Hologic Announces Financial Results for First Quarter of Fiscal 2019 - Revenue of $830.7 Million Grows 5.0%, 5.7% in Constant Currency - - Company Posts GAAP Diluted EPS of $0.36, Non-GAAP Diluted EPS of $0.58 - - Compan

Announces Financial Results for First Quarter of Fiscal 2019

of $830.7 Million Grows 5.0%, 5.7% in Constant Currency -

Posts GAAP Diluted EPS of $0.36, Non-GAAP Diluted EPS of $0.58 -

Raises Full-Year Guidance for Constant Currency Revenue and EPS -

MARLBOROUGH, Mass.--(BUSINESS WIRE)--January 30, 2019--Hologic, Inc.

(Nasdaq: HOLX) announced today the Company's financial results for the

fiscal first quarter ended December 29, 2018.

"We posted strong results in our first fiscal quarter, with both

revenues and EPS exceeding our guidance ranges," said Steve MacMillan,

Hologic's Chairman, President and Chief Executive Officer. "Growth was

driven by acceleration in our largest businesses - U.S. Breast Health,

International, and global Molecular Diagnostics - all of which posted

double-digit constant currency growth to start our year."

Revenue growth in the first quarter was driven by U.S. Breast Health,

International and Molecular Diagnostics.

U.S. Breast Health revenue of $252.6 million grew 12.6% compared

to the prior year period, representing its highest growth rate in

Global Molecular Diagnostics revenue increased 10.5%, or 11.2% in

constant currency, to $164.3 million.

International revenue of $208.9 increased 7.7%, or 10.7% in

Recent new product launches include the Omni hysteroscope and Panther

Fusion Open Access functionality in the United States, the Panther

Fusion Bordetella assay in Europe, and the Surgical handpiece for the

TempSure radiofrequency system in North America.

Completed the acquisition of Focal Therapeutics on October 1, 2018,

strengthening the Company's breast surgery franchise, for

approximately $120 million.

Repurchased 3.7 million shares of common stock for $150.1 million.

Key financial results for the fiscal first quarter are shown in the

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 corresponding prior year period.

Non-GAAP results exclude certain cash and non-cash items as discussed

under "Use of Non-GAAP Financial Measures." Constant currency percentage

changes show current period revenue results as if the foreign exchange

rates were the same as those in the prior year period.

Other Financial Highlights

U.S. revenue of $621.8 million increased 4.1%. International revenue

of $208.9 million increased 7.7%, or 10.7% in constant currency.

The recently acquired Faxitron businesses contributed $7.7 million to

Breast Imaging revenue, and the recently acquired Focal business

contributed $4.5 million to Interventional Breast revenue.

Gross margin was 52.3% on a GAAP basis, and 62.2% on a non-GAAP basis.

GAAP gross margin decreased 140 basis points, while non-GAAP gross

margin decreased 160 basis points, primarily due to geographic and

GAAP net income was $98.6 million compared to $406.7 million in the

prior year period, which included a discrete net tax benefit of $329.2

million from U.S. tax reform. Adjusted non-GAAP earnings before

interest, taxes, depreciation and amortization (EBITDA) was $260.7

million, an increase of 1.0%.

Total debt outstanding at the end of the quarter was $3.1 billion. The

Company ended the quarter with cash and equivalents of $311.1 million,

and a net leverage ratio (net debt over adjusted EBITDA) of 2.8 times.

On a trailing 12 months basis, adjusted Return on Invested Capital

(ROIC) of 12.2% declined 20 basis points compared to the prior year

Financial Guidance for Fiscal 2019

Hologic is raising its full-year, constant currency revenue guidance and

slightly increasing its full-year EPS guidance. Changes are driven by

the Company's strong performance in the first quarter, partially offset

by greater foreign exchange headwinds compared to the Company's initial

Hologic's financial guidance for the second quarter and fiscal year 2019

is shown in the table below. The guidance is based on a full year

non-GAAP tax rate of approximately 23%, and diluted shares outstanding

of approximately 272 million for the full year. Constant currency

guidance assumes that foreign exchange rates are the same in fiscal 2019

as in fiscal 2018. Current guidance assumes that recent foreign exchange

rates persist for all of fiscal 2019.

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 margin;

non-GAAP operating expenses; non-GAAP operating margin; non-GAAP net

income; non-GAAP EPS; and adjusted EBITDA. 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)

additional expenses resulting from the purchase accounting adjustment to

record inventory at fair value; (iv) non-cash interest expense related

to amortization of the debt discount from the equity conversion option

of the convertible notes; (v) restructuring and divestiture charges and

facility closure and consolidation charges and costs incurred to

integrate acquisitions (including retention, transaction bonuses, legal

and professional consulting services) and separate divested businesses

from existing operations; (vi) transaction related expenses for

divestitures and acquisitions; (vii) gains/losses on disposal of a

business; (viii) debt extinguishment losses and related transaction

costs; (ix) the unrealized (gains) losses on the mark-to-market of

forward foreign currency contracts for which the Company has not elected

hedge accounting; (x) litigation settlement charges (benefits) and

non-income tax related charges (benefits); (xi) other-than-temporary

impairment losses on investments and realized gains resulting from the

sale of investments; (xii) the one-time discrete impact of tax reform

primarily related to remeasuring net deferred tax liabilities; (xiii)

other one-time, non-recurring, unusual or infrequent charges, expenses

or gains that may not be indicative of the Company's core business

results; and (xiv) income taxes related to such adjustments. The Company