Varex shareholders approve officer liability shield

Salt Lake City-based Varex Imaging Corp (NASDAQ:VREX), currently trading at $13.61 with a market capitalization of $561 million, announced on Thursday that its stockholders have approved a significant amendment to its corporate governance structure.

According to InvestingPro data, the company has shown strong momentum with an impressive 11% return over the past week. The amendment, which was ratified during the Annual Meeting of Stockholders held on Wednesday, introduces a provision that limits or eliminates the monetary liability of certain officers for breaches of their fiduciary duty of care, aligning with Delaware law to the fullest extent.

The change comes as part of the company's broader efforts to update its Amended and Restated Certificate of Incorporation. The proposal for the amendment was initially approved by Varex's Board of Directors and was subject to stockholder approval, which it received at the Annual Meeting.

In addition to the governance amendment, the shareholders elected seven directors to serve until the 2026 Annual Meeting and approved, on an advisory basis, the compensation of the company's named executive officers. The stockholders also recommended that the advisory vote on executive compensation should occur annually.

Another key resolution passed at the meeting included the approval of the Varex Imaging Corporation 2017 Employee Stock Purchase Plan, as amended. Furthermore, the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year 2025 was ratified by the shareholders.

Varex Imaging Corp specializes in electronic components and is recognized for its manufacturing capabilities. While the company reported $821 million in revenue over the last twelve months, InvestingPro analysis reveals a strong financial position with a current ratio of 4.36, indicating excellent liquidity.

The company's decision to adopt the officer exculpation provision reflects a growing trend among corporations to protect their officers from personal financial liability, while still holding them accountable to the standards set forth by law. InvestingPro subscribers have access to over 30 additional financial metrics and insights about VREX, including detailed profitability analysis and growth forecasts, available in the comprehensive Pro Research Report.

This news is based on a recent statement from an SEC filing.

In other recent news, Varex Imaging Corporation has been the subject of several significant developments. Jefferies analyst Matthew Taylor revised the company's price target to $15, down from $16, while maintaining a Hold rating. This followed Varex's first-quarter results, which showed a 7% year-over-year growth in China, contributing to approximately 18% of total revenue or around $35 million.

Despite a slight earnings per share beat, Varex's first-quarter revenue of $200 million fell short of Wall Street expectations, leading to a 19% drop in the company's shares. The company projected revenues between $200 million and $215 million for the second quarter of fiscal year 2025, with non-GAAP net earnings per diluted share in the range of $0.05 to $0.20.

Furthermore, the company secured orders valued at approximately $14 million for its new high-energy cargo inspection systems. Varex also announced the pricing of a private offering of $125 million in senior secured notes, with the net proceeds intended to repay, in part, its outstanding Convertible Notes due in June 2025.

The company also launched a private offering of $125 million in senior secured notes due October 15, 2027, with the funds expected to be used towards the partial repayment of its outstanding Convertible Notes.

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