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Varex Imaging Corporation reported a downturn in its financial performance for the second quarter of fiscal year 2024, with a notable decline in revenue influenced by reduced sales in China.
The Salt Lake City, Utah-based X-ray component manufacturer posted revenues of $206 million for the quarter, marking a 10% decrease from the previous year. This decline was primarily driven by a 15% drop in the medical segment revenue, which totaled $149 million. However, the industrial segment showed a contrasting performance with a 6% increase, totaling $57 million.
The company's GAAP gross margin stood at 32%, with a slightly higher non-GAAP gross margin of 33%. Operating margins were reported at 4% on a GAAP basis and 6% non-GAAP. Earnings per diluted share were modest, with GAAP net earnings at $0.03 and non-GAAP net earnings at $0.16, down from $0.26 in the same quarter the previous year.
"Revenue of $206 million in the second quarter was in line with guidance, but down year-over-year primarily due to lower sales to our customers in China," said CEO, Sunny Sanyal, in a statement. "Sales in the first half of fiscal 2024 were as expected, but we are lowering our expectations for the second half of the fiscal year due to continued softness in our medical segment, particularly in China."
The balance sheet showed a slight reduction in liquidity with cash, cash equivalents, marketable securities, and CDs reported at $190 million, a decrease from $195 million at the end of the previous fiscal year. Operational cash flow also stood at $3 million for the quarter.
Looking ahead, Varex anticipates third-quarter revenues to range from $200 million to $220 million and projects non-GAAP net earnings per diluted share to be between $0.05 and $0.25. The company also noted the difficulty in providing a GAAP forecast for net earnings per diluted share due to unpredictable reconciling items.
Varex, a key player in the design and manufacturing of X-ray imaging components, continues to navigate through the fiscal year with adjusted expectations, reflecting both the challenges and resilience in different segments of its business.
