The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited Condensed Consolidated Financial Statements and notes thereto that are contained in this Quarterly Report on Form 10-Q (this "Quarterly Report") as well as our Annual Report on Form 10-K for the fiscal year ended October 3, 2025 ("Annual Report") and our other filings, including the Current Reports on Form 8-K, that have been filed with the Securities and Exchange Commission ("SEC") through the date of this report. In this Quarterly Report, unless otherwise specified or the context otherwise requires, the "Company," "Varex," "we," "us," and "our" refer to Varex Imaging Corporation. Forward-Looking Statements This Quarterly Report contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, which provides a “safe harbor” for statements about future events, and financial performance that are based on the beliefs of, estimates made by, and information currently available to the management of Varex. These forward-looking statements include, but are not limited to, statements concerning our proposed acquisition by Teledyne Technologies Incorporated (“Teledyne”) pursuant to an Agreement and Plan of Merger, dated as of August 10, 2026 (the “Merger Agreement”), by and among Varex, Teledyne, and Detect Merger Sub, Inc., a wholly owned subsidiary of Teledyne (“Merger Sub”), pursuant to which Merger Sub will merge with and into Varex (the “Merger”), with Varex surviving the Merger as a wholly owned subsidiary of Teledyne, including our expectations regarding the timing and completion of the proposed acquisition as well as general business uncertainty relating to the proposed acquisition and the anticipated benefits of the proposed acquisition. Actual results and the outcome or timing of certain events described in these forward-looking statements are subject to risk and uncertainties and may differ significantly from those described. Important factors that could cause our actual results and financial condition to differ significantly from those projections or expectations include, among other things, the following: •changes in import/export regulatory regimes, tariffs, trade wars, and national policies, including exemptions thereto; •reduction in or loss of business of one or more of our limited original equipment manufacturing (“OEM”) customers; •challenges in accurately predicting product demand and delivery schedules; •loss of business to, and an inability to effectively compete with, competitors; •pricing pressures and other factors that could result in margin erosion and loss of customers; •failure to meet customers’ needs and demands; •global, regional, and country-specific economic instability, shifting political environments, changing tax treatment, tariffs, trade wars, and other risks associated with international manufacturing, operations, and sales; •the financial results of our equity method investments, including joint ventures that we do not control; •inflation and supply chain disruptions resulting in increased costs and delays in product manufacturing and delivery; •disruption of critical information systems or material breaches in the security of our systems or systems of third parties upon which we rely; •inability to maintain or defend our intellectual property rights, and costs associated with protecting our intellectual property and defending such rights and defending against infringement claims; •noncompliance with regulations applicable to marketing, manufacturing, labeling, and distributing our products and delays in obtaining regulatory clearances or approvals; •limitations imposed by operating and financial restrictions of our debt financing; •the occurrence of any event, change or other circumstances that could give rise to the right of Teledyne or Varex or both to terminate the Merger Agreement; •the outcome of any legal proceedings that may be instituted against us in connection with the Merger Agreement; •the failure to satisfy any of the conditions to the proposed acquisition, including regulatory approvals, on a timely basis or at all; and •other factors cited in Part I, Item 1A, "Risk Factors" in our Annual Report and in Part II, Item 1A, "Risk Factors" of this Quarterly Report. Statements concerning legislative, tariff, and trade wars and trade policy reforms, government investigations, and the uncertainty resulting therefrom; geopolitical tensions; supply chain and logistics challenges; cost increases and expense management; changes in U.S. and worldwide economic conditions, such as the impact of inflation, changes in interest rates, and fluctuations in foreign currency exchange rates; industry or business segment outlook; customer acceptance of or transition to new products or technologies such as advanced X-ray tube and digital flat panel detector products; growth drivers; future orders, revenues, market share, backlog, earnings or other financial results; and any statements using the terms “believe,” “expect,” “anticipate,” “can,” “should,” “would,” “could,” “estimate,” “may,” “intend,” “potential,” and “possible” or similar statements are forward-looking statements that involve risks and uncertainties that could cause our actual results and the outcome and timing of certain events to differ materially from those projected or management’s current expectations. 30 Table of Contents Any forward-looking statement made in this Quarterly Report (including in any exhibits or documents incorporated by reference) is based on information currently available to Varex and its management and speaks only as of the date on which it is made. We have not assumed any obligation to, and you should not expect us to, update or revise those statements because of new information, future events or otherwise. Overview Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components including X-ray tubes, flat panel and photon counting detectors and accessories, linear accelerators, image software processing solutions, and stand-alone X-ray based systems for Industrial applications. Our components are used in medical diagnostic imaging, security inspection systems, and industrial quality inspection systems, as well as for analysis and measurement applications in industrial manufacturing applications. Global OEMs incorporate our X-ray imaging components into their systems to detect, diagnose, protect, irradiate, and inspect. Varex has approximately 2,500 full-time equivalent employees, located at engineering, manufacturing, and service center sites in North America, Europe, and Asia. Our products are sold in three geographic regions: the Americas, EMEA, and APAC. The Americas includes North America (primarily the United States) and Latin America. EMEA includes Europe, the Middle East, India, and Africa. APAC includes Asia (other than India) and Australia. Revenues by region are based on the known final destination of products sold. Our success depends, among other things, on our ability to anticipate and respond to changes in our business, the direction of technological innovation, and the demand from our customers. We continually invest in research and development and employ approximately 400 individuals in product development related activities. Our focus on innovation and product performance along with strong and long-term customer relationships allows us to collaborate with our customers to deliver industry-leading X-ray imaging products. We continue to work to improve the life and quality of our imaging components and leverage our scale as one of the largest independent X-ray imaging component suppliers to provide cost-effective solutions for our customers. Proposed Acquisition by Teledyne Technologies Incorporated On August 10, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Teledyne Technologies Incorporated (“Teledyne”), and Detect Merger Sub, Inc., a wholly owned subsidiary of Teledyne (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Teledyne. Under the terms of the Merger Agreement, at the effective time of the Merger, each issued and outstanding share of our common stock (subject to certain exceptions set forth in the Merger Agreement) will be canceled and converted into the right to receive $18.90 in cash, without interest and subject to applicable withholding taxes. The Merger Agreement generally requires us to use commercially reasonable efforts to operate our business in the ordinary course, subject to certain exceptions including as required by applicable law, pending consummation of the Merger, and subjects us to customary interim operating covenants that restrict us from taking certain specified actions without Teledyne’s approval (such approval not to be unreasonably withheld, conditioned, or delayed) until the Merger is completed or the Merger Agreement is terminated in accordance with its terms. The completion of the Merger, which is currently expected to close in early calendar year 2027, is subject to the receipt of regulatory approvals and other customary closing conditions, including the adoption of the Merger Agreement by our stockholders. If the transaction is consummated, our common stock will be delisted from Nasdaq and deregistered under the Exchange Act. See the section entitled “Risk Factors” in Part II, Item 1A of this Quarterly Report for further discussion about the risks related to the Merger. Current Economic and Trade Environment The economic and trade environment remains dynamic and unpredictable, and tariffs continue to affect our results of operations and profitability. IEEPA Tariffs and Refunds Tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”), particularly bilateral United States and Chinese tariffs, increased our costs and adversely affected our results of operations and profitability in fiscal year 2025 and the first half of fiscal year 2026. In February 2026, the U.S. Supreme Court held that IEEPA does not authorize the President to impose tariffs, and the U.S. Court of International Trade subsequently ordered U.S. Customs and Border Protection ("CBP") to refund IEEPA duties, with interest, through a phased administrative process. As of July 3, 2026, we had received approximately $17.0 million of IEEPA tariff refunds, which reduced cost of revenues by $16.7 million and inventories, net by $0.3 million. We received $0.7 million of interest income related to IEEPA tariff refunds. Following our decision to refund IEEPA tariff surcharges previously collected from customers, we recorded a liability of $6.6 million 31 Table of Contents within accrued liabilities and other current liabilities (the "IEEPA Customer Reimbursement Liability") and a corresponding reduction of revenues, net. See note 14, Other Financial Information. Together these items increased gross profit and operating income by approximately $10.1 million and income before taxes by approximately $10.8 million for the third fiscal quarter of fiscal year 2026. Excluding them, gross margin for the third quarter would have been approximately 31%, compared with reported gross margin of 36.4% and 33.3% in the prior-year quarter. We do not exclude the effects of tariffs or tariff refunds from our non-GAAP financial measures, and cash provided by operating activities for the quarter includes the refunds received. These amounts represent recovery of duties paid in prior periods and are not indicative of future results. We have submitted all refund claims currently eligible under the phases of the refund process that have been implemented, representing approximately $18.0 million of additional duties paid. Because the availability, timing, and amount of any further refunds depend on continuing regulatory, administrative, and judicial developments, including pending appellate proceedings concerning CBP's authority to refund duties on finally liquidated entries, we have not recognized a receivable for unrecovered amounts. To the extent we recover additional amounts previously passed through to customers, certain customer arrangements may require us to remit some or all of those amounts, which would reduce revenues, net rather than cost of revenues, and we may face customer claims regarding the amount or timing of reimbursement. Tariffs Imposed Under Other Authorities The Supreme Court's decision did not invalidate tariffs imposed under other authorities or prevent new tariffs. A 10% global surcharge imposed under Section 122 of the Trade Act of 1974 applied to our imports for substantially all of the third quarter and expired on July 24, 2026. Effective the same date, the U.S. Trade Representative imposed tariffs under Section 301 of the Trade Act of 1974 of 12.5% on imports from China and certain other economies and 10% on others, with no statutory expiration date. A further Section 301 investigation remains pending. In addition, on July 20, 2026, the President issued three proclamations under Section 338 of the Tariff Act of 1930, the first use of that authority, imposing an additional 50% duty on specified products of Canada effective August 19, 2026; we do not currently expect these measures to have a material direct impact on our results. Separately, the U.S. Department of Commerce is conducting an investigation under Section 232 of the Trade Expansion Act of 1962 into imports of medical equipment, the scope of which includes X-ray and imaging equipment. We cannot predict the outcome of that investigation or whether it will result in tariffs applicable to our products or components. Tariffs, trade restrictions, retaliatory actions, and related uncertainty have contributed to, and may continue to contribute to, delayed customer purchasing decisions, increased costs, supply chain and logistics disruption, exchange rate volatility, increased shipping and transportation costs, and disputes with customers regarding IEEPA tariff refunds. Tariffs targeting X-ray imaging products or products shipped from the United States could make our products less competitive and negatively impact our business, financial condition, and results of operations, as could international customers' perceptions of United States trade policy. We continue to monitor these developments and to take actions intended to reduce their impact, including qualifying alternative suppliers, shifting production within our manufacturing footprint, localizing additional manufacturing in affected regions, adjusting pricing, and other duty mitigation practices. We do not expect these efforts to fully offset the additional costs or other negative impacts resulting from tariffs. For additional information on risks related to tariffs and trade policy, supply chain and logistics challenges, cost increases, changes in U.S. and worldwide economic conditions, geopolitical tensions, and other risks that could impact our results, see Item 1A “Risk Factors.” Operating Segments and Products We have two reportable operating segments: Medical and Industrial. The segments align our products and services offerings with customer use in medical and industrial imaging. Medical In our Medical segment, we design, manufacture, sell and service X-ray imaging components, including X-ray tubes, flat panel and photon counting detectors and accessories, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, automatic exposure control devices, generators, and coolers. These components are used in a range of medical imaging applications including computed tomography ("CT"), mammography, oncology, cardiac, surgery, dental, fluoroscopy, and other diagnostic radiography uses. Our X-ray imaging components are primarily sold to OEM customers. These OEM customers then design-in our products to their X-ray imaging systems for a variety of medical modalities. A substantial majority of medical X-ray imaging OEMs globally are our customers, and many of these have been our customers for over 35 years. We believe one of the reasons for customer loyalty is that our hardware and software products are tightly integrated with our customers' systems. We work very closely with our customers to create custom built components for their systems based on technology platforms that we have developed. Because our products are 32 Table of Contents often customized for our customers' specific equipment, it can be costly and complex for our customers to switch to another provider. Once our components are designed into our customers' equipment, our customers will typically continue to buy from us for any replacement components and for service and support for that equipment. Some of our products are also included in product registrations for our customers' equipment that require regulatory approval to change. In addition to sales to OEM customers, we sell our products to independent service companies and distributors as well as directly to end-users for replacement purposes. We are one of the largest independent global manufacturers of X-ray imaging components, and each year, we produce over 27,000 X-ray tubes and 20,000 X-ray detectors. We estimate that our world-wide installed base of products includes more than 170,000 X-ray tubes, 170,000 X-ray detectors, 600,000 connect and control components, and 16,800 software instances. Replacement and service of our existing installed base makes up a significant portion of our revenue. Many of our components need to be replaced regularly, depending upon usage and other factors. For example, CT X-ray tubes generally need to be replaced every 2 to 6 years, in comparison to a general radiography tube which can last up to 10 years, depending on utilization. In China, the replacement cycle for CT X-ray tubes currently can be as frequent as every 10 to 20 months due to high utilization of imaging equipment. Other products such as X-ray detectors have a useful life of as much as 7 years or more but can require more frequent service and repairs during their useful life. In addition, our detector customers often elect to upgrade products to newer technology before the end of a current product’s useful life. X-ray imaging software is a relatively small part of our business and includes maintenance revenue for software licenses. In China, the government has continued its efforts to broaden the availability of healthcare services. In the past 20 years, the number of medical institutions and diagnostic radiology equipment per million of population in China has increased substantially. We are developing CT X-ray tubes and related subsystems for Chinese OEMs as they introduce new systems in China. Over the long term, our objective is to become the partner of choice both for new systems and for replacement components in existing systems as CT systems continue to be more widely adopted throughout China. Industrial In our Industrial segment, we design, develop, manufacture, sell, and service X-ray imaging products for use in a number of applications, including security applications for cargo screening at ports and borders, baggage screening at airports, and nondestructive testing, irradiation, and inspection applications used in a number of other verticals. We also manufacture and sell our own X-ray imaging systems for industrial applications. Our Industrial products include Linatron® X-ray linear accelerators, non-intrusive cargo inspection systems, X-ray tubes, flat panel and photon counting detectors, computed radiography scanners, high voltage connectors, and coolers. In addition, we license proprietary image-processing and detection software designed to work with other Varex products to provide packaged sub-assembly solutions to our Industrial customers. Our Industrial business benefits from the research and development investment and manufacturing economies of scale on the Medical side of our business, as we continue to find new applications for our technology. Along with more favorable pricing dynamics, this allows us to generally achieve higher gross profit for Industrial products relative to our Medical business. In addition, our Industrial business benefits from our long-term service agreements for our Linatron® products. Security applications primarily consist of cargo security for the screening of trucks, trains, and cargo containers at ports and borders as well as airport security for checked baggage and palletized cargo. The end customers for border protection systems are typically government agencies, many of which are in oil-based economies and war zones where there can be significant variation in buying patterns. We have expanded our security offerings to include full systems that perform cargo and vehicle inspections. These systems are used for screening cargo at ports and borders. Non-destructive testing and inspection verticals utilize X-ray imaging to scan items for inspection of manufacturing defects and product integrity in a wide range of industries including aerospace, automotive, electronics, oil and gas, food packaging, metal castings, and additive manufacturing. In addition, new applications for X-ray sources have been developed, such as sterilization of food and its packaging. We provide X-ray sources, digital detectors, high voltage connectors, and image processing software to OEM customers, system integrators, and manufacturers in a variety of these verticals. We believe that non-destructive testing represents a significant growth opportunity for our business, and we are actively pursuing new potential applications for our products. Critical Accounting Policies and Estimates The preparation of our unaudited Condensed Consolidated Financial Statements and related disclosures in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are based on historical experience and on various other factors that we believe are reasonable under the circumstances. Our critical accounting policies that are affected by accounting estimates require us to use judgments, often as a result of the need to make estimates and assumptions regarding matters that are inherently uncertain, and actual results could differ materially from these estimates. 33 Table of Contents We periodically review our accounting policies, estimates, and assumptions and make adjustments when facts and circumstances dictate. Refer to our Annual Report on Form 10-K for the fiscal year ended October 3, 2025 filed with the SEC on November 18, 2025 and Note 1, Summary of Significant Accounting Policies, of the Notes to the Condensed Consolidated Financial Statements of this report for further details. Our critical accounting policies that are affected by accounting estimates include valuation of inventories, assessment of recoverability of goodwill and intangible assets, and income taxes. Except for the changes in certain policies upon adoption of the accounting standard described in Note 1, Summary of Significant Accounting Policies of the Notes to the Condensed Consolidated Financial Statements of this report, there have been no material changes to the Company’s significant accounting policies, compared to the accounting policies described in Note 1, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for fiscal year 2025. Fiscal Year The fiscal years of the Company as reported are the 52 or 53-week periods ending on the Friday nearest September 30. Fiscal year 2026 is the 52-week period ending October 2, 2026. Fiscal year 2025 was the 53-week period that ended on October 3, 2025. The fiscal quarters ended July 3, 2026 and July 4, 2025 were both 13-week periods. The nine-month fiscal periods ended July 3, 2026 and July 4, 2025 were a 39-week period and a 40-week period, respectively. Discussion of Results of Operations for the Three Months Ended July 3, 2026 Compared to the Three Months Ended July 4, 2025 Revenues, Net Three Months Ended (In millions) July 3, 2026 July 4, 2025 $ Change % Change Medical $ 134.0 $ 142.1 $ (8.1) (5.7) % Industrial 76.5 60.9 15.6 25.6 % Total revenues, net $ 210.5 $ 203.0 $ 7.5 3.7 % Medical as a percentage of total revenues, net 63.7 % 70.0 % Industrial as a percentage of total revenues, net 36.3 % 30.0 % Medical revenues decreased $8.1 million, primarily due to decreased sales of radiography, mammography, CT, Dental and other modalities of $9.5 million, partially offset by increased sales in fluoroscopic and veterinary of $1.4 million. Overall Medical revenue for the period was impacted by a $5.3 million reduction of revenues, net, recorded in connection with the IEEPA Customer Reimbursement Liability. Industrial revenues increased $15.6 million, primarily due to increased sales of inspection products, digital detectors, and other products of $16.9 million, partially offset by decreased sales of X-ray tubes of $1.3 million. Overall Industrial revenue for the period was impacted by a $1.2 million reduction of revenues, net, recorded in connection with the IEEPA Customer Reimbursement Liability. Revenues, Net by Region Three Months Ended (In millions) July 3, 2026 July 4, 2025 $ Change % Change Americas $ 74.9 $ 71.0 $ 3.9 5.5 % EMEA 66.9 69.6 (2.7) (3.9) % APAC 68.7 62.4 6.3 10.1 % Total revenues, net $ 210.5 $ 203.0 $ 7.5 3.7 % Overall revenue during the three months ended July 3, 2026 increased as compared to the three months ended July 4, 2025. Americas revenue increased by $3.9 million due to increased sales of security inspection products of $5.7 million, veterinary of $0.3 million, and other product sales of $0.2 million, partially offset by decreased sales of digital detectors of $1.0 million, X-ray tubes of $0.7 million, and software of $0.6 million. EMEA revenues decreased $2.7 million due to decreased sales of X-ray tubes of $3.7 million, digital detectors of $2.8 million, and veterinary of $0.9 million, partially offset by increased sales of security inspection products of $3.8 million, and other product sales of $0.9 million. APAC revenues increased $6.3 million primarily due to increased sales of digital detectors of $3.4 million, other product sales of $1.4 million, security inspection products of $0.8 million, and X-ray 34 Table of Contents tubes of $0.7 million. Revenue in the Americas, EMEA, and APAC for the period were impacted by revenue reductions of $4.8 million, $1.1 million, and $0.6 million, respectively, recorded in connection with the IEEPA Customer Reimbursement Liability. See Note 2, Revenue, to the accompanying Notes to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country. Gross Profit Three Months Ended (In millions) July 3, 2026 July 4, 2025 $ Change % Change Medical $ 48.3 $ 46.7 $ 1.6 3.4 % Industrial 28.4 20.8 7.6 36.5 % Total gross profit $ 76.7 $ 67.5 $ 9.2 13.6 % Medical gross margin 36.0 % 32.9 % Industrial gross margin 37.1 % 34.2 % Total gross margin 36.4 % 33.3 % The Medical segment gross profit increased $1.6 million, primarily due to decreased material costs and the recovery of IEEPA tariffs of $8.8 million, partially offset by an unfavorable shift in product sales mix and reduced productivity of $7.2 million. The IEEPA tariff refunds reduced Medical cost of revenue by $15.9 million and the related IEEPA Customer Reimbursement Liability reduced Medical revenues by $5.3 million, for a net favorable effect of $10.6 million. The Industrial segment gross profit increased $7.6 million, primarily due to both increased sales volume and a favorable shift in product sales mix of $8.7 million, partially offset by increased material costs and decreased productivity of $1.1 million. The IEEPA tariff refunds reduced Industrial cost of revenue by $0.7 million and the related IEEPA Customer Reimbursement Liability reduced Industrial revenues by $1.2 million, for a net unfavorable effect of $0.5 million. Total gross margin increased to 36.4% from 33.3% in the prior-year quarter. The IEEPA tariff refunds and the IEEPA Customer Reimbursement Liability recognized in the third quarter increased nine-month gross margin by approximately 580 basis points. Excluding those items, gross margin for the three months would have been approximately 30.6%, a decline of approximately 300 basis points from the prior-year period. Operating Expenses Three Months Ended (In millions) July 3, 2026 July 4, 2025 $ Change % Change Research and development $ 23.3 $ 21.4 $ 1.9 8.9 % As a percentage of total revenues, net 11.1 % 10.5 % Selling, general, and administrative $ 30.6 $ 32.9 $ (2.3) (7.0) % As a percentage of total revenues, net 14.5 % 16.2 % Impairment of goodwill $ — $ 93.9 $ (93.9) (100.0) % As a percentage of total revenues, net — % 46.3 % Operating expenses $ 53.9 $ 148.2 $ (94.3) (63.6) % As a percentage of total revenues, net 25.6 % 73.0 % Research and Development We are committed to investing in the business to support long-term growth and believe long-term research and development expenses of approximately 8% to 10% of annual revenues is the appropriate range that will allow us to innovate and bring new products to market for our global OEM customers. Research and development increased to 11.1% of revenues, mainly due to increased material costs. Selling, General, and Administrative Selling, general, and administrative expenses decreased $2.3 million, primarily due to decreased legal costs of $1.2 million and compensation costs of $1.6 million, partially offset by increased marketing and other costs of $0.5 million. 35 Table of Contents Impairment of Goodwill During the third quarter of fiscal year 2025, we recognized a goodwill impairment charge of $93.9 million, following a determination that the fair value of the Medical reporting unit was below its carrying value. Interest and Other Expense, Net The following table summarizes the Company’s interest and other expense, net: Three Months Ended (In millions) July 3, 2026 July 4, 2025 $ Change % Change Interest income (1) $ 0.9 $ 2.5 $ (1.6) (64.0) % Interest expense (5.8) (9.4) 3.6 (38.3) % Other (expense) income, net (1.7) 1.0 (2.7) (270) % Interest and other expense, net $ (6.6) $ (5.9) $ (0.7) 11.9 % (1 )Interest income for the three months ended July 3, 2026 includes $0.7 million recognized on IEEPA refunds. See Current Economic and Trade Environment. Interest income for the three months ended July 3, 2026 includes $0.7 million recognized on IEEPA tariff refunds, which we do not expect to recur. Excluding this amount, interest income was approximately $0.2 million, compared with $2.5 million in the prior-year quarter, a decrease of approximately 92%, primarily due to lower average cash, cash equivalents, and marketable securities balances being held in interest bearing deposit accounts when comparing the third quarter of fiscal year 2026 to the third quarter of fiscal year 2025. This was due to an accumulation of cash in the prior period for the repayment of our convertible notes maturing in June 2025. Interest expense for the third quarter of fiscal year 2026 decreased $3.6 million compared to the third quarter of fiscal year 2025 primarily due to the debt refinancing which occurred during the second quarter of fiscal year 2026 which reduced the Company's overall debt balance and provided more favorable rates in fiscal year 2026 compared to fiscal year 2025. Other (expense) income, net for the third quarter of fiscal year 2026 decreased $2.7 million compared to the third quarter of fiscal year 2025 primarily due to increased foreign exchange expense of $2.1 million and a gain on sale of fixed assets of $0.6 million which occurred in fiscal year 2025. Taxes on Income (Loss) For the three months ended July 3, 2026, we recognized income tax expense of $0.3 million on $16.2 million of pre-tax income. For the three months ended July 4, 2025, we recognized income tax expense of $2.5 million on $86.6 million of pre-tax loss. Our tax expense for the three months ended July 3, 2026 was primarily due to increased pre-tax income in profitable jurisdictions. Discussion of Results of Operations for the Nine Months Ended July 3, 2026 Compared to the Nine Months Ended July 4, 2025 Revenues, Net Nine Months Ended (In millions) July 3, 2026 July 4, 2025 $ Change % Change Medical $ 435.0 $ 440.5 $ (5.5) (1.2) % Industrial 201.1 175.2 25.9 14.8 % Total revenues $ 636.1 $ 615.7 $ 20.4 3.3 % Medical as a percentage of total revenues 68.4 % 71.5 % Industrial as a percentage of total revenues 31.6 % 28.5 % Medical revenues decreased $5.5 million, primarily due to decreased sales of dental, fluoroscopic, oncology, and veterinary of $12.6 million, partially offset by increased sales in radiographic, CT, and other modalities of $7.1 million. Overall Medical revenue for the period was impacted by a $5.3 million reduction of revenues, net, recorded in connection with the IEEPA Customer Reimbursement Liability. Industrial revenues increased $25.9 million, primarily due to increased sales of security inspection products, digital detectors, and other components of $28.8 million, partially offset by decreased sales of X-ray tubes of $2.9 million. Overall Industrial revenue 36 Table of Contents for the period was impacted by a $1.2 million reduction of revenues, net, recorded in connection with the IEEPA Customer Reimbursement Liability. Revenues, Net by Region Nine Months Ended (In millions) July 3, 2026 July 4, 2025 $ Change % Change Americas $ 228.9 $ 204.8 $ 24.1 11.8 % EMEA 191.2 201.7 (10.5) (5.2) % APAC 216.0 209.2 6.8 3.3 % Total revenues, net $ 636.1 $ 615.7 $ 20.4 3.3 % Overall revenue during the nine months ended July 3, 2026 increased as compared to the nine months ended July 4, 2025. During the nine months ended July 3, 2026, Americas revenues increased $24.1 million due to increased sales of security inspection products of $18.6 million, X-ray tubes of $4.2 million, digital detectors of $1.3 million, and other product sales of $0.8 million, partially offset by decreased sales of veterinary of $0.5 million, and software of $0.3 million. EMEA revenues decreased $10.5 million primarily due to decreased sales of digital detectors of $7.2 million, security inspection products of $3.6 million, and veterinary of $1.1 million, partially offset by increased sales of other product sales of $1.0 million, and X-ray tubes of $0.4 million. APAC revenues increased $6.8 million primarily due to increased sales of other product sales of $3.9 million, digital detectors of $2.0 million, X-ray tubes of $1.3 million, and security inspection products of $0.2 million, partially offset by decreased sales of software of $0.6 million. Revenue in the Americas, EMEA, and APAC for the period were impacted by revenue reductions of $4.8 million, $1.1 million, and $0.6 million, respectively, recorded in connection with the IEEPA Customer Reimbursement Liability. See Note 2, Revenue, of the accompanying Notes to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country. Gross Profit Nine Months Ended (In millions) July 3, 2026 July 4, 2025 $ Change % Change Medical $ 144.9 $ 152.1 $ (7.2) (4.7) % Industrial 74.2 60.6 13.6 22.4 % Total gross profit $ 219.1 $ 212.7 $ 6.4 3.0 % Medical gross margin % 33.3 % 34.5 % Industrial gross margin % 36.9 % 34.6 % Total gross margin % 34.4 % 34.5 % Medical segment gross profit decreased $7.2 million, primarily due to increased material costs of $5.3 million, which include the recovery of IEEPA tariffs, and both decreased sales volume and unfavorable shift in product sales mix of $2.6 million, partially offset by improved productivity of $0.7 million. The IEEPA tariff refunds reduced Medical cost of revenue by $15.9 million and the related IEEPA Customer Reimbursement Liability reduced Medical revenues by $5.3 million, for a net favorable effect of $10.6 million. Industrial segment gross profit increased $13.6 million, primarily due to improved sales volume and favorable product mix of $21.0 million, partially offset by decreased productivity and increased material costs of $7.4 million. The IEEPA tariff refunds reduced Industrial cost of revenue by $0.7 million and the related IEEPA Customer Reimbursement Liability reduced Industrial revenues by $1.2 million, for a net unfavorable effect of $0.5 million. Gross margin was 34.4% for the nine months ended July 3, 2026, compared with 34.5% for the nine months ended July 4, 2025. The comparison reflects materially offsetting factors. The IEEPA tariff refunds and the IEEPA Customer Reimbursement Liability recognized in the third quarter increased nine-month gross margin by approximately 190 basis points. Excluding those items, gross margin for the nine months would have been approximately 32.5%, a decline of approximately 200 basis points from the prior-year period. 37 Table of Contents Operating Expenses Nine Months Ended (In millions) July 3, 2026 July 4, 2025 $ Change % Change Research and development $ 67.2 $ 66.9 $ 0.3 0.4 % As a percentage of total revenues 10.6 % 10.9 % Selling, general, and administrative $ 99.3 $ 99.3 $ — — % As a percentage of total revenues 15.6 % 16.1 % Impairment of goodwill $ — $ 93.9 $ (93.9) (100.0) % As a percentage of total revenues — % 15.3 % Operating expenses $ 166.5 $ 260.1 $ (93.6) (36.0) % As a percentage of total revenues 26.2 % 42.2 % Research and Development Research and development costs decreased to 10.6% of total revenue, in-line with research and development costs in the prior year period. Selling, General, and Administrative Selling, general, and administrative expenses remained relatively flat when compared to the nine months ended July 4, 2025. Impairment of Goodwill During the third quarter of fiscal year 2025, we recognized a goodwill impairment charge of $93.9 million, following a determination that the fair value of the Medical reporting unit was below its carrying value. Interest and Other Expense, Net The following table summarizes the Company’s interest and other expense, net: Nine Months Ended (In millions) July 3, 2026 July 4, 2025 $ Change % Change Interest income(1) $ 1.9 $ 7.5 $ (5.6) (74.7) % Interest expense (30.9) (27.6) (3.3) 12.0 % Other (expense) income, net (10.0) (5.8) (4.2) 72.4 % Interest and other expense, net $ (39.0) $ (25.9) $ (13.1) 50.6 % (1 )Interest income for the nine months ended July 3, 2026 includes $0.7 million recognized on IEEPA refunds. See Current Economic and Trade Environment. Interest income for the nine months ended July 3, 2026 includes $0.7 million recognized on IEEPA tariff refunds, which we do not expect to recur. Excluding this amount, interest income was approximately $1.2 million, compared with $7.5 million for the nine months ended July 3, 2026. The decrease when compared to the nine months ended July 4, 2025 was primarily due to lower average cash, cash equivalents, and marketable securities balances being held in interest bearing deposit accounts when comparing the third quarter of fiscal year 2026 to the third quarter of fiscal year 2025. This was due to an accumulation of cash in the prior period for the repayment of our convertible notes maturing in June 2025. Interest expense for the nine months ended July 3, 2026 increased when compared to the nine months ended July 4, 2025 primarily due to debt extinguishment costs of $9.4 million related to the repayment of our senior secured notes and the closing of our prior senior secured revolving credit facility, partially offset by reduced interest payments related to a lower debt balance and more favorable interest rates in fiscal year 2026 compared to fiscal year 2025. Other (expense) income, net for the nine months ended July 3, 2026 increased $4.2 million when compared to the nine months ended July 4, 2025 primarily due to increased losses in certain investments in privately-held companies and equity investments of $2.9 million, a gain on sale of fixed assets of $0.6 million which occurred in fiscal year 2025, and increased foreign exchange expense and other costs of $0.7 million. 38 Table of Contents Taxes on Income (Loss) For the nine months ended July 3, 2026, we recognized an income tax expense of $3.3 million on $13.6 million of pre-tax income. For the nine months ended July 4, 2025, the Company recognized income tax expense of $8.8 million on $73.3 million of pre-tax loss. Our tax expense for the nine months ended July 3, 2026, was primarily due to increased pre-tax income in profitable jurisdictions. Liquidity and Capital Resources We assess our liquidity in terms of our ability to generate cash to fund our operations, including working capital and investing activities. We believe that our operating cash flow, cash on our balance sheet, availability under our Revolving Credit Facility, and our ability to access the credit and capital markets are sufficient to meet our anticipated operating activities and cash commitments for at least the next 12 months and will be sufficient to allow us to continue to invest in our existing businesses, consummate strategic acquisitions, and manage our capital structure on a short-term and long-term basis. Other than the effects of tariffs and tariff refunds described above, including the timing of any further refunds we may receive and of payments to customers under the reimbursement liability recorded as of July 3, 2026, we are currently not aware of any trends or demands, commitments, events, or uncertainties that will result in or that are reasonably likely to result in a material change to our liquidity needs during the next 12 months. As of July 3, 2026, the availability under our Revolving Credit Facility was $91.3 million, and we had total debt of $347.1 million, net of deferred issuance costs of $3.6 million. Cash and Cash Equivalents and Marketable Debt Securities The following table summarizes our cash and cash equivalents and marketable debt securities: (In millions) July 3, 2026 October 3, 2025 $ Change Cash and cash equivalents $ 99.2 $ 145.0 $ (45.8) Marketable debt securities not included in cash and cash equivalents — 10.1 (10.1) Total $ 99.2 $ 155.1 $ (55.9) 39 Table of Contents Borrowings The following table summarizes the changes in our debt outstanding: July 3, 2026 October 3, 2025 (In millions) Amount Amount $ Change Current maturities of long-term debt: Term Loan Facility $ 17.5 $ — $ 17.5 Other debt 0.7 1.5 (0.8) Total current maturities of long-term debt $ 18.2 $ 1.5 $ 16.7 Non-current maturities of long-term debt: Revolving Credit Facility $ 8.7 $ — $ 8.7 Term Loan Facility 323.8 — 323.8 Senior Secured Notes — 368.0 (368.0) Other debt — 0.4 (0.4) Total non-current maturities of long-term debt $ 332.5 $ 368.4 $ (35.9) Unamortized issuance costs and debt premiums: Unamortized issuance costs - Term Loan Facility $ (3.6) $ — $ (3.6) Unamortized issuance costs, net of debt premium - Senior Secured Notes — (2.4) 2.4 Total unamortized issuance costs and debt premiums (3.6) (2.4) (1.2) Total debt outstanding, net $ 347.1 $ 367.5 $ (20.4) Cash Flows Nine Months Ended (In millions) July 3, 2026 July 4, 2025 Net cash flow provided by (used in): Operating activities $ 3.4 $ 33.8 Investing activities (17.1) 11.0 Financing activities (32.1) (77.0) Effects of exchange rate changes on cash and cash equivalents and restricted cash (0.2) 0.3 Net decrease in cash and cash equivalents and restricted cash $ (46.0) $ (31.9) Net cash provided by operating activities. Cash provided by operating activities was $3.4 million and $33.8 million for the nine months ended July 3, 2026 and July 4, 2025, respectively. The nine months ended July 3, 2026 includes $17.7 million of IEEPA tariff refunds received during the third fiscal quarter 2026. Excluding these refunds, cash provided by operating activities would have been a use of cash of approximately $14 million. We expect cash flows in future periods to be reduced by payment to customers under the $6.6 million reimbursement liability recorded as of July 3, 2026. Significant changes in operating assets and liabilities affecting cash flows during these periods included: •Net income was $10.3 million for the nine months ended July 3, 2026 compared to a net loss of $82.1 million for the nine months ended July 4, 2025. The change from net income to net loss was primarily due to a goodwill impairment charge of $93.9 million in the nine months ended July 4, 2025, partially offset by a $9.4 million loss on extinguishment of debt and in the nine months ended July 3, 2026. •Cash used for inventories was $15.8 million higher in the nine months ended July 3, 2026, compared to the nine months ended July 4, 2025, primarily due to an increase in quantity of inventory for anticipated future demand. •Cash provided by accounts receivable was $9.2 million lower in the nine months ended July 3, 2026, compared to the nine months ended July 4, 2025, primarily due to an increase in timing of collections from customers. 40 Table of Contents •Cash used in accrued liabilities and other current and long-term liabilities increased by $9.3 million in the nine months ended July 3, 2026, compared to the nine months ended July 4, 2025, primarily due to the timing of monthly interest payments under the new Term Loan Facility. The remaining variance was attributable to other changes in accrued liabilities and other current and long‑term liabilities, each of which was individually insignificant. Net cash (used in) provided by investing activities. Cash (used in) provided by investing activities was $(17.1) million and $11.0 million for the nine months ended July 3, 2026 and July 4, 2025, respectively. This change was primarily due to net cash decreases related to marketable debt securities and certificates of deposits activity of $18.5 million and an increase in purchases of property, plant, and equipment of $8.6 million in the nine months ended July 3, 2026, compared to the nine months ended July 4, 2025. Net cash used in financing activities. Net cash used in financing activities was $32.1 million and $77.0 million for the nine months ended July 3, 2026 and July 4, 2025, respectively. This change was primarily due to the repayment of the senior secured notes and related fees of $375.2 million during the second quarter of fiscal year 2026, partially offset with proceeds from the issuance of the term loan of $345.5 million during the second quarter of fiscal year 2026, compared to the repayment in full of the Convertible Notes of $200.0 million, partially offset by the issuance of $126.9 million of the Senior Secured Notes Add On during the nine months ended July 4, 2025. Material Contractual Obligations In October 2013, we entered into an amended agreement with dpiX and other parties that, among other things, provides us with the right to 50% of dpiX’s total manufacturing capacity produced after January 1, 2014. The amended agreement requires us to pay for 50% of the fixed costs (as defined in the amended agreement), as determined and approved by the dpiX board of directors at the beginning of each calendar year. In January 2026, the Company's fixed cost commitment was determined to be $13.7 million for calendar year 2026. For the remainder of calendar year 2026, we estimate that we have fixed cost commitments of $6.8 million related to this amended agreement. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement). In August 2015, pursuant to a Domination and Profit and Loss Transfer Agreement (the “DPLTA”), we committed to pay the noncontrolling shareholders of MeVis Medical an annual recurring net compensation of €0.95 per MeVis Medical share. The annual net payment will continue for the life of the DPLTA, which we anticipate will continue for as long as we remain as the controlling shareholder of MeVis Medical. As of July 3, 2026, noncontrolling shareholders together held approximately 0.5 million shares of MeVis Medical, representing 26.3% of the outstanding shares. The Company enters into purchase agreements with its suppliers in the ordinary course of its business for the purchase of goods and services. Some of these purchase agreements are non-cancellable and thus contractually obligate the Company to future cash payments. As of July 3, 2026, our non-cancellable supplier purchase obligations totaled $2.6 million. Contingencies From time to time, we are a party to or otherwise involved in legal proceedings, government inspections, investigations, customs and duty audits, and other claims and contingency matters, both inside and outside the United States, arising in the ordinary course of our business or otherwise. We accrue amounts for probable losses, to the extent they can be reasonably estimated, that we believe are adequate to address any liabilities related to legal proceedings as well as other loss contingencies that we believe 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. Other than as described under Current Economic and Trade Environment, we did not have any material contingent liabilities as of July 3, 2026 and October 3, 2025. Legal expenses are expensed as incurred. Days Sales Outstanding Trade accounts receivable days sales outstanding (“DSO”) was 63 days at July 3, 2026 and October 3, 2025. Our accounts receivable and DSO are impacted by a number of factors, including the timing of product shipments, collections performance, payment terms, the mix of revenues from different regions and the effects of economic instability. Letters of Credit The Company uses standby letters of credit as a form of credit support in the ordinary course of business. Outstanding standby letters of credit issued under its credit facilities reduce the borrowing capacity available under the Company’s Revolving Credit Facility and therefore impact available liquidity under our Revolving Credit Facility; however, they do not represent current 41 Table of Contents cash obligations. Management does not expect these standby letters of credit to be drawn. As of July 3, 2026, $11.9 million of standby letters of credit were outstanding. Recent Accounting Standards or Updates Not Yet Effective See Note 1, Summary of Significant Accounting Policies, of the accompanying Notes to the Condensed Consolidated Financial Statements for a description of recent accounting standards, including the expected dates of adoption and the estimated effects on our Condensed Consolidated Financial Statements. Backlog Backlog is the accumulation of all orders for which revenues have not been recognized and are still considered valid. Backlog also includes a small portion of billed service contracts that are included in deferred revenue. Our estimated total backlog at July 3, 2026 was approximately $246 million. Orders may be revised or canceled, either according to their terms or as customers' needs change. Consequently, it is difficult to predict with certainty the amount of backlog that will result in revenues. We perform a quarterly review to verify that outstanding orders in the backlog remain valid. Aged orders that are not expected to be converted to revenues are deemed dormant and are reflected as a reduction in the backlog amounts in the period identified. In addition to orders for which revenues have not been recognized and are still considered valid, we have pricing agreements with many of our established customers that span multi-year periods. These pricing agreements include volume ranges under which orders are placed.