BEDFORD, Mass., Jan. 28, 2015 /PRNewswire/ -- Hologic, Inc.
(NASDAQ: HOLX) announced today the Company's financial results for
the first fiscal quarter ended December 27, 2014.
Revenues for the quarter were $652.8
million, an increase of 6.6% compared to the prior year
period. On a constant currency basis, revenues increased
7.7%. Revenues grew in all four business segments:
$s in
millions
|
Total
Revenues
|
Change
(As
Reported)
|
Change
(Constant
Currency)
|
Diagnostics
|
$304.1
|
6.4%
|
7.4%
|
Breast
Health
|
$242.0
|
6.9%
|
8.2%
|
GYN
Surgical
|
$84.4
|
7.0%
|
7.9%
|
Skeletal
Health
|
$22.3
|
4.5%
|
6.1%
|
Total
|
$652.8
|
6.6%
|
7.7%
|
GAAP net income was $29.2 million
in the quarter, compared to a net loss of ($5.3 million) in the prior year period.
Non-GAAP net income of $111.6 million
increased by 18.6% and represented 17.1% of revenues, compared to
15.4% of revenues in the prior year period.
GAAP earnings per share (EPS) were $0.10 on a fully diluted basis in the quarter,
compared to a net loss per diluted share of ($0.02) in the prior year period. Non-GAAP
EPS were $0.39 on a fully diluted
basis in the quarter, an increase of 15.4% compared to the prior
year period.
"We posted strong organic revenue and earnings growth across the
board in the first quarter," said Steve
MacMillan, Hologic's President and Chief Executive Officer.
"We are pleased with the pace of progress we have made, as we
recorded our fourth consecutive quarter of sequential revenue
growth, and our best quarterly growth rate in a number of
years. While we realize there is still work to do, this
quarter's results show that great products, great people, and new
leadership are coming together in a powerful way at the
Company. As a result, we are raising our financial outlook
for the year."
Revenue Detail
In this section, all revenues are on a reported basis for the
first quarter of fiscal 2015, and are compared to the prior year
period.
Diagnostics revenues of $304.1
million increased 6.4%. This increase was driven by a
26.3% increase in blood screening revenue from our partner Grifols,
mainly from new business with the Japanese Red Cross, and by a 5.6%
increase in molecular diagnostics revenue, mainly from the
Aptima® product line. Revenue from cytology and
perinatal products declined by 1.2%, a lower rate of decline than
in recent quarters.
Breast Health revenues of $242.0
million grew 6.9%. This increase was primarily driven
by a 10.9% increase in breast imaging and service revenue, as
customers continued to adopt Hologic 3D
mammography™, while interventional breast
revenue declined 2.3%.
GYN Surgical revenues of $84.4
million grew 7.0%, driven by a 27.4% increase in MyoSure
system sales. NovaSure system sales also increased 0.1% in
the quarter, an improvement compared to the declines seen in recent
quarters.
Skeletal Health revenues of $22.3
million grew 4.5%, primarily driven by increased sales of
the Company's new Horizon™ bone
densitometry system.
Balance Sheet and Cash Flows
Hologic continues to focus on reducing its debt. Total
debt outstanding at quarter-end was $3,954.8
million, a $312.9 million
decrease from the end of fiscal 2014 that resulted primarily from a
$300 million voluntary pre-payment of
the Term Loan B facility in December. The Company ended the
first fiscal quarter with cash and equivalents of $549.1 million.
Adjusted non-GAAP earnings before interest, taxes, depreciation
and amortization (EBITDA) were $233.1
million in the quarter. Operating cash flow was
$153.5 million, while free cash flow,
defined as operating cash flow less capital expenditures, was
$132.4 million.
Updated Financial Guidance
Based on the Company's strong performance in the first quarter
of fiscal 2015, Hologic is raising its full year 2015 revenue and
non-GAAP EPS guidance, as shown in the table below. The
guidance for reported results is based on recent foreign exchange
rates. Percentage changes from the prior year exclude
one-time benefits associated with the restructuring of the Roka
license, which totaled $20.1 million
of revenue and $0.05 of EPS in
2014.
|
Initial
Guidance
From
11/5/14
|
Updated
Guidance
|
Change vs. Prior
Year
(As
Reported)
|
Change vs. Prior
Year
(Constant
Currency)
|
Revenues
|
$2.54 to $2.57
billion
|
$2.57 to $2.60
billion
|
2.4% to
3.6%
|
4.4% to
5.6%
|
Non-GAAP
EPS
|
$1.50 to
$1.54
|
$1.54 to
$1.57
|
5.5% to
7.5%
|
8.9% to
11.0%
|
Since the Company provided its initial financial guidance on
November 5, 2014, the US dollar has
strengthened significantly. If the US dollar were at the same
level today as it was in early November, the Company's updated
revenue guidance would have been approximately $25 million higher, and its updated EPS guidance
would have been approximately $0.02
higher.
For the second quarter of fiscal 2015, the Company now
expects:
|
Guidance
|
Change vs. Prior
Year
Period (As Reported)
|
Change vs. Prior
Year
Period (Constant Currency)
|
Revenues
|
$640 to $650
million
|
2.4% to
4.0%
|
4.5% to
6.1%
|
Non-GAAP
EPS
|
$0.38 to
$0.39
|
2.7% to
5.4%
|
5.5% to
8.0%
|
Use of Non-GAAP Financial Measures
The Company has presented the following non-GAAP financial
measures in this press release: constant currency revenues; net
income; EPS; and adjusted EBITDA. The Company defines adjusted
EBITDA as its non-GAAP net income plus net interest expense, income
taxes, and depreciation and amortization expense included in its
non-GAAP net income. The Company defines its non-GAAP net income
and EPS to exclude: (i) the amortization of intangible assets and
impairment of goodwill and intangible assets; (ii)
acquisition-related charges and effects, such as charges for
contingent consideration, transaction costs, integration costs
including retention, and credits and/or charges associated with the
write-up of acquired inventory and fixed assets to fair value;
(iii) non-cash interest expense related to amortization of the debt
discount from the equity conversion option of the convertible debt
securities; (iv) restructuring and divestiture charges; (v) debt
extinguishment losses and related transaction costs; (vi)
litigation settlement charges (benefits); (vii)
other-than-temporary impairment losses on investments; (viii) other
one-time, nonrecurring, unusual or infrequent charges, expenses or
gains that may not be indicative of the Company's core business
results; and (ix) income taxes related to such adjustments.
The Company believes the use of non-GAAP financial measures is
useful to investors by eliminating certain of the more significant
effects of its acquisitions and related activities, non-cash
charges resulting from the application of GAAP to convertible debt
instruments with cash settlement features, charges related to debt
extinguishment losses, investment impairments, litigation
settlements, and restructuring and divestiture initiatives. These
non-GAAP measures also reflect how Hologic manages its businesses
internally. In addition to the adjustments set forth in the
calculation of the Company's non-GAAP net income and EPS, its
adjusted EBITDA eliminates the effects of financing, income taxes
and the accounting effects of capital spending. As with the items
eliminated in its calculation of non-GAAP net income, these items
may vary for different companies for reasons unrelated to the
overall operating performance of a company's business. When
analyzing the Company's operating performance, investors should not
consider these non-GAAP financial measures as a substitute for net
income prepared in accordance with GAAP.
Future Non-GAAP Adjustments
Future GAAP EPS may be affected by changes in ongoing
assumptions and judgments relating to the Company's acquired
businesses, and may also be affected by nonrecurring, unusual or
unanticipated charges, expenses or gains, which are excluded in the
calculation of the Company's non-GAAP EPS guidance as described in
this press release. It is therefore not practicable to reconcile
non-GAAP EPS guidance to the most comparable GAAP measure.
Conference Call and Webcast
Hologic's management will host a conference call at 4:30 p.m. ET today to discuss its first quarter
fiscal 2015 operating results. Approximately 10 minutes
before the call, dial 877-675-4750 (US and Canada) or 719-325-4801 (international) and
enter access code 9937337. A replay will be available
starting two hours after the call ends through February 18, 2015, at 888-203-1112 or
719-457-0820 for international callers, access code 9937337.
The Company will also provide a live webcast of the call at
http://investors.hologic.com/investors-overview. A PowerPoint
presentation related to the conference call will be posted to the
same site.
About Hologic, Inc.
Hologic, Inc. is a leading developer, manufacturer and supplier
of premium diagnostic products, medical imaging systems and
surgical products. The Company's core business units focus on
diagnostics, breast health, GYN surgical, and skeletal
health. With a unified suite of technologies and a robust
research and development program, Hologic is dedicated to The
Science of Sure. For more information on Hologic, visit
www.hologic.com.
Hologic, Aptima, Horizon, MyoSure, NovaSure, The Science of
Sure, ThinPrep and associated logos are trademarks and/or
registered trademarks of Hologic, Inc. and/or its subsidiaries in
the United States and/or other
countries.
Forward-Looking Statements
This News Release contains forward-looking information that
involves risks and uncertainties, including statements about the
Company's plans, objectives, expectations and intentions. Such
statements include, without limitation: financial or other
information included herein based upon or otherwise incorporating
judgments or estimates relating to future performance, events or
expectations; the Company's strategies, positioning, resources,
capabilities, and expectations for future performance; and the
Company's outlook and financial and other guidance. These
forward-looking statements are based upon assumptions made by the
Company as of the date hereof and are subject to known and unknown
risks and uncertainties that could cause actual results to differ
materially from those anticipated.
Risks and uncertainties that could adversely affect the
Company's business and prospects, and otherwise cause actual
results to differ materially from those anticipated, include
without limitation: the ability of the Company to successfully
manage leadership and organizational changes, including the ability
of the Company to attract, motivate and retain key employees; U.S.,
European and general worldwide economic conditions and related
uncertainties; the Company's reliance on third-party reimbursement
policies to support the sales and market acceptance of its
products, including the possible adverse impact of government
regulation and changes in the availability and amount of
reimbursement and uncertainties for new products or product
enhancements; uncertainties regarding healthcare reform
legislation, including associated tax provisions, or budget
reduction or other cost containment efforts; changes in guidelines,
recommendations and studies published by various organizations that
could affect the use of the Company's products; uncertainties
inherent in the development of new products and the enhancement of
existing products, including FDA approval and/or clearance and
other regulatory risks, technical risks, cost overruns and delays;
the risk that products may contain undetected errors or defects or
otherwise not perform as anticipated; risks associated with
strategic alliances and the ability of the Company to realize
anticipated benefits of those alliances; risks associated with
acquisitions, including without limitation, the Company's ability
to successfully integrate acquired businesses, the risks that the
acquired businesses may not operate as effectively and efficiently
as expected even if otherwise successfully integrated, and the
risks that acquisitions may involve unexpected costs or unexpected
liabilities; the risks of conducting business internationally; the
risk of adverse exchange rate fluctuations on the Company's
international activities and businesses; manufacturing risks,
including the Company's reliance on a single or limited source of
supply for key components, and the need to comply with especially
high standards for the manufacture of many of its products; the
Company's ability to predict accurately the demand for its
products, and products under development, and to develop strategies
to address its markets successfully; the early stage of market
development for certain of the Company's products; the Company's
leverage risks, including the Company's obligation to meet payment
obligations and financial covenants associated with its debt; risks
related to the use and protection of intellectual property;
expenses, uncertainties and potential liabilities relating to
litigation, including, without limitation, commercial, intellectual
property, employment and product liability litigation; technical
innovations that could render products marketed or under
development by the Company obsolete; and competition.
The risks included above are not exhaustive. Other factors that
could adversely affect the Company's business and prospects are
described in the filings made by the Company with the SEC. The
Company expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any such statements
presented herein to reflect any change in expectations or any
change in events, conditions or circumstances on which any such
statements are based.
Contact:
Michael Watts
Vice President, Investor Relations and
Corporate Communications
(858) 410-8588
HOLOGIC,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(In millions, except
number of shares, which are reflected in thousands, and per share
data)
|
|
|
Three Months
Ended
|
|
December 27,
2014
|
|
December 28,
2013
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
Product
|
$
|
546.6
|
|
|
$
|
512.4
|
|
Service and
other
|
106.2
|
|
|
100.1
|
|
Total
revenues
|
652.8
|
|
|
612.5
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
Product
|
186.7
|
|
|
176.9
|
|
Amortization of
intangible assets
|
73.9
|
|
|
76.7
|
|
Service and
other
|
53.6
|
|
|
53.3
|
|
Total cost of
revenues
|
314.2
|
|
|
306.9
|
|
|
|
|
|
|
|
Gross
profit
|
338.6
|
|
|
305.6
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Research and
development
|
52.0
|
|
|
48.7
|
|
Selling and
marketing
|
86.0
|
|
|
83.3
|
|
General and
administrative
|
61.3
|
|
|
67.8
|
|
Amortization of
intangible assets
|
27.8
|
|
|
26.2
|
|
Restructuring and
divestiture charges
|
8.0
|
|
|
18.3
|
|
|
|
|
|
|
|
Total operating
expenses
|
235.1
|
|
|
244.3
|
|
|
|
|
|
|
|
Income from
operations
|
103.5
|
|
|
61.3
|
|
|
|
|
|
|
|
Other
expense:
|
|
|
|
|
|
Interest
expense
|
(52.5)
|
|
|
(61.3)
|
|
Other (expense)
income, net
|
(0.2)
|
|
|
1.5
|
|
Debt extinguishment
loss
|
(6.7)
|
|
|
(2.9)
|
|
Total other
expense
|
(59.4)
|
|
|
(62.7)
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
44.1
|
|
|
(1.4)
|
|
Provision for income
taxes
|
14.9
|
|
|
3.9
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
29.2
|
|
|
$
|
(5.3)
|
|
|
|
|
|
|
|
Net income (loss)
per common share:
|
|
|
|
|
|
Basic
|
$
|
0.10
|
|
|
$
|
(0.02)
|
|
Diluted
|
$
|
0.10
|
|
|
$
|
(0.02)
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
Basic
|
278,671
|
|
|
272,708
|
|
Diluted
|
283,176
|
|
|
272,708
|
|
HOLOGIC,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
millions)
|
|
|
December 27,
2014
|
|
September 27,
2014
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
544.0
|
|
|
$
|
736.1
|
|
Restricted
cash
|
5.1
|
|
|
5.5
|
|
Accounts receivable,
net
|
400.5
|
|
|
396.0
|
|
Inventories
|
310.3
|
|
|
330.6
|
|
Deferred income
taxes
|
39.0
|
|
|
39.4
|
|
Other current
assets
|
37.7
|
|
|
58.2
|
|
Total current
assets
|
1,336.6
|
|
|
1,565.8
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
458.2
|
|
|
461.9
|
|
Goodwill and
intangible assets
|
6,142.0
|
|
|
6,244.4
|
|
Other
assets
|
141.3
|
|
|
142.6
|
|
Total
assets
|
$
|
8,078.1
|
|
|
$
|
8,414.7
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
139.4
|
|
|
$
|
114.5
|
|
Accounts payable and
accrued liabilities
|
320.0
|
|
|
354.2
|
|
Deferred
revenue
|
148.4
|
|
|
150.9
|
|
Total current
liabilities
|
607.8
|
|
|
619.6
|
|
|
|
|
|
|
|
Long-term debt, net
of current portion
|
3,815.4
|
|
|
4,153.2
|
|
Deferred income
taxes
|
1,345.7
|
|
|
1,375.4
|
|
Other long-term
liabilities
|
206.8
|
|
|
203.5
|
|
Total
liabilities
|
5,975.7
|
|
|
6,351.7
|
|
Total stockholders'
equity
|
2,102.4
|
|
|
2,063.0
|
|
Total liabilities
and stockholders' equity
|
$
|
8,078.1
|
|
|
$
|
8,414.7
|
|
HOLOGIC,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
millions)
|
|
|
Three Months
Ended
|
|
December 27,
2014
|
|
December 28,
2013
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
Net income
(loss)
|
$
|
29.2
|
|
|
$
|
(5.3)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation
|
20.3
|
|
|
24.9
|
|
Amortization
|
101.7
|
|
|
102.9
|
|
Non-cash interest
expense
|
16.7
|
|
|
19.7
|
|
Stock-based
compensation expense
|
12.1
|
|
|
13.7
|
|
Excess tax benefit
related to equity awards
|
(3.0)
|
|
|
(3.0)
|
|
Deferred income
taxes
|
(30.5)
|
|
|
(125.1)
|
|
Asset impairment
charges
|
—
|
|
|
3.1
|
|
Debt extinguishment
loss
|
6.7
|
|
|
2.9
|
|
Loss on disposal of
property and equipment
|
1.7
|
|
|
1.4
|
|
Other
|
1.2
|
|
|
(0.9)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
(9.7)
|
|
|
15.6
|
|
Inventories
|
18.7
|
|
|
(14.1)
|
|
Prepaid income
taxes
|
22.4
|
|
|
44.7
|
|
Prepaid expenses and
other assets
|
(3.0)
|
|
|
2.1
|
|
Accounts
payable
|
(24.8)
|
|
|
10.4
|
|
Accrued expenses and
other liabilities
|
(5.0)
|
|
|
53.7
|
|
Deferred
revenue
|
(1.2)
|
|
|
2.6
|
|
Net cash provided by
operating activities
|
153.5
|
|
|
149.3
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
Net proceeds from
sale of business
|
—
|
|
|
2.4
|
|
Purchase of property
and equipment
|
(10.8)
|
|
|
(8.4)
|
|
Increase in equipment
under customer usage agreements
|
(10.3)
|
|
|
(8.0)
|
|
Net (purchases) sales
of insurance contracts
|
(6.4)
|
|
|
13.8
|
|
Purchases of mutual
funds
|
—
|
|
|
(29.7)
|
|
Sales of mutual
funds
|
6.4
|
|
|
15.9
|
|
Increase in other
assets
|
(0.9)
|
|
|
(0.4)
|
|
Net cash used in
investing activities
|
(22.0)
|
|
|
(14.4)
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
Repayment of
long-term debt
|
(328.8)
|
|
|
(521.3)
|
|
Net proceeds from
issuance of common stock pursuant to employee stock
plans
|
15.2
|
|
|
12.9
|
|
Excess tax benefit
related to equity awards
|
3.0
|
|
|
3.0
|
|
Payment of minimum
tax withholdings on net share settlements of equity
awards
|
(10.6)
|
|
|
(9.1)
|
|
Net cash used in
financing activities
|
(321.2)
|
|
|
(514.5)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(2.4)
|
|
|
(0.4)
|
|
Net decrease in cash
and cash equivalents
|
(192.1)
|
|
|
(380.0)
|
|
Cash and cash
equivalents, beginning of period
|
736.1
|
|
|
822.5
|
|
Cash and cash
equivalents, end of period
|
$
|
544.0
|
|
|
$
|
442.5
|
|
HOLOGIC,
INC.
|
RECONCILIATION OF
GAAP EPS AND NET INCOME (LOSS) TO NON-GAAP EPS, NET INCOME
AND ADJUSTED EBITDA
|
(Unaudited)
|
(In millions, except
earnings per share)
|
|
|
Three Months
Ended
|
|
December 27,
2014
|
|
December 28,
2013
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
GAAP earnings (loss)
per share - Diluted
|
$
|
0.10
|
|
|
$
|
(0.02)
|
|
Adjustment to net
earnings (loss) (as detailed below)
|
0.29
|
|
|
0.36
|
|
Non-GAAP earnings per
share – diluted
|
$
|
0.39
|
(1)
|
|
$
|
0.34
|
(1)
|
|
|
|
|
|
|
Net income
(loss):
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
29.2
|
|
|
$
|
(5.3)
|
|
Adjustments:
|
|
|
|
|
|
Amortization of
intangible assets
|
101.7
|
(2)
|
|
102.9
|
(2)
|
Non-cash interest
expense relating to convertible notes
|
8.8
|
(3)
|
|
11.5
|
(3)
|
Restructuring,
divestiture and acquisition-related charges
|
8.2
|
(4)
|
|
23.5
|
(4)
|
Fair value
adjustments
|
1.4
|
(5)
|
|
3.1
|
(5)
|
Debt extinguishment
loss
|
6.7
|
(6)
|
|
2.9
|
(6)
|
Other
charges
|
0.2
|
(7)
|
|
1.2
|
(7)
|
Income tax effect of
reconciling items
|
(44.6)
|
(8)
|
|
(45.7)
|
(8)
|
Non-GAAP net
income
|
$
|
111.6
|
|
|
$
|
94.1
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
Non-GAAP net
income
|
$
|
111.6
|
|
|
$
|
94.1
|
|
Interest expense, net,
not adjusted above
|
43.2
|
|
|
49.4
|
|
Provision for income
taxes
|
59.5
|
|
|
49.6
|
|
Depreciation expense,
not adjusted above
|
18.8
|
|
|
20.4
|
|
Adjusted
EBITDA
|
$
|
233.1
|
|
|
$
|
213.5
|
|
Explanatory Notes
to Reconciliations:
|
|
(1)
|
Non-GAAP earnings per
share was calculated based on 283,176 and 275,471 weighted average
diluted shares outstanding for the three months ended
December 27, 2014 and December 28, 2013,
respectively.
|
(2)
|
To reflect a non-cash
charge attributable to the amortization of intangible
assets.
|
(3)
|
To reflect certain
non-cash interest expense related to the amortization of the debt
discount from the equity conversion option of the Company's
convertible notes.
|
(4)
|
To reflect certain
costs associated with the Company's acquisition(s) and integration
plans, which primarily include retention costs, transfer costs, and
asset impairments, as well as restructuring and divestiture
charges.
|
(5)
|
To reflect non-cash
fair value adjustments for additional depreciation expense related
to the fair value write-up of fixed assets acquired in the
Gen-Probe acquisition.
|
(6)
|
To reflect a non-cash
loss for partial extinguishment related to voluntary prepayments
under the Credit Agreement.
|
(7)
|
To reflect the net
impact from miscellaneous transactions during the
period.
|
(8)
|
To reflect an
estimated annual effective tax rate of 34.75% for the three months
ended December 27, 2014 and an annual effective tax rate of
34.5% for the three months ended December 28, 2013 on a
non-GAAP basis.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/hologic-announces-financial-results-for-first-quarter-fiscal-2015-300027096.html
SOURCE Hologic, Inc.