What Varex Imaging Corp. told the SEC could break it.

Varex's revenue is concentrated in large imaging OEMs — one customer (Canon) was 18.0% of revenue in fiscal 2025 and its ten largest customers were ~52% of revenue (53%/51% prior years), with one customer 14% of receivables; many of these OEM customers are also competitors, and because lost business takes significant time to replace, a cancellation, delay or reduction by a major OEM has materially hurt and could again hurt operating results. (Top customers captured as named edges; this records the aggregate concentration.)

“Our ten largest customers as a group accounted for approximately 52%, 53% and 51% of our revenue for fiscal years 2025, 2024 and 2023, respectively.”

Some components in Varex's X-ray products are sourced from a limited group of suppliers or a single-source supplier — transistor arrays and cesium iodide coatings for digital detectors, specialized integrated circuits, X-ray tube targets, housings, bearings and others — and it requires metal raw materials (copper, nickel, silver, gold, lead, tungsten, iridium); loss of a sole-source supplier or a raw-material shortage could disrupt manufacturing and delivery.

“Some of the components included in our products may be sourced from a limited group of suppliers or from a single source supplier, such as transistor arrays and cesium iodide coatings for digital detectors and specialized integrated circuits, X-ray tube targets, housings, bearings, and various other components.”

About 70% of Varex's fiscal 2025 revenue came from customers outside the United States, and it manufactures across the U.S., Netherlands, China, Germany, the Philippines and India, exposing it to global/regional economic instability, shifting politics, tariffs and trade wars, and currency risk (a 10% adverse FX move is a ~$14.6M earnings impact).

“Revenues generated from customers located outside the United States accounted for approximately 70%, 68%, and 69% of our total revenues during fiscal years 2025, 2024, and 2023, respectively.”

Varex's business, particularly in China, has been impacted by the U.S.-China trade war — importing raw materials from China to the U.S. and importing materials/sub-assemblies and finished goods into China have all become more expensive and difficult, and competitive pressure has risen versus less-affected Asian/European rivals; tariff exclusions are only temporary and granted shipment-by-shipment, so it is implementing local-for-local sourcing and other mitigation with no guarantee of success.

“In recent years, our business, particularly in China, has been impacted by the United States-China trade war in the following ways, among others: (1) importing raw materials from China to the United States has become more expensive, (2) importing raw materials and sub-assemblies from the United States to China has become more expensive,”