VREX shares were down -21% at $12.65 per share in midday trading today.
The Salt Lake City-based X-ray imaging component maker posted losses of -$28.2 million, or -73¢ per share, on sales of $137.6 million for the three months ended July 3, 2020, for a large bottom-line slide from losses of -$1.3 million last year on a sales decline of -9.2%.
Adjusted to exclude one-time items, losses per share were -20¢, 19¢ behind Wall Street. The company’s revenues came up just short of the analysts’ projections as well, coming in 0.8% behind.
As a result of the poor third-quarter performance, due in large part to the COVID-19 pandemic, Varex implemented measures expected to reduce annual operating costs by more than $25 million.
Those cost-cutting measures include downsizing by eliminating 94 positions at the end of July (about a 10% workforce reduction for the calendar year 2020), accelerating the closure of its Santa Clara facility and discontinuing certain low-margin, low-demand products.
“During the third quarter of fiscal year 2020, the impact of COVID-19 resulted in declining sales and a sizeable unfavorable shift in product mix that reduced our revenues, margins and profitability,” Varex CEO Sunny Sanyal said in a news release. “While sales of CT tubes and other radiographic products used in COVID-19 related diagnostic imaging applications increased significantly, total revenues declined 13% from the year-ago quarter due to sales declines in other products, such as those for oncology, dental and industrial applications.”
Varex said it is still evaluating its guidance for the full year, it anticipates revenues next quarter to range between $155 million and $170 million.
While Varex shares suffered, MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up 0.8%.