontrolling Interests |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201409Member | |||||||||
Shares outstanding, beginning of period (in shares) at Sep. 29, 2017 | 37,600,000 | |||||||||
Balance at beginning of period at Sep. 29, 2017 | $ 379 | $ 0.4 | $ 342.7 | $ 0.8 | $ 35.1 | $ 379 | $ 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net earnings | 27.8 | 27.5 | 27.5 | 0.3 | ||||||
Exercise of stock options (in shares) | 200,000 | |||||||||
Exercise of stock options | 3.8 | 3.8 | 3.8 | |||||||
Common stock issued upon vesting of restricted shares (in shares) | 200,000 | |||||||||
Shares withheld on vesting of restricted stock (in shares) | (100,000) | |||||||||
Shares withheld on vesting of restricted stock | (2.2) | (2.2) | (2.2) | |||||||
Common stock issued under employee stock purchase plan (in shares) | 100,000 | |||||||||
Common stock issued under employee stock purchase plan | 3.3 | 3.3 | 3.3 | |||||||
Share-based compensation | 10 | 10 | 10 | |||||||
Unrealized gain on interest rate swap contracts, net of tax | 5.2 | 5.2 | 5.2 | |||||||
Unrealized loss on defined benefit obligations, net of tax | (0.2) | (0.2) | (0.2) | |||||||
Capital contribution by noncontrolling interest | 1.8 | 1.8 | ||||||||
Other | (0.2) | (0.2) | (0.2) | |||||||
Shares outstanding, end of period (in shares) at Sep. 28, 2018 | 38,000,000 | |||||||||
Ending balance at Sep. 28, 2018 | $ 428.3 | $ (3.5) | $ 0.4 | 357.6 | 5.8 | 62.4 | $ (3.5) | 426.2 | $ (3.5) | 2.1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | |||||||||
Net earnings | $ 15.3 | 15.5 | 15.5 | (0.2) | ||||||
Exercise of stock options (in shares) | 0 | |||||||||
Exercise of stock options | 0.8 | 0.8 | 0.8 | |||||||
Common stock issued upon vesting of restricted shares (in shares) | 200,000 | |||||||||
Shares withheld on vesting of restricted stock (in shares) | 0 | |||||||||
Shares withheld on vesting of restricted stock | (2.1) | (2.1) | (2.1) | |||||||
Common stock issued under employee stock purchase plan (in shares) | 200,000 | |||||||||
Common stock issued under employee stock purchase plan | 3.8 | 3.8 | 3.8 | |||||||
Share-based compensation | 11.7 | 11.7 | 11.7 | |||||||
Unrealized gain on interest rate swap contracts, net of tax | (6.2) | (6.2) | (6.2) | |||||||
Unrealized loss on defined benefit obligations, net of tax | (1.3) | (1.3) | (1.3) | |||||||
Noncontrolling interest acquired/consolidated | $ 1.4 | 1.4 | ||||||||
Reclassification from mezzanine equity to equity for noncontrolling interest in MeVis Medical Solutions, AG | 0 | |||||||||
Shares outstanding, end of period (in shares) at Sep. 27, 2019 | 38,371,305 | 38,400,000 | ||||||||
Ending balance at Sep. 27, 2019 | $ 448.2 | $ (0.3) | $ 0.4 | 371.8 | (1.7) | 74.4 | $ (0.3) | 444.9 | $ (0.3) | 3.3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net earnings | $ (57.9) | (57.9) | (57.9) | 0 | ||||||
Exercise of stock options (in shares) | 64,000 | 100,000 | ||||||||
Exercise of stock options | $ 1.5 | 1.5 | 1.5 | |||||||
Common stock issued upon vesting of restricted shares (in shares) | 200,000 | |||||||||
Shares withheld on vesting of restricted stock (in shares) | (100,000) | |||||||||
Shares withheld on vesting of restricted stock | (1.8) | (1.8) | (1.8) | |||||||
Common stock issued under employee stock purchase plan (in shares) | 200,000 | |||||||||
Common stock issued under employee stock purchase plan | 3.6 | 3.6 | 3.6 | |||||||
Share-based compensation | 13.4 | 13.4 | 13.4 | |||||||
Unrealized gain on interest rate swap contracts, net of tax | 0.4 | 0.4 | 0.4 | |||||||
Unrealized loss on defined benefit obligations, net of tax | 0.6 | 0.6 | 0.6 | |||||||
Noncontrolling interest acquired/consolidated | 0 | |||||||||
Conversion feature of Convertible Notes, net of issuance costs | 49.7 | 49.7 | 49.7 | |||||||
Purchase of hedges | (61) | (61) | (61) | |||||||
Issuance of warrants | 49.8 | 49.8 | 49.8 | |||||||
Currency translation adjustments | 1.5 | 1.5 | 1.5 | |||||||
Shares issued to settle deferred compensation (in shares) | 300,000 | |||||||||
Shares issued to settle deferred consideration | 7.4 | 7.4 | 7.4 | |||||||
Reclassification from mezzanine equity to equity for noncontrolling interest in MeVis Medical Solutions, AG | 11.3 | 11.3 | ||||||||
Other | $ (0.6) | (0.1) | (0.1) | (0.5) | ||||||
Shares outstanding, end of period (in shares) at Oct. 02, 2020 | 39,059,094 | 39,100,000 | ||||||||
Ending balance at Oct. 02, 2020 | $ 465.8 | $ 0.4 | $ 434.4 | $ 0.8 | $ 16.1 | $ 451.7 | $ 14.1 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Oct. 02, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Varex Imaging Corporation (the “Company,” “Varex” or “Varex Imaging”) designs, manufactures, sells and services a broad range of Medical products, which include X-ray tubes, digital detectors and accessories, high voltage connectors, image processing software and workstations, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, ionization chambers and buckys, for use in a range of applications, including radiographic or fluoroscopic imaging, mammography, computed tomography, oncology and computer-aided detection. The Company sells its products to imaging system original equipment manufacturer (“OEM”) customers for incorporation into new medical diagnostic, radiation therapy, dental, and veterinary, to independent service companies, distributors and directly to end-users for replacement purposes. The Company also designs, manufacturers, sells and services industrial products, which include Linatron ® X-ray accelerators, imaging processing software and image detection products for security and inspection purposes, such as cargo screening at ports and borders and nondestructive examination in a variety of applications. The Company generally sells security and inspection products to OEM customers who incorporate Varex’s products into their inspection systems. The Company conducts an active research and development program to focus on new technology and applications in both the medical and industrial X-ray imaging markets. Basis of Presentation and Principle of Consolidation The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Segment Reporting The Company has two reportable operating segments; (i) Medical and (ii) Industrial, which aligns with how its Chief Executive Officer ("CEO"), who is the Company's Chief Operating Decision Maker (“CODM”), reviews the Company’s performance. See Note 17. Segment Information, included in this report, for further information on the Company’s segments. Fiscal Year The fiscal years of the Company as reported are the 52 or 53-week period ending on the Friday nearest September 30. Fiscal year 2020 was the 53-week period that ended October 2, 2020, fiscal year 2019 was the 52-week period that ended September 27, 2019, and fiscal year 2018 was the 52-week period ended September 28, 2018. Variable Interest Entities For entities in which the Company has variable interests, the Company focuses on identifying which entity has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. If the Company is the primary beneficiary of a variable interest entity, the assets, liabilities and results of operations of the variable interest entity will be included in the Company’s consolidated financial statements. As of October 2, 2020, the Company had two variable interest entities neither of which were consolidated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include the valuation of inventories, goodwill and intangible assets, warranties, contract liabilities, long-lived asset valuations, impairment on investments, financial instruments, and taxes on earnings. Actual results could differ from these estimates. Impact of COVID-19 The coronavirus (“COVID-19”) pandemic and the mitigation efforts by governments to attempt to control its spread created uncertainties and disruptions in the economic and financial markets. The extent to which COVID-19 will continue to impact the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it will impact worldwide macroeconomic conditions including interest rates, unemployment rates, the speed of the anticipated recovery, and governmental and business reactions to the pandemic. During the 2020 fiscal year, as a result of the economic downturn resulting from COVID-19, the Company experienced reduced demand in the Company’s industrial segment and for certain higher end medical products that negatively impacted revenues and gross margin. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the currently estimated future impacts of COVID-19 as of October 2, 2020 and through the date of filing this report. The accounting matters assessed included, but were not limited to, the Company’s carrying value of goodwill, intangibles, long-lived assets, equity method investments, inventory and related reserves, and allowance for doubtful accounts. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material negative impacts to the Company’s consolidated financial statements in future reporting periods. These future developments are highly uncertain and the outcomes cannot be estimated with certainty. Actual results may differ from those estimates, and such differences may be material to the financial statements. As described in Note 1 to the Company’s consolidated financial statements for the year ended September 27, 2019, as reissued on September 22, 2020 in our Current Report on Form 8-K, the Company concluded that there was substantial doubt about its ability to continue as a going concern. This assessment was based on the Company’s financial projections, which included the anticipated adverse effects of the COVID-19 pandemic on the Company’s financial condition and results of operations, and which indicated that it was probable that the Company would be in violation of certain leverage ratio covenants contained in its previously existing credit agreement. As described more fully in Note 10. Borrowings , on September 30, 2020, the Company issued $300.0 million aggregate principal amount of 7.875% Senior Secured Notes due in 2027, the proceeds from which were used to repay the principal amounts outstanding under the Company’s previously existing credit agreement (which was then terminated), and entered into a new revolving credit agreement consisting of a $100.0 million asset-based loan revolving credit facility. The Senior Secured Notes do not contain any financial covenants and the asset-based loan revolving credit facility’s financial covenant is limited to when excess availability falls below a specified threshold. Management has concluded that the replacement of the Company's previously existing credit agreement with the Senior Secured Notes, combined with our current and anticipated future cash flows, has alleviated the substantial doubt about the Company's ability to continue as a going concern and the Company has sufficient liquidity to satisfy our obligations over the twelve-month period from the issuance date of these consolidated financial statements. Cash and Cash Equivalents The Company considers currency on hand, demand deposits, time deposits and all highly-liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. Restricted Cash Restricted cash primarily consists of cash collateral related to certain leases and inventory arrangements. Restricted cash is included in other assets on the consolidated balance sheet. Cash and cash equivalents and restricted cash as reported within the consolidated statements of cash flows consisted of the following: Twelve Months Ended October 2, 2020 Twelve Months Ended September 27, 2019 (In millions) Beginning of Period End of Period Beginning of Period End of Period Cash and cash equivalents $ 29.9 $ 100.6 $ 51.9 $ 29.9 Restricted cash 1.4 1.5 1.5 1.4 Cash and cash equivalents and restricted cash as reported per statement of cash flows $ 31.3 $ 102.1 $ 53.4 $ 31.3 Fair Value Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There is a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or, other inputs that are observable or can be corroborated by observable market data. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Derivative instruments and hedging activities The Company records all derivatives on the consolidated balance sheets at fair value as of the reporting date. For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income or loss and reclassified from accumulated other comprehensive loss into earnings when the hedged transaction affects earnings. For derivatives that are designated and qualify as net investment hedges, the gain or loss on the derivative is reported as a component of other comprehensive income or loss until the hedged item is sold. The portion of the change in fair value of the Company's net investment hedges (or cross currency swaps) related to the cross-currency basis spread is an excluded component in the assessment of the effectiveness of these net investment hedges (or cross currency swaps). These changes in fair value are recognized as an adjustment to interest expense. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective, in which case, a quantitative assessment of hedge effectiveness is performed. Concentration of Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash, cash equivalents and trade accounts receivable. Cash held with financial institutions may exceed the Federal Deposit Insurance Corporation insurance limits or similar limits in foreign jurisdictions. The Company has not experienced any losses on its deposits of cash and cash equivalents. The Company performs ongoing credit evaluations of its customers and, except for government tenders, group purchases and orders with a letter of credit, its industrial customers often provide a down payment. The Company maintains an allowance for doubtful accounts based upon the expected collectability of all accounts receivable. The Company obtains some of the components in its products from a limited group of suppliers or from a single-source supplier. The Company has neither experienced nor expects any significant disruptions to its operations due to supplier concentration. Credit is extended to customers based on an evaluation of the customer’s financial condition, and collateral is not required. During the periods presented, one of the Company's Medical segment customers accounted for a significant portion of revenues, which is as follows: Fiscal Year 2020 2019 2018 Canon Medical Systems Corporation 20.5 % 17.3 % 18.1 % Canon Medical Systems Corporation accounted for 12.0% and 10.1% of the Company’s accounts receivable as of October 2, 2020 and September 27, 2019, respectively. Inventories Inventories are valued at the lower of cost or net realizable value. Costs include materials, labor and manufacturing overhead and is computed on a first-in-first-out basis. The Company evaluates the carrying value of its inventories taking into consideration such factors as historical and anticipated future sales compared to quantities on hand and the prices the Company expects to obtain for products in its various markets. The Company adjusts excess and obsolete inventories to net realizable value and write-downs of excess and obsolete inventories are recorded as a component of cost of revenues. The following table summarizes the Company’s inventories, net: (In millions) October 2, 2020 September 27, 2019 Raw materials and parts $ 184.6 $ 160.1 Work-in-process 23.9 27.9 Finished goods 63.4 60.2 Total inventories $ 271.9 $ 248.2 As a result of the economic downturn resulting from COVID-19, during the three months ended July 3, 2020, the Company discontinued certain products and wrote-down approximately $15.8 million of inventory associated with discontinued products and restructuring activity. Property, Plant and Equipment, net Property, plant and equipment are stated at cost, net of accumulated depreciation. Major improvements are capitalized, while repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or remaining lease term. Land is not subject to depreciation, but land improvements are depreciated over fifteen years. Land leasehold rights and leasehold improvements are depreciated over the lesser of their estimated useful lives or remaining lease terms. Buildings are depreciated over twenty years. Machinery and equipment are depreciated over a range from three The following table summarizes the Company’s property, plant and equipment, net: (In millions) October 2, 2020 September 27, 2019 Land $ 8.3 $ 8.3 Buildings and leasehold improvements 137.2 134.4 Machinery and equipment 175.5 170.7 Construction in progress 35.4 28.5 $ 356.4 $ 341.9 Accumulated depreciation and amortization (211.2) (199.6) Property, plant, and equipment, net $ 145.2 $ 142.3 The Company recorded depreciation expense of $22.3 million, $23.5 million and $26.0 million, in fiscal years 2020, 2019 and 2018, respectively. During fiscal years 2020, 2019 and 2018 the Company recorded accelerated depreciation of $2.9 million, $4.5 million and $4.2 million, respectively, which primarily related to the machinery and equipment used at the Santa Clara, CA facility. See Note 6. Restructu ring, included in this report, for further information. Investments The Company accounts for its equity investments in privately-held companies under the equity method of accounting if the Company has the ability to exercise significant influence in these investments. Distributions received from an equity method investment are classified using the cumulative earnings approach. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment as operating cash flows and those in excess of that amount will be treated as returns of investment as investing cash flows. The Company monitors these equity investments for impairment and makes appropriate reductions in carrying values if the Company determines that impairment charges are required based primarily on the financial condition and near-term prospects of these companies. During the three months ended July 3, 2020, the Company wrote off a $2.7 million cost investment in a privately-held company, the related expense is included as part of other expenses, net in the Company's consolidated financial statements. Goodwill and Intangible Assets Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net identified tangible and intangible assets acquired. Purchased intangible assets are carried at cost, net of accumulated amortization, and are included in intangible assets in the Company's consolidated balance sheets. Intangible assets with finite lives are amortized over their estimated useful lives of primarily two Impairment of Long-lived Assets, Intangible Assets and Goodwill The Company reviews long-lived assets and identifiable intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company assesses these assets for impairment based on their estimated undiscounted future cash flows. If the carrying value of the assets exceeds the estimated future undiscounted cash flows, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. The Company evaluates goodwill and indefinite lived intangible assets for impairment at least annually at the beginning of the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The evaluation includes consideration of qualitative factors including industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit. If the Company determine that a quantitative analysis is necessary, the Company performs a step one analysis, which consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit. The Company determines the fair value of its reporting units based on a combination of income and market approaches. The income approach is based on the present value of estimated future cash flows of the reporting units, and the market approach is based on a market multiple calculated for each reporting unit based on market data of other companies engaged in similar business. If the carrying amount of the reporting unit is in excess of its fair value, the difference between the fair value and carrying amount is recorded as an impairment loss. The impairment test for intangible assets with indefinite useful lives, if any, consists of a comparison of fair value to carrying value, with any excess of carrying value over fair value being recorded as an impairment loss. In fiscal years 2020, 2019 and 2018, the Company performed the annual goodwill impairment test for our two reporting units and found no impairment. In the third quarter of 2020, changes in facts and circumstances and general market declines due to COVID-19 resulted in reduced expectations of future operating results. The Company considered these circumstances and the potential long-term impact on cash flows associated with its reporting units and indefinite-lived intangible assets and determined that an indicator of possible impairment existed within its Medical and Industrial reporting units and indefinite-lived intangible assets. Accordingly, the Company performed a quantitative impairment analysis to determine the fair values of those reporting units and indefinite-lived intangible assets. Based on the output of the analysis, the Company determined that the fair values of both the Medical and Industrial reporting units substantially exceeded their carrying amounts. Accordingly, no impairment charges were required as of July 3, 2020 related to Goodwill. However, an impairment charge of $2.8 million was required for the Company's in-process R&D. See Note 12. Goodwill and Intangible Assets for more information. During the fiscal years ended October 2, 2020, September 27, 2019 and September 28, 2018, the Company recognized $2.8 million, $4.8 million, and $3.0 million of impairments of intangible assets, respectively. No goodwill impairment charges were recognized for any of the periods presented. Loss Contingencies From time to time, the Company is involved in legal proceedings, claims and government inspections or investigations, customs and duties audits, other contingency matters, both inside and outside the United States, arising in the ordinary course of its business or otherwise. The Company accrues amounts for probable losses, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss (including, among other things, probable settlement value). A loss or a range of loss is disclosed when it is reasonably possible that a material loss will be incurred and can be estimated or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision. When a loss contingency is probable but not reasonably estimable the nature of the contingency and the fact that an estimate cannot be made is disclosed. See Note 13. Commitments and Contingencies, for further information regarding certain of our contractual obligations and contingencies. Product Warranty The Company warrants most of its products for a specific period of time, usually 12 to 24 months from delivery or acceptance, against material defects. The Company provides for the estimated future costs of warranty obligations in cost of revenues when the related revenues are recognized. The accrued warranty costs represent the best estimate at the time of sale of the total costs that the Company will incur to repair or replace product parts that fail while still under warranty. The amount of the accrued estimated warranty costs obligation for established products is primarily based on historical experience as to product failures adjusted for current information on repair costs. For new products, estimates include the historical experience of similar products, as well as a reasonable allowance for warranty expenses associated with new products. On a quarterly basis, the Company reviews the accrued warranty costs and updates the historical warranty cost trends, if required. The following table reflects the changes in the Company’s accrued product warranty: Fiscal Years (In millions) 2020 2019 Accrued product warranty, at beginning of period $ 8.1 $ 7.3 Charged to cost of revenues 15.1 12.9 Actual product warranty expenditures (15.1) (12.1) Accrued product warranty, at end of period $ 8.1 $ 8.1 Leases The Company determines if an arrangement is or contains a lease at the inception of an arrangement. The Company's operating lease right-of-use ("ROU") assets represent the right to use an underlying asset over the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets may also include initial direct costs incurred and prepaid lease payments, less lease incentives. Lease liabilities and their corresponding ROU assets are recognized based on the present value of lease payments over the lease term, discounted using the Company's incremental borrowing rate ("IBR"). The Company recognizes operating leases with lease terms of more than twelve months in operating lease assets, current operating lease liabilities, and operating lease liabilities on its consolidated balance sheets. The Company recognizes finance leases with lease terms of more than twelve months in property, plant, and equipment, net, accrued liabilities and other current liabilities, and other long-term liabilities on its consolidated balance sheets. For purposes of calculating lease liabilities and the corresponding ROU assets, the Company's lease term may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Revenue Recognition Effective September 29, 2018, the Company adopted the requirements of Accounting Standards Update (“ASU”) 2014-09 and related amendments, Revenue from Contracts with Customers (“ASC 606”), which superseded all prior revenue recognition methods and industry-specific guidance. The Company’s revenues are derived primarily from the sale of hardware and services. The Company recognizes its revenues net of any value-added or sales tax and net of sales discounts. The Company sells a high proportion of its X-ray products to a limited number of OEM customers. X-ray tubes, digital detectors and image-processing tools and security and inspection products are generally sold on a stand-alone basis. However, the Company occasionally sells its digital detectors, X-ray tubes and imaging processing tools as a package that is optimized for digital X-ray imaging and sells its Linatron ® X-ray accelerators together with its imaging processing software and image detection products to OEM customers that incorporate them into their inspection systems. Service contracts are often sold with certain security and inspection products and computer-aided detection products. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, a performance obligation is satisfied Transaction price and allocation to performance obligations Transaction prices of products or services are typically based on contracted rates. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method when there is a large number of transactions with similar characteristics or the most likely amount method when there are two possible outcomes, depending on the circumstances of the transaction, to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company allows customers to return specific parts of purchased X-ray tubes for a partial refund credit, which is identified as variable consideration. ASC 606-10-55-23 requires that for sales with a right of return, revenue is reduced for expected returns, a liability is recorded for expected returns, and an asset is recorded for the right to recover products from customers on settling the liability. The Company recognizes a reduction to revenue and cost of sales at the time of sale and a corresponding contract liability and contract asset. The Company records this estimate based on the historical volume of product returns and adjusts the estimate on a quarterly basis based on the current quarter sales and current quarter returns. If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. Contracts and performance obligations The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. The Company's performance obligations consist mainly of transferring control of products and services identified in the contracts or purchase orders. For each contract, the Company considers the obligation to transfer products and services to the customer, which are distinct, to be performance obligations. Recognition of revenue Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. Product revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Service revenue is generally recognized over time as the services are rendered to the customer based on the extent of progress towards completion of the performance obligation. The Company recognizes service revenue over the term of the service contract. Services are expected to be transferred to the customer throughout the term of the contract and the Company believes recognizing revenue ratably over the term of the contract best depicts the transfer of value to the customer. Disaggregation of Revenue Revenue is disaggregated from contracts between geography and by reportable operating segment, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. Refer to Note 17. Segment Information, included in this report, for the disaggregation of the Company’s revenue based on reportable operating segments and disaggregated by geographic region. Contract Balances Contract assets are included within the prepaid expenses and other current assets, and other assets balances in the consolidated balance sheets. Contract liabilities, which also includes refund obligations, are included within the accrued liabilities and other current liabilities, deferred revenues, and other long-term liabilities balances in the consolidated balance sheets. Costs to Obtain or Fulfill a Customer Contract The Company has certain costs to obtain and fulfill a customer contract, such as commissions and shipping costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Incremental costs of obtaining contracts that would be recognized over greater than one year are not material. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. These costs are included as a component of cost of revenues. Deferred Revenues Deferred revenue primarily represents (i) the amount received applicable to non-software products for which parts and services under the warranty contracts have not been delivered, and (ii) the amount received for service contracts for which the services have not been rendered. Allowance for Doubtful Accounts The Company evaluates the creditworthiness of customers prior to authorizing shipment for all major sale transactions. On a quarterly basis, the Company evaluates aged items in the accounts receivable aging report and provides an allowance in an amount deemed adequate for doubtful accounts. If the evaluation of customers’ financial conditions does not reflect a future ability to collect outstanding receivables, additional provisions may be needed. The Company had an allowance for doubtful accounts of $0.3 million and $1.0 million as of October 2, 2020 and September 27, 2019, respectively. Share-Based Compensation Expense The Company has an equity-based incentive plan that provides for the grant of nonqualified stock options and restricted stock units to directors, officers and other employees. The Company also permits employees to purchase shares under the Varex employee stock purchase plan. The Company values stock options granted and the option component of the shares of common stock purchased under the equity-based incentive plans and stock purchased under the employee stock purcha |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Oct. 02, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company adopted ASC 606 on September 29, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for fiscal year 2020 and 2019 reflect the application of ASC 606 guidance while the reported results for fiscal year 2018 were prepared under the guidance of ASC 605, Revenue Recognition. The following tables summarize the changes in the contract assets and refund liabilities for the twelve months ended October 2, 2020 and September 27, 2019: (In millions) Contract Assets Balance at September 28, 2018 $ 24.4 Costs recovered from product returns during the period (6.4) Contract asset from shipments of products, subject to return during the period 5.7 Balance at September 27, 2019 $ 23.7 Costs recovered from product returns during the period (5.6) Contract asset from shipments of products, subject to return during the period 6.5 Balance at October 2, 2020 $ 24.6 (In millions) Refund Liabilities Balance at September 28, 2018 $ 27.1 Release of refund liability included in beginning of year refund liability (7.0) Additions to refund liabilities 6.3 Balance at September 27, 2019 $ 26.4 Release of refund liability included in beginning of year refund liability (6.2) Additions to refund liabilities 7.2 Balance at October 2, 2020 $ 27.4 During fiscal year 2020, the Company recognized revenue of $8.4 million related to deferred revenue which existed at September 27, 2019. During fiscal year 2019, the Company recognized revenue of $10.5 million related to deferred revenue which existed at September 28, 2018. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which revenue has not yet been recognized, which are primarily related to contracts where control will be transferred to customers over the next 12 months. See Note 1. Summary of Significant Accounting Policies, for details on the nature of the remaining performance obligations within these contracts and how they will be resolved. |
LEASES
LEASES | 12 Months Ended |
Oct. 02, 2020 | |
Leases [Abstract] | |
LEASES | LEASES On September 28, 2019, the Company adopted ASC 842, which amends the guidance for the accounting and reporting of leases. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. The Company has operating and finance leases for office space, warehouse and manufacturing space, vehicles and certain equipment. The Company's lease agreements do not contain any material residual value guarantees, variable lease costs, bargain purchase options or restrictive covenants. The Company does not have any lease transactions with related parties. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet and expense for these leases is recognized on a straight-line basis over the lease term. The Company's leases have remaining lease terms of one year to approximately seven years, some of which may include options to extend the leases for up to six years and some include options to terminate early. These options have been included in the determination of the lease liability when it is reasonably certain that the option will be exercised. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease contract. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of fixed lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company's incremental borrowing rate is based on a credit-adjusted risk-free rate, which best approximates a secured rate over a similar term of lease. The following table presents supplemental balance sheet information related to the Company's operating and finance leases: October 2, 2020 (In millions) Balance Sheet Location Operating Leases Finance Leases Assets Operating lease right-of-use assets Operating lease assets $ 27.7 $ — Finance lease right-of-use assets Property, plant and equipment, net $ — $ 0.5 Liabilities Operating lease liabilities (current) Current operating lease liabilities $ 6.1 $ — Finance lease liabilities (current) Accrued liabilities and other current liabilities $ — $ 0.2 Operating lease liabilities (non-current) Operating lease liabilities $ 23.1 $ — Finance lease liabilities (non-current) Other long-term liabilities $ — $ 0.4 The following table presents the weighted average remaining lease term and discount rate information related to the Company's operating and finance leases: October 2, 2020 Operating Leases Finance Leases Weighted average remaining lease term (in years) 6.6 3.3 Weighted average discount rate 4.5 % 4.1 % The following table provides information related to the Company’s operating and finance leases: (In millions) Fiscal Year 2020 Total operating lease costs (a) $ 8.4 Total finance lease costs $ 0.3 Operating cash flows from operating leases $ 8.0 Financing cash flows from finance leases 0.3 Total cash paid for amounts included in the measurement of lease liabilities $ 8.3 Noncash operating right-of-use assets obtained in exchange for new lease liabilities (b) $ 10.6 Noncash finance right-of-use assets obtained in exchange for new lease liabilities (b) 0.2 Total right-of-use assets obtained in exchange for new lease liabilities (b) $ 10.8 (a) Includes variable and short-term lease expense, which were immaterial for fiscal year 2020. (b) Excludes the impact of adopting the new leases standard in the first quarter of 2020. For fiscal year 2019 and 2018 the Company's lease expense was $5.1 million and $5.3 million, respectively. As of October 2, 2020, maturities of operating lease and finance lease liabilities for each of the following five years and a total thereafter were as follows: (In millions) Fiscal years: Operating Leases Finance Leases 2021 $ 7.1 $ 0.2 2022 6.6 0.2 2023 4.2 0.2 2024 3.5 — 2025 3.3 — Thereafter 9.4 — Total future lease payments $ 34.1 $ 0.6 Less: imputed interest (4.9) — Present value of lease liabilities $ 29.2 $ 0.6 As of October 2, 2020 , the Company had not entered into any material leases that have not yet commenced. At September 27, 2019, the Company was committed to minimum rentals under non-cancelable operating leases (including rent escalation clauses) for fiscal years 2020 through 2024 and therea fter, as follows: $7.5 million, $5.4 million, $4.7 million, $1.8 million, $0.9 million, and $0.2 million, respectively. |
LEASES | LEASES On September 28, 2019, the Company adopted ASC 842, which amends the guidance for the accounting and reporting of leases. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. The Company has operating and finance leases for office space, warehouse and manufacturing space, vehicles and certain equipment. The Company's lease agreements do not contain any material residual value guarantees, variable lease costs, bargain purchase options or restrictive covenants. The Company does not have any lease transactions with related parties. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet and expense for these leases is recognized on a straight-line basis over the lease term. The Company's leases have remaining lease terms of one year to approximately seven years, some of which may include options to extend the leases for up to six years and some include options to terminate early. These options have been included in the determination of the lease liability when it is reasonably certain that the option will be exercised. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease contract. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of fixed lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company's incremental borrowing rate is based on a credit-adjusted risk-free rate, which best approximates a secured rate over a similar term of lease. The following table presents supplemental balance sheet information related to the Company's operating and finance leases: October 2, 2020 (In millions) Balance Sheet Location Operating Leases Finance Leases Assets Operating lease right-of-use assets Operating lease assets $ 27.7 $ — Finance lease right-of-use assets Property, plant and equipment, net $ — $ 0.5 Liabilities Operating lease liabilities (current) Current operating lease liabilities $ 6.1 $ — Finance lease liabilities (current) Accrued liabilities and other current liabilities $ — $ 0.2 Operating lease liabilities (non-current) Operating lease liabilities $ 23.1 $ — Finance lease liabilities (non-current) Other long-term liabilities $ — $ 0.4 The following table presents the weighted average remaining lease term and discount rate information related to the Company's operating and finance leases: October 2, 2020 Operating Leases Finance Leases Weighted average remaining lease term (in years) 6.6 3.3 Weighted average discount rate 4.5 % 4.1 % The following table provides information related to the Company’s operating and finance leases: (In millions) Fiscal Year 2020 Total operating lease costs (a) $ 8.4 Total finance lease costs $ 0.3 Operating cash flows from operating leases $ 8.0 Financing cash flows from finance leases 0.3 Total cash paid for amounts included in the measurement of lease liabilities $ 8.3 Noncash operating right-of-use assets obtained in exchange for new lease liabilities (b) $ 10.6 Noncash finance right-of-use assets obtained in exchange for new lease liabilities (b) 0.2 Total right-of-use assets obtained in exchange for new lease liabilities (b) $ 10.8 (a) Includes variable and short-term lease expense, which were immaterial for fiscal year 2020. (b) Excludes the impact of adopting the new leases standard in the first quarter of 2020. For fiscal year 2019 and 2018 the Company's lease expense was $5.1 million and $5.3 million, respectively. As of October 2, 2020, maturities of operating lease and finance lease liabilities for each of the following five years and a total thereafter were as follows: (In millions) Fiscal years: Operating Leases Finance Leases 2021 $ 7.1 $ 0.2 2022 6.6 0.2 2023 4.2 0.2 2024 3.5 — 2025 3.3 — Thereafter 9.4 — Total future lease payments $ 34.1 $ 0.6 Less: imputed interest (4.9) — Present value of lease liabilities $ 29.2 $ 0.6 As of October 2, 2020 , the Company had not entered into any material leases that have not yet commenced. At September 27, 2019, the Company was committed to minimum rentals under non-cancelable operating leases (including rent escalation clauses) for fiscal years 2020 through 2024 and therea fter, as follows: $7.5 million, $5.4 million, $4.7 million, $1.8 million, $0.9 million, and $0.2 million, respectively. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Oct. 02, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Acquisition of Direct Conversion AB In April 2019, Varex completed the acquisition of 98.2% of the outstanding shares of common stock of Direct Conversion AB (publ) (“Direct Conversion”) for $69.5 million in cash, net of cash acquired, the assumption of Direct Conversion's debt of $4.5 million and deferred consideration equal to $9.9 million or 0.3 million shares of the Company’s common stock. The acquisition of Direct Conversion expanded our detector product portfolio to include photon counting technology. This technology will allow Varex to expand its range of imaging applications and offer new solutions to both Medical and Industrial customers. To settle the deferred consideration, in April 2020, the Company issued the 0.3 million shares of its common stock valued at $7.4 million to certain shareholders of Direct Conversion. The following table summarizes the purchase price allocation for Direct Conversion: (In millions) Fair Value Allocation of the purchase consideration: Accounts receivable $ 2.4 Inventories 5.7 Prepaid expenses and other current assets 0.7 Property, plant, and equipment 0.9 Goodwill 47.2 Intangible assets 32.9 Total assets acquired 89.8 Accounts payable (1.0) Accrued liabilities (1.5) Current maturities of long-term debt (1.0) Deferred revenues (0.9) Long-term debt (3.5) Other long-term liabilities (1.1) Total liabilities assumed (9.0) Noncontrolling interest (1.4) Net assets acquired, less noncontrolling interest $ 79.4 Net cash paid $ 69.5 Deferred consideration 9.9 Total consideration $ 79.4 The Company recorded the assets acquired and liabilities assumed at their fair values. Intangibles were valued primarily using a discounted cash flow, which included estimated revenue growth and discount rate. The fair value assigned to goodwill is primarily attributable to expected synergies. The goodwill related to the Direct Conversion acquisition is not tax deductible. The following amounts represent the determination of the fair value and estimated weighted average useful lives of identifiable intangible assets for the Direct Conversion, which are amortized using the straight-line method: (In millions) Fair Value Estimated Weighted Average Backlog $ 0.2 1 Trade names 2.5 5 Developed technology 18.4 10 In-process research and development 2.8 indefinite Customer relationships 9.0 10 Total intangible assets acquired $ 32.9 During the third quarter of 2020, the in-process research and development assets from the Direct Conversion acquisition were determined to be impaired. Refer to Note 12. Goodwill and Intangible Assets, for more information. The following amounts represent revenues by reporting segment from Direct Conversion from the acquisition date of April 29, 2019, through September 27, 2019: (In millions) Direct Conversion Revenue Medical $ 4.5 Industrial 1.8 Total Direct Conversion revenues $ 6.3 The acquisition of Direct Conversion did not have a significant impact on the Company's consolidated results of operations on a pro forma basis for the current or prior years. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Oct. 02, 2020 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS Investment in Privately-Held Companies The Company has a 40% ownership interest in dpiX Holding LLC (“dpiX Holding”), a four-member consortium that has a 100% ownership interest in dpiX LLC (“dpiX”), a supplier of amorphous silicon based thin film transistor arrays for digital flat panel image detectors. In accordance with the dpiX Holding Agreement, net profits or losses are allocated to the members, in accordance with their ownership interests. The equity investment in dpiX Holding is accounted for under the equity method of accounting. When the Company recognizes its share of net profits or losses of dpiX Holding, profits or losses in inventory purchased from dpiX are eliminated until realized by the Company. In fiscal years 2020, 2019 and 2018, the Company recorded (loss) and income on the equity investment in dpiX Holding of $(0.8) million, $(1.1) million and $3.4 million, respectively. Income and loss on the equity investment in dpiX Holding is included in other (expense) income, net in the consolidated statements of (loss) earnings. The carrying value of the equity investment in dpiX Holding, which was included in investments in privately-held companies on the consolidated balance sheets, was $47.3 million and $48.1 million at October 2, 2020 and September 27, 2019, respectively. In fiscal years 2020, 2019 and 2018, the Company purchased glass transistor arrays from dpiX totaling $20.4 million, $23.5 million and $19.3 million, respectively. These purchases of glass transistor arrays are included as a component of inventories on the consolidated balance sheets or cost of revenues in the consolidated statements of (loss) earnings for these fiscal years. As of October 2, 2020 and September 27, 2019, the Company had accounts payable to dpiX totaling $4.6 million and $3.6 million, respectively. In October 2013, the Company entered into an amended agreement with dpiX and other parties that, among other things, provides the Company with the right to 50% of dpiX’s total manufacturing capacity produced after January 1, 2014. In addition, the amended agreement requires the Company to pay for 50% of the fixed costs (as defined in the amended agreement), as determined at the beginning of each calendar year. In January 2020, the fixed cost commitment was determined and approved by the dpiX board of directors to be $12.7 million for calendar year 2020. As of October 2, 2020, the Company estimated it has fixed cost commitments of $3.2 million related to this amended agreement through the remainder of calendar year 2020. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement). The Company has determined that dpiX is a variable interest entity because at-risk equity holders, as a group, lack the characteristics of a controlling financial interest. Majority votes are required to direct the manufacturing activities, legal operations and other activities that most significantly affect dpiX’s economic performance. The Company does not have majority voting rights and no power to direct the activities of dpiX and therefore is not the primary beneficiary of dpiX. The Company’s exposure to loss as a result of its involvement with dpiX is limited to the carrying value of the Company’s investment of $47.3 million and fixed cost commitments. In November 2018, the Company and CETTEEN GmbH (“CETTEEN”), formed a German joint venture entity, VEC Imaging Verwaltungsgesellschaft GmbH (“VEC”), to develop technology for use in X-ray imaging components. In accordance with the VEC agreement, net profits or losses are allocated to the members in accordance with their ownership interest. The Company's investment in VEC is accounted for under the equity method. As of October 2, 2020, the Company has made contributions totaling |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Oct. 02, 2020 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING In July 2018, the Company committed to relocate the production of amorphous silicon glass for digital detectors, from its Santa Clara facility, to the jointly owned dpiX fabrication facility in Colorado. In July 2019, the Company committed to close its Santa Clara facility and to relocate the remaining production to its other existing facilities. The Company ceased all operations at the Santa Clara facility as of October 2, 2020 and all activities related to the closure of the facility are expected to be complete by the end of December 2020. In connection with the relocation of the glass production and site closure, the Company recorded $9.1 million and $18.9 million of restructuring charges during fiscal year 2020 and 2019, respectively. On July 29, 2020, the Company commenced the implementation of a reduction in workforce to reduce the Company’s operating costs and address the impact of the COVID-19 pandemic. This action is expected to result in the reduction of the Company’s workforce by approximately 94 employees, of which nearly all are located within the United States. This reduction is in addition to the previously disclosed reduction in workforce associated with the closure of the Company’s Santa Clara facility. The Company expects to complete the reduction in workforce by December 31, 2020. In connection with this reduction in workforce and other restructuring activities, excluding those related to the Santa Clara facility, the Company has recorded $4.4 million of expense during fiscal year 2020. Cash outflows associated with these restructuring charges are limited to employee termination expenses, facility closure and equipment sales and disposals. Below is a detail of restructuring charges incurred during the 2020 and 2019 fiscal years, which predominately relate to the Company's Medical segment: (In millions) Location of Restructuring Charges in Consolidated Statements of (Loss) Earnings October 2, 2020 September 27, 2019 Inventory write downs Cost of revenues $ 1.3 $ 3.1 Intangible assets impairment Impairment of intangible assets — 4.8 Accelerated depreciation Cost of revenues 2.9 4.5 Severance costs Selling, general and administrative 5.7 6.2 Facility closure costs Selling, general and administrative 3.6 0.3 Total restructuring charges $ 13.5 $ 18.9 |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 12 Months Ended |
Oct. 02, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER FINANCIAL INFORMATION | OTHER FINANCIAL INFORMATION The following table summarizes the Company’s accrued liabilities and other current liabilities: (In millions) October 2, 2020 September 27, 2019 Accrued compensation and benefits $ 33.0 $ 32.1 Product warranty 8.1 8.1 Income taxes payable 5.6 10.7 Right of return liability 7.4 6.9 Deferred consideration — 8.9 Other 16.4 9.0 Total accrued liabilities and other current liabilities $ 70.5 $ 75.7 The following table summarizes the Company’s other long-term liabilities: (In millions) October 2, 2020 September 27, 2019 Long-term income tax payable $ 3.9 $ 3.9 Environment liabilities 0.8 0.9 Defined benefit obligation liability 6.5 5.5 Long-term right of return liability 19.9 19.5 Long-term other 3.8 2.7 Total other long-term liabilities $ 34.9 $ 32.5 The following table summarizes the Company’s other (expense) income, net: Fiscal Years (In millions) 2020 2019 2018 Income (loss) from equity method investments $ (2.1) $ (2.3) $ 3.9 Change in fair value of deferred consideration 0.9 1.0 — Impairment of investment (2.7) 0.0 — Realized (loss) on foreign currencies (3.7) (1.9) (1.2) Total other income (expense), net $ (7.6) $ (3.2) $ 2.7 |
(LOSS) EARNINGS PER SHARE
(LOSS) EARNINGS PER SHARE | 12 Months Ended |
Oct. 02, 2020 | |
Earnings Per Share [Abstract] | |
(LOSS) EARNINGS PER SHARE | (LOSS) EARNINGS PER SHARE Basic (loss) earnings per common share is computed by dividing the net (loss) earnings for the period by the weighted average number of shares of common stock outstanding during the reporting period. Diluted earnings per common share reflects the effects of potentially dilutive securities, which is computed by dividing net (loss) earnings by the sum of the weighted average number of common shares outstanding and dilutive common shares, which consists of stock options and unvested restricted stock. A reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per common share is as follows: Fiscal Year (In millions, except per share amounts) 2020 2019 2018 Net (loss) earnings attributable to Varex $ (57.9) $ 15.5 $ 27.5 Weighted average shares outstanding - basic 38.8 38.2 37.9 Dilutive effect of potential common shares — 0.4 0.5 Weighted average shares outstanding - diluted 38.8 38.6 38.4 (Loss) earnings per share attributable to Varex - basic $ (1.49) $ 0.41 $ 0.73 (Loss) earnings per share attributable to Varex - diluted $ (1.49) $ 0.40 $ 0.72 Anti-dilutive employee shared based awards, excluded 3.5 1.9 1.2 Potentially dilutive shares, which are based on the weighted-average shares of common stock underlying stock options, unvested stock awards, purchase rights granted under the employee stock purchase plan, warrants and convertible notes using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted net income (loss) earnings per share attributable to Varex when their effect is dilutive. Because the Company incurred a net loss for fiscal year 2020, none of the potentially dilutive common shares were included in the diluted share calculations for those periods as they would have been anti-dilutive. |
FINANCIAL DERIVATIVES AND HEDGI
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES | 12 Months Ended |
Oct. 02, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES | FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES As part of the Company’s overall risk management practices, the Company enters into financial derivatives to manage its financial exposures to foreign currency exchange rates and interest rates. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective. The changes in fair value for all trades that are not designated for hedge accounting are recognized in current period earnings. The Company does not offset fair value amounts recognized for derivative instruments in its consolidated balance sheets for presentation purposes. Credit risk related to derivative transactions reflects the risk that a party to the transaction could fail to meet its obligation under the derivative contracts. Therefore, the Company’s exposure to the counterparty’s credit risk is generally limited to the amounts, if any, by which the counterparty’s obligations to the Company exceed the Company’s obligations to the counterparty. The Company’s policy is to enter into contracts only with financial institutions which meet certain minimum credit ratings to help mitigate counterparty credit risk. Derivatives Designated as Hedging Instruments - Cash Flow Hedges The Company previously used interest rate swap contracts as cash flow hedges to manage its exposure to fluctuations in LIBOR interest rates. Interest rate swap contracts hedging variable rate debt effectively fixed the LIBOR component of its interest rate for a specific period of time. These hedges were entered into in connection with the Company's prior Credit Agreement, as defined in Note 10. Borrowings , as the interest rates under the Credit Agreement were at variable rates. In September 2020, the Company repaid the debt under the Credit Agreement and terminated all of the interest rate swap contracts. The loss on the interest rate contracts that was deferred in other comprehensive income (OCI) was immediately recognized in earnings from transactions that are remote. The following table summarizes the amount of pre-tax (loss) earnings recognized from derivative instruments for the periods indicated and the line items in the accompanying financial statements where the results are recorded for cash flow hedges: Amount of Gain or (Loss) Recognized in OCI on Derivatives Fiscal Year Ended Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Fiscal Year Ended (In millions) 2020 2019 2018 2020 2019 2018 Interest Rate Swap Contracts $ (3.4) $ (6.3) $ 6.9 Interest expense $ (1.5) $ 1.9 $ 0.1 These derivative instruments are subject to master netting agreements giving effect to rights of offset with each counterparty. None of the balances were eligible for netting. The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded. Derivative Liabilities (In millions) October 2, 2020 September 27, 2019 Derivatives designated as cash flow hedges Balance sheet location Interest rate swap contracts Other non-current liabilities $ — $ (0.5) Derivatives Designated as Hedging Instruments - Net Investment Hedges The Company uses cross currency swap contracts as net investment hedges to manage its risk of variability in foreign currency-denominated net investments in majority-owned international operations. All changes in fair value of the derivatives designated as net investment hedges are reported in accumulated other comprehensive (loss) income along with the foreign currency translation adjustments on those investments. In September 2020, the Company terminated one of the net investment swaps and the loss on the swap was recorded in accumulated other comprehensive (loss) income where it will remain until substantial liquidation of the international operations. As of October 2, 2020, the Company had the following outstanding derivatives designated as net investment hedging instruments: (In millions, except for number of instruments) Number of Instruments Notional Value Cross Currency Swap Contracts 3 $ 66.6 The following table summarizes the amount of pre-tax earnings recognized from derivative instruments for the periods indicated and the line items in the accompanying statements of (loss) earnings where the results are recorded for net investment hedges: Amount of Gain or (Loss) Recognized in OCI on Derivatives Fiscal Year Ended Location of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) (In millions) 2020 2019 2018 2020 2019 2018 Cross Currency Swap Contracts $ (1.3) $ (0.2) $ — Interest expense $ 1.5 $ 0.2 $ — These derivative instruments are subject to master netting agreements giving effect to rights of offset with each counterparty. None of the balances were eligible for netting. The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded: Derivative Assets Derivative Liabilities (In millions) October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Derivatives designated as net investment hedges Balance sheet location Balance sheet location Cross currency swap contracts Other current assets $ 1.3 $ — Other current liabilities $ — $ (0.2) Cross currency swap contracts Other non-current assets — — Other non-current liabilities (2.1) — $ 1.3 $ — $ (2.1) $ (0.2) Balance Sheet Hedges The Company also enters into foreign currency forward contracts to hedge fluctuations associated with foreign currency denominated monetary assets and liabilities, primarily cash, third-party accounts receivable, accounts payable, and intercompany receivables and payables. These forward contracts expire within 30 days. These forward contracts are not designated for hedge accounting treatment, therefore, the change in fair value of these derivatives is recorded as a component of other income (expense) and offsets the change in fair value of the foreign currency denominated assets and liabilities, which are also recorded in other income (expense). The effect of derivative instruments not designated as hedges for fiscal year 2020 was a loss of $0.2 million. The Company does not, and does not intend to use derivative financial instruments for speculative or trading purposes. The following table shows the notional amounts of outstanding foreign currency contracts entered into under its balance sheet hedge program as of October 2, 2020: Notional Value of Derivatives not Designated as Hedging Instruments: (in millions) Buy contracts Sell contracts Swiss franc $ — $ 1.1 Chinese renminbi 3.4 — Euro — 29.3 $ 3.4 $ 30.4 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Oct. 02, 2020 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS The following table summarizes the Company's short-term and long-term debt: October 2, 2020 September 27, 2019 (In millions, except for percentages) Amount Weighted-Avg Effective Interest Rate Amount Weighted-Avg Effective Interest Rate $ Change Current maturities of long-term debt Term Facility $ — $ 29.4 5.6% $ (29.4) Other debt 2.5 1.3 1.2 Total current maturities of long-term debt $ 2.5 $ 30.7 $ (28.2) Non-current maturities of long-term debt: Revolving Credit Facility $ — $ 59.0 5.6% $ (59.0) Asset-Based Loan — — — Term Facility — 308.6 5.6% (308.6) Convertible Senior Unsecured Notes 200.0 10.9% — 200.0 Senior Secured Notes 300.0 8.2% — 300.0 Other debt 8.8 2.5 6.3 Total non-current maturities of long-term debt: $ 508.8 $ 370.1 $ 138.7 Unamortized issuance costs and debt discounts Debt issuance costs - Credit Agreement $ — $ (5.7) $ 5.7 Unamortized discount and issuance costs - Convertible Notes (50.4) — (50.4) Debt issuance costs - Senior Secured Notes (5.6) — (5.6) Total $ (56.0) $ (5.7) $ (50.3) Total debt outstanding, net $ 455.3 $ 395.1 $ 60.2 Future principal payments of long-term debt outstanding as of October 2, 2020 are as follows: (In millions) Fiscal years: 2021 $ 2.5 2022 2.6 2023 2.4 2024 1.5 2025 201.4 Thereafter 300.9 Total debt outstanding 511.3 Less: current maturities of long-term debt (2.5) Non-current portion of long -term debt $ 508.8 Convertible Senior Unsecured Notes On June 9, 2020, Varex issued $200.0 million in aggregate principal amount of 4.00% convertible senior unsecured notes due 2025 (“Convertible Notes”). The net proceeds from the issuance of the Convertible Notes, after deducting transaction fees and offering expense payable by the Company, were approximately $193.1 million. The Convertible Notes bear interest at the annual rate of 4.00%, payable semiannually on June 15 and December 15 of each year, beginning on December 15, 2020, and will mature on June 15, 2025, unless earlier converted or repurchased by us. The Convertible Notes will be convertible into cash, shares of Varex common stock or a combination thereof, at the Company's election, at an initial conversion rate of 48.05 shares of common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $20.81 per share, subject to adjustment pursuant to the terms of the Indenture governing the Convertible Notes (the "Indenture"). The Convertible Notes may be converted at any time after, and including, December 15, 2024 until the close of business on the second scheduled trading day immediately before the maturity date. The conversion rate of the Convertible Notes may be adjusted in certain circumstances, including in connection with a conversion of the Convertible Notes made following certain fundamental changes and under other circumstances set forth in the Indenture. It is the Company's current intent and policy to settle any conversions of notes through a combination of cash and shares. Prior to the close of business on the business day immediately preceding December 15, 2024, the Convertible Notes at the option of the holder can be convertible only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2020, if the last reported sale price per share of Varex common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; • during the five five five • upon the occurrence of certain corporate events or distributions on Varex common stock, as described in the Indenture; or • if the Company calls any notes for redemption (under the conditions specified below). The Convertible Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after June 1, 2023 and on or before the 60th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any Convertible Note for redemption will constitute a make-whole fundamental change with respect to that Convertible Note, in which case the conversion rate applicable to the conversion of that Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption. No sinking fund is provided for the Convertible Notes. Total interest expense related to the Convertible Notes for the twelve months ended October 2, 2020 was $5.0 million and was comprised of $2.5 million related to the contractual interest coupon and $2.5 million related to the amortization of the discount and issuance costs on the liability component. Call Spread On June 4, 2020 and June 5, 2020, in connection with the offering of the Convertible Notes, Varex entered into privately negotiated convertible note hedge transactions (collectively, the “Hedge Transactions”). The Hedge Transactions cover, subject to customary anti-dilution adjustments, the number of shares of Varex common stock that initially underlie the Convertible Notes. The Hedge Transactions are expected generally to reduce the potential dilution and/or offset any cash payments Varex is required to make in excess of the principal amount due upon conversion of the Convertible Notes in the event that the market price of Varex common stock is greater than the strike price of the Hedge Transactions, which was initially $20.81 per share (subject to adjustment under the terms of the Hedge Transactions). The strike price of $20.81 corresponds to the initial conversion price of the Convertible Notes. The number of shares underlying the Hedge Transactions is 9.6 million. On June 4, 2020 and June 5, 2020, Varex also entered into privately negotiated warrant transactions (collectively, the “Warrant Transactions” and, together with the Hedge Transactions, the “Call Spread Transactions”), whereby the Company sold warrants at a higher strike price relating to the same number of shares of Varex common stock that initially underlie the Convertible Notes, subject to customary anti-dilution adjustments. The initial strike price of the warrants is $24.975 per share (subject to adjustment under the terms of the Warrant Transactions), which is 50% above the last reported sale price of Varex common stock on June 4, 2020. The Warrant Transactions could have a dilutive effect to the Company's stockholders to the extent that the market price per share of Varex common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants. The number of shares underlying the Warrant Transactions is 9.6 million. The number of warrants outstanding as of October 2, 2020, was 9.6 million. The Company used $11.2 million of the net proceeds from the issuance of the Convertible Notes and $49.8 million from the Warrant Transactions to pay the cost of the Hedge Transactions, which totaled $61.0 million. The Hedge Transactions and the Warrant Transactions are separate transactions, in each case, and are not part of the terms of the Convertible Notes and will not affect any holder’s rights under the Convertible Notes. Holders of the Convertible Notes will not have any rights with respect to the Call Spread Transactions. Accounting Treatment of the Convertible Notes and Related Hedge Transactions and Warrant Transactions As the Call Spread Transactions meet certain accounting criteria, the Call Spread Transactions were classified as equity and are not accounted for as derivatives. The proceeds from the offering of the Convertible Notes were separated into liability and equity components. On the date of issuance, the liability and equity components of the Convertible Notes were calculated to be approximately $152.3 million and $47.7 million, respectively. The initial $152.3 million liability component was determined based on the fair value of similar debt instruments excluding the conversion feature assuming a hypothetical interest rate of 10.45%. The initial $47.7 million equity component represents the difference between the fair value of the initial $152.3 million in debt and the $200.0 million of gross proceeds. The equity component is included in additional paid-in capital in the consolidated balance sheets and will not be subsequently remeasured as long as it continues to meet the conditions for equity classification. The related initial debt discount of $47.7 million is being amortized over the life of the Convertible Notes as non-cash interest expense using the effective interest method at an interest rate of 10.9%. In connection with the above-noted transactions, the Company incurred approximately $6.9 million of offering-related costs. These offering fees were allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt and equity issuance costs, respectively. The Company allocated $5.3 million of debt issuance costs to the liability component, which were capitalized as deferred financing costs within long-term debt. These costs are being amortized as interest expense over the term of the debt using the effective interest method. The remaining $1.6 million of transaction costs allocated to the equity component were recorded as a reduction of the equity component. Senior Secured Notes Varex issued $300.0 million aggregate principal amount of 7.875% Senior Secured Notes due 2027 (the "Senior Secured Notes") pursuant to an indenture dated September 30, 2020, among Varex, certain of its direct or indirect wholly-owned subsidiaries as guarantors, and Wells Fargo Bank, National Association as trustee and collateral agent. Interest payments are paid semiannually on April 15 and October 15 of each year, beginning on April 15, 2021. The net proceeds from the Senior Secured Notes after initial purchasers’ discount, commissions and estimated fees and expenses of $5.6 million, were approximately $294.4 million. The Company used $267.5 million of the proceeds from the offering to repay the Term Facility (defined below), including accrued interest. As of October 2, 2020, the book value of the Senior Secured Notes was presented net of unamortized debt issuance costs of $5.6 million. Debt issuance costs are amortized to interest expense over the agreement term using the effective interest method. The effective interest rate was 8.2% as of October 2, 2020. The Senior Secured Notes are secured by a first priority lien on substantially all of the assets of Varex and the assets and capital stock of its subsidiary guarantors (subject to exceptions), except for assets for which a first priority security interest is pledged for the ABL Facility (defined below), in which the Senior Secured Notes will have a second lien security interest. The Senior Secured Notes include negative covenants, subject to certain exceptions, restricting or limiting Varex's ability and the ability of its restricted subsidiaries to, among other things, incur liens on collateral; sell certain assets; incur additional indebtedness; pay dividends; issue preferred shares; consolidate, merge, or sell all or substantially all of its assets; and enter into certain transactions with their affiliates. At any time prior to October 15, 2023, the Company has the ability to redeem the Senior Secured Notes under the following optional redemptions: • up to 30% of the aggregate principal amount of the notes issued under the indenture with the proceeds of certain equity offerings at a redemption price equal to 107.875% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. • some or all of the notes at a price equal to 100% of the principal amount of the notes, plus a “make-whole premium,” together with accrued and unpaid interest, if any, to, but excluding, the redemption date. • up to 10% of the aggregate principal amount of the notes per year at a redemption price equal to 103% of the aggregate principal amount of notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding the redemption date. At any time on or after October 15, 2023, Varex may redeem all or part of the notes at the redemption prices indicated in the indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, if the Company experiences certain changes of control or receive proceeds from certain asset sales, holders of the notes will have the right to require the Company to repurchase the notes under the terms set forth within the indenture. Interest expense related to the Senior Secured Notes for the twelve months ended October 2, 2020 was $0.2 million. Asset-Based Loan Concurrent with the termination of the Credit Agreement (defined below) and closing of the Senior Secured Notes on September 30, 2020, the Company entered into a new revolving credit agreement consisting of a $100.0 million asset-based loan revolving credit facility (the “Asset-Based Loan”, or "ABL Facility"). Borrowings under the Asset-Based Loan will be expected to bear interest at floating rates based on LIBOR, or comparable rate, or a base rate, and an applicable margin based on Average Daily Excess Availability (as defined in the Asset-Based Loan Agreement). In addition, the Company is required to pay a quarterly commitment fee of 0.375% to 0.5%, based on the aggregate unused commitments under the Asset-Based Loan. The ABL Facility matures on the earlier of September 30, 2025 or 91 days prior to the maturity of the Convertible Notes, at which time all outstanding amounts under the ABL Facility will be due and payable. As of October 2, 2020, the total undrawn amount under the ABL Facility was $100.0 million, however, the borrowing base under the ABL fluctuates from month-to-month depending on the amount of eligible accounts receivable and inventory. Debt issuance costs, including unamortized deferred costs for continuing lenders under the previously existing revolving credit facility, of $3.1 million were capitalized and are being amortized over the term of the new agreement. The amortization associated with these costs is recorded within Interest expense in the consolidated statement of operations. The debt issuance costs are included net of amortization within other assets in the accompanying consolidated balance sheets. The ABL Facility includes various restrictive covenants that limit our ability to engage in certain transactions, including the incurrence of debt, payment of dividends and other restrictive payments, existence of restrictions affecting subsidiaries, sales of stock and assets, certain affiliate transactions, modifications of debt documents and organizational documents, changes to line of business and fiscal year, incurrence of liens, making fundamental changes, prepayments of junior indebtedness, and certain other transactions. The ABL Facility contains a minimum Fixed Charge Coverage Ratio of 1.00 to 1.00 that is tested when excess availability under the ABL is less than the greater of (i) 10.0% of the Line Cap (the lesser of (a) the aggregate commitments under the ABL Facility and (b) the aggregate borrowing base) and (ii) $7.5 million. The ABL Facility will have a first lien security interest on accounts receivable, cash, and inventory as well as certain real estate and holds second lien security interest on all other assets. Credit Agreement On May 1, 2017 Varex entered into a secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $200.0 million with a term of five years, and a secured term facility (the “Term Facility” and together with the Revolving Credit Facility, the “Credit Agreement”) in an aggregate principal amount of $400.0 million, which was subsequently amended. On September 30, 2020, the Company terminated its previously existing Credit Agreement, consisting of both the Term Facility and Revolving Credit Facility. The Company repaid the outstanding Term Facility balance of $265.5 million and accrued |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Oct. 02, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Assets/Liabilities Measured at Fair Value on a Recurring Basis In the tables below, the Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. (In millions) Fair Value Measurements at October 2, 2020 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 $ — $ 72.9 $ — $ 72.9 Derivative assets — 1.1 — 1.1 Total assets measured at fair value $ — $ 74.0 $ — $ 74.0 Liabilities: Derivative liabilities $ — $ 2.1 $ — $ 2.1 Total liabilities measured at fair value $ — $ 2.1 $ — $ 2.1 The fair values of certain of the Company’s financial instruments, including bank deposits included in cash and cash equivalents, accounts receivable and accounts payable, also approximate their fair values due to their short maturities. As of October 2, 2020, the fair value of the Company's Convertible Notes and Senior Secured Notes, as defined in Note 10. Borrowings, was $178.5 million and $312.8 million, respectively. As of September 27, 2019, the total outstanding borrowings of $395.1 million, net of deferred loan costs, approximated its fair value as it was carried at a market observable interest rate that resets periodically and was categorized as Level 2 in the fair value hierarchy. The Company has elected to use the income approach to value its derivative instruments using standard valuation techniques and Level 2 inputs, such as currency spot rates, forward points and credit default swap spreads. There were no financial assets or liabilities measured on a recurring basis using significant unobservable inputs (Level 3) and there were no transfers in or out of Level 1, 2 or 3 during fiscal year 2020. At September 27, 2019, the Company determined the following levels of inputs for the following assets or liabilities: (In millions) Fair Value Measurements at September 27, 2019 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 $ — $ 8.8 $ — $ 8.8 Total assets measured at fair value $ — $ 8.8 $ — $ 8.8 Liabilities: Derivative liabilities $ — $ 0.7 $ — $ 0.7 Deferred consideration 8.9 — — 8.9 Total liabilities measured at fair value $ 8.9 $ 0.7 $ — $ 9.6 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Oct. 02, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS In the third quarter of 2020, changes in facts and circumstances and general market declines from COVID-19 resulted in reduced expectations of future operating results. The Company considered these circumstances and the potential long-term impact on cash flows associated with its reporting units and indefinite-lived intangible assets and determined that an indicator of possible impairment existed within its Medical and Industrial reporting units and indefinite-lived intangible assets. Accordingly, the Company performed a quantitative impairment analysis to determine the fair values of those reporting units and indefinite-lived intangible assets. The Company used both an income approach utilizing the discounted cash flow method ("DCF") and a market approach utilizing the public company market multiple method. The Company developed multiple forecasted future cash flow scenarios for the reporting units and indefinite-lived intangible assets with varied recovery timing and sales impact assumptions. Based on the output of the analysis, the Company determined that the fair values of both the Medical and Industrial reporting units exceeded their carrying amounts. The Company's Industrial reporting unit's fair value exceeded its carrying value by more than 20% and the Company's Medical reporting unit's fair value exceeded its carrying value by more than 30%. Accordingly, no impairment charges were required as of July 3, 2020. However, an impairment charge was required for the Company's in-process R&D as discussed below. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding the Company's future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include estimated future annual net cash flows, income tax rates, discount rates, revenue growth rates, forecasted gross margins, market multiples, terminal value and other market factors. This fair value measurement was based on significant inputs not observable in the market and thus represents a Level 3 fair value measurement. If current expectations of future revenue growth rates and forecasted gross margins, both in size and timing, are not met, if market factors outside of the Company's control, such as discount rates, change, if market multiples decline, or if management’s expectations or plans otherwise change, including as a result of the development of the Company's global five-year operating plan, then one or more of the Company's reporting units might become impaired in the future. The Company will continue to monitor the financial performance of and assumptions for its reporting units. A future impairment charge for goodwill could have a material effect on the Company's consolidated financial position and results of operations. The following table reflects goodwill by reportable operating segment: (In millions) Medical Industrial Total Balance at September 27, 2019 $ 173.0 $ 117.8 $ 290.8 Foreign currency translation adjustments 1.4 0.9 2.3 Balance at October 2, 2020 $ 174.4 $ 118.7 $ 293.1 The following table reflects the gross carrying amount and accumulated amortization of the Company’s finite-lived intangible assets included in other assets in the consolidated balance sheets: October 2, 2020 September 27, 2019 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 74.9 $ (37.5) $ 37.4 $ 74.1 $ (28.4) $ 45.7 Patents, licenses and other 12.8 (9.7) 3.1 12.7 (8.4) 4.3 Customer contracts and supplier relationship 51.2 (24.2) 27.0 50.7 (17.2) 33.5 Total intangible assets with finite lives 138.9 (71.4) 67.5 137.5 (54.0) 83.5 In-process R&D with indefinite lives — — — 2.8 — 2.8 Total intangible assets $ 138.9 $ (71.4) $ 67.5 $ 140.3 $ (54.0) $ 86.3 Amortization expense for intangible assets was $17.2 million, $15.7 million and $16.2 million in fiscal years 2020, 2019 and 2018, respectively. The Company recognized intangible asset impairment charges of $2.8 million, $4.8 million, and $3.0 million in fiscal years 2020, 2019, and 2018, respectively, which are included in the consolidated statements of (loss) earnings under impairment of intangible assets. These impairment charges related primarily to the Company's Medical reporting segment. The fair value of the asset impaired during the third quarter of 2020 was determined using an estimated weighted average cost of capital of 25.0% (consistent with the rate used at the acquisition date), which reflects the risks inherent in future cash flow projections and represents a rate of return that a market participant would expect for this asset. The Company believes its assumptions are consistent with the plans and estimates that a market participant would use to manage the business. The estimated fair value of the in-process R&D intangible asset as of July 3, 2020 was zero. This fair value measurement was based on significant inputs not observable in the market and thus represents a Level 3 fair value measurement. In addition, as a result of the impact of COVID-19 as discussed above, the Company determined certain impairment triggers had occurred related to the Company’s finite-lived tangible and intangible assets. Accordingly, the Company analyzed undiscounted cash flows at the asset group level for certain finite-lived tangible and intangible assets as of July 3, 2020. Based on that undiscounted cash flow analysis, the Company determined that estimated undiscounted future cash flows exceeded their net carrying values, and, therefore, as of July 3, 2020, the Company's finite-lived tangible and intangible assets were not impaired. As of October 2, 2020, the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal years: 2021 $ 16.5 2022 15.0 2023 13.9 2024 9.3 2025 3.2 Thereafter 9.6 Total $ 67.5 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 02, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments See Note 3 . Leases, included in this report, for additional information about Varex's lease commitments. Purchase Agreement With Supplier During the third quarter of fiscal year 2020, Varex entered into a purchase agreement with a supplier to acquire certain equipment and intellectual property from the supplier that is utilized to manufacture X-ray cables utilized in Varex's products. As of October 2, 2020, there has been no transfer of control of the underlying equipment. This acquisition is expected to be completed during the 2021 fiscal year and the total consideration to be paid by Varex for the acquired assets is expected to be ¥1,084.7 million or approximately $10.3 million. Other Commitments See Note 5. Related Party Transactions, included in this report, for additional information about the Company’s commitments to dpiX. See Note 14 . Redeemable Noncontrolling Interests & Noncontrolling Interests, included in this report, for additional information about the Company’s commitment to the noncontrolling shareholders of MeVis. The Company has an environmental liability of approximately $2.0 million as of October 2, 2020. Contingencies From time to time, the Company is a party to or otherwise involved in legal proceedings, claims and government inspections or investigations, customs and duty audits, other contingency matters, both inside and outside the United States, arising in the ordinary course of its business or otherwise. The Company accrues amounts for probable losses, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss (including, among other things, probable settlement value). A loss or a range of loss is disclosed when it is reasonably possible that a material loss will be incurred and can be estimated or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision. The Company did not have any material contingent liabilities as of October 2, 2020 and September 27, 2019. Legal expenses are expensed as incurred. |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS | 12 Months Ended |
Oct. 02, 2020 | |
Noncontrolling Interest [Abstract] | |
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS | REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS In April 2019, a subsidiary of Varex completed the acquisition of 98.2% of the outstanding shares of common stock of Direct Conversion. As the Company has majority voting rights it has consolidated Direct Conversion's operations in its consolidated financial statements and recorded the noncontrolling interest. The noncontrolling interest related to Direct Conversion is included in noncontrolling interest in the equity section of the Company's consolidated balance sheet. Earnings representing the noncontrolling interest's portion of Direct Conversion's income from operations is included in the Company's consolidated statements of (loss) earnings. In September 2018, the Company entered into a partnership in Saudi Arabia. The Company has majority voting rights with an approximate 75% interest. Accordingly, the Company has consolidated the operations of the Saudi Arabia partnership in the Company's consolidated financial statements and recorded the noncontrolling interests. The noncontrolling interest related to the partner’s 25% interest in the joint venture is included in noncontrolling interest in the equity section of the Company’s consolidated balance sheet. Earnings representing the noncontrolling partner's share of income from operations is included in the Company's consolidated statements of (loss) earnings. In April 2015, the Company completed the acquisition of 73.5% of the then outstanding shares of MeVis Medical Solutions AG (“MeVis”), a public company based in Bremen, Germany that provides image processing software and services for cancer screening. In August 2015, the Company, through one of its German subsidiaries, entered into a domination and profit and loss transfer agreement (the “DPLTA”) with MeVis. In October 2015, the DPLTA became effective upon its registration at the local court of Bremen, Germany. Unde r the DPLTA, MeVis subordinates its management to the Company and undertakes to transfer all of its annual profits and losses to the Company. In return, the DPLTA grants the noncontrolling shareholders of MeVis: (1) an annual recurring net compensation of €0.95 per MeVis share starting from January 1, 2015 and (2) a put right for their MeVis shares at €19.77 per MeVis share. During fiscal year 2018 , an immaterial number of MeVis’ shares were purchased under the put right. During the fourth quarter of fiscal year 2020, the put right granted to the noncontrolling shareholders of MeVis under the DPLTA expired unexercised, which resulted in the redeemable noncontrolling interests being reclassified to permanent equity as noncontrolling interest in the consolidated balance sheet. As of October 2, 2020, noncontrolling shareholders together held approximately 0.5 million shares of MeVis, representing 26.3% of the outstanding shares. Changes in redeemable noncontrolling interests and noncontrolling interests were as follows: Fiscal Years 2020 2019 (In millions) Redeemable Noncontrolling Redeemable Noncontrolling Interest Balance at beginning of period $ 10.5 $ 3.3 $ 11.1 $ 2.1 Net earnings attributable to noncontrolling interests 0.5 — 0.5 (0.2) Contributions from noncontrolling interests — — — 1.4 Reclassification of redeemable NCI in MeVis to noncontrolling interests in permanent equity (11.3) 11.3 — — Dividend distributions (0.5) — (0.5) — Other 0.8 (0.5) (0.6) — Balance at end of period $ — $ 14.1 $ 10.5 $ 3.3 |
EMPLOYEE STOCK PLANS
EMPLOYEE STOCK PLANS | 12 Months Ended |
Oct. 02, 2020 | |
Share-based Payment Arrangement [Abstract] | |
EMPLOYEE STOCK PLANS | EMPLOYEE STOCK PLANS Employee Stock Plans The Company's employees participate in Varex Imaging Corporation 2020 Omnibus Stock Plan (the “2020 Stock Plan”), 2017 Omnibus Stock Plan (the “2017 Stock Plan”), and Varex Imaging Corporation 2017 Employee Stock Purchase Plan (the “2017 ESPP”) which allows the grants of stock options, restricted stock units and performance shares among other types of awards. In January 2017, Varex stockholders approved the 2017 ESPP, which provides eligible employees with an opportunity to purchase shares of Varex common stock at 85% of the lower of its fair market value at the start and end of a six-month purchase period. The 2017 ESPP provides for the purchase of up to one million shares of Varex common stock. Share-Based Compensation Expense Share-based compensation expense recognized in the consolidated statements of (loss) earnings is based on awards ultimately expected to vest. Share-based compensation expense includes expenses related to the Company’s direct employees. The table below summarizes the effect of recording share-based compensation expense and for the option component of the employee stock purchase plan shares: Fiscal Year (In millions) 2020 2019 2018 Cost of revenues $ 1.1 $ 1.2 $ 1.3 Research and development 2.5 2.2 1.8 Selling, general and administrative 9.8 8.3 6.9 Total share-based compensation expense $ 13.4 $ 11.7 $ 10.0 The unrecognized share-based compensation cost as of October 2, 2020 was $24.4 million, and is expected to be recognized in the next 3 to 4 fiscal years. As of October 2, 2020, there were approximately 4.8 million and 0.5 million shares of common stock available for future issuances under the 2020 Stock Plan and the 2017 ESPP, respectively. The Company utilized the Black-Scholes valuation model for estimating the fair value of stock options granted and the option component of ESPP grants. The Company calculated the fair value of option grants and option component of ESPP grants on the respective dates of grant using the following weighted average assumptions: Employee Stock Option Plan Employee Stock Purchase Plans Fiscal Year Fiscal Year 2020 2019 2018 2020 2019 2018 Expected term (in years) 6.1 4.6 4.8 0.5 0.5 0.5 Risk-free interest rate 1.1 % 2.5 % 2.6 % 0.9 % 2.5 % 2.0 % Expected volatility 36.9 % 33.9 % 31.8 % 50.0 % 43.9 % 34.1 % Expected dividend — % — % — % — % — % — % Weighted average fair value at grant date $7.53 $10.19 $11.57 $7.94 $7.81 $8.92 Option valuation methods, including Black-Scholes, require the input of subjective assumptions, which are discussed below. Risk-Free Interest Rate The interest rates used are based on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. Expected Term Options granted generally vest over a period of 36 to 48 months and expire 7 to 10 years from date of grant. Employee stock purchase plan offering periods are 6 months and provides eligible employees with an opportunity to purchase shares of Varex common stock at 85% of the lower of its fair market value at the start and end of a six-month purchase period. The Company has elected to use the simplified method in calculating the expected term of its options due to a lack of sufficient historical information. Expected Dividend Yield The dividend rate used is zero as the Company has never paid any cash dividends on its common stock and does not anticipate doing so in the foreseeable future. The Company is also restricted from paying dividends on common stock under its debt facilities. Expected Volatility Authoritative accounting guidance on stock-based compensation indicates that companies should consider volatility over a period generally commensurate with the expected or contractual term of the stock option. Adequate Company-specific data does not exist for this time period as the Company began trading in January 2017. The volatility variable used is a blended approach by using the Company's historic data for the years it has been publicly traded and a benchmark of other comparable companies’ volatility rates for the prior years. Stock Option Activity The following table summarizes the activity for stock options under Varex’s employee incentive plans for the Company’s employees: (In thousands, except per share amounts and the remaining term) Options Price range Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) Outstanding at September 27, 2019 2,269 $22.63 - $37.60 $ 30.60 4.1 $ 1,220.3 Granted 591 $13.61 - $28.12 23.39 Canceled, expired or forfeited (61) $22.63 - $37.10 30.17 Exercised (64) $22.84 - $23.24 22.93 Outstanding at October 2, 2020 2,735 $13.61 - $37.60 $ 29.23 4.5 $ — Exercisable at October 2, 2020 1,794 $25.17 - $37.60 $ 30.48 2.9 $ — (1) The aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the exercise price and the closing price of Varex common stock of $12.37 as of October 2, 2020, the last trading date of the Company's respective fiscal years, and which represents the amount that would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise as of that date. The grant-date fair value of options granted during fiscal years 2020, 2019 and 2018 was $4.4 million, $3.0 million and $3.1 million, respectively. The total intrinsic value of the options exercised during the years ended October 2, 2020, September 27, 2019 and September 28, 2018 was $0.4 million, $0.2 million and $1.7 million, respectively Restricted Stock Units, Restricted Stock Awards and Deferred Stock Units The following table summarizes the activity for restricted stock units, restricted stock awards and deferred stock units under Varex’s employee incentive plans for the Company’s employees: (In thousands, except per share amounts) Number of Shares Weighted Average Grant-Date Fair Value Balance at September 27, 2019 678 $ 33.18 Granted 587 20.30 Vested (224) 32.77 Canceled, expired or forfeited (86) 31.27 Balance at October 2, 2020 955 $ 25.54 The total grant-date fair value of shares granted was $11.9 million, $9.0 million and $10.1 million for fiscal years 2020, 2019 and 2018, respectively. Shares outstanding at October 2, 2020, September 27, 2019 and September 28, 2018 had an estimated market value of $11.8 million, $19.2 million and $18.4 million, respectively. |
TAXES ON EARNINGS
TAXES ON EARNINGS | 12 Months Ended |
Oct. 02, 2020 | |
Income Tax Disclosure [Abstract] | |
TAXES ON EARNINGS | TAXES ON EARNINGS Income tax expense or benefit is based on reported income or loss before income taxes. Deferred income taxes reflect the effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws. Valuation allowances are recognized to reduce deferred tax assets to the amount that is more likely than not to be realized. Taxes on earnings were as follows: Fiscal Years (In millions) 2020 2019 2018 Current (benefit) provision: Federal $ (16.3) $ 9.2 $ (2.1) State and local (1.4) 1.3 (0.3) Foreign 5.7 6.8 7.5 Total current $ (12.0) $ 17.3 $ 5.1 Deferred (benefit) provision: Federal $ (1.7) $ (10.0) $ (7.0) State and local 0.6 (1.6) 0.7 Foreign (2.1) — (1.4) Total deferred (3.2) (11.6) (7.7) Taxes on (loss) earnings $ (15.2) $ 5.7 $ (2.6) (Loss) earnings before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2020 2019 2018 United States $ (74.1) $ 5.9 $ 3.7 Foreign 1.5 15.6 22.0 (Loss) earnings before taxes $ (72.6) $ 21.5 $ 25.7 The effective tax rate differs from the U.S. federal statutory tax rate as a result of the following: Fiscal Years 2020 2019 2018 Federal statutory income tax rate 21.0 % 21.0 % 24.5 % State and local taxes, net of federal tax benefit 1.0 (0.9) 1.1 Revaluation of deferred tax liabilities for US statutory change — — (41.8) Mandatory repatriation tax on foreign earnings — 1.9 13.0 Domestic production activities deduction — — (0.8) Research and development credit 3.7 (10.2) (11.1) Prior year deferred tax adjustments 0.4 4.7 1.9 Foreign rate difference (0.4) 6.0 0.8 Change in valuation allowance (11.0) 11.2 (1.9) US tax reform - international provisions — (4.7) — US NOL carryback 5.6 — — Other 0.6 (2.5) 4.2 Effective tax rate 20.9 % 26.5 % (10.1) % During fiscal year 2020, the Company’s effective tax rate varied from the U.S. federal statutory rate of 21% primarily because of the favorable impact of U.S. net operating losses to be carried back to tax years with greater U.S. federal statutory rates. These favorable tax items were mostly offset by the unfavorable impact of additional losses in certain foreign jurisdictions, limitations on interest expense, and R&D credits for which no benefit is recognized. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (U.S. Tax Reform) was enacted in the U.S. which significantly revised the U.S. corporate income tax structure. Among the revisions impacting our effective tax rate are a lower U.S. corporate statutory rate going from 35% to 21% effective January 1, 2018 and changes to the way foreign earnings are taxed. As a September fiscal year filer, the lower corporate income tax rate is phased in from a U.S. statutory federal rate of 24.5% in fiscal year ending September 28, 2018 to a rate of 21% for the fiscal year ending September 27, 2019. During fiscal year 2019, the Company’s effective tax rate varied from the U.S. federal statutory rate of 21% primarily because of the favorable impact of changes to the U.S. corporate tax structure resulting from U.S. Tax Reform, and U.S. research and development tax credits. These favorable U.S. tax items were offset by losses in certain foreign jurisdictions for which no benefit is recognized and earnings in other foreign jurisdictions that are taxed at higher rates. During fiscal year 2018, the Company’s effective tax rate varied from the U.S. federal statutory rate primarily because of the favorable impact of changes to the U.S. corporate tax structure resulting from U.S. Tax Reform. During fiscal years 2018 and 2017, the effective tax rate also differs from the U.S. federal statutory rate due to increases resulting from U.S. state income tax expense, losses in certain foreign jurisdictions for which no benefit is recognized, earnings in other foreign jurisdictions that are taxed at higher rates, and limitations on the deductibility of officers' compensation. These are offset by decreases due to U.S. research and development credits, tax windfalls for share-based compensation, and the release of a valuation allowance against loss carryforwards in certain foreign jurisdictions. During fiscal year 2019, additional U.S. Tax Reform provisions, including GILTI (global intangible low-taxed income), BEAT (base-erosion anti-abuse tax), FDII (foreign-derived intangible income), limitations on interest expense deductions (if certain conditions apply), and other components became effective for the Company and, if applicable, have been included in the calculation of the fiscal year 2019 tax provision. The determination of the tax effects of U.S. Tax Reform may change following future legislation or further interpretation of U.S. Tax Reform from U.S. Federal and state tax authorities. The guidance for accounting for U.S. Tax Reform requires taxpayers to make an election regarding the accounting for GILTI. This policy election is to either: (1) treat GILTI as a period cost if and when incurred, or (2) recognize deferred taxes for basis differences that are expected to reverse as GILTI in future years. During the first quarter of fiscal year 2019, the Company has made the accounting policy election to account for GILTI under the period cost method. Significant components of deferred tax assets and liabilities are as follows: (In millions) October 2, 2020 September 27, 2019 Deferred Tax Assets: Inventory adjustments $ 4.4 $ 5.6 Share-based compensation 4.2 3.1 Product warranty 1.7 1.6 Deferred compensation 1.3 1.1 Net operating loss carryforwards 27.0 24.3 Accrued vacation 1.0 1.0 Credit carryforwards 5.9 1.9 Deferred financing fees 3.3 — Interest expense limitation 4.7 — Lease liabilities 7.2 — Other 6.0 7.5 $ 66.7 $ 46.1 Valuation allowance (28.7) (18.8) Total deferred tax assets $ 38.0 $ 27.3 Deferred Tax Liabilities: Acquired intangibles $ (16.6) $ (19.3) Property, plant and equipment (12.4) (10.6) Investments in privately held companies (2.8) (3.3) Right of use assets (6.7) — Other (1.3) (2.3) Total deferred tax liabilities (39.8) (35.5) Net deferred tax liabilities $ (1.8) $ (8.2) Reported As: Deferred tax assets $ 38.0 $ 27.3 Deferred tax liabilities (39.8) (35.5) Net deferred tax liabilities $ (1.8) $ (8.2) As a result of the changes to the U.S. taxation of foreign earnings included in U.S. Tax Reform, the Company reevaluated its previous indefinite reinvestment assertion with respect to these earnings during fiscal year 2018, which resulted in the Company revoking its assertion for current and future earnings for all countries, while maintaining the assertion that historic earnings are indefinitely reinvested outside the U.S. The Company modified its prior assertion in fiscal year 2019 with respect to the acquisition of Direct Conversion. The modification was to assert that all earnings for Direct Conversion, located primarily in Sweden and Finland, are indefinitely reinvested in those countries. For the year ended October 2, 2020, the Company maintains these assertions. Due to the level of earnings available for repatriation, the treaty benefits applicable to jurisdictions in which those earnings are located, and the now favorable U.S. tax treatment of repatriated foreign earnings, the amount of deferred tax liability recorded related to the potential repatriation is approximately $0.1 million. This estimated liability is for U.S. State income taxes and foreign withholding taxes that would apply if the foreign earnings were actually repatriated in the form of a dividend. As of October 2, 2020, the Company had foreign net operating loss carryforwards ("NOL") of approximately $27.0 million with $4.3 million expiring between 2021 and 2030 and $22.7 million carried forward indefinitely. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. On July 2, 2020, the US Treasury Department issued a regulation providing an election to waive NOL carryback to a former consolidated group. The Company has evaluated the impact of the CARES Act and concludes the NOL carryback provision of the CARES Act will result in a material cash tax benefit. The valuation allowance relates primarily to net operating losses in certain foreign jurisdictions where, based on the weight of available evidence, it is more likely than not that the tax benefit of the net operating losses will not be realized. The valuation allowance increased by $9.9 million during fiscal year 2020 and increased by $14.8 million during fiscal year 2019. The increase during the current year was primarily related to net operating losses in certain foreign jurisdictions, limitations on interest expense, and U.S. Federal and State research and development tax credits. Changes in the Company's valuation allowance for deferred tax assets were as follows: Fiscal Years (In millions) 2020 2019 2018 Valuation allowance balance–beginning of fiscal year $ 18.8 $ 4.0 $ 4.3 Increases resulting from business combinations — 12.0 — Other increases 10.2 2.8 2.2 Other decreases (0.3) — (2.5) Valuation allowance balance—end of fiscal year $ 28.7 $ 18.8 $ 4.0 During fiscal year 2020, the Company paid U.S and foreign taxes of approximately $4.2 million. In fiscal year 2019, the Company paid U.S. and foreign taxes of approximately $8.2 million. The Company accounts for uncertainty in income taxes following a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether the weight of available evidence indicates that it is more likely than not that, based on the technical merits, the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Changes in the Company’s unrecognized tax benefits were as follows: Fiscal Years (In millions) 2020 2019 Unrecognized tax benefits balance–beginning of fiscal year $ 0.6 $ 0.6 Additions (subtractions) based on tax positions related to a prior year 0.2 (0.2) Additions based on tax positions related to the current year — 0.2 Unrecognized tax benefits balance—end of fiscal year $ 0.8 $ 0.6 As of October 2, 2020 and September 27, 2019, the total amount of gross unrecognized tax benefits was $0.8 million and $0.6 million, respectively, all of which would affect the effective tax rate if recognized. The Company includes interest and penalties related to income taxes within taxes (benefit) on earnings on the consolidated statements of (loss) earnings. For the year ended October 2, 2020, $0.1 million interest and penalties have been included for this period. For the year ended September 27, 2019, $0.1 million interest and penalties have been included for this period. The Company files U.S. federal and state income tax returns and non-U.S. income tax returns in various jurisdictions. All of these returns are subject to examination by their respective taxing jurisdictions from the date of filing through each applicable statute of limitation period. The Company’s significant operations up to the date of separation have historically been included in Varian’s U.S. federal and state income tax returns and non-U.S. jurisdiction tax returns. Material liabilities arising related to the pre-spin operations would be the responsibility of Varian. Other periods for entities acquired are still open and subject to examination. Generally, periods prior to 2010 are no longer subject to examination. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Oct. 02, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has two reportable operating segments Medical and Industrial. The segments align the Company’s products and service offerings with customer use in medical and industrial markets and are consistent with how the Company’s Chief Executive Officer, who is also its CODM, evaluates the business for the allocation of resources. The CODM allocates resources to and evaluates the financial performance of each operating segment primarily based on revenues and gross profit. The operating and reportable segment structure provides alignment between business strategies and operating results. Description of Segments The Medical segment designs, manufactures, sells and services X-ray imaging components, including X-ray tubes, digital detectors, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, heat exchangers, ionization chambers and buckys (a component of X-ray units that holds X-ray film cassettes). These components are used in a range of medical imaging applications including CT, mammography, oncology, cardiac, surgery, dental, and other diagnostic radiography uses. 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 and inspection applications used in a number of other markets. The Company's Industrial products include Linatron ® X-ray linear accelerators, X-ray tubes, digital detectors and high voltage connectors. In addition, the Company licenses proprietary image-processing and detection software designed to work with other Varex products to provide packaged sub-assembly solutions to Industrial customers. Accordingly, the following information is provided for purposes of achieving an understanding of operations, but it may not be indicative of the financial results of the reported segments were they independent organizations. In addition, comparisons of the Company’s operations to similar operations of other companies may not be meaningful. Information related to the Company’s segments is as follows: Fiscal Year (In millions) 2020 2019 2018 Revenues Medical $ 584.5 $ 596.8 $ 602.0 Industrial 153.8 183.8 171.4 Total revenues 738.3 780.6 773.4 Gross profit Medical 136.4 188.9 190.5 Industrial 53.8 67.8 63.4 Total gross profit 190.2 256.7 253.9 Total operating expenses 223.9 211.0 209.4 Interest and other expense, net (38.9) (24.2) (18.8) (Loss) earnings before taxes (72.6) 21.5 25.7 Taxes (benefit) on earnings (15.2) 5.7 (2.6) Net (loss) earnings (57.4) 15.8 28.3 Less: Net earnings attributable to noncontrolling interests 0.5 0.3 0.8 Net (loss) earnings attributable to Varex $ (57.9) $ 15.5 $ 27.5 The following table summarizes the Company’s total assets by its reportable segments: (In millions) October 2, 2020 September 27, 2019 Identifiable assets: Medical $ 900.2 $ 794.3 Industrial 239.3 244.6 Total reportable segments $ 1,139.5 $ 1,038.9 Geographic Information Revenues Property, plant and equipment, net Fiscal Years Fiscal Years (In millions) 2020 2019 2018 2020 2019 United States $ 249.8 $ 275.3 $ 268.8 $ 115.9 $ 122.6 Latin America 5.2 7.3 7.0 — — EMEA 231.5 269.0 254.5 21.5 11.4 APAC 251.8 229.0 243.1 7.8 8.3 Total company $ 738.3 $ 780.6 $ 773.4 $ 145.2 $ 142.3 The Company operates various manufacturing and marketing operations outside the United States. Latin America includes Brazil and Mexico. EMEA includes Europe, Russia, the Middle East, India and Africa. APAC includes Asia and Australia. Revenues by region are based on the known final destination of products sold. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Oct. 02, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Varex’s 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code and intended for all full-time employees in the United States. This plan allows employees to contribute a portion of their pretax salary up to the maximum dollar limitation prescribed by the Internal Revenue Service. The Company made matching contributions to the plan totaling $4.4 million, $6.7 million and $6.5 million in fiscal years 2020, 2019 and 2018, respectively. The Company also maintains defined benefit plans for employees located outside the US. The net pension liability is included in other long-term liabilities on the Company's consolidated balance sheets and totaled $6.5 million and $5.5 million as of October 2, 2020 and September 27, 2019, respectively. The Company’s net periodic benefit costs for the Company’s defined benefit plans were not material for fiscal years 2020, 2019 and 2018. |
OTHER COMPREHENSIVE (LOSS) INCO
OTHER COMPREHENSIVE (LOSS) INCOME | 12 Months Ended |
Oct. 02, 2020 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE (LOSS) INCOME | OTHER COMPREHENSIVE (LOSS) INCOME The following tables present the changes in the accumulated balances for each component of other comprehensive income (loss): (In millions) Unrealized Gain (Loss) on Derivative Financial Instruments Unrealized Gain (Loss) on Defined Benefit Obligations Currency Translation Adjustment Accumulated Other Comprehensive (Loss) Income Balance at September 28, 2018 $ 5.8 $ — $ — $ 5.8 Other comprehensive loss before reclassifications (8.3) (1.9) — (10.2) Income tax benefit 2.1 0.6 — 2.7 Foreign currency translation adjustment — — — — Balance at September 27, 2019 $ (0.4) $ (1.3) $ — $ (1.7) Other comprehensive (loss) income before reclassifications (3.4) 0.9 (1.3) (3.8) Amount reclassified out of other comprehensive income 1.5 — — 1.5 Amount reclassified out of other comprehensive earnings - transaction remote 2.4 — — 2.4 Income tax impact (0.1) (0.3) 0.3 (0.1) Foreign currency translation adjustment — — 2.5 2.5 Balance at October 2, 2020 $ — $ (0.7) $ 1.5 $ 0.8 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Oct. 02, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). |
Segment Reporting | Segment Reporting The Company has two reportable operating segments; (i) Medical and (ii) Industrial, which aligns with how its Chief Executive Officer ("CEO"), who is the Company's Chief Operating Decision Maker (“CODM”), reviews the Company’s performance. |
Fiscal Year | Fiscal Year The fiscal years of the Company as reported are the 52 or 53-week period ending on the Friday nearest September 30. Fiscal year 2020 was the 53-week period that ended October 2, 2020, fiscal year 2019 was the 52-week period that ended September 27, 2019, and fiscal year 2018 was the 52-week period ended September 28, 2018. |
Variable Interest Entities | Variable Interest Entities For entities in which the Company has variable interests, the Company focuses on identifying which entity has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. If the Company is the primary beneficiary of a variable interest entity, the assets, liabilities and results of operations of the variable interest entity will be included in the Company’s consolidated financial statements. As of October 2, 2020, the Company had two variable interest entities neither of which were consolidated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include the valuation of inventories, goodwill and intangible assets, warranties, contract liabilities, long-lived asset valuations, impairment on investments, financial instruments, and taxes on earnings. Actual results could differ from these estimates. Impact of COVID-19 The coronavirus (“COVID-19”) pandemic and the mitigation efforts by governments to attempt to control its spread created uncertainties and disruptions in the economic and financial markets. The extent to which COVID-19 will continue to impact the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it will impact worldwide macroeconomic conditions including interest rates, unemployment rates, the speed of the anticipated recovery, and governmental and business reactions to the pandemic. During the 2020 fiscal year, as a result of the economic downturn resulting from COVID-19, the Company experienced reduced demand in the Company’s industrial segment and for certain higher end medical products that negatively impacted revenues and gross margin. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the currently estimated future impacts of COVID-19 as of October 2, 2020 and through the date of filing this report. The accounting matters assessed included, but were not limited to, the Company’s carrying value of goodwill, intangibles, long-lived assets, equity method investments, inventory and related reserves, and allowance for doubtful accounts. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material negative impacts to the Company’s consolidated financial statements in future reporting periods. These future developments are highly uncertain and the outcomes cannot be estimated with certainty. Actual results may differ from those estimates, and such differences may be material to the financial statements. As described in Note 1 to the Company’s consolidated financial statements for the year ended September 27, 2019, as reissued on September 22, 2020 in our Current Report on Form 8-K, the Company concluded that there was substantial doubt about its ability to continue as a going concern. This assessment was based on the Company’s financial projections, which included the anticipated adverse effects of the COVID-19 pandemic on the Company’s financial condition and results of operations, and which indicated that it was probable that the Company would be in violation of certain leverage ratio covenants contained in its previously existing credit agreement. As described more fully in Note 10. Borrowings , on September 30, 2020, the Company issued $300.0 million aggregate principal amount of 7.875% Senior Secured Notes due in 2027, the proceeds from which were used to repay the principal amounts outstanding under the Company’s previously existing credit agreement (which was then terminated), and entered into a new revolving credit agreement consisting of a $100.0 million asset-based loan revolving credit facility. The Senior Secured Notes do not contain any financial covenants and the asset-based loan revolving credit facility’s financial covenant is limited to when excess availability falls below a specified threshold. Management has concluded that the replacement of the Company's previously existing credit agreement with the Senior Secured Notes, combined with our current and anticipated future cash flows, has alleviated the substantial doubt about the Company's ability to continue as a going concern and the Company has sufficient liquidity to satisfy our obligations over the twelve-month period from the issuance date of these consolidated financial statements. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents The Company considers currency on hand, demand deposits, time deposits and all highly-liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. Restricted Cash Restricted cash primarily consists of cash collateral related to certain leases and inventory arrangements. Restricted cash is |
Fair Value | Fair Value Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There is a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or, other inputs that are observable or can be corroborated by observable market data. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Derivative instruments and hedging activities | Derivative instruments and hedging activities The Company records all derivatives on the consolidated balance sheets at fair value as of the reporting date. For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income or loss and reclassified from accumulated other comprehensive loss into earnings when the hedged transaction affects earnings. For derivatives that are designated and qualify as net investment hedges, the gain or loss on the derivative is reported as a component of other comprehensive income or loss until the hedged item is sold. The portion of the change in fair value of the Company's net investment hedges (or cross currency swaps) related to the cross-currency basis spread is an excluded component in the assessment of the effectiveness of these net investment hedges (or cross currency swaps). These changes in fair value are recognized as an adjustment to interest expense. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective, in which case, a quantitative assessment of hedge effectiveness is performed. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash, cash equivalents and trade accounts receivable. Cash held with financial institutions may exceed the Federal Deposit Insurance Corporation insurance limits or similar limits in foreign jurisdictions. The Company has not experienced any losses on its deposits of cash and cash equivalents. The Company performs ongoing credit evaluations of its customers and, except for government tenders, group purchases and orders with a letter of credit, its industrial customers often provide a down payment. The Company maintains an allowance for doubtful accounts based upon the expected collectability of all accounts receivable. The Company obtains some of the components in its products from a limited group of suppliers or from a single-source supplier. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. Costs include materials, labor and manufacturing overhead and is computed on a first-in-first-out basis. The Company evaluates the carrying value of its inventories taking into consideration such factors as historical and anticipated future sales compared to quantities on hand and the prices the Company expects to obtain for products in its various markets. The Company adjusts excess and obsolete inventories to net realizable value and write-downs of excess and obsolete inventories are recorded as a component of cost of revenues. |
Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment are stated at cost, net of accumulated depreciation. Major improvements are capitalized, while repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or remaining lease term. Land is not subject to depreciation, but land improvements are depreciated over fifteen years. Land leasehold rights and leasehold improvements are depreciated over the lesser of their estimated useful lives or remaining lease terms. Buildings are depreciated over twenty years. Machinery and equipment are depreciated over a range from three |
Investments | Investments The Company accounts for its equity investments in privately-held companies under the equity method of accounting if the Company has the ability to exercise significant influence in these investments. Distributions received from an equity method investment are classified using the cumulative earnings approach. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment as operating cash flows and those in excess of that amount will be treated as returns of investment as investing cash flows. The Company monitors these equity investments for impairment and makes appropriate reductions in carrying values if the Company determines that impairment charges are required based primarily on the financial condition and near-term prospects of these companies. During the three months ended July 3, 2020, the Company wrote off a $2.7 million cost investment in a privately-held company, the related expense is included as part of other expenses, net in the Company's consolidated financial statements. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net identified tangible and intangible assets acquired. Purchased intangible assets are carried at cost, net of accumulated amortization, and are included in intangible assets in the Company's consolidated balance sheets. Intangible assets with finite lives are amortized over their estimated useful lives of primarily two |
Impairment of Long-lived Assets, Intangible Assets and Goodwill | Impairment of Long-lived Assets, Intangible Assets and Goodwill The Company reviews long-lived assets and identifiable intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company assesses these assets for impairment based on their estimated undiscounted future cash flows. If the carrying value of the assets exceeds the estimated future undiscounted cash flows, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. The Company evaluates goodwill and indefinite lived intangible assets for impairment at least annually at the beginning of the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The evaluation includes consideration of qualitative factors including industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit. If the Company determine that a quantitative analysis is necessary, the Company performs a step one analysis, which consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit. The Company determines the fair value of its reporting units based on a combination of income and market approaches. The income approach is based on the present value of estimated future cash flows of the reporting units, and the market approach is based on a market multiple calculated for each reporting unit based on market data of other companies engaged in similar business. If the carrying amount of the reporting unit is in excess of its fair value, the difference between the fair value and carrying amount is recorded as an impairment loss. The impairment test for intangible assets with indefinite useful lives, if any, consists of a comparison of fair value to carrying value, with any excess of carrying value over fair value being recorded as an impairment loss. In fiscal years 2020, 2019 and 2018, the Company performed the annual goodwill impairment test for our two reporting units and found no impairment. |
Loss Contingencies | Loss Contingencies From time to time, the Company is involved in legal proceedings, claims and government inspections or investigations, customs and duties audits, other contingency matters, both inside and outside the United States, arising in the ordinary course of its business or otherwise. The Company accrues amounts for probable losses, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss (including, among other things, probable settlement value). A loss or a range of loss is disclosed when it is reasonably possible that a material loss will be incurred and can be estimated or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision. When a loss contingency is probable but not reasonably estimable the nature of the contingency and the fact that an estimate cannot be made is disclosed. See Note 13. Commitments and Contingencies, for further information regarding certain of our contractual obligations and contingencies. |
Product Warranty | Product Warranty The Company warrants most of its products for a specific period of time, usually 12 to 24 months from delivery or acceptance, against material defects. The Company provides for the estimated future costs of warranty obligations in cost of revenues when the related revenues are recognized. The accrued warranty costs represent the best estimate at the time of sale of the total costs that the Company will incur to repair or replace product parts that fail while still under warranty. The amount of the accrued estimated warranty costs obligation for established products is primarily based on historical experience as to product failures adjusted for current information on repair costs. For new products, estimates include the historical experience of similar products, as well as a reasonable allowance for warranty expenses associated with new products. On a quarterly basis, the Company reviews the accrued warranty costs and updates the historical warranty cost trends, if required. |
Leases | Leases The Company determines if an arrangement is or contains a lease at the inception of an arrangement. The Company's operating lease right-of-use ("ROU") assets represent the right to use an underlying asset over the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets may also include initial direct costs incurred and prepaid lease payments, less lease incentives. Lease liabilities and their corresponding ROU assets are recognized based on the present value of lease payments over the lease term, discounted using the Company's incremental borrowing rate ("IBR"). The Company recognizes operating leases with lease terms of more than twelve months in operating lease assets, current operating lease liabilities, and operating lease liabilities on its consolidated balance sheets. The Company recognizes finance leases with lease terms of more than twelve months in property, plant, and equipment, net, accrued liabilities and other current liabilities, and other long-term liabilities on its consolidated balance sheets. For purposes of calculating lease liabilities and the corresponding ROU assets, the Company's lease term may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. |
Revenue Recognition | Revenue Recognition Effective September 29, 2018, the Company adopted the requirements of Accounting Standards Update (“ASU”) 2014-09 and related amendments, Revenue from Contracts with Customers (“ASC 606”), which superseded all prior revenue recognition methods and industry-specific guidance. The Company’s revenues are derived primarily from the sale of hardware and services. The Company recognizes its revenues net of any value-added or sales tax and net of sales discounts. The Company sells a high proportion of its X-ray products to a limited number of OEM customers. X-ray tubes, digital detectors and image-processing tools and security and inspection products are generally sold on a stand-alone basis. However, the Company occasionally sells its digital detectors, X-ray tubes and imaging processing tools as a package that is optimized for digital X-ray imaging and sells its Linatron ® X-ray accelerators together with its imaging processing software and image detection products to OEM customers that incorporate them into their inspection systems. Service contracts are often sold with certain security and inspection products and computer-aided detection products. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, a performance obligation is satisfied Transaction price and allocation to performance obligations Transaction prices of products or services are typically based on contracted rates. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method when there is a large number of transactions with similar characteristics or the most likely amount method when there are two possible outcomes, depending on the circumstances of the transaction, to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company allows customers to return specific parts of purchased X-ray tubes for a partial refund credit, which is identified as variable consideration. ASC 606-10-55-23 requires that for sales with a right of return, revenue is reduced for expected returns, a liability is recorded for expected returns, and an asset is recorded for the right to recover products from customers on settling the liability. The Company recognizes a reduction to revenue and cost of sales at the time of sale and a corresponding contract liability and contract asset. The Company records this estimate based on the historical volume of product returns and adjusts the estimate on a quarterly basis based on the current quarter sales and current quarter returns. If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. Contracts and performance obligations The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. The Company's performance obligations consist mainly of transferring control of products and services identified in the contracts or purchase orders. For each contract, the Company considers the obligation to transfer products and services to the customer, which are distinct, to be performance obligations. Recognition of revenue Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. Product revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Service revenue is generally recognized over time as the services are rendered to the customer based on the extent of progress towards completion of the performance obligation. The Company recognizes service revenue over the term of the service contract. Services are expected to be transferred to the customer throughout the term of the contract and the Company believes recognizing revenue ratably over the term of the contract best depicts the transfer of value to the customer. Disaggregation of Revenue Revenue is disaggregated from contracts between geography and by reportable operating segment, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. Refer to Note 17. Segment Information, included in this report, for the disaggregation of the Company’s revenue based on reportable operating segments and disaggregated by geographic region. Contract Balances Contract assets are included within the prepaid expenses and other current assets, and other assets balances in the consolidated balance sheets. Contract liabilities, which also includes refund obligations, are included within the accrued liabilities and other current liabilities, deferred revenues, and other long-term liabilities balances in the consolidated balance sheets. Costs to Obtain or Fulfill a Customer Contract The Company has certain costs to obtain and fulfill a customer contract, such as commissions and shipping costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Incremental costs of obtaining contracts that would be recognized over greater than one year are not material. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. These costs are included as a component of cost of revenues. Deferred Revenues Deferred revenue primarily represents (i) the amount received applicable to non-software products for which parts and services under the warranty contracts have not been delivered, and (ii) the amount received for service contracts for which the services have not been rendered. Shipping and Handling Costs Shipping and handling costs are included as a component of cost of revenues. |
Allowance for Doubtful Accounts | Allowance for Doubtful AccountsThe Company evaluates the creditworthiness of customers prior to authorizing shipment for all major sale transactions. On a quarterly basis, the Company evaluates aged items in the accounts receivable aging report and provides an allowance in an amount deemed adequate for doubtful accounts. If the evaluation of customers’ financial conditions does not reflect a future ability to collect outstanding receivables, additional provisions may be needed. |
Share-Based Compensation Expense | Share-Based Compensation Expense The Company has an equity-based incentive plan that provides for the grant of nonqualified stock options and restricted stock units to directors, officers and other employees. The Company also permits employees to purchase shares under the Varex employee stock purchase plan. The Company values stock options granted and the option component of the shares of common stock purchased under the equity-based incentive plans and stock purchased under the employee stock purchase plan using the Black-Scholes option-pricing model. Share-based compensation expense for restricted stock units is measured using the fair value of the Company’s stock on the date of grant and is amortized over the award’s respective service period. The Black-Scholes option-pricing model requires the input of certain assumptions, and changes in the assumptions can materially affect the fair value estimates of share-based payment awards. |
Software Development Costs | Software Development Costs Costs for the development of new software products and substantial enhancements to existing software products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. No costs associated with the development of software have been capitalized, as the Company believes its current software development process is essentially completed concurrent with the establishment of technological feasibility. |
Research and Development | Research and Development Research and development costs are expensed as incurred. These costs primarily include employees’ compensation, consulting fees and material costs. |
Taxes on Earnings | Taxes on Earnings Current income tax expense or benefit is the amount of income taxes expected to be payable or receivable for the current year. Deferred income tax liabilities or assets are established for the expected future tax consequences resulting from the differences in financial reporting and tax bases of assets and liabilities. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. In addition, we provide reserves for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by the authoritative guidance for accounting for income taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. |
Foreign Currency Translation | Foreign Currency Translation The Company uses the U.S. Dollar predominately as the functional currency of its foreign operations. Gains and losses from remeasurement of foreign currency balances into U.S. Dollars are included in the consolidated statements of (loss) earnings. For the foreign subsidiaries where the local currency is the functional currency, translation adjustments of foreign currency financial statements into U.S. dollars are recorded to a separate component of accumulated other comprehensive loss. |
Recently Adopted Accounting Pronouncements and Recent Accounting Standards Updates Not Yet Effective | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update ASU No. 2016-02 Upon transition, the Company applied the package of practical expedients permitted under ASC 842 transition guidance to its entire lease portfolio at September 28, 2019. As a result, the Company was not required to reassess (i) whether any expired or existing contracts are or contain leases, (ii) the classification of any expired or existing leases, and (iii) initial direct costs for any existing leases. Also, the Company applied the hindsight practical expedient. Furthermore, as a lessee the Company elected to combine lease and non-lease components for the majority of its leases, which means that the Company accounted for each separate lease component and the non-lease components associated with that lease component as a single lease component. The only asset class that did not combine lease and non-lease components were vehicle leases. The most significant impact of the standards for the Company relate to the recognition of the right-of-use assets and lease liabilities for the operating leases in the balance sheet. Upon adoption of the new lease standard, the Company recognized operating lease right-of-use assets and finance lease right-of-use assets of $26.8 million and $0.6 million, respectively, and corresponding operating lease liabilities and finance lease liabilities of $27.5 million and $0.6 million, respectively. This includes the recording of the Company’s existing capital leases as finance leases at transition. The cumulative impact of adoption was a $0.3 million decrease to retained earnings. Refer to Note 3. Leases, for a detailed description of the impact of adopting this standard and its impact on the consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which provides the option to reclassify certain income tax effects related to the Tax Cuts and Jobs Act passed in December of 2017 between accumulated other comprehensive income and retained earnings and also requires additional disclosures. The amendments in this ASU were effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Effective September 28, 2019, the Company adopted ASU 2018-02 and it did not have a material effect on the Company’s financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, Simplifying the Test for Goodwill Impairment, which simplified the testing required for the impairment of goodwill by removing Step 2 from the goodwill impairment test. Step 2 of the goodwill impairment test measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. ASU 2017-04 allows an entity to measure the impairment based off Step 1 of the impairment test, which calculates the impairment as the difference between the carrying amount of the reporting unit and its fair value. Adoption of this ASU was required for the Company in the first quarter of fiscal year 2021. The Company elected to early adopt this standard effective April 4, 2020. This adoption was made on a prospective basis, as required by the standard. Recent Accounting Standards Updates Not Yet Effective In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. In addressing the complexity, this ASU is focused on amending the guidance for convertible instruments and the derivatives scope exception for contracts in an entity’s own equity. The Company is evaluating the impact of adopting this guidance to its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The Company is currently evaluating the impact from the replacement of the London Interbank Offered Rate (LIBOR) and whether the Company will elect the adoption of the optional guidance. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the current guidance, and improving the consistent application of and simplification of other areas of the guidance. The standard is effective for the Company beginning in the first quarter of fiscal year 2022. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance to its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. This ASU replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In addition, the ASU requires new disclosures. This standard will be effective for the Company's interim and annual periods beginning with the first quarter of fiscal 2021 and must be applied on a modified retrospective basis. This standard will not materially impact the Company's consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Accounting Policies [Abstract] | |
Restrictions on Cash and Cash Equivalents | Cash and cash equivalents and restricted cash as reported within the consolidated statements of cash flows consisted of the following: Twelve Months Ended October 2, 2020 Twelve Months Ended September 27, 2019 (In millions) Beginning of Period End of Period Beginning of Period End of Period Cash and cash equivalents $ 29.9 $ 100.6 $ 51.9 $ 29.9 Restricted cash 1.4 1.5 1.5 1.4 Cash and cash equivalents and restricted cash as reported per statement of cash flows $ 31.3 $ 102.1 $ 53.4 $ 31.3 |
Schedules of Concentration of Risk, by Risk Factor | Credit is extended to customers based on an evaluation of the customer’s financial condition, and collateral is not required. During the periods presented, one of the Company's Medical segment customers accounted for a significant portion of revenues, which is as follows: Fiscal Year 2020 2019 2018 Canon Medical Systems Corporation 20.5 % 17.3 % 18.1 % |
Schedule of Inventory, Net | The following table summarizes the Company’s inventories, net: (In millions) October 2, 2020 September 27, 2019 Raw materials and parts $ 184.6 $ 160.1 Work-in-process 23.9 27.9 Finished goods 63.4 60.2 Total inventories $ 271.9 $ 248.2 |
Property, Plant and Equipment | The following table summarizes the Company’s property, plant and equipment, net: (In millions) October 2, 2020 September 27, 2019 Land $ 8.3 $ 8.3 Buildings and leasehold improvements 137.2 134.4 Machinery and equipment 175.5 170.7 Construction in progress 35.4 28.5 $ 356.4 $ 341.9 Accumulated depreciation and amortization (211.2) (199.6) Property, plant, and equipment, net $ 145.2 $ 142.3 |
Schedule of Product Warranty Liability | The following table reflects the changes in the Company’s accrued product warranty: Fiscal Years (In millions) 2020 2019 Accrued product warranty, at beginning of period $ 8.1 $ 7.3 Charged to cost of revenues 15.1 12.9 Actual product warranty expenditures (15.1) (12.1) Accrued product warranty, at end of period $ 8.1 $ 8.1 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Rollforward of Contract Assets and Liabilities | The following tables summarize the changes in the contract assets and refund liabilities for the twelve months ended October 2, 2020 and September 27, 2019: (In millions) Contract Assets Balance at September 28, 2018 $ 24.4 Costs recovered from product returns during the period (6.4) Contract asset from shipments of products, subject to return during the period 5.7 Balance at September 27, 2019 $ 23.7 Costs recovered from product returns during the period (5.6) Contract asset from shipments of products, subject to return during the period 6.5 Balance at October 2, 2020 $ 24.6 (In millions) Refund Liabilities Balance at September 28, 2018 $ 27.1 Release of refund liability included in beginning of year refund liability (7.0) Additions to refund liabilities 6.3 Balance at September 27, 2019 $ 26.4 Release of refund liability included in beginning of year refund liability (6.2) Additions to refund liabilities 7.2 Balance at October 2, 2020 $ 27.4 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information, Weighted Average Remaining Lease Terms and Discount Rates | The following table presents supplemental balance sheet information related to the Company's operating and finance leases: October 2, 2020 (In millions) Balance Sheet Location Operating Leases Finance Leases Assets Operating lease right-of-use assets Operating lease assets $ 27.7 $ — Finance lease right-of-use assets Property, plant and equipment, net $ — $ 0.5 Liabilities Operating lease liabilities (current) Current operating lease liabilities $ 6.1 $ — Finance lease liabilities (current) Accrued liabilities and other current liabilities $ — $ 0.2 Operating lease liabilities (non-current) Operating lease liabilities $ 23.1 $ — Finance lease liabilities (non-current) Other long-term liabilities $ — $ 0.4 The following table presents the weighted average remaining lease term and discount rate information related to the Company's operating and finance leases: October 2, 2020 Operating Leases Finance Leases Weighted average remaining lease term (in years) 6.6 3.3 Weighted average discount rate 4.5 % 4.1 % |
Schedule of Lease Cost and Supplemental Cash Flow Information | The following table provides information related to the Company’s operating and finance leases: (In millions) Fiscal Year 2020 Total operating lease costs (a) $ 8.4 Total finance lease costs $ 0.3 Operating cash flows from operating leases $ 8.0 Financing cash flows from finance leases 0.3 Total cash paid for amounts included in the measurement of lease liabilities $ 8.3 Noncash operating right-of-use assets obtained in exchange for new lease liabilities (b) $ 10.6 Noncash finance right-of-use assets obtained in exchange for new lease liabilities (b) 0.2 Total right-of-use assets obtained in exchange for new lease liabilities (b) $ 10.8 (a) Includes variable and short-term lease expense, which were immaterial for fiscal year 2020. (b) Excludes the impact of adopting the new leases standard in the first quarter of 2020. |
Schedule of Finance Lease Liability Maturities | For fiscal year 2019 and 2018 the Company's lease expense was $5.1 million and $5.3 million, respectively. As of October 2, 2020, maturities of operating lease and finance lease liabilities for each of the following five years and a total thereafter were as follows: (In millions) Fiscal years: Operating Leases Finance Leases 2021 $ 7.1 $ 0.2 2022 6.6 0.2 2023 4.2 0.2 2024 3.5 — 2025 3.3 — Thereafter 9.4 — Total future lease payments $ 34.1 $ 0.6 Less: imputed interest (4.9) — Present value of lease liabilities $ 29.2 $ 0.6 |
Schedule of Operating Lease Liability Maturities | For fiscal year 2019 and 2018 the Company's lease expense was $5.1 million and $5.3 million, respectively. As of October 2, 2020, maturities of operating lease and finance lease liabilities for each of the following five years and a total thereafter were as follows: (In millions) Fiscal years: Operating Leases Finance Leases 2021 $ 7.1 $ 0.2 2022 6.6 0.2 2023 4.2 0.2 2024 3.5 — 2025 3.3 — Thereafter 9.4 — Total future lease payments $ 34.1 $ 0.6 Less: imputed interest (4.9) — Present value of lease liabilities $ 29.2 $ 0.6 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocation for Direct Conversion: (In millions) Fair Value Allocation of the purchase consideration: Accounts receivable $ 2.4 Inventories 5.7 Prepaid expenses and other current assets 0.7 Property, plant, and equipment 0.9 Goodwill 47.2 Intangible assets 32.9 Total assets acquired 89.8 Accounts payable (1.0) Accrued liabilities (1.5) Current maturities of long-term debt (1.0) Deferred revenues (0.9) Long-term debt (3.5) Other long-term liabilities (1.1) Total liabilities assumed (9.0) Noncontrolling interest (1.4) Net assets acquired, less noncontrolling interest $ 79.4 Net cash paid $ 69.5 Deferred consideration 9.9 Total consideration $ 79.4 |
Schedule of Intangible Assets Acquired | The following amounts represent the determination of the fair value and estimated weighted average useful lives of identifiable intangible assets for the Direct Conversion, which are amortized using the straight-line method: (In millions) Fair Value Estimated Weighted Average Backlog $ 0.2 1 Trade names 2.5 5 Developed technology 18.4 10 In-process research and development 2.8 indefinite Customer relationships 9.0 10 Total intangible assets acquired $ 32.9 |
Schedule of Segment Reporting Information, by Segment | The following amounts represent revenues by reporting segment from Direct Conversion from the acquisition date of April 29, 2019, through September 27, 2019: (In millions) Direct Conversion Revenue Medical $ 4.5 Industrial 1.8 Total Direct Conversion revenues $ 6.3 Fiscal Year (In millions) 2020 2019 2018 Revenues Medical $ 584.5 $ 596.8 $ 602.0 Industrial 153.8 183.8 171.4 Total revenues 738.3 780.6 773.4 Gross profit Medical 136.4 188.9 190.5 Industrial 53.8 67.8 63.4 Total gross profit 190.2 256.7 253.9 Total operating expenses 223.9 211.0 209.4 Interest and other expense, net (38.9) (24.2) (18.8) (Loss) earnings before taxes (72.6) 21.5 25.7 Taxes (benefit) on earnings (15.2) 5.7 (2.6) Net (loss) earnings (57.4) 15.8 28.3 Less: Net earnings attributable to noncontrolling interests 0.5 0.3 0.8 Net (loss) earnings attributable to Varex $ (57.9) $ 15.5 $ 27.5 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges | Below is a detail of restructuring charges incurred during the 2020 and 2019 fiscal years, which predominately relate to the Company's Medical segment: (In millions) Location of Restructuring Charges in Consolidated Statements of (Loss) Earnings October 2, 2020 September 27, 2019 Inventory write downs Cost of revenues $ 1.3 $ 3.1 Intangible assets impairment Impairment of intangible assets — 4.8 Accelerated depreciation Cost of revenues 2.9 4.5 Severance costs Selling, general and administrative 5.7 6.2 Facility closure costs Selling, general and administrative 3.6 0.3 Total restructuring charges $ 13.5 $ 18.9 |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accrued Liabilities | The following table summarizes the Company’s accrued liabilities and other current liabilities: (In millions) October 2, 2020 September 27, 2019 Accrued compensation and benefits $ 33.0 $ 32.1 Product warranty 8.1 8.1 Income taxes payable 5.6 10.7 Right of return liability 7.4 6.9 Deferred consideration — 8.9 Other 16.4 9.0 Total accrued liabilities and other current liabilities $ 70.5 $ 75.7 |
Other Noncurrent Liabilities | The following table summarizes the Company’s other long-term liabilities: (In millions) October 2, 2020 September 27, 2019 Long-term income tax payable $ 3.9 $ 3.9 Environment liabilities 0.8 0.9 Defined benefit obligation liability 6.5 5.5 Long-term right of return liability 19.9 19.5 Long-term other 3.8 2.7 Total other long-term liabilities $ 34.9 $ 32.5 |
Schedule of Other Nonoperating Income (Expense) | The following table summarizes the Company’s other (expense) income, net: Fiscal Years (In millions) 2020 2019 2018 Income (loss) from equity method investments $ (2.1) $ (2.3) $ 3.9 Change in fair value of deferred consideration 0.9 1.0 — Impairment of investment (2.7) 0.0 — Realized (loss) on foreign currencies (3.7) (1.9) (1.2) Total other income (expense), net $ (7.6) $ (3.2) $ 2.7 |
(LOSS) EARNINGS PER SHARE (Tabl
(LOSS) EARNINGS PER SHARE (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per common share is as follows: Fiscal Year (In millions, except per share amounts) 2020 2019 2018 Net (loss) earnings attributable to Varex $ (57.9) $ 15.5 $ 27.5 Weighted average shares outstanding - basic 38.8 38.2 37.9 Dilutive effect of potential common shares — 0.4 0.5 Weighted average shares outstanding - diluted 38.8 38.6 38.4 (Loss) earnings per share attributable to Varex - basic $ (1.49) $ 0.41 $ 0.73 (Loss) earnings per share attributable to Varex - diluted $ (1.49) $ 0.40 $ 0.72 Anti-dilutive employee shared based awards, excluded 3.5 1.9 1.2 |
FINANCIAL DERIVATIVES AND HED_2
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivative Instruments | The following table summarizes the amount of pre-tax (loss) earnings recognized from derivative instruments for the periods indicated and the line items in the accompanying financial statements where the results are recorded for cash flow hedges: Amount of Gain or (Loss) Recognized in OCI on Derivatives Fiscal Year Ended Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Fiscal Year Ended (In millions) 2020 2019 2018 2020 2019 2018 Interest Rate Swap Contracts $ (3.4) $ (6.3) $ 6.9 Interest expense $ (1.5) $ 1.9 $ 0.1 These derivative instruments are subject to master netting agreements giving effect to rights of offset with each counterparty. None of the balances were eligible for netting. The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded. Derivative Liabilities (In millions) October 2, 2020 September 27, 2019 Derivatives designated as cash flow hedges Balance sheet location Interest rate swap contracts Other non-current liabilities $ — $ (0.5) Amount of Gain or (Loss) Recognized in OCI on Derivatives Fiscal Year Ended Location of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) (In millions) 2020 2019 2018 2020 2019 2018 Cross Currency Swap Contracts $ (1.3) $ (0.2) $ — Interest expense $ 1.5 $ 0.2 $ — These derivative instruments are subject to master netting agreements giving effect to rights of offset with each counterparty. None of the balances were eligible for netting. The following table summarizes the gross fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded: Derivative Assets Derivative Liabilities (In millions) October 2, 2020 September 27, 2019 October 2, 2020 September 27, 2019 Derivatives designated as net investment hedges Balance sheet location Balance sheet location Cross currency swap contracts Other current assets $ 1.3 $ — Other current liabilities $ — $ (0.2) Cross currency swap contracts Other non-current assets — — Other non-current liabilities (2.1) — $ 1.3 $ — $ (2.1) $ (0.2) |
Schedule of Derivative Instruments | In September 2020, the Company terminated one of the net investment swaps and the loss on the swap was recorded in accumulated other comprehensive (loss) income where it will remain until substantial liquidation of the international operations. As of October 2, 2020, the Company had the following outstanding derivatives designated as net investment hedging instruments: (In millions, except for number of instruments) Number of Instruments Notional Value Cross Currency Swap Contracts 3 $ 66.6 Notional Value of Derivatives not Designated as Hedging Instruments: (in millions) Buy contracts Sell contracts Swiss franc $ — $ 1.1 Chinese renminbi 3.4 — Euro — 29.3 $ 3.4 $ 30.4 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Short-Term and Long-Term Debt | The following table summarizes the Company's short-term and long-term debt: October 2, 2020 September 27, 2019 (In millions, except for percentages) Amount Weighted-Avg Effective Interest Rate Amount Weighted-Avg Effective Interest Rate $ Change Current maturities of long-term debt Term Facility $ — $ 29.4 5.6% $ (29.4) Other debt 2.5 1.3 1.2 Total current maturities of long-term debt $ 2.5 $ 30.7 $ (28.2) Non-current maturities of long-term debt: Revolving Credit Facility $ — $ 59.0 5.6% $ (59.0) Asset-Based Loan — — — Term Facility — 308.6 5.6% (308.6) Convertible Senior Unsecured Notes 200.0 10.9% — 200.0 Senior Secured Notes 300.0 8.2% — 300.0 Other debt 8.8 2.5 6.3 Total non-current maturities of long-term debt: $ 508.8 $ 370.1 $ 138.7 Unamortized issuance costs and debt discounts Debt issuance costs - Credit Agreement $ — $ (5.7) $ 5.7 Unamortized discount and issuance costs - Convertible Notes (50.4) — (50.4) Debt issuance costs - Senior Secured Notes (5.6) — (5.6) Total $ (56.0) $ (5.7) $ (50.3) Total debt outstanding, net $ 455.3 $ 395.1 $ 60.2 |
Schedule of Maturities of Long-term Debt | Future principal payments of long-term debt outstanding as of October 2, 2020 are as follows: (In millions) Fiscal years: 2021 $ 2.5 2022 2.6 2023 2.4 2024 1.5 2025 201.4 Thereafter 300.9 Total debt outstanding 511.3 Less: current maturities of long-term debt (2.5) Non-current portion of long -term debt $ 508.8 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | In the tables below, the Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. (In millions) Fair Value Measurements at October 2, 2020 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 $ — $ 72.9 $ — $ 72.9 Derivative assets — 1.1 — 1.1 Total assets measured at fair value $ — $ 74.0 $ — $ 74.0 Liabilities: Derivative liabilities $ — $ 2.1 $ — $ 2.1 Total liabilities measured at fair value $ — $ 2.1 $ — $ 2.1 (In millions) Fair Value Measurements at September 27, 2019 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 $ — $ 8.8 $ — $ 8.8 Total assets measured at fair value $ — $ 8.8 $ — $ 8.8 Liabilities: Derivative liabilities $ — $ 0.7 $ — $ 0.7 Deferred consideration 8.9 — — 8.9 Total liabilities measured at fair value $ 8.9 $ 0.7 $ — $ 9.6 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table reflects goodwill by reportable operating segment: (In millions) Medical Industrial Total Balance at September 27, 2019 $ 173.0 $ 117.8 $ 290.8 Foreign currency translation adjustments 1.4 0.9 2.3 Balance at October 2, 2020 $ 174.4 $ 118.7 $ 293.1 |
Schedule of Finite-Lived Intangible Assets | The following table reflects the gross carrying amount and accumulated amortization of the Company’s finite-lived intangible assets included in other assets in the consolidated balance sheets: October 2, 2020 September 27, 2019 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 74.9 $ (37.5) $ 37.4 $ 74.1 $ (28.4) $ 45.7 Patents, licenses and other 12.8 (9.7) 3.1 12.7 (8.4) 4.3 Customer contracts and supplier relationship 51.2 (24.2) 27.0 50.7 (17.2) 33.5 Total intangible assets with finite lives 138.9 (71.4) 67.5 137.5 (54.0) 83.5 In-process R&D with indefinite lives — — — 2.8 — 2.8 Total intangible assets $ 138.9 $ (71.4) $ 67.5 $ 140.3 $ (54.0) $ 86.3 |
Schedule of Indefinite-Lived Intangible Assets | The following table reflects the gross carrying amount and accumulated amortization of the Company’s finite-lived intangible assets included in other assets in the consolidated balance sheets: October 2, 2020 September 27, 2019 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired existing technology $ 74.9 $ (37.5) $ 37.4 $ 74.1 $ (28.4) $ 45.7 Patents, licenses and other 12.8 (9.7) 3.1 12.7 (8.4) 4.3 Customer contracts and supplier relationship 51.2 (24.2) 27.0 50.7 (17.2) 33.5 Total intangible assets with finite lives 138.9 (71.4) 67.5 137.5 (54.0) 83.5 In-process R&D with indefinite lives — — — 2.8 — 2.8 Total intangible assets $ 138.9 $ (71.4) $ 67.5 $ 140.3 $ (54.0) $ 86.3 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of October 2, 2020, the estimated future amortization expense of intangible assets with finite lives is as follows: (In millions) Fiscal years: 2021 $ 16.5 2022 15.0 2023 13.9 2024 9.3 2025 3.2 Thereafter 9.6 Total $ 67.5 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Noncontrolling Interest [Abstract] | |
Changes in Redeemable Noncontrolling Interest | Changes in redeemable noncontrolling interests and noncontrolling interests were as follows: Fiscal Years 2020 2019 (In millions) Redeemable Noncontrolling Redeemable Noncontrolling Interest Balance at beginning of period $ 10.5 $ 3.3 $ 11.1 $ 2.1 Net earnings attributable to noncontrolling interests 0.5 — 0.5 (0.2) Contributions from noncontrolling interests — — — 1.4 Reclassification of redeemable NCI in MeVis to noncontrolling interests in permanent equity (11.3) 11.3 — — Dividend distributions (0.5) — (0.5) — Other 0.8 (0.5) (0.6) — Balance at end of period $ — $ 14.1 $ 10.5 $ 3.3 |
EMPLOYEE STOCK PLANS (Tables)
EMPLOYEE STOCK PLANS (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The table below summarizes the effect of recording share-based compensation expense and for the option component of the employee stock purchase plan shares: Fiscal Year (In millions) 2020 2019 2018 Cost of revenues $ 1.1 $ 1.2 $ 1.3 Research and development 2.5 2.2 1.8 Selling, general and administrative 9.8 8.3 6.9 Total share-based compensation expense $ 13.4 $ 11.7 $ 10.0 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | The Company utilized the Black-Scholes valuation model for estimating the fair value of stock options granted and the option component of ESPP grants. The Company calculated the fair value of option grants and option component of ESPP grants on the respective dates of grant using the following weighted average assumptions: Employee Stock Option Plan Employee Stock Purchase Plans Fiscal Year Fiscal Year 2020 2019 2018 2020 2019 2018 Expected term (in years) 6.1 4.6 4.8 0.5 0.5 0.5 Risk-free interest rate 1.1 % 2.5 % 2.6 % 0.9 % 2.5 % 2.0 % Expected volatility 36.9 % 33.9 % 31.8 % 50.0 % 43.9 % 34.1 % Expected dividend — % — % — % — % — % — % Weighted average fair value at grant date $7.53 $10.19 $11.57 $7.94 $7.81 $8.92 |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes the activity for stock options under Varex’s employee incentive plans for the Company’s employees: (In thousands, except per share amounts and the remaining term) Options Price range Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) Outstanding at September 27, 2019 2,269 $22.63 - $37.60 $ 30.60 4.1 $ 1,220.3 Granted 591 $13.61 - $28.12 23.39 Canceled, expired or forfeited (61) $22.63 - $37.10 30.17 Exercised (64) $22.84 - $23.24 22.93 Outstanding at October 2, 2020 2,735 $13.61 - $37.60 $ 29.23 4.5 $ — Exercisable at October 2, 2020 1,794 $25.17 - $37.60 $ 30.48 2.9 $ — (1) The aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the exercise price and the closing price of Varex common stock of $12.37 as of October 2, 2020, the last trading date of the Company's respective fiscal years, and which represents the amount that would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise as of that date. |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes the activity for restricted stock units, restricted stock awards and deferred stock units under Varex’s employee incentive plans for the Company’s employees: (In thousands, except per share amounts) Number of Shares Weighted Average Grant-Date Fair Value Balance at September 27, 2019 678 $ 33.18 Granted 587 20.30 Vested (224) 32.77 Canceled, expired or forfeited (86) 31.27 Balance at October 2, 2020 955 $ 25.54 |
TAXES ON EARNINGS (Tables)
TAXES ON EARNINGS (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Taxes on earnings were as follows: Fiscal Years (In millions) 2020 2019 2018 Current (benefit) provision: Federal $ (16.3) $ 9.2 $ (2.1) State and local (1.4) 1.3 (0.3) Foreign 5.7 6.8 7.5 Total current $ (12.0) $ 17.3 $ 5.1 Deferred (benefit) provision: Federal $ (1.7) $ (10.0) $ (7.0) State and local 0.6 (1.6) 0.7 Foreign (2.1) — (1.4) Total deferred (3.2) (11.6) (7.7) Taxes on (loss) earnings $ (15.2) $ 5.7 $ (2.6) |
Schedule of Income before Income Tax, Domestic and Foreign | (Loss) earnings before taxes are generated from the following geographic areas: Fiscal Years (In millions) 2020 2019 2018 United States $ (74.1) $ 5.9 $ 3.7 Foreign 1.5 15.6 22.0 (Loss) earnings before taxes $ (72.6) $ 21.5 $ 25.7 |
Schedule of Effective Income Tax Rate Reconciliation | The effective tax rate differs from the U.S. federal statutory tax rate as a result of the following: Fiscal Years 2020 2019 2018 Federal statutory income tax rate 21.0 % 21.0 % 24.5 % State and local taxes, net of federal tax benefit 1.0 (0.9) 1.1 Revaluation of deferred tax liabilities for US statutory change — — (41.8) Mandatory repatriation tax on foreign earnings — 1.9 13.0 Domestic production activities deduction — — (0.8) Research and development credit 3.7 (10.2) (11.1) Prior year deferred tax adjustments 0.4 4.7 1.9 Foreign rate difference (0.4) 6.0 0.8 Change in valuation allowance (11.0) 11.2 (1.9) US tax reform - international provisions — (4.7) — US NOL carryback 5.6 — — Other 0.6 (2.5) 4.2 Effective tax rate 20.9 % 26.5 % (10.1) % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of deferred tax assets and liabilities are as follows: (In millions) October 2, 2020 September 27, 2019 Deferred Tax Assets: Inventory adjustments $ 4.4 $ 5.6 Share-based compensation 4.2 3.1 Product warranty 1.7 1.6 Deferred compensation 1.3 1.1 Net operating loss carryforwards 27.0 24.3 Accrued vacation 1.0 1.0 Credit carryforwards 5.9 1.9 Deferred financing fees 3.3 — Interest expense limitation 4.7 — Lease liabilities 7.2 — Other 6.0 7.5 $ 66.7 $ 46.1 Valuation allowance (28.7) (18.8) Total deferred tax assets $ 38.0 $ 27.3 Deferred Tax Liabilities: Acquired intangibles $ (16.6) $ (19.3) Property, plant and equipment (12.4) (10.6) Investments in privately held companies (2.8) (3.3) Right of use assets (6.7) — Other (1.3) (2.3) Total deferred tax liabilities (39.8) (35.5) Net deferred tax liabilities $ (1.8) $ (8.2) Reported As: Deferred tax assets $ 38.0 $ 27.3 Deferred tax liabilities (39.8) (35.5) Net deferred tax liabilities $ (1.8) $ (8.2) |
Summary of Valuation Allowance | Changes in the Company's valuation allowance for deferred tax assets were as follows: Fiscal Years (In millions) 2020 2019 2018 Valuation allowance balance–beginning of fiscal year $ 18.8 $ 4.0 $ 4.3 Increases resulting from business combinations — 12.0 — Other increases 10.2 2.8 2.2 Other decreases (0.3) — (2.5) Valuation allowance balance—end of fiscal year $ 28.7 $ 18.8 $ 4.0 |
Schedule of Unrecognized Tax Benefits Roll Forward | Changes in the Company’s unrecognized tax benefits were as follows: Fiscal Years (In millions) 2020 2019 Unrecognized tax benefits balance–beginning of fiscal year $ 0.6 $ 0.6 Additions (subtractions) based on tax positions related to a prior year 0.2 (0.2) Additions based on tax positions related to the current year — 0.2 Unrecognized tax benefits balance—end of fiscal year $ 0.8 $ 0.6 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following amounts represent revenues by reporting segment from Direct Conversion from the acquisition date of April 29, 2019, through September 27, 2019: (In millions) Direct Conversion Revenue Medical $ 4.5 Industrial 1.8 Total Direct Conversion revenues $ 6.3 Fiscal Year (In millions) 2020 2019 2018 Revenues Medical $ 584.5 $ 596.8 $ 602.0 Industrial 153.8 183.8 171.4 Total revenues 738.3 780.6 773.4 Gross profit Medical 136.4 188.9 190.5 Industrial 53.8 67.8 63.4 Total gross profit 190.2 256.7 253.9 Total operating expenses 223.9 211.0 209.4 Interest and other expense, net (38.9) (24.2) (18.8) (Loss) earnings before taxes (72.6) 21.5 25.7 Taxes (benefit) on earnings (15.2) 5.7 (2.6) Net (loss) earnings (57.4) 15.8 28.3 Less: Net earnings attributable to noncontrolling interests 0.5 0.3 0.8 Net (loss) earnings attributable to Varex $ (57.9) $ 15.5 $ 27.5 |
Reconciliation of Assets from Segment to Consolidated | The following table summarizes the Company’s total assets by its reportable segments: (In millions) October 2, 2020 September 27, 2019 Identifiable assets: Medical $ 900.2 $ 794.3 Industrial 239.3 244.6 Total reportable segments $ 1,139.5 $ 1,038.9 |
Revenue from External Customers by Geographic Areas | Geographic Information Revenues Property, plant and equipment, net Fiscal Years Fiscal Years (In millions) 2020 2019 2018 2020 2019 United States $ 249.8 $ 275.3 $ 268.8 $ 115.9 $ 122.6 Latin America 5.2 7.3 7.0 — — EMEA 231.5 269.0 254.5 21.5 11.4 APAC 251.8 229.0 243.1 7.8 8.3 Total company $ 738.3 $ 780.6 $ 773.4 $ 145.2 $ 142.3 |
OTHER COMPREHENSIVE (LOSS) IN_2
OTHER COMPREHENSIVE (LOSS) INCOME (Tables) | 12 Months Ended |
Oct. 02, 2020 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The following tables present the changes in the accumulated balances for each component of other comprehensive income (loss): (In millions) Unrealized Gain (Loss) on Derivative Financial Instruments Unrealized Gain (Loss) on Defined Benefit Obligations Currency Translation Adjustment Accumulated Other Comprehensive (Loss) Income Balance at September 28, 2018 $ 5.8 $ — $ — $ 5.8 Other comprehensive loss before reclassifications (8.3) (1.9) — (10.2) Income tax benefit 2.1 0.6 — 2.7 Foreign currency translation adjustment — — — — Balance at September 27, 2019 $ (0.4) $ (1.3) $ — $ (1.7) Other comprehensive (loss) income before reclassifications (3.4) 0.9 (1.3) (3.8) Amount reclassified out of other comprehensive income 1.5 — — 1.5 Amount reclassified out of other comprehensive earnings - transaction remote 2.4 — — 2.4 Income tax impact (0.1) (0.3) 0.3 (0.1) Foreign currency translation adjustment — — 2.5 2.5 Balance at October 2, 2020 $ — $ (0.7) $ 1.5 $ 0.8 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | 12 Months Ended |
Oct. 02, 2020segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Variable Interest Entities (Details) | 12 Months Ended |
Oct. 02, 2020entity | |
Accounting Policies [Abstract] | |
Number of variable interest entities | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impact of COVID-19 (Details) - Secured Debt | Sep. 30, 2020USD ($) |
Senior Secured Notes | |
Debt Instrument [Line Items] | |
Debt instrument, face amount | $ 300,000,000 |
Interest rate, stated percentage | 7.875% |
Asset-Based Loan Revolving Credit Facility | Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 100,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restricted Cash (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 100.6 | $ 29.9 | $ 51.9 | |
Restricted cash | 1.5 | 1.4 | 1.5 | |
Cash and cash equivalents and restricted cash as reported per statement of cash flows | $ 102.1 | $ 31.3 | $ 53.4 | $ 84.2 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Details) - Canon Medical Systems Corporation - Customer Concentration Risk | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 20.50% | 17.30% | 18.10% |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 12.00% | 10.10% |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jul. 03, 2020 | Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Inventory [Line Items] | ||||
Raw materials and parts | $ 184.6 | $ 160.1 | ||
Work-in-process | 23.9 | 27.9 | ||
Finished goods | 63.4 | 60.2 | ||
Total inventories | 271.9 | 248.2 | ||
Inventory write-down | $ 18.1 | $ 3.1 | $ 3.1 | |
COVID-19 | ||||
Inventory [Line Items] | ||||
Inventory write-down | $ 15.8 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 341.9 | ||
Property, plant, and equipment, and finance lease right-of-use asset, gross | $ 356.4 | ||
Property, plant, and equipment, and finance lease right-of-use asset, accumulated depreciation and amortization | (211.2) | ||
Accumulated depreciation and amortization | (199.6) | ||
Property, plant, and equipment, and finance lease right-of-use asset, net | 145.2 | ||
Property, plant, and equipment, net | 142.3 | ||
Depreciation | $ 22.3 | 23.5 | $ 26 |
Accelerated depreciation | $ 4.2 | ||
Land Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives | 15 years | ||
Building | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives | 20 years | ||
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 8.3 | 8.3 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 137.2 | 134.4 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 170.7 | ||
Property, plant, and equipment, and finance lease right-of-use asset, gross | 175.5 | ||
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 35.4 | $ 28.5 | |
Minimum | Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives | 3 years | ||
Maximum | Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful lives | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Investments (Details) $ in Millions | 3 Months Ended |
Jul. 03, 2020USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Equity method investment, other than temporary impairment | $ 2.7 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Intangible Assets (Details) | 12 Months Ended |
Oct. 02, 2020 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 2 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of Long-Lived Assets, Intangible Assets and Goodwill (Details) | 3 Months Ended | 12 Months Ended | ||
Jul. 03, 2020USD ($) | Oct. 02, 2020USD ($)reportingUnit | Sep. 27, 2019USD ($)reportingUnit | Sep. 28, 2018USD ($)reportingUnit | |
Accounting Policies [Abstract] | ||||
Number of reporting units | reportingUnit | 2 | 2 | 2 | |
Impairment of indefinite-lived intangible assets, excluding goodwill | $ 0 | $ 0 | $ 0 | |
Goodwill impaired | $ 0 | |||
Impairment of intangible assets | $ 2,800,000 | 2,800,000 | 4,800,000 | 3,000,000 |
Goodwill, impairment loss | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 02, 2020 | Sep. 27, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Accrued product warranty, at beginning of period | $ 8.1 | $ 7.3 |
Charged to cost of revenues | 15.1 | 12.9 |
Actual product warranty expenditures | (15.1) | (12.1) |
Accrued product warranty, at end of period | $ 8.1 | $ 8.1 |
Minimum | ||
Product Warranty Liability [Line Items] | ||
Warranty term (in months) | 12 months | |
Maximum | ||
Product Warranty Liability [Line Items] | ||
Warranty term (in months) | 24 months |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 0.3 | $ 1 |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounting Standards Recently Adopted (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 27, 2019 | Sep. 28, 2018 | Oct. 02, 2020 | Sep. 28, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201409Member | ||
Operating lease assets | $ 0 | $ 27.7 | ||
Finance lease right-of-use assets | 0.5 | |||
Operating lease liability | 29.2 | |||
Finance lease liability | 0.6 | |||
Decrease to retained earnings for adoption of new accounting guidance | $ (74.4) | (16.1) | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Operating lease assets | $ 26.8 | |||
Finance lease right-of-use assets | 0.6 | |||
Operating lease liability | 27.5 | |||
Finance lease liability | $ 0.6 | |||
Decrease to retained earnings for adoption of new accounting guidance | $ 0.3 |
REVENUE RECOGNITION - Rollfowar
REVENUE RECOGNITION - Rollfoward of Contract Assets and Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 02, 2020 | Sep. 27, 2019 | |
Change in Contract with Customer, Asset [Abstract] | ||
Contract with customer, asset, beginning balance | $ 23.7 | $ 24.4 |
Costs recovered from product returns during the period | (5.6) | (6.4) |
Contract asset from shipments of products, subject to return during the period | 6.5 | 5.7 |
Contract with customer, asset, ending balance | 24.6 | 23.7 |
Change in Contract with Customer, Liability [Abstract] | ||
Contract with customer, liability, beginning balance | 26.4 | 27.1 |
Release of refund liability included in beginning of year refund liability | (6.2) | (7) |
Additions to refund liabilities | 7.2 | 6.3 |
Contract with customer, liability, ending balance | $ 27.4 | $ 26.4 |
Revenue from Contract with Cust
Revenue from Contract with Customer - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 02, 2020 | Sep. 27, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, liability, revenue recognized | $ 8.4 | $ 10.5 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Lease renewal term | 6 years | ||
Operating lease expense under Topic 840 | $ 5.1 | $ 5.3 | |
Operating lease payments due in 2020, under topic 840 | $ 7.5 | ||
Operating lease payments due in 2021, under topic 840 | 5.4 | ||
Operating lease payments due in 2022, under topic 840 | 4.7 | ||
Operating lease payments due in 2023, under topic 840 | 1.8 | ||
Operating lease payments due in 2024, under topic 840 | 0.9 | ||
Operating lease payments due thereafter, under topic 840 | $ 0.2 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 7 years |
LEASES - Schedule of Lease Righ
LEASES - Schedule of Lease Right-of-Use Assets and Liabilities (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Assets [Abstract] | ||
Operating lease assets | $ 27.7 | $ 0 |
Finance lease right-of-use assets | 0.5 | |
Liabilities | ||
Operating lease liabilities (current) | 6.1 | 0 |
Finance lease liabilities (current) | 0.2 | |
Operating lease liabilities (non-current) | 23.1 | $ 0 |
Finance lease liabilities (non-current) | $ 0.4 |
LEASES - Schedule of Weighted A
LEASES - Schedule of Weighted Average Remaining Lease Terms and Discount Rates (Details) | Oct. 02, 2020 |
Operating Leases [Abstract] | |
Weighted average remaining lease term (in years) | 6 years 7 months 6 days |
Weighted average discount rate | 4.50% |
Finance Leases [Abstract] | |
Weighted average remaining lease term (in years) | 3 years 3 months 18 days |
Weighted average discount rate | 4.10% |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Lease Cost and Supplemental Cash Flow Information (Details) $ in Millions | 12 Months Ended |
Oct. 02, 2020USD ($) | |
Leases [Abstract] | |
Total operating lease costs | $ 8.4 |
Total finance lease costs | 0.3 |
Operating cash flows from operating leases | 8 |
Financing cash flows from finance leases | 0.3 |
Total cash paid for amounts included in the measurement of lease liabilities | 8.3 |
Noncash operating right-of-use assets obtained in exchange for new lease liabilities | 10.6 |
Noncash finance right-of-use assets obtained in exchange for new lease liabilities | 0.2 |
Total right-of-use assets obtained in exchange for new lease liabilities | $ 10.8 |
LEASES - Schedule of Operatin_2
LEASES - Schedule of Operating and Finance Lease Liability Maturities (Details) $ in Millions | Oct. 02, 2020USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2021 | $ 7.1 |
2022 | 6.6 |
2023 | 4.2 |
2024 | 3.5 |
2025 | 3.3 |
Thereafter | 9.4 |
Total future lease payments | 34.1 |
Less: imputed interest | (4.9) |
Present value of lease liabilities | 29.2 |
Finance Lease, Liability, Payment, Due [Abstract] | |
2021 | 0.2 |
2022 | 0.2 |
2023 | 0.2 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Total future lease payments | 0.6 |
Less: imputed interest | 0 |
Present value of lease liabilities | $ 0.6 |
BUSINESS COMBINATIONS - Direct
BUSINESS COMBINATIONS - Direct Conversion Narrative (Details) - USD ($) shares in Thousands, $ in Millions | Apr. 29, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | Oct. 02, 2020 |
Business Acquisition [Line Items] | ||||
Shares issued to settle deferred consideration | $ 7.4 | |||
Direct Conversion AB | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests acquired | 98.20% | |||
Net cash paid | $ 69.5 | $ 69.5 | ||
Debt assumed | 4.5 | |||
Deferred payment, value assigned | $ 9.9 | |||
Deferred payment (in shares) | 300 | 300 | ||
Shares issued to settle deferred consideration | $ 7.4 |
BUSINESS COMBINATIONS - Fair Va
BUSINESS COMBINATIONS - Fair Value of Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Apr. 29, 2019 | Apr. 30, 2019 | Oct. 02, 2020 | Sep. 27, 2019 |
Allocation of the purchase consideration: | ||||
Goodwill | $ 293.1 | $ 290.8 | ||
Direct Conversion AB | ||||
Allocation of the purchase consideration: | ||||
Accounts receivable | $ 2.4 | |||
Inventories | 5.7 | |||
Prepaid expenses and other current assets | 0.7 | |||
Property, plant, and equipment | 0.9 | |||
Goodwill | 47.2 | |||
Intangible assets | 32.9 | |||
Total assets acquired | 89.8 | |||
Accounts payable | (1) | |||
Accrued liabilities | (1.5) | |||
Current maturities of long-term debt | (1) | |||
Deferred revenues | (0.9) | |||
Long-term debt | (3.5) | |||
Other long-term liabilities | (1.1) | |||
Total liabilities assumed | (9) | |||
Noncontrolling interest | (1.4) | |||
Net assets acquired, less noncontrolling interest | 79.4 | |||
Net cash paid | 69.5 | $ 69.5 | ||
Deferred consideration | 9.9 | |||
Total consideration | $ 79.4 |
BUSINESS COMBINATIONS - Intangi
BUSINESS COMBINATIONS - Intangibles Acquired (Details) - Direct Conversion AB $ in Millions | Apr. 29, 2019USD ($) |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangible assets | $ 32.9 |
In-process research and development | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangible assets | 2.8 |
Backlog | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangible assets | $ 0.2 |
Estimated useful life | 1 year |
Trade names | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangible assets | $ 2.5 |
Estimated useful life | 5 years |
Developed technology | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangible assets | $ 18.4 |
Estimated useful life | 10 years |
Customer relationships | |
Intangible Assets Acquired as Part of Business Combination [Table] [Line Items] | |
Intangible assets | $ 9 |
Estimated useful life | 10 years |
BUSINESS COMBINATIONS - Revenue
BUSINESS COMBINATIONS - Revenues by Segment (Details) - Direct Conversion AB $ in Millions | 5 Months Ended |
Sep. 27, 2019USD ($) | |
Segment Reporting Information [Line Items] | |
Revenues | $ 6.3 |
Medical | |
Segment Reporting Information [Line Items] | |
Revenues | 4.5 |
Industrial | |
Segment Reporting Information [Line Items] | |
Revenues | $ 1.8 |
RELATED-PARTY TRANSACTIONS - In
RELATED-PARTY TRANSACTIONS - Investment in Privately Held Companies (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Oct. 31, 2013 | Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Oct. 02, 2020USD ($)member | Sep. 27, 2019USD ($) | Sep. 28, 2018USD ($) | |
Related Party Transaction [Line Items] | ||||||
Income (loss) from equity method investments | $ (2.1) | $ (2.3) | $ 3.9 | |||
Equity method investments | 2.5 | 2 | ||||
Contributions to equity method investments | $ 1.8 | 3.9 | 0 | |||
dpiX Holding | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment, ownership percentage | 40.00% | |||||
Number of consortium members | member | 4 | |||||
Income (loss) from equity method investments | $ (0.8) | (1.1) | 3.4 | |||
Equity method investments | 47.3 | 48.1 | ||||
dpiX Holding | Equity Method Investee | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases from related party | 20.4 | 23.5 | $ 19.3 | |||
Accounts payable, related parties | $ 4.6 | $ 3.6 | ||||
Percentage of manufacturing capacity | 50.00% | |||||
Percentage of fixed costs | 50.00% | |||||
dpiX LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment, ownership percentage | 100.00% | |||||
VEC Imaging | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment, ownership percentage | 50.00% | |||||
Contributions to equity method investments | $ 4 | |||||
Expected contributions equity method investments, milestone achievement | $ 1.2 | |||||
CETTEEN GmbH | VEC Imaging | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment, ownership percentage | 50.00% | |||||
Forecast | Fixed Cost Commitments | dpiX Holding | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, expected fixed cost | $ 3.2 | $ 12.7 |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) $ in Millions | Jul. 29, 2020employee | Oct. 02, 2020USD ($) | Sep. 27, 2019USD ($) |
Restructuring Cost and Reserve [Line Items] | |||
Approximate number of positions eliminated | employee | 94 | ||
Santa Clara Facility Relocation | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and impairment charges | $ 9.1 | $ 18.9 | |
Workforce Reduction and Other Restructuring Activities | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and impairment charges | $ 4.4 |
RESTRUCTURING - Restructuring C
RESTRUCTURING - Restructuring Charges Incurred (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Accelerated depreciation | $ 4.2 | ||
Santa Clara Facility Relocation | |||
Restructuring Cost and Reserve [Line Items] | |||
Inventory write-down | $ 3.1 | ||
Intangible assets impairment | 4.8 | ||
Accelerated depreciation | 4.5 | ||
Severance costs | 6.2 | ||
Facility closure costs | 0.3 | ||
Total restructuring charges | $ 9.1 | $ 18.9 | |
Santa Clara Relocation, Workforce Reduction and Other Restructuring Activities | |||
Restructuring Cost and Reserve [Line Items] | |||
Inventory write-down | 1.3 | ||
Intangible assets impairment | 0 | ||
Accelerated depreciation | 2.9 | ||
Severance costs | 5.7 | ||
Facility closure costs | 3.6 | ||
Total restructuring charges | $ 13.5 |
OTHER FINANCIAL INFORMATION -Ac
OTHER FINANCIAL INFORMATION -Accrued Liabilities and Other Current Liabilities (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued compensation and benefits | $ 33 | $ 32.1 |
Product warranty | 8.1 | 8.1 |
Income taxes payable | 5.6 | 10.7 |
Right of return liability | 7.4 | 6.9 |
Deferred consideration | 0 | 8.9 |
Other | 16.4 | 9 |
Total accrued liabilities and other current liabilities | $ 70.5 | $ 75.7 |
OTHER FINANCIAL INFORMATION - O
OTHER FINANCIAL INFORMATION - Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Long-term income tax payable | $ 3.9 | $ 3.9 |
Environment liabilities | 0.8 | 0.9 |
Defined benefit obligation liability | 6.5 | 5.5 |
Long-term right of return liability | 19.9 | 19.5 |
Long-term other | 3.8 | 2.7 |
Total other long-term liabilities | $ 34.9 | $ 32.5 |
OTHER FINANCIAL INFORMATION -_2
OTHER FINANCIAL INFORMATION - Other Income (Expense) Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Income (loss) from equity method investments | $ (2.1) | $ (2.3) | $ 3.9 |
Change in fair value of deferred consideration | 0.9 | 1 | 0 |
Impairment of investment | (2.7) | 0 | 0 |
Realized (loss) on foreign currencies | (3.7) | (1.9) | (1.2) |
Total other income (expense), net | $ (7.6) | $ (3.2) | $ 2.7 |
(LOSS) EARNINGS PER SHARE - (De
(LOSS) EARNINGS PER SHARE - (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Earnings Per Share [Abstract] | |||
Net (loss) earnings attributable to Varex | $ (57.9) | $ 15.5 | $ 27.5 |
Weighted average shares outstanding - basic (in shares) | 38.8 | 38.2 | 37.9 |
Dilutive effect of potential common shares (in shares) | 0 | 0.4 | 0.5 |
Weighted average shares outstanding - diluted (in shares) | 38.8 | 38.6 | 38.4 |
Net earnings per share attributable to Varex - basic (in USD per share) | $ (1.49) | $ 0.41 | $ 0.73 |
Net earnings per share attributable to Varex - diluted (in USD per share) | $ (1.49) | $ 0.40 | $ 0.72 |
Anti-dilutive employee shared based awards, excluded (in shares) | 3.5 | 1.9 | 1.2 |
FINANCIAL DERIVATIVES AND HED_3
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Income Recognized From Derivative Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Derivative [Line Items] | |||
Unrealized gain on interest rate swap contracts, net of tax | $ 0.4 | $ (6.2) | $ 5.2 |
Designated as Hedging Instrument | Interest Rate Swap | |||
Derivative [Line Items] | |||
Unrealized gain on interest rate swap contracts, net of tax | (3.4) | (6.3) | 6.9 |
Designated as Hedging Instrument | Interest Rate Swap | Interest Expense | |||
Derivative [Line Items] | |||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Fiscal Year Ended | (1.5) | 1.9 | 0.1 |
Designated as Hedging Instrument | Cross Currency Swap Contracts | |||
Derivative [Line Items] | |||
Unrealized gain on interest rate swap contracts, net of tax | (1.3) | (0.2) | 0 |
Designated as Hedging Instrument | Cross Currency Swap Contracts | Interest Expense | |||
Derivative [Line Items] | |||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Fiscal Year Ended | $ 1.5 | $ 0.2 | $ 0 |
FINANCIAL DERIVATIVES AND HED_4
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Derivatives at Fair Value (Details) - Derivatives designated as cash flow hedges - Designated as Hedging Instrument - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Cross Currency Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Assets | $ 1.3 | $ 0 |
Derivative Liabilities | (2.1) | (0.2) |
Other current assets | Cross Currency Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Assets | 1.3 | 0 |
Other current liabilities | Cross Currency Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Liabilities | 0 | (0.2) |
Other non-current assets | Cross Currency Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Assets | 0 | 0 |
Other non-current liabilities | Interest Rate Swap | ||
Derivative [Line Items] | ||
Derivative Liabilities | 0 | (0.5) |
Other non-current liabilities | Cross Currency Swap Contracts | ||
Derivative [Line Items] | ||
Derivative Liabilities | $ (2.1) | $ 0 |
FINANCIAL DERIVATIVES AND HED_5
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Derivative Instruments (Details) - Derivatives designated as cash flow hedges - Designated as Hedging Instrument - Cross Currency Swap Contracts $ in Millions | Oct. 02, 2020USD ($)derivative |
Derivative [Line Items] | |
Number of Instruments | derivative | 3 |
Notional Value | $ | $ 66.6 |
FINANCIAL DERIVATIVES AND HED_6
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Narrative (Details) $ in Millions | 12 Months Ended |
Oct. 02, 2020USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Loss on derivative instruments not designated as cash flow hedges | $ 0.2 |
FINANCIAL DERIVATIVES AND HED_7
FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES - Summary of Foreign Currency Contracts (Details) - Foreign Exchange Contract - Designated as Hedging Instrument $ in Millions | Oct. 02, 2020USD ($) |
Buy contracts | |
Derivatives, Fair Value [Line Items] | |
Notional Value | $ 3.4 |
Buy contracts | Swiss franc | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Buy contracts | Chinese renminbi | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 3.4 |
Buy contracts | Euro | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Sell contracts | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 30.4 |
Sell contracts | Swiss franc | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 1.1 |
Sell contracts | Chinese renminbi | |
Derivatives, Fair Value [Line Items] | |
Notional Value | 0 |
Sell contracts | Euro | |
Derivatives, Fair Value [Line Items] | |
Notional Value | $ 29.3 |
BORROWINGS - Schedule of Short-
BORROWINGS - Schedule of Short-Term and Long-Term Debt (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Current maturities of long-term debt | |||
Current maturities of long-term debt | $ 2.5 | $ 30.7 | |
Net repayments of long term debt current maturities | (28.2) | ||
Non-current maturities of long-term debt: | |||
Long-term debt excluding current maturities, gross | 508.8 | 370.1 | |
Net proceeds from long-term debt, excluding current maturities | 138.7 | ||
Unamortized Issuance Costs and Debt Discounts [Abstract] | |||
Unamortized discount and issuance costs - Convertible Notes | (50.4) | 0 | |
Total | (56) | (5.7) | |
Amortization of deferred loan costs | 5.1 | 2.4 | $ 2.3 |
Decrease in unamortized discount | (50.4) | ||
Total | (50.3) | ||
Total debt outstanding, net | 455.3 | 395.1 | |
Net proceeds from debt, net of issuance costs | 60.2 | ||
Convertible Debt | |||
Non-current maturities of long-term debt: | |||
Long-term debt excluding current maturities, gross | $ 200 | 0 | |
Weighted-average interest rate, long-term debt | 10.90% | ||
Proceeds from convertible debt | $ 200 | ||
Secured Debt | |||
Non-current maturities of long-term debt: | |||
Long-term debt excluding current maturities, gross | 300 | 0 | |
Proceeds from issuance of senior secured notes | 300 | ||
Other Debt | |||
Current maturities of long-term debt | |||
Current maturities of long-term debt | 2.5 | 1.3 | |
Proceeds from repayment of other debt | 1.2 | ||
Non-current maturities of long-term debt: | |||
Long-term debt excluding current maturities, gross | 8.8 | 2.5 | |
Proceeds from repayment of other long-term debt | 6.3 | ||
Secured Debt | |||
Current maturities of long-term debt | |||
Current maturities of long-term debt | 0 | $ 29.4 | |
Weighted-average interest rate, short-term debt | 5.60% | ||
Proceeds from repayment | (29.4) | ||
Non-current maturities of long-term debt: | |||
Long-term debt excluding current maturities, gross | 0 | $ 308.6 | |
Weighted-average interest rate, long-term debt | 5.60% | ||
Repayments of long term lines of credit | (308.6) | ||
Unamortized Issuance Costs and Debt Discounts [Abstract] | |||
Debt issuance costs | (5.6) | $ 0 | |
Amortization of deferred loan costs | 5.6 | ||
Revolving Credit Facility | |||
Unamortized Issuance Costs and Debt Discounts [Abstract] | |||
Debt issuance costs | 0 | (5.7) | |
Amortization of deferred loan costs | 5.7 | ||
Revolving Credit Facility | Revolving Credit Facility | |||
Non-current maturities of long-term debt: | |||
Long-term debt excluding current maturities, gross | 0 | $ 59 | |
Weighted-average interest rate, long-term debt | 5.60% | ||
Repayments of long term lines of credit | (59) | ||
Revolving Credit Facility | Asset-Based Loan Revolving Credit Facility | |||
Non-current maturities of long-term debt: | |||
Long-term debt excluding current maturities, gross | 0 | $ 0 | |
Repayments of long term lines of credit | $ 0 |
BORROWINGS - Schedule of Debt M
BORROWINGS - Schedule of Debt Maturities (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Debt Disclosure [Abstract] | ||
2021 | $ 2.5 | |
2022 | 2.6 | |
2023 | 2.4 | |
2024 | 1.5 | |
2025 | 201.4 | |
Thereafter | 300.9 | |
Total debt outstanding | 511.3 | |
Less: current maturities of long-term debt | (2.5) | $ (30.7) |
Non-current portion of long -term debt | $ 508.8 | $ 370.1 |
BORROWINGS - Convertible Senior
BORROWINGS - Convertible Senior Unsecured Notes Narrative (Details) - Convertible Debt | Jun. 09, 2020USD ($)tradingDay$ / sharesRate | Oct. 02, 2020USD ($) | Jun. 04, 2020$ / shares |
Line of Credit Facility [Line Items] | |||
Proceeds from convertible debt | $ 200,000,000 | ||
Convertible Notes | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, face amount | $ 200,000,000 | ||
Interest rate, stated percentage | 4.00% | ||
Proceeds from convertible debt | $ 193,100,000 | ||
Conversion ratio | Rate | 4.805% | ||
Convertible, conversion price | $ / shares | $ 20.81 | $ 20.81 | |
Threshold percentage of stock price trigger | 130.00% | ||
Convertible threshold trading days | tradingDay | 20 | ||
Convertible threshold consecutive trading days | tradingDay | 30 | ||
Convertible consecutive business days | 5 days | ||
Consecutive trading day measurement period | 5 days | ||
Threshold for measurement period | 98.00% | ||
Debt interest expense | 5,000,000 | ||
Debt interest expense, contractual interest coupon | 2,500,000 | ||
Amortization of discount and issuance costs | $ 2,500,000 |
BORROWINGS - Call Spread Narrat
BORROWINGS - Call Spread Narrative (Details) $ / shares in Units, $ in Millions | Oct. 02, 2020equity_instruments | Jun. 05, 2020USD ($)equity_instruments | Jun. 09, 2020$ / shares | Jun. 04, 2020$ / shares |
Debt Instrument [Line Items] | ||||
Exercise price of warrants or rights | $ / shares | $ 24.975 | |||
Increase of strike price over sale price | 50.00% | |||
Payment of hedge transactions from proceeds of convertible debt | $ 11.2 | |||
Payment of hedge transactions from proceeds of warrant transactions | 49.8 | |||
Payments for hedge, financing activities | $ 61 | |||
Convertible Notes | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Convertible, conversion price | $ / shares | $ 20.81 | $ 20.81 | ||
Number of equity investments | equity_instruments | 9,600,000 | 9,600,000 |
BORROWINGS - Accounting Treatme
BORROWINGS - Accounting Treatment of the Convertible Notes and Related Hedge Transactions and Warrant Transactions Narrative (Details) - USD ($) | Jun. 05, 2020 | Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | Jun. 09, 2020 | Jun. 04, 2020 |
Debt Instrument [Line Items] | ||||||
Payments of debt issuance costs | $ 16,700,000 | $ 500,000 | $ 400,000 | |||
Convertible Notes | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Convertible debt | $ 152,300,000 | |||||
Carrying amount of equity component | $ 47,700,000 | |||||
Hypothetical interest rate | 10.45% | |||||
Debt instrument, face amount | $ 200,000,000 | |||||
Effective percentage | 10.90% | |||||
Payment of financing and stock issuance costs | $ 6,900,000 | |||||
Payments of debt issuance costs | 5,300,000 | |||||
Payments of stock issuance costs | $ 1,600,000 |
BORROWINGS - Senior Secured Not
BORROWINGS - Senior Secured Notes Narrative (Details) - Senior Secured Notes - Secured Debt - USD ($) | Sep. 30, 2020 | Oct. 02, 2020 |
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 300,000,000 | |
Interest rate, stated percentage | 7.875% | |
Weighted-average interest rate, long-term debt | 8.20% | |
Debt issuance costs, gross | $ 5,600,000 | |
Proceeds from debt, net of issuance costs | 294,400,000 | |
Proceeds from debt, net of issuance costs, used to pay other debt | $ 267,500,000 | |
Debt instrument, redemption amount as percentage of aggregate principal amount, option one | 30.00% | |
Debt instrument, redemption price, percentage, option one | 107.875% | |
Debt instrument, redemption price, percentage, option two | 100.00% | |
Debt instrument, redemption amount as percentage of aggregate principal amount, option three | 10.00% | |
Debt instrument, redemption price, percentage, option three | 103.00% | |
Debt interest expense | $ 200,000 |
BORROWINGS - Asset-Based Loan N
BORROWINGS - Asset-Based Loan Narrative (Details) - Revolving Credit Facility - Asset-Based Loan Revolving Credit Facility - Secured Debt | Sep. 30, 2020USD ($)equity_instruments |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 100,000,000 |
Long term line of credit | 100,000,000 |
Debt issuance costs, gross | $ 3,100,000 |
Debt covenant, Fixed Charge Coverage Ratio | equity_instruments | 1 |
Debt covenant, line of credit facility, excess availability as percent of Line Cap threshold | 10.00% |
Debt covenant, line of credit facility, excess availability threshold | $ 7,500,000 |
Minimum | |
Debt Instrument [Line Items] | |
Line of credit facility, commitment fee percentage | 0.375% |
Maximum | |
Debt Instrument [Line Items] | |
Line of credit facility, commitment fee percentage | 0.50% |
BORROWINGS - Credit Agreement N
BORROWINGS - Credit Agreement Narrative (Details) - USD ($) | Sep. 30, 2020 | May 01, 2017 |
Revolving Credit Facility and Secured Debt | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 400,000,000 | |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Repayments of debt | $ 265,500,000 | |
Payment of debt accrued interest | 2,000,000 | |
Write off of deferred debt issuance cost | 3,800,000 | |
Loss on extinguishment of debt | $ 3,800,000 | |
Revolving Credit Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 200,000,000 | |
Debt instrument term | 5 years |
FAIR VALUE - (Details)
FAIR VALUE - (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Liabilities: | ||
Total debt outstanding, net | $ 455.3 | $ 395.1 |
Convertible Debt | ||
Liabilities: | ||
Long-term debt, fair value | 178.5 | |
Secured Debt | ||
Liabilities: | ||
Long-term debt, fair value | 312.8 | |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Cash equivalents - money market funds | 72.9 | 8.8 |
Derivative assets | 1.1 | |
Total assets measured at fair value | 74 | 8.8 |
Liabilities: | ||
Derivative liabilities | 2.1 | 0.7 |
Deferred consideration | 8.9 | |
Total liabilities measured at fair value | 2.1 | 9.6 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | ||
Assets: | ||
Cash equivalents - money market funds | 0 | 0 |
Derivative assets | 0 | |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Deferred consideration | 8.9 | |
Total liabilities measured at fair value | 0 | 8.9 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash equivalents - money market funds | 72.9 | 8.8 |
Derivative assets | 1.1 | |
Total assets measured at fair value | 74 | 8.8 |
Liabilities: | ||
Derivative liabilities | 2.1 | 0.7 |
Deferred consideration | 0 | |
Total liabilities measured at fair value | 2.1 | 0.7 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Cash equivalents - money market funds | 0 | 0 |
Derivative assets | 0 | |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Deferred consideration | 0 | |
Total liabilities measured at fair value | $ 0 | $ 0 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jul. 03, 2020 | Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill impaired | $ 0 | |||
Amortization of intangible assets | $ 17,200,000 | $ 15,700,000 | $ 16,200,000 | |
Impairment of intangible assets | 2,800,000 | $ 2,800,000 | $ 4,800,000 | $ 3,000,000 |
In-process R&D intangible asset, fair value | $ 0 | |||
Industrial | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Fair value exceeding carrying value | 20.00% | |||
Medical | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Fair value exceeding carrying value | 30.00% | |||
Measurement Input Cost Of Capital | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated weighted average cost of capital | 25.00% |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Summary of Goowill (Details) $ in Millions | 12 Months Ended |
Oct. 02, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance at September 27, 2019 | $ 290.8 |
Foreign currency translation adjustments | 2.3 |
Balance at October 2, 2020 | 293.1 |
Medical | |
Goodwill [Roll Forward] | |
Balance at September 27, 2019 | 173 |
Foreign currency translation adjustments | 1.4 |
Balance at October 2, 2020 | 174.4 |
Industrial | |
Goodwill [Roll Forward] | |
Balance at September 27, 2019 | 117.8 |
Foreign currency translation adjustments | 0.9 |
Balance at October 2, 2020 | $ 118.7 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 138.9 | $ 137.5 |
Accumulated Amortization | (71.4) | (54) |
Net Carrying Amount | 67.5 | 83.5 |
In-process R&D with indefinite lives | 0 | 2.8 |
Total intangible assets, gross | 138.9 | 140.3 |
Total intangible assets, net | 67.5 | 86.3 |
Acquired existing technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 74.9 | 74.1 |
Accumulated Amortization | (37.5) | (28.4) |
Net Carrying Amount | 37.4 | 45.7 |
Patents, licenses and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 12.8 | 12.7 |
Accumulated Amortization | (9.7) | (8.4) |
Net Carrying Amount | 3.1 | 4.3 |
Customer contracts and supplier relationship | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 51.2 | 50.7 |
Accumulated Amortization | (24.2) | (17.2) |
Net Carrying Amount | $ 27 | $ 33.5 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Amortization Schedule (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2021 | $ 16.5 | |
2022 | 15 | |
2023 | 13.9 | |
2024 | 9.3 | |
2025 | 3.2 | |
Thereafter | 9.6 | |
Net Carrying Amount | $ 67.5 | $ 83.5 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - (Details) ¥ in Millions, $ in Millions | 12 Months Ended | ||
Oct. 01, 2021CNY (¥) | Oct. 01, 2021USD ($) | Oct. 02, 2020USD ($) | |
Other Commitments [Line Items] | |||
Environmental liability, current and noncurrent | $ 2 | ||
Forecast | |||
Other Commitments [Line Items] | |||
Payments to acquire productive assets | ¥ 1,084.7 | $ 10.3 |
REDEEMABLE NONCONTROLLING INT_3
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS - Narrative (Details) - € / shares shares in Millions | 1 Months Ended | ||||
Oct. 31, 2015 | Oct. 02, 2020 | Apr. 30, 2019 | Sep. 30, 2018 | Apr. 30, 2015 | |
Joint Venture In Saudi Arabia | |||||
Noncontrolling Interest [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 75.00% | ||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 25.00% | ||||
Direct Conversion AB | |||||
Noncontrolling Interest [Line Items] | |||||
Percentage of voting interests acquired | 98.20% | ||||
MeVis Medical Solutions AG (MeVis) | |||||
Noncontrolling Interest [Line Items] | |||||
Percentage of voting interests acquired | 73.50% | ||||
Annual recurring compensation (in euros per share) | € 0.95 | ||||
Temporary equity, redemption price per share (in eur per share) | € 19.77 | ||||
Temporary equity, shares outstanding (in shares) | 0.5 | ||||
MeVis Medical Solutions AG (MeVis) | MeVis Medical Solutions AG (MeVis) | |||||
Noncontrolling Interest [Line Items] | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 26.30% |
REDEEMABLE NONCONTROLLING INT_4
REDEEMABLE NONCONTROLLING INTERESTS & NONCONTROLLING INTERESTS - Summary of Changes in Redeemable Noncontrolling Interests & Noncontrolling INterets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 02, 2020 | Sep. 27, 2019 | |
Noncontrolling Interest [Line Items] | ||
Balance at beginning of period | $ 10.5 | $ 11.1 |
Net earnings attributable to noncontrolling interests | 0.5 | 0.5 |
Reclassification of redeemable NCI in MeVis to noncontrolling interests in permanent equity | (11.3) | 0 |
Dividend distributions | (0.5) | (0.5) |
Other | 0.8 | (0.6) |
Balance at end of period | 0 | 10.5 |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||
Balance at beginning of period | 448.2 | 428.3 |
Contributions from noncontrolling interests | 1.4 | |
Reclassification from mezzanine equity to equity for noncontrolling interest in MeVis Medical Solutions, AG | 11.3 | |
Dividend distributions | (0.5) | (0.5) |
Balance at end of period | 14.1 | 3.3 |
Noncontrolling Interests | ||
Noncontrolling Interest [Line Items] | ||
Dividend distributions | 0 | 0 |
Other | (0.5) | 0 |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||
Balance at beginning of period | 3.3 | 2.1 |
Net earnings attributable to noncontrolling interests | 0 | (0.2) |
Contributions from noncontrolling interests | 0 | 1.4 |
Reclassification from mezzanine equity to equity for noncontrolling interest in MeVis Medical Solutions, AG | 11.3 | 0 |
Dividend distributions | 0 | 0 |
Redeemable Noncontrolling Interest | ||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||
Contributions from noncontrolling interests | $ 0 | $ 0 |
EMPLOYEE STOCK PLANS - Narrativ
EMPLOYEE STOCK PLANS - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017 | Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend | 0.00% | |||
Options, grants in period, grant date fair value | $ 4.4 | $ 3 | $ 3.1 | |
Options exercised, intrinsic value | 0.4 | 0.2 | 1.7 | |
Grant-date fair value of shares granted in the period | 11.9 | 9 | 10.1 | |
Shares outstanding, market value | $ 11.8 | $ 19.2 | $ 18.4 | |
Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend | 0.00% | 0.00% | 0.00% | |
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost not yet recognized | $ 24.4 | |||
Expected dividend | 0.00% | 0.00% | 0.00% | |
2017 ESPP | Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Purchase price of common stock, percent | 85.00% | 85.00% | ||
Stock plan offering period (in months) | 6 months | |||
Number of shares authorized (in shares) | 1,000,000 | |||
2017 ESPP | Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant (in shares) | 500,000 | |||
2017 Omnibus Stock Plan | Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant (in shares) | 4,800,000 | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period (in months) | 36 months | |||
Award expiration period (in years) | 7 years | |||
Minimum | Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost period for recognition (in years) | 3 years | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period (in months) | 48 months | |||
Award expiration period (in years) | 10 years | |||
Maximum | Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost period for recognition (in years) | 4 years |
EMPLOYEE STOCK PLANS - Share-ba
EMPLOYEE STOCK PLANS - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | $ 13.4 | $ 11.7 | $ 10 |
Cost of revenues | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | 1.1 | 1.2 | 1.3 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | 2.5 | 2.2 | 1.8 |
Selling, general and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Allocated share-based compensation expense | $ 9.8 | $ 8.3 | $ 6.9 |
EMPLOYEE STOCK PLANS - Valuatio
EMPLOYEE STOCK PLANS - Valuation Assumptions (Details) - $ / shares | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend | 0.00% | ||
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 1 month 6 days | 4 years 7 months 6 days | 4 years 9 months 18 days |
Risk-free interest rate | 1.10% | 2.50% | 2.60% |
Expected volatility | 36.90% | 33.90% | 31.80% |
Expected dividend | 0.00% | 0.00% | 0.00% |
Weighted average fair value at grant date (in USD per share) | $ 7.53 | $ 10.19 | $ 11.57 |
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | 6 months | 6 months |
Risk-free interest rate | 0.90% | 2.50% | 2.00% |
Expected volatility | 50.00% | 43.90% | 34.10% |
Expected dividend | 0.00% | 0.00% | 0.00% |
Weighted average fair value at grant date (in USD per share) | $ 7.94 | $ 7.81 | $ 8.92 |
EMPLOYEE STOCK PLANS - Stock Op
EMPLOYEE STOCK PLANS - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | |
Oct. 02, 2020 | Sep. 27, 2019 | |
Options | ||
Options, outstanding, beginning balance (in shares) | 2,269 | |
Options, grants in period (in shares) | 591 | |
Options, forfeitures and expirations in period (in shares) | (61) | |
Options, exercises in period, value (in shares) | (64) | |
Options, outstanding, ending balance (in shares) | 2,735 | 2,269 |
Options, exercisable (in shares) | 1,794 | |
Weighted Average Exercise Price | ||
Options, outstanding, weighted average exercise price, beginning (in USD per share) | $ 30.60 | |
Options, grants in period, weighted average exercise price (in USD per share) | 23.39 | |
Options, forfeitures and expirations in period, weighted average exercise price (in USD per share) | 30.17 | |
Options, exercises in period, weighted average exercise price (in USD per share) | 22.93 | |
Options, outstanding, weighted average exercise price, ending (in USD per share) | 29.23 | $ 30.60 |
Options, exercisable, weighted average exercise price (in USD per share) | $ 30.48 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Options, outstanding, weighted average remaining contractual term (in years) | 4 years 6 months | 4 years 1 month 6 days |
Options, exercisable, weighted average remaining contractual term (in years) | 2 years 10 months 24 days | |
Options, outstanding, intrinsic value | $ 0 | $ 1,220,300 |
Options, exercisable, intrinsic value | $ 0 | |
Share price (in usd per share) | $ 12.37 | |
Minimum | ||
Price Range | ||
Options, outstanding, price, beginning (in USD per share) | 22.63 | |
Options, grants in period, price (in USD per share) | 13.61 | |
Options, forfeitures and expirations in period, price (in USD per share) | 22.63 | |
Options, exercises in period, price (in USD per share) | 22.84 | |
Options, outstanding, price, ending (in USD per share) | 13.61 | $ 22.63 |
Options, exercisable, price (in USD per share) | 25.17 | |
Maximum | ||
Price Range | ||
Options, outstanding, price, beginning (in USD per share) | 37.60 | |
Options, grants in period, price (in USD per share) | 28.12 | |
Options, forfeitures and expirations in period, price (in USD per share) | 37.10 | |
Options, exercises in period, price (in USD per share) | 23.24 | |
Options, outstanding, price, ending (in USD per share) | 37.60 | $ 37.60 |
Options, exercisable, price (in USD per share) | $ 37.60 |
EMPLOYEE STOCK PLANS - Restrict
EMPLOYEE STOCK PLANS - Restricted Stock and Performance Stock (Details) shares in Thousands | 12 Months Ended |
Oct. 02, 2020$ / sharesshares | |
Number of Shares | |
Restricted Stock Units and Performance Stock Units, nonvested, beginning balance (in shares) | shares | 678 |
Restricted Stock Units and Performance Stock Units, grants in period (in shares) | shares | 587 |
Restricted Stock Units and Performance Stock Units, vested in period (in shares) | shares | (224) |
Restricted Stock Units and Performance Stock Units, forfeited in period (in shares) | shares | (86) |
Restricted Stock Units and Performance Stock Units, nonvested, ending balance (in shares) | shares | 955 |
Weighted Average Grant-Date Fair Value | |
Restricted Stock Units and Performance Stock Units, nonvested, beginning of period, weighted average grant date fair value (in USD per share) | $ / shares | $ 33.18 |
Restricted Stock Units and Performance Stock Units, grants in period, weighted average grant date fair value (in USD per share) | $ / shares | 20.30 |
Restricted Stock Units and Performance Stock Units, vested in period, weighted average grant date fair value (in USD per share) | $ / shares | 32.77 |
Restricted Stock Units and Performance Stock Units, forfeitures, weighted average grant date fair value (in USD per share) | $ / shares | 31.27 |
Restricted Stock Units and Performance Stock Units, nonvested, end of period, weighted average grant date fair value (in USD per share) | $ / shares | $ 25.54 |
TAXES ON EARNINGS - Summary of
TAXES ON EARNINGS - Summary of Taxes by Jurisdiction and Classification (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Current (benefit) provision: | |||
Federal | $ (16.3) | $ 9.2 | $ (2.1) |
State and local | (1.4) | 1.3 | (0.3) |
Foreign | 5.7 | 6.8 | 7.5 |
Total current | (12) | 17.3 | 5.1 |
Deferred (benefit) provision: | |||
Federal | (1.7) | (10) | (7) |
State and local | 0.6 | (1.6) | 0.7 |
Foreign | (2.1) | 0 | (1.4) |
Total deferred | (3.2) | (11.6) | (7.7) |
Taxes on (loss) earnings | (15.2) | 5.7 | (2.6) |
United States | (74.1) | 5.9 | 3.7 |
Foreign | 1.5 | 15.6 | 22 |
(Loss) earnings before taxes | $ (72.6) | $ 21.5 | $ 25.7 |
TAXES ON EARNINGS - Income Tax
TAXES ON EARNINGS - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21.00% | 21.00% | 24.50% |
State and local taxes, net of federal tax benefit | 1.00% | (0.90%) | 1.10% |
Revaluation of deferred tax liabilities for US statutory change | 0.00% | 0.00% | (41.80%) |
Mandatory repatriation tax on foreign earnings | 0.00% | 1.90% | 13.00% |
Domestic production activities deduction | 0.00% | 0.00% | (0.80%) |
Research and development credit | 3.70% | (10.20%) | (11.10%) |
Prior year deferred tax adjustments | 0.40% | 4.70% | 1.90% |
Foreign rate difference | (0.40%) | 6.00% | 0.80% |
Change in valuation allowance | (11.00%) | 11.20% | (1.90%) |
US tax reform - international provisions | 0 | (0.047) | 0 |
US NOL carryback | 5.60% | 0.00% | 0.00% |
Other | 0.60% | (2.50%) | 4.20% |
Effective tax rate | 20.90% | 26.50% | (10.10%) |
TAXES ON EARNINGS - Deferred Ta
TAXES ON EARNINGS - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | Sep. 29, 2017 |
Deferred Tax Assets: | ||||
Inventory adjustments | $ 4.4 | $ 5.6 | ||
Share-based compensation | 4.2 | 3.1 | ||
Product warranty | 1.7 | 1.6 | ||
Deferred compensation | 1.3 | 1.1 | ||
Net operating loss carryforwards | 27 | 24.3 | ||
Accrued vacation | 1 | 1 | ||
Credit carryforwards | 5.9 | 1.9 | ||
Deferred financing fees | 3.3 | 0 | ||
Interest expense limitation | 4.7 | 0 | ||
Lease liabilities | 7.2 | 0 | ||
Other | 6 | 7.5 | ||
Deferred tax assets, gross | 66.7 | 46.1 | ||
Valuation allowance | (28.7) | (18.8) | $ (4) | $ (4.3) |
Total deferred tax assets | 38 | 27.3 | ||
Deferred Tax Liabilities: | ||||
Acquired intangibles | (16.6) | (19.3) | ||
Property, plant and equipment | (12.4) | (10.6) | ||
Investments in privately held companies | (2.8) | (3.3) | ||
Right of use assets | (6.7) | 0 | ||
Other | (1.3) | (2.3) | ||
Total deferred tax liabilities | (39.8) | (35.5) | ||
Net deferred tax liabilities | $ (1.8) | $ (8.2) |
TAXES ON EARNINGS - Narrative (
TAXES ON EARNINGS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Income Tax Disclosure [Abstract] | |||
Deferred tax liabilities of undistributed foreign earnings | $ 0.1 | ||
Net operating loss carryforwards | 27 | $ 24.3 | |
Operating loss carryforwards, that expire | 4.3 | ||
Operating loss carryforwards, that do not expire | 22.7 | ||
Operating loss carryforwards, valuation allowance increase | 9.9 | 14.8 | |
Cash paid for income tax, net of refunds | 4.2 | 8.2 | |
Unrecognized tax benefits | 0.8 | 0.6 | $ 0.6 |
Income tax penalties and interest expense | $ 0.1 | $ 0.1 |
TAXES ON EARNINGS - Valuation A
TAXES ON EARNINGS - Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Deferred Tax Assets Valuation Allowance [Roll Forward] | |||
Valuation allowance balance–beginning of fiscal year | $ 18.8 | $ 4 | $ 4.3 |
Increases resulting from business combinations | 0 | 12 | 0 |
Other increases | 10.2 | 2.8 | 2.2 |
Other decreases | (0.3) | 0 | (2.5) |
Valuation allowance balance—end of fiscal year | $ 28.7 | $ 18.8 | $ 4 |
TAXES ON EARNINGS - Income Ta_2
TAXES ON EARNINGS - Income Tax Contingency (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 02, 2020 | Sep. 27, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits balance–beginning of fiscal year | $ 0.6 | $ 0.6 |
Additions (subtractions) based on tax positions related to a prior year | 0.2 | |
Additions (subtractions) based on tax positions related to a prior year | (0.2) | |
Additions based on tax positions related to the current year | 0 | 0.2 |
Unrecognized tax benefits balance—end of fiscal year | $ 0.8 | $ 0.6 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 12 Months Ended |
Oct. 02, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT INFORMATION - Summary o
SEGMENT INFORMATION - Summary of Segment Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Segment Reporting Information [Line Items] | |||
Revenues, net | $ 738.3 | $ 780.6 | $ 773.4 |
Gross profit | 190.2 | 256.7 | 253.9 |
Total operating expenses | 223.9 | 211 | 209.4 |
Interest and other expense, net | (38.9) | (24.2) | (18.8) |
(Loss) earnings before taxes | (72.6) | 21.5 | 25.7 |
Taxes (benefit) on earnings | (15.2) | 5.7 | (2.6) |
Net (loss) earnings | (57.4) | 15.8 | 28.3 |
Less: Net earnings attributable to noncontrolling interests | 0.5 | 0.3 | 0.8 |
Net (loss) earnings attributable to Varex | (57.9) | 15.5 | 27.5 |
Medical | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 584.5 | 596.8 | 602 |
Gross profit | 136.4 | 188.9 | 190.5 |
Industrial | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 153.8 | 183.8 | 171.4 |
Gross profit | $ 53.8 | $ 67.8 | $ 63.4 |
SEGMENT INFORMATION - Assets (D
SEGMENT INFORMATION - Assets (Details) - USD ($) $ in Millions | Oct. 02, 2020 | Sep. 27, 2019 |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,139.5 | $ 1,038.9 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,139.5 | 1,038.9 |
Medical | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 900.2 | 794.3 |
Industrial | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 239.3 | $ 244.6 |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | $ 738.3 | $ 780.6 | $ 773.4 |
Property, plant and equipment, net | 142.3 | ||
Property, plant, and equipment, and finance lease right-of-use asset, net | 145.2 | ||
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 249.8 | 275.3 | 268.8 |
Property, plant and equipment, net | 122.6 | ||
Property, plant, and equipment, and finance lease right-of-use asset, net | 115.9 | ||
Latin America | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 5.2 | 7.3 | 7 |
Property, plant and equipment, net | 0 | ||
Property, plant, and equipment, and finance lease right-of-use asset, net | 0 | ||
EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 231.5 | 269 | 254.5 |
Property, plant and equipment, net | 11.4 | ||
Property, plant, and equipment, and finance lease right-of-use asset, net | 21.5 | ||
APAC | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | 251.8 | 229 | $ 243.1 |
Property, plant and equipment, net | $ 8.3 | ||
Property, plant, and equipment, and finance lease right-of-use asset, net | $ 7.8 |
EMPLOYEE BENEFIT PLANS - (Detai
EMPLOYEE BENEFIT PLANS - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Retirement Benefits [Abstract] | |||
Employer discretionary contribution amount | $ 4.4 | $ 6.7 | $ 6.5 |
Defined benefit pension plan liability | $ 6.5 | $ 5.5 |
OTHER COMPREHENSIVE (LOSS) IN_3
OTHER COMPREHENSIVE (LOSS) INCOME - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 02, 2020 | Sep. 27, 2019 | Sep. 28, 2018 | |
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | $ 448.2 | $ 428.3 | $ 379 |
Other comprehensive (loss) income before reclassifications | (3.8) | (10.2) | |
Amount reclassified out of other comprehensive income | 1.5 | ||
Amount reclassified out of other comprehensive earnings - transaction remote | 2.4 | ||
Income tax impact | (0.1) | 2.7 | |
Foreign currency translation adjustments | 1.5 | 0 | 0 |
Ending balance | 465.8 | 448.2 | 428.3 |
Unrealized Gain (Loss) on Derivative Financial Instruments | |||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | (0.4) | 5.8 | |
Other comprehensive (loss) income before reclassifications | (3.4) | (8.3) | |
Amount reclassified out of other comprehensive income | 1.5 | ||
Amount reclassified out of other comprehensive earnings - transaction remote | 2.4 | ||
Income tax impact | (0.1) | 2.1 | |
Ending balance | 0 | (0.4) | 5.8 |
Unrealized Gain (Loss) on Defined Benefit Obligations | |||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | (1.3) | 0 | |
Other comprehensive (loss) income before reclassifications | 0.9 | (1.9) | |
Amount reclassified out of other comprehensive income | 0 | ||
Amount reclassified out of other comprehensive earnings - transaction remote | 0 | ||
Income tax impact | (0.3) | 0.6 | |
Ending balance | (0.7) | (1.3) | 0 |
Currency Translation Adjustment | |||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | 0 | 0 | |
Other comprehensive (loss) income before reclassifications | (1.3) | 0 | |
Amount reclassified out of other comprehensive income | 0 | ||
Amount reclassified out of other comprehensive earnings - transaction remote | 0 | ||
Income tax impact | 0.3 | 0 | |
Foreign currency translation adjustments | 2.5 | 0 | |
Ending balance | 1.5 | 0 | 0 |
Accumulated Other Comprehensive (Loss) Income | |||
Changes In Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance at beginning of period | (1.7) | 5.8 | |
Ending balance | $ 0.8 | $ (1.7) | $ 5.8 |