Hologic Announces Financial Results for Fourth Quarter of Fiscal 2018 - Revenue of $813.5 Million Grows 1.3%, 1.7% in Constant Currency - - Company Posts GAAP Diluted EPS of $0.18, Non-GAAP Diluted EPS of $0.58 - - Compa

Announces Financial Results for Fourth Quarter of Fiscal 2018

of $813.5 Million Grows 1.3%, 1.7% in Constant Currency -

Posts GAAP Diluted EPS of $0.18, Non-GAAP Diluted EPS of $0.58 -

Expects Solid Revenue and EPS Growth in Fiscal 2019 -

MARLBOROUGH, Mass.--(BUSINESS WIRE)--November 7, 2018--Hologic, Inc.

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

fiscal fourth quarter ended September 29, 2018.

"Hologic posted solid results in the fourth quarter of fiscal 2018,"

said Steve MacMillan, Hologic's Chairman, President and Chief Executive

Officer. "We clearly finished the year in a much stronger position than

when we started, as underlying growth improved in our largest

businesses, Breast Health and Molecular Diagnostics. In addition,

International sales continued to show robust growth, and we completed

two attractive tuck-in acquisitions to bolster our Breast Health

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

Molecular Diagnostics and International.

U.S. Breast Health revenue of $254.5 million increased 5.4%

compared to the prior year period.

Molecular Diagnostics revenue increased 2.9%, or 3.4% in constant

currency, to $158.0 million. Excluding $9.5 million of

non-recurring royalty revenue in the prior year period, molecular

diagnostics revenue increased 9.7%, or 10.2% in constant currency.

International revenue of $198.4 million increased 4.5%, or 6.3% in

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

strengthening the Company's breast surgery franchise, for

approximately $125 million.

Continued to launch new products, including the Group B Streptococcus

(GBS) assay on the Panther Fusion system and the Fluent fluid

management system for hysteroscopic procedures.

Final cervical cancer screening recommendations from the United States

Preventive Services Task Force (USPSTF) retained "A" grade for Pap +

HPV (co-testing) for women ages 30 to 65.

Repurchased 2.3 million shares of common stock for $88.5 million.

Key financial results for the fiscal fourth 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 $615.1 million increased 0.3%. International revenue

of $198.4 million increased 4.5%, or 6.3% in constant currency.

Gross margin was 51.8% on a GAAP basis, and 61.8% on a non-GAAP basis.

GAAP gross margin decreased 20 basis points, while non-GAAP gross

margin decreased 230 basis points, primarily due to geographic and

product sales mix, $9.5 million of non-recurring royalties in the

prior year period, and refunds and rebates totaling $6.8 million

associated with the previously announced marketing suspension of our

TempSure Vitalia product.

GAAP net income of $50.5 million decreased 38.9% due primarily to a

$34.8 million charge associated with the settlement of a long-standing

patent infringement dispute with Smith & Nephew pertaining to the

MyoSure system. Adjusted non-GAAP earnings before interest, taxes,

depreciation and amortization (EBITDA) was $263.3 million, an increase

Total debt outstanding at the end of the quarter was $3.3 billion. The

Company ended the quarter with cash and equivalents of $666.7 million,

and a net leverage ratio (net debt over adjusted EBITDA) of 2.6 times.

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

(ROIC) of 12.6% was flat versus the prior year.

Free cash flow for fiscal 2018 was $687.3 million, excluding $60

million of tax recapture payments associated with extinguishing the

Company's convertible debt.

Financial Guidance for Fiscal 2019

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

is shown in the tables immediately below. The guidance is based on a

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

outstanding of approximately 276 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; (viii) gains/losses on disposal of a

business; (vii) debt extinguishment losses and related transaction

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

forward foreign currency contracts for which the Company has not elected

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

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

impairment losses on investments and realized gains resulting from the