MARLBOROUGH, Mass.,
Nov. 2, 2016 /PRNewswire/ -- Hologic,
Inc. (Nasdaq: HOLX) announced today the Company's financial results
for the fiscal fourth quarter ended September 24, 2016. GAAP diluted
earnings per share (EPS) of $0.33
increased 266.7% compared to the prior year period, while non-GAAP
diluted EPS of $0.52 increased
20.9%. Revenue of $726.8
million increased 3.4%, or 3.8% in constant currency
terms.
"We closed out a very successful fiscal year with another strong
performance in the fourth quarter," said Steve MacMillan, Hologic's Chairman, President
and Chief Executive Officer. "Our results demonstrate that we
are making good progress in building a sustainable growth company,
and we look forward to more successes in 2017 based on the strength
of our product franchises and the dedication of our people."
Key financial results for the fiscal fourth quarter are shown
below. Throughout this press release, all dollar figures are
in millions, except EPS. Some totals may not foot due to
rounding. Unless otherwise noted, all results are compared to
the prior year period. Non-GAAP presentations exclude a
number of cash and non-cash items as discussed below under "Use of
Non-GAAP Financial Measures."
|
GAAP
|
Non-GAAP
|
|
Q4'16
|
Q4'15
|
Change
Increase
(Decrease)
|
Q4'16
|
Q4'15
|
Change
Increase
(Decrease)
|
Revenues
|
$726.8
|
$702.8
|
3.4%
|
$726.8
|
$702.8
|
3.4%
|
Gross
Margin
|
55.9%
|
54.0%
|
190 bps
|
65.7%
|
64.6%
|
110 bps
|
Operating
Expenses
|
$259.0
|
$253.7
|
2.1%
|
$235.5
|
$218.7
|
7.7%
|
Operating
Margin
|
20.2%
|
17.9%
|
230 bps
|
33.3%
|
33.5%
|
(20 bps)
|
Net Margin
|
12.7%
|
3.6%
|
910 bps
|
20.0%
|
18.1%
|
190 bps
|
Diluted
EPS
|
$0.33
|
$0.09
|
266.7%
|
$0.52
|
$0.43
|
20.9%
|
Revenue Detail
Revenue growth in the fourth quarter was led by the GYN Surgical
division, while the molecular diagnostics and breast imaging
franchises also performed well. Growth rates were affected by
strong revenue growth in the prior year period.
$s in
millions
|
Q4'16
|
Q4'15
|
Reported
Change
Increase
(Decrease)
|
Impact of Foreign
Currency
Increase
(Decrease)
$
%
|
Constant Currency
Change
Increase
(Decrease)
|
Cytology &
Perinatal
|
$121.0
|
$120.8
|
0.2%
|
$(0.9)
|
(0.7%)
|
0.9%
|
Molecular
Diagnostics
|
134.3
|
123.2
|
9.0%
|
(0.7)
|
(0.6%)
|
9.6%
|
Blood
Screening
|
56.6
|
60.2
|
(6.0%)
|
-
|
-
|
(6.0%)
|
Total
Diagnostics
|
$311.9
|
$304.2
|
2.5%
|
$(1.7)
|
(0.6%)
|
3.1%
|
Breast
Imaging
|
248.8
|
241.6
|
3.0%
|
$(0.7)
|
(0.2%)
|
3.2%
|
Interventional Breast
Solutions
|
40.9
|
42.4
|
(3.7%)
|
(0.1)
|
(0.2%)
|
(3.5%)
|
Other
|
2.6
|
2.3
|
18.1%
|
0.0
|
0.4%
|
17.7%
|
Total Breast
Health
|
$292.3
|
$286.3
|
2.1%
|
$(0.7)
|
(0.2%)
|
2.3%
|
GYN
Surgical
|
$101.5
|
$86.8
|
16.9%
|
$(0.7)
|
(0.7%)
|
17.6%
|
Skeletal
Health
|
$21.1
|
$25.5
|
(17.1%)
|
$0.0
|
0.2%
|
(17.3%)
|
Total
|
$726.8
|
$702.8
|
3.4%
|
$(3.0)
|
(0.4%)
|
3.8%
|
Other quarterly revenue highlights:
- U.S. sales of $578.0 million
increased 7.4%, continuing strong recent trends.
- International sales of $148.9
million decreased (9.6%), or (7.8%) in constant currency,
compared to strong results in the prior year period.
- Total revenues increased 3.4%, or 3.8% in constant
currency. Excluding a $3.9
million headwind from sales of discontinued products, total
revenue would have increased 4.0%, or 4.4% in constant
currency.
- The GYN Surgical business continued to perform well.
Divisional revenue of $101.5 million
increased 16.9%, or 17.6% in constant currency. MyoSure®
system sales of $42.6 million
increased 32.7%, or 33.4% in constant currency. NovaSure®
sales of $58.6 million increased
7.9%, or 8.7% in constant currency.
- Breast Health revenue totaled $292.3
million, an increase of 2.1%, or 2.3% in constant
currency. Revenue in the United
States increased 7.2%, driven by increases in service
revenue and new product sales that supplemented continued adoption
of Hologic's Genius™ 3D
Mammography™ systems.
- In Diagnostics:
- Molecular diagnostics sales of $134.3
million increased 9.0%, or 9.6% in constant currency.
Growth was driven primarily by continued strength across Aptima®
women's health products on the fully automated Panther® and Tigris®
platforms, both in the United
States and internationally. In addition, sales
benefited from a royalty payment of $5.0
million.
- Cytology and perinatal sales of $121.0
million increased 0.2%, or 0.9% in constant currency.
- Blood screening revenue totaled $56.6
million, a decrease of (6.0%) on both a reported and
constant currency basis that was driven, as expected, mainly by
ordering patterns by Hologic's partner Grifols.
- In Skeletal Health, revenue of $21.1
million decreased (17.1%), or (17.3%) in constant currency,
due to lower sales of mini C-arm products.
Segment revenue highlights by geography are shown below:
|
U.S.
Change
|
International
Change
(Reported)
|
Impact of Foreign
Currency
on International Revenues
$
%
|
International
Change
(Constant
Currency)
|
|
Increase
(Decrease)
|
Diagnostics
|
6.0%
|
(6.5%)
|
$(1.7)
|
(2.0%)
|
(4.5%)
|
Breast
Health
|
7.2%
|
(17.8%)
|
$(0.7)
|
(1.3%)
|
(16.5%)
|
GYN
Surgical
|
16.7%
|
18.4%
|
$(0.7)
|
(5.6%)
|
24.0%
|
Skeletal
Health
|
(14.4%)
|
(21.5%)
|
$0.0
|
0.4%
|
(21.9%)
|
Total
Revenues
|
7.4%
|
(9.6%)
|
$(3.0)
|
(1.8%)
|
(7.8%)
|
Fourth Quarter Expense Detail
Gross margin was 55.9% on a GAAP basis, and 65.7% on a non-GAAP
basis. GAAP gross margin improved by 190 basis points, while
non-GAAP gross margin improved by 110 basis points, mainly
due to strong domestic sales growth, favorable product mix, and
operational improvements.
Operating expenses were $259.0
million on a GAAP basis, and $235.5
million on a non-GAAP basis. GAAP operating
expenses increased 2.1%, while non-GAAP operating expenses
increased 7.7%, mainly due to increased investments in research and
development, higher general and administrative and selling and
marketing expenses, and an increase to stock-based compensation
from a change in the retirement provisions of the Company's equity
compensation plan.
Hologic's effective tax rate was 14.3% on a GAAP basis, and
31.0% on a non-GAAP basis.
Other Key Financial Results
GAAP net income was $92.2
million. Adjusted non-GAAP earnings before interest,
taxes, depreciation and amortization (EBITDA) were $263.9 million, an increase of 5.2%.
Operating cash flow was $226.7
million and free cash flow, defined as operating cash flow
less capital expenditures, was $194.9
million. For the full year, the Company generated
operating cash flow of $787.2 million
and free cash flow of $692.7 million,
109.4% higher than GAAP net income and 23.3% higher than non-GAAP
net income.
Total debt outstanding at the end of the quarter was
$3.3 billion, a decrease of
($0.3) billion compared to the prior
year period. During the quarter, the Company repurchased
$47.6 million of its 2010 convertible
notes for $81.3 million, reducing the
future dilutive effect of these securities.
The Company ended the quarter with cash and cash equivalents of
$548.4 million.
The combination of lower debt and EBITDA growth helped improve
Hologic's leverage ratio (net debt over adjusted EBITDA) to 2.8 in
the quarter.
Strong profit growth and lower debt have continued to improve
Hologic's adjusted return on invested capital (ROIC). On a
trailing 12 months basis, ROIC of 12.7% improved 180 basis
points.
Financial Guidance for Fiscal 2017
"We expect to post good financial results in fiscal 2017 that
reflect our emergence as a sustainable growth company," said
Bob McMahon, the Company's chief
financial officer. "We forecast mid-single-digit revenue
growth in constant currency, and EPS growth at roughly double this
rate on both a GAAP and non-GAAP basis, as new products and higher
international sales supplement continued commercial execution in
the United States."
The guidance below is based on a full year non-GAAP tax rate of
approximately 31%, and diluted shares outstanding of between 289
and 291 million for the full year. As shown below, constant
currency guidance assumes that foreign exchange rates are the same
in fiscal 2017 as in fiscal 2016. Current guidance assumes
that recent foreign exchange rates persist for all of fiscal
2017.
For fiscal 2017, Hologic expects:
|
GAAP
|
Non-GAAP
|
|
Current
Guidance
|
Current
Guidance
|
Current Guidance
(Constant Currency)
|
Current
Guidance
|
Current
Guidance
|
Revenues
|
3.8% to
5.2%
|
$2.94 to $2.98
billion
|
4.0% to
5.5%
|
3.8% to
5.2%
|
$2.94 to $2.98
billion
|
EPS
|
6.0% to
9.5%
|
$1.23 to
$1.27
|
8.5% to
10.6%
|
8.2% to
10.2%
|
$2.12 to
$2.16
|
For the first quarter of fiscal 2017, Hologic expects:
|
GAAP
|
Non-GAAP
|
|
Current
Guidance
|
Current
Guidance
|
Current Guidance
(Constant Currency)
|
Current
Guidance
|
Current
Guidance
|
Revenues
|
3.6% to
5.0%
|
$720 to $730
million
|
3.8% to
5.2%
|
3.6% to
5.0%
|
$720 to $730
million
|
EPS
|
(10.3%) to
(6.9%)
|
$0.26 to
$0.27
|
9.1% to
11.3%
|
8.7% to
10.9%
|
$0.50 to
$0.51
|
Use of Non-GAAP Financial Measures
The Company has presented the following non-GAAP financial
measures in this press release: constant currency revenues;
non-GAAP gross profit; non-GAAP gross margin; non-GAAP operating
expenses; non-GAAP income from operations; non-GAAP operating
margin; non-GAAP interest expense; non-GAAP pre-tax income;
non-GAAP net margin; non-GAAP net income; non-GAAP diluted EPS; and
adjusted EBITDA. Constant currency presentations show reported
period operating results as if the foreign exchange rates remain
the same as those in effect in the comparable prior year
period. The Company defines its non-GAAP net income, EPS, and
other non-GAAP financial measures to exclude, as applicable: (i)
the amortization of intangible assets and impairment of goodwill
and intangible assets; (ii) additional depreciation expense from
acquired fixed assets and accelerated depreciation related to
consolidation and closure of facilities ; (iii) non-cash interest
expense related to amortization of the debt discount from the
equity conversion option of the convertible notes; (iv)
restructuring and divestiture charges and facility closure and
consolidation charges; (v) debt extinguishment losses and related
transaction costs; (vi) the unrealized (gains) losses on the
mark-to-market of forward foreign currency contracts for which the
Company has not elected hedge accounting; (vii) litigation
settlement charges (benefits); (viii) other-than-temporary
impairment losses on investments and realized gains and (losses)
resulting from the sale of investments; (ix) other one-time,
non-recurring, unusual or infrequent charges, expenses or gains
that may not be indicative of the Company's core business results
as detailed in our reconciliations of such adjustments; and (x)
income taxes related to such adjustments. 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.
These non-GAAP financial measures should be considered
supplemental to, and not a substitute for, financial information
prepared in accordance with GAAP. The company's definition of these
non-GAAP measures may differ from similarly titled measures used by
others.
The non-GAAP financial measures used in this press release
adjust for specified items that can be highly variable or difficult
to predict. The company generally uses these non-GAAP financial
measures to facilitate management's financial and operational
decision-making, including evaluation of Hologic's historical
operating results, comparison to competitors' operating results and
determination of management incentive compensation. These non-GAAP
financial measures reflect an additional way of viewing aspects of
the company's operations that, when viewed with GAAP results and
the reconciliations to corresponding GAAP financial measures, may
provide a more complete understanding of factors and trends
affecting Hologic's business.
Because non-GAAP financial measures exclude the effect of items
that will increase or decrease the company's reported results of
operations, management strongly encourages investors to review the
company's consolidated financial statements and publicly filed
reports in their entirety. A reconciliation of the non-GAAP
financial measures to the most directly comparable GAAP financial
measures is included in the tables accompanying this release.
Future Non-GAAP Adjustments
Future GAAP EPS may be affected by changes in ongoing
assumptions and judgments, and may also be affected by
non-recurring, 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.
Conference Call and Webcast
Hologic's management will host a conference call at 4:30 p.m. ET today to discuss its financial
results for the fourth quarter of fiscal 2016. Approximately
10 minutes before the call, dial 877-548-7906 (U.S. and
Canada) or 719-325-4923
(international) and enter access code 8610000. A replay will
be available starting two hours after the call ends through
November 25, 2016 at 888-203-1112
(U.S. and Canada) or 719-457-0820
(international), access code 8610000, Pin 9876. The Company
will also provide a live webcast of the call at
http://investors.hologic.com.
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, Genius 3D Mammography, Aptima, ThinPrep, MyoSure,
NovaSure, Panther, Tigris, The Science of Sure, 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, the need to comply with especially high
standards for the manufacture of many of its products and risks
associated with utilizing third party manufacturers; 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 INCOME
(Unaudited)
(In millions, except number of shares, which are reflected in
thousands, and per share data)
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
September 24,
2016
|
|
September 26,
2015
|
|
September 24,
2016
|
|
September 26,
2015
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Product
|
$
|
607.5
|
|
|
$
|
594.4
|
|
|
$
|
2,379.0
|
|
|
$
|
2,270.4
|
|
Service and
other
|
119.3
|
|
|
108.4
|
|
|
453.7
|
|
|
434.6
|
|
Total
revenues
|
726.8
|
|
|
702.8
|
|
|
2,832.7
|
|
|
2,705.0
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Product
|
195.5
|
|
|
195.9
|
|
|
756.8
|
|
|
755.5
|
|
Amortization of
intangible assets
|
71.2
|
|
|
74.1
|
|
|
293.4
|
|
|
299.7
|
|
Service and
other
|
54.0
|
|
|
53.4
|
|
|
219.2
|
|
|
217.1
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
406.1
|
|
|
379.4
|
|
|
1,563.3
|
|
|
1,432.7
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
62.5
|
|
|
53.8
|
|
|
232.1
|
|
|
214.9
|
|
Selling and
marketing
|
105.8
|
|
|
99.7
|
|
|
415.1
|
|
|
363.0
|
|
General and
administrative
|
65.4
|
|
|
66.2
|
|
|
267.3
|
|
|
261.0
|
|
Amortization of
intangible assets
|
22.4
|
|
|
27.5
|
|
|
89.7
|
|
|
110.2
|
|
Restructuring and
divestiture charges
|
2.9
|
|
|
6.5
|
|
|
10.5
|
|
|
28.5
|
|
Total operating
expenses
|
259.0
|
|
|
253.7
|
|
|
1,014.7
|
|
|
977.6
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
147.1
|
|
|
125.7
|
|
|
548.6
|
|
|
455.1
|
|
Interest
income
|
0.1
|
|
|
0.3
|
|
|
0.7
|
|
|
1.3
|
|
Interest
expense
|
(37.9)
|
|
|
(51.2)
|
|
|
(155.3)
|
|
|
(205.5)
|
|
Debt extinguishment
loss
|
(0.8)
|
|
|
(37.8)
|
|
|
(5.3)
|
|
|
(62.7)
|
|
Other income
(expense), net
|
(0.9)
|
|
|
(11.5)
|
|
|
26.6
|
|
|
(11.0)
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
107.6
|
|
|
25.5
|
|
|
415.3
|
|
|
177.2
|
|
Provision for income
taxes
|
15.4
|
|
|
0.3
|
|
|
84.5
|
|
|
45.6
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
92.2
|
|
|
$
|
25.2
|
|
|
$
|
330.8
|
|
|
$
|
131.6
|
|
|
|
|
|
|
|
|
|
Net income per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.33
|
|
|
$
|
0.09
|
|
|
$
|
1.18
|
|
|
$
|
0.47
|
|
Diluted
|
$
|
0.33
|
|
|
$
|
0.09
|
|
|
$
|
1.16
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
277,549
|
|
|
282,072
|
|
|
280,213
|
|
|
280,566
|
|
Diluted
|
282,494
|
|
|
294,778
|
|
|
286,156
|
|
|
289,537
|
|
HOLOGIC,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In
millions)
|
|
|
September 24,
2016
|
|
September 26,
2015
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
548.4
|
|
|
$
|
492.7
|
|
Accounts receivable,
net
|
447.0
|
|
|
416.1
|
|
Inventories
|
274.7
|
|
|
283.1
|
|
Deferred income
taxes
|
—
|
|
|
19.0
|
|
Other current
assets
|
56.5
|
|
|
54.9
|
|
Total current
assets
|
1,326.6
|
|
|
1,265.8
|
|
|
|
|
|
Property, plant and
equipment, net
|
460.2
|
|
|
457.1
|
|
Goodwill and
intangible assets
|
5,446.5
|
|
|
5,831.4
|
|
Other
assets
|
83.7
|
|
|
88.2
|
|
Total
assets
|
$
|
7,317.0
|
|
|
$
|
7,642.5
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term debt
|
$
|
296.0
|
|
|
$
|
391.2
|
|
Accounts payable and
accrued liabilities
|
444.5
|
|
|
389.1
|
|
Deferred
revenue
|
161.4
|
|
|
163.1
|
|
Total current
liabilities
|
901.9
|
|
|
943.4
|
|
|
|
|
|
Long-term debt, net
of current portion
|
3,049.4
|
|
|
3,221.0
|
|
Deferred income
taxes
|
982.6
|
|
|
1,178.4
|
|
Other long-term
liabilities
|
240.4
|
|
|
220.5
|
|
Total
liabilities
|
5,174.3
|
|
|
5,563.3
|
|
Total stockholders'
equity
|
2,142.7
|
|
|
2,079.2
|
|
Total liabilities
and stockholders' equity
|
$
|
7,317.0
|
|
|
$
|
7,642.5
|
|
HOLOGIC,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(in
millions)
|
|
|
Years
Ended
|
|
September 24,
2016
|
|
September 26,
2015
|
OPERATING
ACTIVITIES
|
|
|
|
Net income
|
$
|
330.8
|
|
|
$
|
131.6
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
82.3
|
|
|
81.5
|
|
Amortization
|
383.1
|
|
|
409.9
|
|
Non-cash interest
expense
|
52.1
|
|
|
63.8
|
|
Stock-based
compensation expense
|
65.4
|
|
|
59.3
|
|
Excess tax benefit
related to equity awards
|
(11.0)
|
|
|
(10.7)
|
|
Deferred income
taxes
|
(155.8)
|
|
|
(148.8)
|
|
Gain on sale of
available-for-sale marketable security
|
(25.1)
|
|
|
—
|
|
Debt extinguishment
losses
|
5.3
|
|
|
62.7
|
|
Equity investment
impairment charges
|
1.1
|
|
|
7.8
|
|
Loss on disposal of
property and equipment
|
5.5
|
|
|
6.6
|
|
Loss on sale of
business
|
—
|
|
|
9.6
|
|
Other adjustments and
non-cash items
|
(2.9)
|
|
|
14.3
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(31.8)
|
|
|
(30.3)
|
|
Inventories
|
7.6
|
|
|
43.9
|
|
Prepaid income
taxes
|
4.7
|
|
|
0.7
|
|
Prepaid expenses and
other assets
|
(4.9)
|
|
|
5.7
|
|
Accounts
payable
|
40.1
|
|
|
25.5
|
|
Accrued expenses and
other liabilities
|
45.6
|
|
|
36.9
|
|
Deferred
revenue
|
(4.9)
|
|
|
16.1
|
|
Net cash provided by
operating activities
|
787.2
|
|
|
786.1
|
|
INVESTING
ACTIVITIES
|
|
|
|
Purchase of property
and equipment
|
(47.3)
|
|
|
(48.1)
|
|
Increase in equipment
under customer usage agreements
|
(47.2)
|
|
|
(41.3)
|
|
Proceeds from sale of
available-for-sale marketable security
|
31.1
|
|
|
—
|
|
Purchases of
insurance contracts
|
(5.2)
|
|
|
(6.4)
|
|
Sales of mutual
funds
|
5.2
|
|
|
10.0
|
|
Purchase of
intellectual property
|
(4.0)
|
|
|
—
|
|
Increase in other
assets
|
(1.0)
|
|
|
(0.3)
|
|
Net cash used in
investing activities
|
(68.4)
|
|
|
(86.1)
|
|
FINANCING
ACTIVITIES
|
|
|
|
Proceeds from
long-term debt
|
—
|
|
|
2,495.1
|
|
Repayment of
long-term debt
|
(75.0)
|
|
|
(3,095.0)
|
|
Payments to
extinguish convertible notes
|
(392.8)
|
|
|
(543.7)
|
|
Proceeds from amounts
borrowed under revolving credit line
|
50.0
|
|
|
358.0
|
|
Repayment of amounts
borrowed under revolving credit line
|
(225.0)
|
|
|
(183.0)
|
|
Proceeds from
accounts receivable securitization agreement
|
200.0
|
|
|
—
|
|
Repurchase of common
stock
|
(250.0)
|
|
|
—
|
|
Payment of debt
issuance costs
|
—
|
|
|
(22.7)
|
|
Purchase of interest
rate caps
|
—
|
|
|
(13.2)
|
|
Net proceeds from
issuance of common stock pursuant to employee stock
plans
|
38.5
|
|
|
70.0
|
|
Excess tax benefit
related to equity awards
|
11.0
|
|
|
10.7
|
|
Payment of minimum
tax withholdings on net share settlements of equity
awards
|
(16.4)
|
|
|
(12.9)
|
|
Net cash used in
financing activities
|
(659.7)
|
|
|
(936.7)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(2.0)
|
|
|
(8.1)
|
|
Net increase
(decrease) in cash and cash equivalents
|
57.1
|
|
|
(244.8)
|
|
Cash and cash
equivalents, beginning of period
|
491.3
|
|
|
736.1
|
|
Cash and cash
equivalents, end of period
|
$
|
548.4
|
|
|
$
|
491.3
|
|
HOLOGIC,
INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (Unaudited)
(In millions, except earnings per share)
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
September 24,
2016
|
|
September 26,
2015
|
|
September 24,
2016
|
|
September 26,
2015
|
|
|
|
|
|
|
|
|
Gross
Profit:
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
406.1
|
|
|
$
|
379.4
|
|
|
$
|
1,563.3
|
|
|
$
|
1,432.7
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
71.2
|
|
|
74.1
|
|
|
293.4
|
|
|
299.7
|
|
Incremental
depreciation expense (2)
|
0.4
|
|
|
0.6
|
|
|
1.8
|
|
|
3.0
|
|
Integration/consolidation costs (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
Non-GAAP gross
profit
|
$
|
477.7
|
|
|
$
|
454.1
|
|
|
$
|
1,858.5
|
|
|
$
|
1,735.9
|
|
|
|
|
|
|
|
|
|
Gross Margin
Percentage:
|
|
|
|
|
|
|
|
GAAP gross margin
percentage
|
55.9
|
%
|
|
54.0
|
%
|
|
55.2
|
%
|
|
53.0
|
%
|
Impact of adjustments
above
|
9.8
|
%
|
|
10.6
|
%
|
|
10.4
|
%
|
|
11.2
|
%
|
Non-GAAP gross margin
percentage
|
65.7
|
%
|
|
64.6
|
%
|
|
65.6
|
%
|
|
64.2
|
%
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
|
259.0
|
|
|
$
|
253.7
|
|
|
$
|
1,014.7
|
|
|
$
|
977.6
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
(22.4)
|
|
|
(27.5)
|
|
|
(89.7)
|
|
|
(110.2)
|
|
Incremental
depreciation expense (2)
|
(0.7)
|
|
|
(0.9)
|
|
|
(3.3)
|
|
|
(3.2)
|
|
Integration/consolidation costs (3)
|
(0.2)
|
|
|
(0.1)
|
|
|
(0.9)
|
|
|
(0.1)
|
|
Restructuring and
divestiture charges (3)
|
(2.9)
|
|
|
(6.5)
|
|
|
(10.5)
|
|
|
(28.5)
|
|
Other (4)
|
2.7
|
|
|
—
|
|
|
(3.3)
|
|
|
(0.1)
|
|
Non-GAAP operating
expenses
|
$
|
235.5
|
|
|
$
|
218.7
|
|
|
$
|
907.0
|
|
|
$
|
835.5
|
|
|
|
|
|
|
|
|
|
Operating
Margin:
|
|
|
|
|
|
|
|
GAAP income from
operations
|
147.1
|
|
|
125.7
|
|
|
548.6
|
|
|
455.1
|
|
Adjustments to gross
profit as detailed above
|
71.6
|
|
|
74.7
|
|
|
295.2
|
|
|
303.2
|
|
Adjustments to
operating expenses as detailed above
|
23.5
|
|
|
35.0
|
|
|
107.7
|
|
|
142.1
|
|
Non-GAAP income from
operations
|
$
|
242.2
|
|
|
$
|
235.4
|
|
|
$
|
951.5
|
|
|
$
|
900.4
|
|
|
|
|
|
|
|
|
|
Operating Margin
Percentage:
|
|
|
|
|
|
|
|
GAAP income from
operations margin percentage
|
20.2
|
%
|
|
17.9
|
%
|
|
19.4
|
%
|
|
16.8
|
%
|
Impact of adjustments
above
|
13.1
|
%
|
|
15.6
|
%
|
|
14.2
|
%
|
|
16.5
|
%
|
Non-GAAP operating
margin percentage
|
33.3
|
%
|
|
33.5
|
%
|
|
33.6
|
%
|
|
33.3
|
%
|
|
|
|
|
|
|
|
|
Interest
Expense:
|
|
|
|
|
|
|
|
GAAP interest
expense
|
$
|
37.9
|
|
|
$
|
51.2
|
|
|
$
|
155.3
|
|
|
$
|
205.5
|
|
Adjustments:
|
|
|
|
|
|
|
|
Non-cash interest
expense relating to convertible notes (5)
|
(5.0)
|
|
|
(7.9)
|
|
|
(22.3)
|
|
|
(34.9)
|
|
Debt transaction
costs (6)
|
—
|
|
|
(4.7)
|
|
|
—
|
|
|
(9.3)
|
|
Non-GAAP interest
expense
|
$
|
32.9
|
|
|
$
|
38.6
|
|
|
$
|
133.0
|
|
|
$
|
161.3
|
|
|
|
|
|
|
|
|
|
Pre-Tax
Income:
|
|
|
|
|
|
|
|
GAAP pre-tax
earnings
|
$
|
107.6
|
|
|
$
|
25.5
|
|
|
$
|
415.3
|
|
|
$
|
177.2
|
|
Adjustments to
pre-tax earnings as detailed above
|
100.1
|
|
|
122.3
|
|
|
425.2
|
|
|
489.4
|
|
Debt extinguishment
loss (6)
|
0.8
|
|
|
37.8
|
|
|
5.3
|
|
|
62.7
|
|
Gain on sale of
available-for-sale marketable security (7)
|
—
|
|
|
—
|
|
|
(25.1)
|
|
|
—
|
|
Equity investment
impairment charges (8)
|
1.1
|
|
|
7.8
|
|
|
1.1
|
|
|
7.8
|
|
Unrealized losses on
forward foreign currency contracts (9)
|
1.6
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
Non-GAAP pre-tax
Income
|
$
|
211.2
|
|
|
$
|
193.4
|
|
|
$
|
822.9
|
|
|
$
|
737.1
|
|
|
|
|
|
|
|
|
|
Net
income:
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
92.2
|
|
|
$
|
25.2
|
|
|
$
|
330.8
|
|
|
$
|
131.6
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
93.6
|
|
|
101.6
|
|
|
383.1
|
|
|
409.9
|
|
Non-cash interest
expense relating to convertible notes (5)
|
5.0
|
|
|
7.9
|
|
|
22.3
|
|
|
34.9
|
|
Restructuring,
divestiture, and integration/consolidation costs (3)
|
3.1
|
|
|
6.6
|
|
|
11.4
|
|
|
29.1
|
|
Incremental
depreciation expenses (2)
|
1.1
|
|
|
1.5
|
|
|
5.1
|
|
|
6.2
|
|
Debt extinguishment
loss and transaction charges (6)
|
0.8
|
|
|
42.5
|
|
|
5.3
|
|
|
72.0
|
|
Gain on sale of
available-for-sale marketable security (7)
|
—
|
|
|
—
|
|
|
(25.1)
|
|
|
—
|
|
Equity investment
impairment charges (8)
|
1.1
|
|
|
7.8
|
|
|
1.1
|
|
|
7.8
|
|
Unrealized losses on
forward foreign currency contracts (9)
|
1.6
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
Other charges
(4)
|
(2.7)
|
|
|
—
|
|
|
3.3
|
|
|
0.1
|
|
Income tax effect of
reconciling items (10)
|
(50.1)
|
|
|
(66.0)
|
|
|
(176.8)
|
|
|
(206.9)
|
|
Non-GAAP net
income
|
$
|
145.7
|
|
|
$
|
127.1
|
|
|
$
|
561.6
|
|
|
$
|
484.7
|
|
|
|
|
|
|
|
|
|
Net Income
Percentage:
|
|
|
|
|
|
|
|
GAAP net income
percentage
|
12.7
|
%
|
|
3.6
|
%
|
|
11.7
|
%
|
|
4.9
|
%
|
Impact of adjustments
above
|
7.3
|
%
|
|
14.5
|
%
|
|
8.1
|
%
|
|
13.0
|
%
|
Non-GAAP net income
percentage
|
20.0
|
%
|
|
18.1
|
%
|
|
19.8
|
%
|
|
17.9
|
%
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
GAAP earnings per
share - Diluted
|
$
|
0.33
|
|
|
$
|
0.09
|
|
|
$
|
1.16
|
|
|
$
|
0.45
|
|
Adjustment to net
earnings (as detailed above)
|
0.19
|
|
|
0.34
|
|
|
0.80
|
|
|
1.22
|
|
Non-GAAP earnings per
share – diluted (11)
|
$
|
0.52
|
|
|
$
|
0.43
|
|
|
$
|
1.96
|
|
|
$
|
1.67
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
Non-GAAP net
income
|
$
|
145.7
|
|
|
$
|
127.1
|
|
|
$
|
561.6
|
|
|
$
|
484.7
|
|
Interest expense,
net, not adjusted above
|
32.8
|
|
|
38.3
|
|
|
132.3
|
|
|
160.0
|
|
Provision for income
taxes
|
65.5
|
|
|
66.3
|
|
|
261.3
|
|
|
252.5
|
|
Depreciation expense,
not adjusted above
|
19.9
|
|
|
19.2
|
|
|
77.1
|
|
|
75.1
|
|
Adjusted
EBITDA
|
$
|
263.9
|
|
|
$
|
250.9
|
|
|
$
|
1,032.3
|
|
|
$
|
972.3
|
|
|
|
|
|
|
|
|
|
Explanatory Notes to Reconciliations:
(1)
|
To reflect non-cash
expenses attributable to the amortization of intangible
assets.
|
(2)
|
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 and accelerated depreciation expense related
to facility closure and consolidation.
|
(3)
|
To reflect
restructuring and divestiture charges and certain costs associated
with the Company's integration and facility consolidation plans,
which primarily include retention and transfer costs.
|
(4)
|
To reflect the net
impact from miscellaneous transactions during the relevant period,
including legal settlements and tax accrual adjustments not
established in the ordinary course of business.
|
(5)
|
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.
|
(6)
|
To reflect losses for
extinguishment and partial extinguishment related to voluntary
prepayments and refinancings under the Prior Credit Agreement for
fiscal 2015 and related cash transaction costs, as well as
repurchase of $137.7 million of the 2010 Convertible Notes and
$136.6 million of the 2012 Convertible Notes for fiscal
2016.
|
(7)
|
To reflect a realized
gain on the sale of an available-for-sale marketable
security.
|
(8)
|
To reflect
other-than-temporary impairment charges on certain equity
investments, including available-for-sale marketable
securities.
|
(9)
|
To reflect non-cash
unrealized losses on the mark-to market on outstanding forward
foreign currency contracts, which do not qualify for hedging
accounting.
|
(10)
|
To reflect an
estimated annual effective tax rate of 31.75% and 34.25% for fiscal
2016 and 2015, respectively.
|
(11)
|
Non-GAAP earnings per
share was calculated based on 282,494 and 294,778 weighted average
diluted shares outstanding for the three months ended
September 24, 2016 and September 26, 2015, respectively,
and 286,156 and 289,537 weighted average diluted shares outstanding
for the years ended September 24, 2016 and September 26,
2015, respectively.
|
Reconciliation of GAAP to non-GAAP EPS guidance:
|
Guidance
Range
|
|
Guidance
Range
|
|
Quarter Ending
December 31, 2016
|
|
Year Ending
September 30,2017
|
|
Low
|
High
|
|
Low
|
High
|
GAAP Net Income Per
Share
|
$0.26
|
$0.27
|
|
$1.23
|
$1.27
|
Amortization of Intangible Assets
|
$0.34
|
$0.34
|
|
$1.29
|
$1.29
|
Amortization of Debt Discount
|
$0.02
|
$0.02
|
|
$0.07
|
$0.07
|
Restructuring and Other Charges
|
$0.01
|
$0.01
|
|
$0.04
|
$0.04
|
Tax
Impact of Exclusions
|
$(0.13)
|
$(0.13)
|
|
$(0.51)
|
$(0.51)
|
Non-GAAP Net Income
Per Share
|
$0.50
|
$0.51
|
|
$2.12
|
$2.16
|
|
Trailing Twelve
Months
ended
September 24,
2016
|
Adjusted Return on
Invested Capital:
|
|
|
|
Adjusted Net
Operating Profit After Tax
|
|
Non-GAAP net
income
|
561.6
|
|
Non-GAAP provision
for income taxes
|
261.3
|
|
Non-GAAP interest
expense
|
133.0
|
|
Non-GAAP other
income
|
(4.4)
|
|
Adjusted net
operating profit before tax
|
951.5
|
|
Non-GAAP average
effective tax rate (1)
|
31.75
|
%
|
Adjusted net
operating profit after tax
|
649.4
|
|
|
|
Average Net Debt plus
Average Stockholders' Equity (2)
|
|
Average total
debt
|
3,492.6
|
|
Less: Average cash,
cash equivalents and restricted cash
|
(520.5)
|
|
Average net
debt
|
2,972.1
|
|
Average stockholders'
equity (3)
|
2,143.2
|
|
Average net debt plus
average stockholders' equity
|
5,115.3
|
|
|
|
Adjusted
ROIC
|
|
Adjusted ROIC
(adjusted net operating profit after tax above divided by average net debt plus stockholders'
equity above)
|
12.70
|
%
|
|
(1) ROIC is
presented on a TTM basis; non-GAAP effective tax rate for the year
ended September 24, 2016 was 31.75%.
|
(2) Calculated
using the average of the balances as of September 24, 2016 and
September 26, 2015.
|
(3) Adjusted
(increased) to eliminate the effect of the impairment of intangible
assets of $32.2 million in fiscal 2014.
|
|
|
As
of
|
|
September 24,
2016
|
Leverage
Ratio:
|
|
|
|
Total principal
debt
|
3,409.0
|
|
Total cash
|
(548.4)
|
|
Net principal debt,
as adjusted
|
2,860.6
|
|
EBITDA for the last
four quarters
|
1,032.3
|
|
Leverage
Ratio
|
2.77
|
|
Other Supplemental
Information:
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
September 24,
2016
|
|
September 26,
2015
|
|
September 24,
2016
|
|
September 26,
2015
|
|
|
|
|
|
|
|
|
|
Geographic
Revenues
|
|
|
|
|
|
|
|
|
U.S.
|
|
79.5
|
%
|
|
76.6
|
%
|
|
78.9
|
%
|
|
76.0
|
%
|
Europe
|
|
9.8
|
%
|
|
10.7
|
%
|
|
10.2
|
%
|
|
11.8
|
%
|
Asia-Pacific
|
|
7.8
|
%
|
|
8.7
|
%
|
|
7.6
|
%
|
|
8.5
|
%
|
All Others
|
|
2.9
|
%
|
|
4.0
|
%
|
|
3.3
|
%
|
|
3.7
|
%
|
Total
Revenues
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
Revenue
Composition:
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
September 24,
2016
|
|
September 26,
2015
|
|
September 24,
2016
|
|
September 26,
2015
|
|
|
|
|
|
|
|
|
|
Revenue
Composition
|
|
|
|
|
|
|
|
|
Disposables
|
|
59.5
|
%
|
|
59.8
|
%
|
|
60.8
|
%
|
|
61.3
|
%
|
Capital
Equipment
|
|
24.1
|
%
|
|
24.7
|
%
|
|
23.2
|
%
|
|
22.6
|
%
|
Service &
Other
|
|
16.4
|
%
|
|
15.5
|
%
|
|
16.0
|
%
|
|
16.1
|
%
|
Total
Revenues
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/hologic-announces-financial-results-for-fourth-quarter-of-fiscal-2016-300356023.html
SOURCE Hologic, Inc.