Form 8-K

8-K — Varex Imaging Corp

Accession: 0001104659-26-093036

Filed: 2026-08-10

Period: 2026-08-10

CIK: 0001681622

SIC: 3679 (ELECTRONIC COMPONENTS, NEC)

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — tm2622686d1_8k.htm (Primary)

EX-99.1 — EXHIBIT 99.1 (tm2622686d1_ex99-1.htm)

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8-K — FORM 8-K

8-K (Primary)

Filename: tm2622686d1_8k.htm · Sequence: 1

false

0001681622

2026-08-10

iso4217:USD

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UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

8-K

CURRENT

REPORT

Pursuant

to Section 13 or 15(d)

the Securities Exchange Act of 1934

Date

of Report (Date of earliest event reported): August 10, 2026

VAREX

IMAGING CORPORATION

(Exact

name of registrant as specified in its charter)

Delaware

001-37860

81-3434516

(State or other jurisdiction of

incorporation or organization)

(Commission File Number)

(I.R.S. Employer

Identification Number)

1678 S. Pioneer Road, Salt Lake City, Utah

84104

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number,

including area code: (801) 972-5000

Not

Applicable

(Former

name or former address, if changed since last report)

Check

the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant

under any of the following provisions (see General Instruction A.2. below):

Written

communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting

material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement

communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement

communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities

registered pursuant to Section 12(b) of the Act:

Title

of each class

Trading

Symbol(s)

Name

of each exchange on which registered

Common

Stock

VREX

The

Nasdaq Global Select Market

Indicate

by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule

12b - 2 of the Securities Exchange Act of 1934. Emerging growth company ¨

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period

for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 2.02

Results of Operations and Financial Condition

On August 10, 2026, Varex Imaging Corporation

(the “Company”) issued a press release announcing its preliminary results of operations for the three and nine months ended

July 3, 2026 entitled: “Varex Announces Financial Results for Third Quarter Fiscal Year 2026.” A copy of the press release

is furnished as Exhibit 99.1 and incorporated by reference into this item.

This information shall not be deemed “filed” for purposes

of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act or the Exchange Act, except

as shall be expressly set forth by specific reference in such a filing.

Item 9.01

Financial Statements and Exhibits

(d) Exhibits

Exhibit No.

Description

99.1

Press

Release dated August 10, 2026, entitled "Varex Announces Financial Results for Third Quarter Fiscal Year 2026"

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,

the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

VAREX IMAGING CORPORATION

Dated: August 10, 2026

By:

/s/ Matthew A. Martinez

Matthew A. Martinez

Chief Legal Officer and Corporate Secretary

EX-99.1 — EXHIBIT 99.1

EX-99.1

Filename: tm2622686d1_ex99-1.htm · Sequence: 2

Exhibit 99.1

VAREX ANNOUNCES FINANCIAL RESULTS FOR

THIRD QUARTER FISCAL YEAR 2026

SALT LAKE

CITY, August 10, 2026 – Varex Imaging Corporation (Nasdaq: VREX) today announced its unaudited financial results

for the third quarter fiscal year 2026.

Q3FY26 Summary

· Revenues $211 million

· GAAP gross margin 36% | Non-GAAP gross margin* 37%

· GAAP operating margin 11% | Non-GAAP operating margin* 12%

· GAAP net income $0.37 per diluted share | Non-GAAP net income*

$0.31 per diluted share

· Cash flow from operations of $21 million

"Third-quarter product sales before the IEEPA-related customer

reimbursement adjustment were approximately $217 million, reflecting strong growth in Industrial and continued expansion in cargo and

vehicle inspection systems,” said Sunny Sanyal, Chief Executive Officer. “The quarter also included the recovery of tariffs

that had increased our product costs in prior periods. We generated $21 million of operating cash flow and enter the fourth quarter with

continued momentum.”

During the quarter, Varex received refunds totaling $17 million

from U.S. Customs related to previously paid IEEPA tariffs. The Company recorded a corresponding $7 million reduction to revenues

reflecting an accrual for expected customer reimbursements of previously billed IEEPA tariffs. Together, these items resulted in higher

third-quarter gross profit by approximately $10 million.

Third quarter revenues were up 4% year-over-year. Third quarter Medical

revenue was $134 million and Industrial revenue was $77 million. Non-GAAP gross margin increased to 37% from 34% in the prior-year

quarter, and non-GAAP EPS was $0.31 compared to $0.13 in the third quarter of fiscal year 2025.

Balance Sheet & Cash Flow

Cash, cash equivalents, and marketable securities were $99 million

as of the end of the third quarter, compared to $155 million at the end of fiscal year 2025. The change in cash primarily reflects the

Company's debt redemption and refinancing completed in March, as well as increased working capital associated with inventory.

Non-GAAP Financial Measures

*Please

refer to "Reconciliation between GAAP and non-GAAP Financial Measures" below for

a reconciliation of non-GAAP items to the comparable GAAP measures.

Cancellation of Earnings Conference Call

In light of the announced transaction with Teledyne Technologies Incorporated,

and as is customary during the pendency of such a transaction, Varex has cancelled its earnings conference call for the third quarter

of fiscal year 2026 previously scheduled for 3:00 p.m. Mountain Time on August 10, 2026, and will not be providing financial

guidance in conjunction with its third quarter fiscal year 2026 earnings release.

About Varex

Varex Imaging Corporation is a leading innovator, designer, and manufacturer

of X-ray imaging components, which include X-ray tubes, digital detectors, and other image processing solutions that are key components

of X-ray imaging systems, as well as X-ray imaging systems for industrial applications. With a 70+ year history of successful innovation,

Varex’s products are used in medical imaging as well as in industrial and security imaging applications. Global OEM manufacturers

incorporate the company’s X-ray sources, digital detectors, connecting devices, and imaging software in their systems to detect,

diagnose, protect, and inspect. Headquartered in Salt Lake City, Utah, Varex employs approximately 2,500 people located in North America,

Europe, and Asia. For more information visit www.vareximaging.com.

Forward Looking Statements

This news release contains “forward-looking” statements

within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning unaudited financial results; industry

or business outlook; product demand environment; and any statements using the terms “believe,” “expect,” “anticipate,”

“can,” “should,” “would,” “could,” “estimate,” “may,” “intend,”

and “potential,” or similar statements are forward-looking statements that involve risks and uncertainties that could cause

the company's actual results and the outcome and timing of certain events to differ materially from those projected or management’s

current expectations. While forward-looking statements are based on assumptions and analyses made by management of Varex that it believes

to be reasonable under the circumstances, actual results and developments will depend on a number of risks and uncertainties which could

cause actual results, performance, and financial condition to differ materially from such expectations. Such risks and uncertainties

include: the ability of the parties to consummate the proposed transaction with Teledyne on anticipated terms and timing or at all, including

obtaining stockholder and regulatory approvals and other conditions to the completion of the transaction; 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

the company's limited original equipment manufacturing customers; 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; loss of business to, and an inability to effectively compete with, competitors; pricing pressures and other factors that could

result in market erosion or loss of customers; failure to meet customers’ needs and demands; supply chain disruptions resulting

in delayed product delivery, and increased costs as a result of reliance on a limited number of suppliers for certain key components;

disruption of critical information systems or material breaches in the security of such systems; inability to maintain or defend intellectual

property rights, and cost associated with protecting the company's intellectual property and defending such rights and defending against

infringement claims; non-compliance with regulations applicable to marketing, manufacturing, labeling, and distributing the company's

products and delays in obtaining regulatory clearances or approvals; limitations imposed by operating and financial restrictions of the

company's debt financing agreements; the financial results of the company's equity method investments and joint ventures, and the other

risks listed from time to time in the company's filings with the U.S. Securities and Exchange Commission. Any forward-looking statement

made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause the company's actual

results to differ may emerge from time to time, and it is not possible for us to predict all of them. Varex assumes no obligation to

update or revise the forward-looking statements in this release because of new information, future events, or otherwise.

Varex has not filed its Form 10-Q for the third quarter of fiscal

year 2026. All financial results described here should be considered preliminary and are subject to change to reflect any necessary adjustments

or changes in accounting estimates that are identified prior to the time Varex files its Form 10-Q.

# # #

For Information Contact:

Sam Maheshwari

Chief Financial Officer

Varex Imaging Corporation

801.973.1574 | investors@vareximaging.com

VAREX IMAGING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended

Nine Months Ended

(In millions, except for per share amounts)

July 3, 2026

July 4, 2025

July 3, 2026

July 4, 2025

Revenues, net

Medical

$ 134.0

$ 142.1

$ 435.0

$ 440.5

Industrial

76.5

60.9

201.1

175.2

Total revenues

210.5

203.0

636.1

615.7

Cost of revenues

Medical

85.7

95.4

290.1

288.4

Industrial

48.1

40.1

126.9

114.6

Total cost of revenues

133.8

135.5

417.0

403.0

Gross profit

Medical

48.3

46.7

144.9

152.1

Industrial

28.4

20.8

74.2

60.6

Total gross profit

76.7

67.5

219.1

212.7

Operating expenses:

Research and development

23.3

21.4

67.2

66.9

Selling, general, and administrative

30.6

32.9

99.3

Impairment of goodwill

—

93.9

—

93.9

Total operating expenses

53.9

148.2

166.5

260.1

Operating income (loss)

22.8

(80.7 )

52.6

(47.4 )

Interest income

0.9

2.5

1.9

7.5

Interest expense

(5.8 )

(9.4 )

(30.9 )

(27.6 )

Other (expense) income, net

(1.7 )

1.0

(10.0 )

(5.8 )

Interest and other expense, net

(6.6 )

(5.9 )

(39.0 )

(25.9 )

Income (loss) before taxes

16.2

(86.6 )

13.6

(73.3 )

Income tax expense

0.3

2.5

3.3

8.8

Net income (loss)

15.9

(89.1 )

10.3

(82.1 )

Less: Net income attributable to noncontrolling interests

0.2

—

0.4

Net income (loss) attributable to Varex

$ 15.7

$ (89.1 )

$ 9.9

$ (82.5 )

Net income (loss) per common share attributable to Varex

Basic

$ 0.37

$ (2.15 )

$ 0.24

$ (2.00 )

Diluted

$ 0.37

$ (2.15 )

$ 0.23

$ (2.00 )

Weighted average common shares outstanding

Basic

42.1

41.5

42.0

41.3

Diluted

42.6

41.5

42.5

41.3

VAREX IMAGING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions, except share and per share amounts)

July 3, 2026

October 3, 2025

Assets

Current assets:

Cash and cash equivalents

$ 99.2

$ 145.0

Marketable securities

0.0

10.1

Accounts receivable, net of allowance for credit losses of $1.9 million and $2.1 million at July 3, 2026 and October 3, 2025, respectively

144.7

156.6

Inventories, net

347.1

299.4

Prepaid expenses and other current assets

42.1

30.7

Total current assets

633.1

641.8

Property, plant, and equipment, net

169.3

157.8

Goodwill

197.6

198.4

Intangible assets, net

12.4

14.0

Investments in privately-held companies

20.2

24.5

Deferred tax assets

2.0

2.9

Operating lease assets

27.7

29.4

Other assets

37.7

38.6

Total assets

$ 1,100.0

$ 1,107.4

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$ 83.5

$ 69.9

Accrued liabilities and other current liabilities

72.6

98.4

Current operating lease liabilities

4.5

4.4

Current maturities of long-term debt, net

18.2

1.5

Deferred revenues

8.6

13.0

Total current liabilities

187.4

187.2

Long-term debt, net

328.9

366.0

Deferred tax liabilities

4.5

5.5

Operating lease liabilities

22.0

24.0

Other long-term liabilities

46.7

38.1

Total liabilities

589.5

620.8

Stockholders' equity:

Preferred stock, $0.01 par value: 20,000,000 shares authorized, none issued

—

Common stock, $0.01 par value: 150,000,000 shares authorized Shares issued and outstanding: 42,147,925 and 41,689,672 at July 3, 2026 and October 3, 2025, respectively.

0.4

Additional paid-in capital

495.1

483.3

Accumulated other comprehensive loss

(2.9 )

(5.2 )

Retained earnings (accumulated deficit)

4.0

(5.9 )

Total Varex stockholders' equity

496.6

472.6

Noncontrolling interests

13.9

14.0

Total stockholders' equity

510.5

486.6

Total liabilities and stockholders' equity

$ 1,100.0

$ 1,107.4

VAREX IMAGING CORPORATION

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL

MEASURES

(Unaudited)

Three Months Ended

Nine Months Ended

(In millions, except per share amounts)

July 3, 2026

July 4, 2025

July 3, 2026

July 4, 2025

GROSS PROFIT RECONCILIATION

Revenues, net

$ 210.5

$ 203.0

$ 636.1

$ 615.7

Gross profit

76.7

67.5

219.1

212.7

Amortization of intangible assets

0.5

1.7

1.6

Non-GAAP gross profit

$ 77.2

$ 68.0

$ 220.8

$ 214.3

Gross margin %

36.4 %

33.3 %

34.4 %

34.5 %

Non-GAAP gross margin %

36.7 %

33.5 %

34.7 %

34.8 %

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE RECONCILIATION

Selling, general, and administrative

$ 30.6

$ 32.9

$ 99.3

Amortization of intangible assets

0.5

1.4

1.3

Restructuring charges

—

0.4

0.2

2.1

Non-ordinary course litigation

0.6

1.7

6.7

5.1

Other non-operational costs

0.1

0.3

0.1

0.3

Non-GAAP selling, general, and administrative expense

$ 29.4

$ 30.0

$ 90.9

$ 90.5

OPERATING EXPENSE RECONCILIATION

Total operating expenses

$ 53.9

$ 148.2

$ 166.5

$ 260.1

Amortization of intangible assets

0.5

1.4

1.3

Restructuring charges

—

0.4

0.2

2.1

Impairment of goodwill

—

93.9

—

93.9

Non-ordinary course litigation

0.6

1.7

6.7

5.1

Other non-operational costs

0.1

0.3

0.1

0.3

Non-GAAP operating expense

$ 52.7

$ 51.4

$ 158.1

$ 157.4

VAREX IMAGING CORPORATION

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL

MEASURES

(Unaudited)

Three Months Ended

Nine Months Ended

(In millions, except per share amounts)

July 3, 2026

July 4, 2025

July 3, 2026

July 4, 2025

OPERATING INCOME (LOSS) RECONCILIATION

Operating income (loss)

$ 22.8

$ (80.7 )

$ 52.6

$ (47.4 )

Amortization of intangible assets (includes amortization impacts to cost of revenues)

1.0

3.1

2.9

Restructuring charges (includes restructuring impact to cost of revenues)

—

0.4

0.2

2.1

Impairment of goodwill

—

93.9

—

93.9

Non-ordinary course litigation

0.6

1.7

6.7

5.1

Other non-operational costs (includes other non-operational impacts to cost of revenues)

0.1

0.3

0.1

0.3

Total operating income adjustments

1.7

97.3

10.1

104.3

Non-GAAP operating income

$ 24.5

$ 16.6

$ 62.7

$ 56.9

Operating margin %

10.8 %

(39.8 )%

8.3 %

(7.7 )%

Non-GAAP operating margin %

11.6 %

8.2 %

9.9 %

9.2 %

INCOME (LOSS) BEFORE TAXES RECONCILIATION

Income (loss) before taxes

$ 16.2

$ (86.6 )

$ 13.6

$ (73.3 )

Total operating income adjustments

1.7

97.3

10.1

104.3

Restructuring charges

—

(0.6 )

—

(0.6 )

(Gain) loss from equity-method investments

(0.2 )

(1.4 )

4.3

2.2

Other non-operational (gain) costs1

—

(0.1 )

10.0

0.3

Total income before taxes adjustments

1.5

95.2

24.4

106.2

Non-GAAP income before taxes

$ 17.7

$ 8.6

$ 38.0

$ 32.9

INCOME TAX EXPENSE RECONCILIATION

Income tax expense

$ 0.3

$ 2.5

$ 3.3

$ 8.8

Tax effect on non-GAAP adjustments

(3.8 )

(0.8 )

(4.2 )

0.4

Non-GAAP income tax expense

$ 4.1

$ 3.3

$ 7.5

$ 8.4

VAREX IMAGING CORPORATION

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL

MEASURES

(Unaudited)

Three Months Ended

Nine Months Ended

(In millions, except per share amounts)

July 3, 2026

July 4, 2025

July 3, 2026

July 4, 2025

NET INCOME (LOSS) AND DILUTED NET INCOME (LOSS) PER SHARE RECONCILIATION

Net income (loss) attributable to Varex

$ 15.7

$ (89.1 )

$ 9.9

$ (82.5 )

Total income before taxes adjustments

1.5

95.2

24.4

106.2

Effective tax rate on non-GAAP adjustments %

253.3 %

0.8 %

17.2 %

(0.4 )%

Tax effect on non-GAAP adjustments

(3.8 )

(0.8 )

(4.2 )

0.4

Non-GAAP net income

13.4

5.3

30.1

24.1

Non-GAAP net income adjusted for interest add-back

13.4

5.3

30.1

24.1

Diluted net income (loss) per share

0.37

(2.15 )

0.23

(2.00 )

Non-GAAP diluted net income per share

$ 0.31

$ 0.13

$ 0.71

$ 0.58

ADJUSTED EBITDA RECONCILIATION

Net income (loss) attributable to Varex

$ 15.7

$ (89.1 )

$ 9.9

$ (82.5 )

Interest expense

5.8

9.4

21.5

27.5

Income tax expense

0.3

2.5

3.3

8.8

Depreciation

5.9

5.8

17.3

17.6

Amortization

1.1

1.0

3.3

2.9

Share-based compensation

3.8

3.7

11.6

Restructuring charges

—

(0.2 )

0.2

1.5

Impairment of goodwill

—

93.9

—

93.9

Non-ordinary course litigation

0.6

1.7

6.7

5.1

(Gain) loss from equity-method investments

(0.2 )

(1.4 )

4.3

2.2

Other non-operational costs

0.1

0.2

10.1

0.6

Adjusted EBITDA

$ 33.1

$ 27.5

$ 88.2

$ 89.2

Other non-operational costs consist primarily of costs related to the early extinguishment of debt. For the nine months ended July 3,

2026 and July 4, 2025 these costs totaled $9.4 million and $0.1 million, respectively. These amounts reflect losses incurred

in connection with the early repayment, refinancing, or modification of existing debt agreements. Such costs are episodic, arise from

discrete financing decisions, and are not reflective of the Company’s ongoing operating performance. Management believes excluding

these amounts from its non-GAAP results enhances comparability across periods and with peer companies and provides investors with a clearer

view of the Company’s core operating results.

Reconciliation of 2025 Non-GAAP Financial Information As Previously

Reported to 2025 Non-GAAP Financial Results as per Updated Policy - Excluding gains and losses from equity-method investments

(Unaudited)

We annually review our non-GAAP policy to determine whether any changes

to the policy should be made. As part of our review, we considered a strategic shift at one of our equity method investees. Because of

this, and because we do not control operations of either of our equity method investments, we believe that the results of these businesses

no longer provide investors with information helpful to evaluate our ongoing operations. As such, we have modified our non-GAAP policy

to exclude the gains and losses from our equity method investments. The gains and losses on the company's equity-method investments in

privately-held companies are recorded to other (expense) income, net, in the company’s Condensed Consolidated Statements of Operations.

This updated non-GAAP policy will become the basis for the company’s comparisons going forward in fiscal year 2026 and is reflected

in its 2026 guidance. The reconciliations below reflect the application of the new policy as if it had been adopted at the beginning

of fiscal year 2025. Please refer to "Reconciliation between GAAP and non-GAAP Financial Measures" below for a reconciliation

of non-GAAP items to the most comparable GAAP measures.

INCOME BEFORE TAXES RECONCILIATION

(In millions)

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Non-GAAP income before taxes (as reported)

$ 5.8

$ 14.9

$ 10.0

$ 17.8

$ 48.5

Loss (income) from equity-method investments

1.7

1.9

(1.4 )

0.1

2.3

Non-GAAP income before taxes (as adjusted)

$ 7.5

$ 16.8

$ 8.6

$ 17.9

$ 50.8

INCOME TAX EXPENSE RECONCILIATION

(In millions)

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Non-GAAP income tax expense (as reported)

$ 2.7

$ 3.2

$ 2.4

$ 2.5

$ 10.8

Tax effect on non-GAAP adjustment

(0.3 )

1.1

(0.9 )

(0.4 )

(0.5 )

Non-GAAP income tax expense (as adjusted)

$ 3.0

$ 2.1

$ 3.3

$ 2.9

$ 11.3

NET INCOME (LOSS) AND DILUTED NET INCOME (LOSS) PER SHARE RECONCILIATION

(In millions, except per share amounts)

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Non-GAAP net income (as reported)

$ 2.9

$ 11.5

$ 7.6

$ 15.3

$ 37.3

Loss (income) from equity-method investments

1.7

1.9

(1.4 )

0.1

2.3

Tax effect on non-GAAP adjustment

(0.3 )

1.1

(0.9 )

(0.4 )

(0.5 )

Non-GAAP net income (as adjusted)

$ 4.3

$ 14.5

$ 5.3

$ 15.0

$ 39.1

Non-GAAP net income adjusted for interest add-back (as reported)

$ 2.9

$ 13.1

$ 7.6

$ 15.3

$ 37.3

Loss (income) from equity-method investments

1.7

1.9

(1.4 )

0.1

2.3

Tax effect on non-GAAP adjustment

(0.3 )

1.1

(0.9 )

(0.4 )

(0.5 )

Non-GAAP net income adjusted for interest add-back (as adjusted)

$ 4.3

$ 16.1

$ 5.3

$ 15.0

$ 39.1

Diluted shares

41.1

51.2

41.5

41.8

41.4

Diluted EPS (as reported)

$ 0.07

$ 0.26

$ 0.18

$ 0.37

$ 0.90

Diluted EPS (as adjusted)

$ 0.10

$ 0.31

$ 0.13

$ 0.36

$ 0.94

ADJUSTED EBITDA RECONCILIATION

(In millions)

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Adjusted EBITDA (as reported)

$ 23.8

$ 34.3

$ 28.9

$ 34.9

$ 121.9

Loss (income) from equity-method investments

1.7

1.9

(1.4 )

0.1

2.3

Adjusted EBITDA (as adjusted)

$ 25.5

$ 36.2

$ 27.5

$ 35.0

$ 124.2

Discussion of Non-GAAP Financial Measures

This press release includes non-GAAP financial measures derived from

the company's Condensed Consolidated Statements of Operations. These measures are not presented in accordance with, nor are they a substitute

for U.S. generally accepted accounting principles, or GAAP. These measures include: non-GAAP gross profit; non-GAAP gross margin; non-GAAP

operating expense; non-GAAP operating earnings; non-GAAP operating earnings margin; non-GAAP earnings before taxes; non-GAAP net earnings;

non-GAAP net earnings per diluted share, non-GAAP dilutive shares; and non-GAAP EBITDA. The company is providing a reconciliation above

of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure.

The company utilizes a number of different financial measures, both

GAAP and non-GAAP, in analyzing and assessing the overall performance of its business, in making operating decisions, and forecasting

and planning for future periods. The company considers the use of the non-GAAP measures to be helpful in assessing the performance of

the ongoing operation of its business by excluding unusual and one-time costs. The company believes that disclosing non-GAAP financial

measures provides useful supplemental data that allows for greater transparency in the review of its financial and operational performance.

The company also believes that disclosing non-GAAP financial measures provides useful information to investors and others in understanding

and evaluating its operating results and future prospects in the same manner as management and in comparing financial results across

accounting periods and to those of peer companies.

Non-GAAP measures include the following items:

Amortization

of intangible assets: The company does not acquire businesses and assets on a predictable cycle. The amount of purchase

price allocated to intangible assets and the term of amortization can vary significantly and are unique to each acquisition or asset

purchase. The company believes that excluding amortization of intangible assets allows the users of its financial statements to better

review and understand the historic and current results of its operations, and also facilitates comparisons to peer companies.

Purchase

price accounting charges to cost of revenues: The company may incur charges to cost of revenues as a result of

acquisitions. The company believes that excluding these charges allows the users of its financial statements to better understand the

historic and current cost of its products, its gross margin, and also facilitates comparisons to peer companies.

Restructuring

charges: The company incurs restructuring charges that result from events which arise from unforeseen circumstances

and/or often occur outside of the ordinary course of its on-going business. Although these events are reflected in its GAAP financials,

these unique transactions may limit the comparability of its on-going operations with prior and future periods.

Acquisition

and integration related costs: The company incurs expenses or benefits with respect to certain items associated

with its acquisitions, such as transaction costs, changes in fair value of acquisition related hedges, changes in the fair value of contingent

consideration liabilities, gain or expense on settlement of pre-existing relationships, etc. The company excludes such expenses

or benefits as they are related to acquisitions and have no direct correlation to the operation of its on-going business. The company

also incurs expenses or benefits with respect to certain items associated with its acquisitions, such as integration costs relating to

acquisition costs incurred prior to closing and up to 12 months after the closing date of the acquisition.

Impairment

of goodwill: The company may incur impairment charges that result from events which arise from unforeseen circumstances

and/or often occur outside of the ordinary course of its on-going business and such charges may limit the comparability of its on-going

operations with prior and future periods.

Non-ordinary

course litigation: The company may incur charges that result from non-ordinary course litigation matters such as

certain intellectual property disputes and joint venture litigation. Litigation matters that are part of the ordinary course of the company’s

business, such as product liability claims, employment related matters and commercial contract disputes, are not excluded.

Other

non-operational costs: Certain items may be non-recurring, unusual, infrequent and directly related to an event

that is distinct and non-reflective of the company’s ongoing business operations. These may include such items as legal settlements,

inventory write-downs for discontinued products, cost of facilities no longer in use, extinguishment of debt and hedge costs, environmental

settlements, governmental settlements including tax settlements, and other items of similar nature.

Non-operational

tax adjustments: Certain tax items may be non-recurring, unusual, infrequent and directly related to an event that

is distinct and non-reflective of the company’s normal business operations. These may include such items as the retroactive impact

of significant changes in tax laws, including changes to statutory tax rates and one-time tax charges.

Tax

effects of operating earnings adjustments: The company applies its non-GAAP adjustments to the GAAP pretax income

to calculate the non-GAAP effective tax rate. This application of its non-GAAP effective tax rate excludes any discrete items, as defined

in the guidance for accounting for income taxes in interim periods, or any other non-operational tax adjustments.

Dilution

offset from convertible notes hedge transaction: In connection with the issuance of the company’s Convertible Senior

Unsecured Notes (the Convertible Notes) in June 2020, the company entered into convertible note hedge transactions (the Hedge Transactions)

to reduce the potential dilutive effect on common shares upon the potential conversion of the Convertible Notes. GAAP diluted shares

outstanding includes the incremental dilutive shares from the company’s Convertible Notes. Under GAAP, the anti-dilutive impact

of the Convertible Note Hedge Transactions is not reflected in GAAP diluted shares outstanding. In periods in which the average stock

price per share exceeds $20.81 and the company has GAAP net income, the non-GAAP diluted share count includes the anti-dilutive impact

of the company’s Hedge Transactions, which reduces the potential dilution that otherwise would occur upon conversion of the company’s

Convertible Notes. The company believes non-GAAP diluted shares is a useful non-GAAP metric because it provides insight into the offsetting

economic effect of the Hedge Transactions against potential conversion of the Convertible Notes.

Gains

and losses on equity-method investments: The company's net income (loss) is impacted by gains and losses associated with

its equity-method investments in privately-held companies included in other (expense) income, net on the Condensed Consolidated Statements

of Operations. These gains and losses may arise from unforeseen circumstances and/or often occur outside of the ordinary course of the

company's on-going business. By excluding these gains and losses, investors can better evaluate its operating performance period-over-period.

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