Varex Imaging Reports $8.1 Million Net Loss Despite 1.5% Revenue Growth

Varex Imaging Corporation reported a net loss of $8.1 million for the three months ended April 3, 2026, compared to a net income of $6.9 million for the same period in the previous year. Total revenues for the quarter reached $216.0 million, reflecting a modest increase of 1.5% from $212.9 million in the prior year. The medical segment generated $156.2 million in revenue, up 1.6%, while the industrial segment saw a 1.2% increase to $59.8 million. The decline in profitability was attributed to increased material costs and a shift in product sales mix, which negatively impacted gross margins.

In terms of operational performance, Varex's gross profit decreased to $72.6 million, down 5.3% from $76.7 million in the prior year. The gross margin for the medical segment fell to 32.4% from 36.3%, while the industrial segment improved slightly to 36.8% from 35.2%. The company also reported a significant increase in interest expense, which rose to $17.2 million from $10.2 million, primarily due to costs associated with the redemption of senior secured notes and the closing of a revolving credit facility.

Strategically, Varex entered into a new $490 million secured credit facility in March 2026, which includes a $350 million term loan, a $100 million revolving credit facility, and a $40 million delayed draw term loan. The proceeds from this facility were used to redeem all outstanding senior secured notes, which is expected to reduce annual interest expenses by over $7 million. The company anticipates that this refinancing will enhance financial flexibility and support ongoing investments in the business.

Varex's workforce remains stable, with approximately 2,450 full-time equivalent employees engaged in various operations across North America, Europe, and Asia. The company continues to focus on research and development, with R&D expenses representing about 10.3% of total revenues, consistent with the previous year. The company also reported a backlog of approximately $266 million as of April 3, 2026, indicating a solid pipeline of future business.

Looking ahead, Varex acknowledges the challenges posed by the current economic and trade environment, including potential impacts from tariffs and geopolitical tensions. The company remains committed to monitoring these developments and adapting its strategies accordingly. Despite the recent financial setbacks, Varex aims to leverage its market position and ongoing product innovations to drive future growth and profitability.