Full Press Release Details
Announces Financial Results for Second Quarter of Fiscal 2019
of $818.4 Million Grows 3.7%, 5.2% in Constant Currency -
Posts GAAP Loss per Share of ($1.01) Due to Non-Cash Charges, Non-GAAP
Diluted Earnings per Share (EPS) of $0.58 -
Raises Full-Year Guidance for Revenue and Non-GAAP EPS -
MARLBOROUGH, Mass.--(BUSINESS WIRE)--May 1, 2019--Hologic, Inc. (Nasdaq:
HOLX) announced today the Company's financial results for the fiscal
second quarter ended March 30, 2019.
"We posted strong results in our second fiscal quarter, with both
revenues and non-GAAP EPS exceeding our guidance ranges," said Steve
MacMillan, Hologic's Chairman, President and Chief Executive Officer.
"Growth was again driven by our largest businesses, Breast Health and
Molecular Diagnostics. Our international franchises continued to perform
well, our Surgical division strengthened, and our recent Breast Health
acquisitions are off to a great start."
Total revenue of $818.4 million increased 3.7%, or 5.2% in constant
currency, compared to the prior year period.
On a GAAP basis, the Company recorded a loss per share of ($1.01) due
primarily to non-cash impairment charges totaling $443.8 million
related to Medical Aesthetics. On a non-GAAP basis, the Company
recorded diluted EPS of $0.58, an increase of 9.4% compared to the
Global Molecular Diagnostics revenue of $167.8 million increased
11.4%, or 12.8% in constant currency, representing its highest growth
rate in six quarters.
Global Breast Health revenue of $321.5 million increased 7.1%, or 8.4%
in constant currency, continuing strong recent performance.
Global GYN Surgical revenue of $102.2 million increased 2.8%, or 4.1%
in constant currency, representing its highest growth rate in seven
International revenue of $202.9 million increased 1.0%, or 6.9% in
constant currency. All businesses grew solidly outside the United
States except Medical Aesthetics, which declined.
Hologic's innovation pipeline continued to be productive. Recent new
product launches include the Aptima Mycoplasma genitalium assay
and the Unifi Analytics business intelligence tool for mammography
centers in the United States, the Omni hysteroscope in Europe and
Canada, and the LOCalizer wireless breast lesion localization system
in Europe. In addition, the Aptima HIV-1 Quant Dx Assay received two
new CE marks in Europe - for early infant diagnosis and testing dried
The Company opened a state-of-the-art Learning and Experience Centre
in Zaventem, Belgium, to provide comprehensive training for customers,
healthcare professionals and employees in the region.
Key financial results for the fiscal second quarter are shown in the
| GAAP | Non-GAAP | |||||||||||||||||||||||
| Q2'19 | Q2'18 | Change Increase (Decrease) | Q2'19 | Q2'18 | Change Increase (Decrease) | |||||||||||||||||||
| Revenues | $818.4 | $789.3 | 3.7% | $818.4 | $789.3 | 3.7% | ||||||||||||||||||
| Gross Margin | 5.2% | 52.6% | (4,740 bps) | 61.0% | 62.7% | (170 bps) | ||||||||||||||||||
| Operating Expenses | $365.6 | $1,019.3 | (64.1%) | $272.8 | $266.9 | 2.2% | ||||||||||||||||||
| Operating Margin | (39.5%) | (76.5%) | 3,700 bps | 27.7% | 28.9% | (120 bps) | ||||||||||||||||||
| Net Margin | (33.3%) | (86.3%) | 5,300 bps | 19.0% | 18.7% | 30 bps | ||||||||||||||||||
| Diluted EPS | ($1.01) | ($2.46) | 58.9% | $0.58 | $0.53 | 9.4% |
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.
| Increase (Decrease) | |||||||||||||||||||||||||||||
| $ in millions | Q2'19 | Q2'18 | Global Reported Change | Global Constant Currency Change | U.S. Reported Change | International Reported Change | International Constant Currency Change | ||||||||||||||||||||||
| Diagnostics | |||||||||||||||||||||||||||||
| Cytology & Perinatal | $ | 115.5 | $ | 117.7 | (1.9 | %) | 0.3 | % | (2.5 | %) | (0.7 | %) | 6.0 | % | |||||||||||||||
| Molecular Diagnostics | $ | 167.8 | $ | 150.7 | 11.4 | % | 12.8 | % | 10.6 | % | 14.8 | % | 22.8 | % | |||||||||||||||
| Blood Screening | $ | 13.4 | $ | 11.3 | 19.0 | % | 19.0 | % | 18.6 | % | - | - | |||||||||||||||||
| Total Diagnostics | $ | 296.7 | $ | 279.7 | 6.0 | % | 7.8 | % | 6.2 | % | 5.6 | % | 12.9 | % | |||||||||||||||
| Total Diagnostics ex. Blood | $ | 283.3 | $ | 268.4 | 5.6 | % | 7.3 | % | 5.5 | % | 5.6 | % | 12.9 | % | |||||||||||||||
| Breast Health | |||||||||||||||||||||||||||||
| Breast Imaging | $ | 265.9 | $ | 250.4 | 6.2 | % | 7.5 | % | 7.5 | % | 1.6 | % | 7.2 | % | |||||||||||||||
| Interventional Breast Solutions | $ | 55.6 | $ | 49.7 | 11.8 | % | 12.9 | % | 14.7 | % | (1.5 | %) | 4.6 | % | |||||||||||||||
| Total Breast Health | $ | 321.5 | $ | 300.1 | 7.1 | % | 8.4 | % | 8.8 | % | 1.2 | % | 6.9 | % | |||||||||||||||
| Medical Aesthetics | $ | 73.8 | $ | 85.5 | (13.7 | %) | (12.1 | %) | (15.3 | %) | (11.9 | %) | (8.2 | %) | |||||||||||||||
| GYN Surgical | $ | 102.2 | $ | 99.4 | 2.8 | % | 4.1 | % | 2.0 | % | 6.5 | % | 14.2 | % | |||||||||||||||
| Skeletal Health | $ | 24.2 | $ | 24.6 | (1.4 | %) | 0.8 | % | (10.7 | %) | 14.9 | % | 20.8 | % | |||||||||||||||
| Total | $ | 818.4 | $ | 789.3 | 3.7 | % | 5.2 | % | 4.6 | % | 1.0 | % | 6.9 | % | |||||||||||||||
| Total Revenue ex. Blood | $ | 805.0 | $ | 778.1 | 3.5 | % | 5.0 | % | 4.3 | % | 1.0 | % | 6.9 | % |
Other Financial Highlights
U.S. revenue of $615.5 million increased 4.6%. International revenue
of $202.9 million increased 1.0%, or 6.9% in constant currency.
Excluding Medical Aesthetics, international growth was 4.4%, or 10.9%
in constant currency.
The recently acquired Faxitron and Focal businesses contributed $14.6
million to Breast Health revenue, an increase of 40.4% compared to
what the companies recorded as independent entities in the prior year
Gross margin was 5.2% on a GAAP basis, and 61.0% on a non-GAAP basis.
GAAP gross margin decreased significantly primarily due to a $374.6
million non-cash impairment charge related to Medical Aesthetics
intangible assets and equipment recorded within cost of goods sold.
Non-GAAP gross margin decreased 170 basis points, primarily due to
unfavorable product sales mix, manufacturing variances, one-time
charges, and the negative impact of a stronger U.S. dollar.
The Company's effective tax rate was a benefit of 22.9% on a GAAP
basis, and a provision of 21.0% on a non-GAAP basis.
GAAP net loss was ($272.6) million, which included an aggregate $443.8
million of non-cash impairment charges related to intangible assets
and equipment in Medical Aesthetics. This compares to a GAAP net loss
of ($681.4) million in the prior year period, which included
impairment charges related to goodwill and an in-process research and
development asset in Medical Aesthetics.
Adjusted non-GAAP earnings before interest, taxes, depreciation and
amortization (EBITDA) was $254.1 million, an increase of 2.4%.
GAAP EPS of ($1.01) increased 58.9% compared to the prior year period.
Non-GAAP diluted EPS of $0.58 increased 9.4%.
Total debt outstanding at the end of the quarter was $3.1 billion. The
Company ended the quarter with cash and equivalents of $401.0 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 12.3% declined 30 basis points compared to the prior year
Financial Guidance for Fiscal 2019
Based on its strong performance in the fiscal second quarter, Hologic is
raising its full-year guidance for revenue and non-GAAP EPS.
Hologic's financial guidance for the third 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 22%, lower than the Company's
previous estimate of 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.
| Current Guidance | Previous Guidance | |||||||||||||||||||||||
| Constant Currency % Increase (Decrease) | Reported % Increase (Decrease) | Guidance $ | Constant Currency % Increase (Decrease) | Reported % Increase (Decrease) | Guidance $ | |||||||||||||||||||
| Fiscal 2019 | ||||||||||||||||||||||||
| Revenue | 4.3% to 4.9% | 3.3% to 3.9% | $3,325 - $3,345 | 3.8% to 4.7% | 2.7% to 3.6% | $3,305 - $3,335 | ||||||||||||||||||
| GAAP EPS | N.M. | $0.06 - $0.09 | N.M. | $1.39 - $1.43 | ||||||||||||||||||||
| Non-GAAP EPS | 8.1% to 9.4% | $2.41 - $2.44 | 7.2% to 9.0% | $2.39 - $2.43 | ||||||||||||||||||||
| Q3 2019 | ||||||||||||||||||||||||
| Revenue | 1.2% to 3.0% | 0.1% to 1.9% | $825 - $840 | |||||||||||||||||||||
| GAAP EPS | N.M. | $0.33 - $0.35 | ||||||||||||||||||||||
| Non-GAAP EPS | 3.4% to 6.9% | $0.60 - $0.62 |
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