Moody's alters Varex outlook to positive

Moody's Investors Service said changed the outlook for Varex Imaging Corp. to positive from stable and affirmed its ratings, including the B2 corporate family rating and the B1 rating on the company's senior secured bonds. The agency also upgraded the company's speculative grade liquidity rating to SGL-1 (very good) from SGL-2 (good).

“The change in outlook reflects Moody's view of continued revenue growth, modest leverage and very good liquidity. Varex will maintain its market position in the niche medical imaging component business, supported by industry tailwinds that will drive top and bottom-line growth. Moody's expects the company's debt-to-EBITDA ratio to remain below 4x times over the next 12 to 18 months,” the agency said in a press release.

The upgraded SGL rating reflects an expectation that Varex will protect its very good liquidity profile over the next 12-18 months, Moody’s said.

As of June 30, the company had $118.5 million of cash on hand. Including marketable securities not in cash and cash equivalents, the total was $152.5 million. The company also had access to a $100 million undrawn asset-based lending facility.

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