– Revenue of $1.61 Billion Increases 89.3%,
86.5% in Constant Currency –
– Organic Revenue Increases 107.0%, 104.0% in
Constant Currency –
– Company Posts GAAP Diluted EPS of $2.50,
Non-GAAP Diluted EPS of $2.86 –
Hologic, Inc. (Nasdaq: HOLX) announced today the Company’s
financial results for the fiscal first quarter ended December 26,
2020.
“Hologic had a strong start to fiscal 2021 across all our
businesses and major geographies,” said Steve MacMillan, the
Company’s Chairman, President and Chief Executive Officer. “Our
Diagnostics division continued to deliver incredible performance by
making a massive impact against COVID-19. Furthermore, our Breast
Health and Surgical businesses continued to strengthen, with each
returning to growth in the United States, Europe and
Asia-Pacific.”
Recent Highlights
- Revenue increased 89.3% for the quarter, or 86.5% in constant
currency, including revenue from the divested Medical Aesthetics
business in the prior year period. Excluding material acquisitions
and divestitures, organic revenue in the first quarter increased
107.0%, or 104.0% in constant currency.
- Worldwide molecular diagnostics revenue of $995.3 million
increased 457.6%, or 448.7% in constant currency, exceeding
expectations based on increased production of, and strong global
demand for, the Company’s two SARS-CoV-2 assays that run on the
fully automated Panther® and Panther Fusion® systems.
- In early January, announced an agreement to acquire
Biotheranostics, a privately held, commercial-stage company that
provides molecular diagnostic tests for breast and metastatic
cancers, for approximately $230 million.
- On December 31, completed the acquisition of SOMATEX Medical
Technologies GmbH, a leader in biopsy site markers and localization
technologies, for approximately $64 million.
- Recent regulatory clearances:
- U.S. FDA clearance of Genius AI™ detection technology, a deep
learning-based software designed to help radiologists detect subtle
potential cancers in breast tomosynthesis images.
- U.S. FDA approval of a diagnostic claim for the Company’s
Aptima® HIV-1 Quant Dx viral load monitoring assay, making it the
first dual-claim assay for both diagnosis and viral load monitoring
in the United States.
- European CE Mark of the Genius™ digital diagnostics system, the
first digital cytology platform to combine a new artificial
intelligence algorithm with advanced digital imaging to help
identify cancerous and pre-cancerous cells in women.
- Cash flow from operations was $650.0 million in the quarter.
Based on this strong cash flow, the Company announced the
Biotheranostics and SOMATEX acquisitions, repaid $250 million of
debt under its revolving credit facility, and repurchased 1.5
million shares of its common stock for $101 million.
Key financial results for the fiscal first quarter are shown in
the table below.
GAAP
Non-GAAP
Q1’21
Q1’20
Change
Increase
(Decrease)
Q1’21
Q1’20
Change
Increase
(Decrease)
Revenues
$1,609.8
$850.5
89.3%
$1,609.8
$850.5
89.3%
Gross Margin
73.3%
51.0%
2,230 bps
77.2%
61.6%
1,560 bps
Operating Expenses
$294.9
$309.0
(4.6%)
$274.5
$289.3
(5.1%)
Operating Margin
55.0%
14.7%
4,030 bps
60.2%
27.5%
3,270 bps
Net Margin
40.6%
45.4%
(480 bps)
46.6%
19.3%
2,730 bps
Diluted EPS
$2.50
$1.43
74.8%
$2.86
$0.61
368.9%
Throughout this press release, all dollar figures are in
millions, except EPS, unless otherwise noted. 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. Organic
revenue is on a constant currency basis and excludes the divested
Blood Screening and Medical Aesthetics businesses, as well as the
acquired Acessa business.
Revenue
Detail
Increase (Decrease)
$ in millions
Q1’21
Q1’20
Global
Reported
Change
Global
Constant
Currency
Change
U.S.
Reported
Change
International
Reported
Change
International
Constant
Currency
Change
Diagnostics
Cytology & Perinatal
$124.8
$121.0
3.1%
1.1%
3.3%
2.8%
(2.9%)
Molecular Diagnostics
$995.3
$178.5
457.6%
448.7%
375.2%
779.8%
736.1%
Blood Screening
$8.1
$12.0
(32.5%)
(32.5%)
(32.5%)
N/A
N/A
Total Diagnostics
$1,128.2
$311.5
262.2%
256.3%
229.6%
356.3%
333.4%
Excluding Blood
$1,120.1
$299.5
274.0%
267.8%
243.9%
356.3%
333.4%
Breast Health
Breast Imaging
$267.7
$274.8
(2.6%)
(3.7%)
(3.1%)
(1.1%)
(5.7%)
Interventional Breast Solutions
$65.0
$56.3
15.5%
14.6%
17.2%
7.1%
0.9%
Total Breast Health
$332.7
$331.1
0.5%
(0.6%)
0.7%
(0.1%)
(4.9%)
Medical Aesthetics*
$0.0
$65.3
N/A
N/A
N/A
N/A
N/A
GYN Surgical
$124.0
$119.1
4.1%
3.3%
2.3%
13.1%
8.2%
Skeletal Health
$24.9
$23.5
6.0%
4.0%
1.2%
14.4%
8.8%
Total
$1,609.8
$850.5
89.3%
86.5%
79.8%
116.7%
106.0%
Excluding divested Blood and Aesthetics
businesses
$1,601.7
$773.2
107.2%
104.1%
91.5%
157.5%
144.7%
Excluding divestitures and Acessa
acquisition (organic)
$1,600.4
$773.2
107.0%
104.0%
91.3%
157.5%
144.7%
* Hologic completed the divestiture of its Medical Aesthetics
business on December 30, 2019.
Other Financial
Highlights
- U.S. revenue of $1,137.8 million increased 79.8%. International
revenue of $472.0 million increased 116.7%, or 106.0% in constant
currency. Organically, U.S. revenue of $1,128.4 million increased
91.3%, while international revenue of $472.0 million increased
157.5%, or 144.7% in constant currency.
- GAAP gross margin of 73.3% increased 2,230 basis points.
Non-GAAP gross margin of 77.2% increased 1,560 basis points,
primarily due to sales of SARS-CoV-2 tests and the divestiture of
the lower margin Medical Aesthetics business.
- GAAP operating margin of 55.0% increased 4,030 basis points.
Non-GAAP operating margin of 60.2% increased 3,270 basis points,
primarily due to sales of SARS-CoV-2 tests and the divestiture of
the lower margin Medical Aesthetics business.
- GAAP net income attributable to Hologic of $654.4 million
increased 69.5%. Non-GAAP net income attributable to Hologic of
$749.6 million increased 356.8%. Adjusted non-GAAP earnings before
interest, taxes, depreciation and amortization (EBITDA) was
$1,000.7 million, an increase of 282.1%.
- Total principal debt outstanding at the end of the first
quarter was $2.8 billion. The Company ended the quarter with cash
and equivalents of $868.7 million, and a net leverage ratio (net
debt over adjusted EBITDA) of 0.8 times.
- On a trailing 12 months basis, adjusted Return on Invested
Capital (ROIC) of 26.7% increased 1,440 basis points compared to
the prior year period.
Financial Guidance for the Second
Quarter of Fiscal 2021
“We expect our strong financial performance to continue in the
second quarter of fiscal 2021,” said Karleen Oberton, Hologic’s
Chief Financial Officer.
Hologic’s financial guidance for the second quarter of fiscal
2021 is shown in the table below. The guidance is based on a
non-GAAP tax rate of approximately 21.75%, and diluted shares
outstanding of 262 to 263 million for the quarter. Constant
currency guidance assumes that foreign exchange rates are the same
in fiscal 2021 as in fiscal 2020. Current guidance assumes that
recent foreign exchange rates persist for all of the second quarter
of fiscal 2021. Organic revenue guidance is on a constant currency
basis and excludes the divested Blood Screening and the acquired
Acessa businesses. The guidance does not include the impact of the
pending Biotheranostics acquisition, which has not closed.
Guidance for the Second Quarter
of Fiscal 2021
Guidance $
Reported % Increase
(Decrease)
Constant Currency % Increase
(Decrease)
Organic % Increase (Decrease)
Q2 2021
Revenue
$1,500 - $1,560
98.4% to 106.3%
93.9% - 101.9%
96.2% - 104.3%
GAAP EPS
$2.34 - $2.46
550.0% - 583.3%
Non-GAAP EPS
$2.56 - $2.68
349.1% - 370.2%
Use of Non-GAAP Financial
Measures
The Company has presented the following non-GAAP financial
measures in this press release: constant currency revenues; organic
revenues; non-GAAP gross margin; non-GAAP operating expenses;
non-GAAP operating margin; non-GAAP effective tax rate; non-GAAP
net income; non-GAAP net margin; 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,
intangible assets and equipment; (ii) accelerated depreciation
related to consolidation and closure of facilities; (iii)
additional expenses resulting from the purchase accounting
adjustment to record inventory at fair value and adjustments to
contingent consideration; (iv) 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; (v)
expenses related to its divested Cynosure business incurred
subsequent to the disposition date primarily related to
indemnification provisions for legal and tax matters; (vi)
transaction related expenses for divestitures and acquisitions;
(vii) third-party expenses incurred related to implementing the
European MDR/IVDR requirements and obtaining the appropriate
approvals for its existing products; (viii) debt extinguishment
losses and related transaction costs; (ix) the unrealized (gains)
losses on the mark-to-market of forward foreign currency contracts
and foreign currency option 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 and losses resulting from the sale of investments; (xii) the
one-time discrete impacts related to internal restructuring and
non-operational items; (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 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 organic revenue to exclude
the divested Blood Screening and Medical Aesthetic businesses, and
the acquired Acessa business.
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.
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 first quarter of
fiscal 2021. Approximately 10 minutes before the call, dial
888-204-4368 (in the U.S. and Canada) or +1 323-994-2093
(international) and enter access code 2632110. A replay will be
available approximately two hours after the call ends through
Friday, February 26, 2021. The replay numbers are 888-203-1112
(U.S.) or +1 719-457-0820 (international), access code 2632110, PIN
7018. The Company will also provide a live webcast of the call at
investors.hologic.com
About Hologic, Inc.
Hologic, Inc. is an innovative medical technology company
primarily focused on improving women's health and well-being
through early detection and treatment. For more information on
Hologic, visit www.hologic.com.
Hologic 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 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 severity and duration of the COVID-19
pandemic and its impact on the U.S. healthcare system, the U.S.
economy and worldwide economy; the timing, scope and effect of
further U.S. and international governmental, regulatory, fiscal,
monetary and public health responses to the COVID-19 pandemic;
continued demand for the Company’s COVID-19 TMA assay; the
Company’s ability to manufacture, on a scale necessary to meet
demand, its COVID-19 TMA assay as well as the Panther systems on
which the assay runs; U.S., European and general worldwide economic
conditions, trade relations, and related uncertainties;
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 ability
of the Company to successfully manage leadership and organizational
changes, including the ability of the Company to attract, motivate
and retain key employees and maintain engagement and efficiency in
remote work environments; 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; changes to applicable laws and regulations, including
tax laws, global health care reform, and import/export trade laws;
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; 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; cybersecurity risks; 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,
including its most recent Annual Report on Form 10-K and Quarterly
Report on Form 10-Q. 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.
SOURCE: Hologic, Inc.
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
December 26,
2020
December 28,
2019
Revenues:
Product
$
1,455.4
$
699.3
Service and other
154.4
151.2
Total revenues
1,609.8
850.5
Cost of revenues:
Product
284.5
237.5
Amortization of acquired intangible
assets
61.6
63.6
Impairment of intangible assets and
equipment
—
25.8
Service and other
83.3
89.8
Gross profit
1,180.4
433.8
Operating expenses:
Research and development
59.3
61.2
Selling and marketing
128.0
144.9
General and administrative
91.5
87.6
Amortization of acquired intangible
assets
10.1
9.1
Impairment of intangible assets and
equipment
—
4.4
Contingent consideration fair value
adjustments
4.6
0.9
Restructuring and divestiture charges
1.4
0.9
Total operating expenses
294.9
309.0
Income from operations
885.5
124.8
Interest income
0.4
2.1
Interest expense
(28.1
)
(32.8
)
Debt extinguishment loss
(21.6
)
—
Other income (expense), net
(3.8
)
3.3
Income before income taxes
832.4
97.4
Provision (benefit) for income taxes
179.0
(288.4
)
Net income
$
653.4
$
385.8
Net loss attributable to noncontrolling
interest
(1.0
)
(0.3
)
Net income attributable to
Hologic
654.4
386.1
Net income per common share
attributable to Hologic:
Basic
$
2.53
$
1.44
Diluted
$
2.50
$
1.43
Weighted average number of shares
outstanding:
Basic
258,605
267,893
Diluted
261,785
269,721
HOLOGIC, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In millions)
December 26, 2020
September 26, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
868.7
$
701.0
Accounts receivable, net
1,216.1
1,028.9
Inventories
420.2
395.1
Other current assets
91.3
97.3
Total current assets
2,596.3
2,222.3
Property, plant and equipment, net
514.5
491.5
Goodwill and intangible assets, net
3,908.1
3,965.4
Other assets
531.8
516.6
Total assets
$
7,550.7
$
7,195.8
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term debt
$
74.9
$
324.9
Accounts payable and accrued
liabilities
798.2
728.3
Deferred revenue
182.9
186.1
Total current liabilities
1,056.0
1,239.3
Long-term debt, net of current portion
2,689.5
2,713.9
Deferred income taxes
189.4
201.8
Other long-term liabilities
346.8
333.5
Total Hologic stockholders' equity
3,267.9
2,705.2
Noncontrolling interest
1.1
2.1
Total liabilities and stockholders’
equity
$
7,550.7
$
7,195.8
HOLOGIC, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
(in millions)
Three Months Ended
December 26,
2020
December 28,
2019
OPERATING ACTIVITIES
Net income
$
653.4
$
385.8
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
21.1
21.6
Amortization of acquired intangibles
71.7
72.8
Stock-based compensation expense
18.6
18.1
Deferred income taxes
(12.0
)
(327.9
)
Intangible asset and equipment impairment
charges
—
30.2
Debt extinguishment loss
21.6
—
Other adjustments and non-cash items
29.5
0.5
Changes in operating assets and
liabilities, excluding the effect of acquisitions:
Accounts receivable
(175.5
)
17.6
Inventories
(21.2
)
(14.9
)
Prepaid income taxes
8.9
1.0
Prepaid expenses and other assets
(18.3
)
(2.6
)
Accounts payable
4.6
(55.4
)
Accrued expenses and other liabilities
58.1
(22.6
)
Deferred revenue
(10.5
)
(10.3
)
Net cash provided by operating
activities
650.0
113.9
INVESTING ACTIVITIES
Acquisition of businesses, net of cash
acquired
(4.9
)
(11.8
)
Capital expenditures
(32.4
)
(11.4
)
Increase in equipment under customer usage
agreements
(12.4
)
(20.1
)
Purchase of insurance contracts
—
(2.4
)
Other activity
(0.2
)
—
Net cash used in investing activities
(49.9
)
(45.7
)
FINANCING ACTIVITIES
Repayments of long-term debt
(18.8
)
(9.4
)
Proceeds from senior notes
950.0
—
Repayment of senior notes
(970.8
)
—
Repayment under revolving credit line
(250.0
)
—
Proceeds from accounts receivable
securitization agreement
—
16.0
Purchase of non-controlling interest
—
(1.4
)
Payment of deferred acquisition
consideration
—
(16.6
)
Payment of debt issuance costs
(13.7
)
—
Repurchase of common stock
(101.3
)
(285.9
)
Proceeds from issuance of common stock
pursuant to employee stock plans
23.3
18.7
Payment of minimum tax withholdings on net
share settlements of equity awards
(46.4
)
(10.9
)
Payments under finance lease
obligations
(0.5
)
(0.4
)
Net cash used in financing activities
(428.2
)
(289.9
)
Effect of exchange rate changes on cash
and cash equivalents
(4.2
)
1.4
Net increase (decrease) in cash and cash
equivalents
167.7
(220.3
)
Cash and cash equivalents, beginning of
period
701.0
601.8
Cash and cash equivalents, end of
period
$
868.7
$
381.5
HOLOGIC, INC.
RECONCILIATION OF GAAP TO
NON-GAAP RESULTS
(Unaudited)
(In millions, except earnings per
share and margin percentages)
Three Months Ended
December 26,
2020
December 28,
2019
Gross Profit:
GAAP gross profit
$
1,180.4
$
433.8
Adjustments:
Amortization of acquired intangible assets
(1)
61.6
63.6
Impairment of intangible assets and
equipment (2)
—
25.8
Integration/consolidation costs (8)
0.3
—
Fair value write-up of acquired inventory
sold (11)
0.9
0.3
Non-GAAP gross profit
$
1,243.2
$
523.5
Gross Margin Percentage:
GAAP gross margin percentage
73.3
%
51.0
%
Impact of adjustments above
3.9
%
10.6
%
Non-GAAP gross margin percentage
77.2
%
61.6
%
Operating Expenses:
GAAP operating expenses
$
294.9
$
309.0
Adjustments:
Amortization of acquired intangible assets
(1)
(10.1
)
(9.1
)
Impairment of intangible assets and
equipment (2)
—
(4.4
)
Transaction expenses (3)
(0.5
)
(2.0
)
Acquisition related adjustment (4)
—
3.8
MDR expenses (9)
(2.0
)
—
Contingent consideration adjustments
(6)
(4.6
)
(0.9
)
Litigation settlements (7)
—
(0.7
)
Integration/consolidation costs (8)
(1.8
)
(5.5
)
Restructuring and divestiture charges
(8)
(1.4
)
(0.9
)
Non-GAAP operating expenses
$
274.5
$
289.3
Operating Margin:
GAAP income from operations
$
885.5
$
124.8
Adjustments to gross profit as detailed
above
62.8
89.7
Adjustments to operating expenses as
detailed above
20.4
19.7
Non-GAAP income from operations
$
968.7
$
234.2
Operating Margin Percentage:
GAAP income from operations margin
percentage
55.0
%
14.7
%
Impact of adjustments above
5.2
%
12.8
%
Non-GAAP operating margin percentage
60.2
%
27.5
%
Pre-Tax Income:
GAAP pre-tax income
$
832.4
$
97.4
Adjustments to pre-tax earnings as
detailed above
83.2
109.4
Debt extinguishment loss (5)
21.6
—
Debt transaction costs (15)
5.8
—
Gain from SSI (14)
—
(1.5
)
Unrealized losses on forward foreign
currency contracts (10)
14.0
3.0
Other (17)
—
1.1
Non-GAAP pre-tax income
$
957.0
$
209.4
Net Income Attributable to
Hologic:
GAAP net income
$
653.4
$
385.8
Adjustments:
Amortization of acquired intangible assets
(1)
71.7
72.7
Restructuring and
integration/consolidation costs (8)
3.5
8.4
MDR expenses (9)
2.0
—
Impairment of intangible assets and
equipment (2)
—
30.2
Acquisition related expenses and
adjustments (3) (4) (11)
1.4
(3.5
)
Contingent consideration adjustment
(6)
4.6
0.9
Litigation settlements (7)
—
0.7
Debt extinguishment loss and transaction
costs (5) (15)
27.4
—
Gain from SSI (14)
—
(1.5
)
Non-operating charges (17) (10)
14.0
4.0
Discrete tax benefit from sale of Cynosure
(16)
—
(312.2
)
Income tax effect of reconciling items
(12)
(29.1
)
(21.6
)
Non-GAAP net income
$
748.9
$
163.9
Net loss attributable to non-controlling
interest
(0.7
)
(0.2
)
Net income attributable to Hologic
$
749.6
$
164.1
Net Income Percentage:
GAAP net income percentage
40.6
%
45.4
%
Impact of adjustments above
6.0
%
(26.1
)
%
Non-GAAP net income attributable to
Hologic percentage
46.6
%
19.3
%
Earnings Per Share Attributable to
Hologic:
GAAP earnings per share - Diluted
$
2.50
$
1.43
Adjustment to net income (as detailed
above)
0.36
(0.82
)
Non-GAAP earnings per share – diluted
(13)
$
2.86
$
0.61
Adjusted EBITDA:
Non-GAAP net income
$
749.6
$
164.1
Interest expense, net, not adjusted
above
21.9
30.7
Provision for income taxes
208.1
45.6
Depreciation expense, not adjusted
above
21.1
21.5
Adjusted EBITDA
$
1,000.7
$
261.9
Explanatory Notes to Reconciliations:
(1)
To reflect non-cash expenses attributable
to the amortization of acquired intangible assets.
(2)
To reflect recording the Cynosure business
to fair value based upon meeting the assets-held-for-sale criteria
in the first quarter of fiscal 2020 due to executing an agreement
to sell the business.
(3)
To reflect expenses with third parties
related to acquisitions and divestitures prior to when such
transactions are completed. These expenses primarily comprise
broker fees, legal fees, and consulting and due diligence fees.
(4)
To reflect an adjustment for the final
Faxitron hold-back payment and an adjustment to reduce certain
acquired accruals in fiscal 2020.
(5)
To reflect a debt extinguishment loss from
refinancing the 2025 Senior Notes.
(6)
To reflect adjustments to the estimated
contingent consideration liabilities related to the Acessa Health
and Faxitron acquisitions in fiscal 2021 and 2020, respectively,
which are payable upon meeting defined revenue growth metrics.
(7)
To reflect the Company's settlements of
litigation.
(8)
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, as well as costs incurred to
integrate acquisitions and dispose businesses, including
consulting, legal, tax and accounting fees. In addition, this
category includes additional expenses incurred related to the
Cynosure disposition and indemnification provisions for legal and
tax matters that existed as of the date of disposition.
(9)
To reflect the exclusion of third party
expenses incurred to obtain compliance with the European Medical
Device Regulation requirement for the Company's existing products
for which it already has FDA approval and/or CE mark.
(10)
To reflect non-cash unrealized gains and
losses on the mark-to market on outstanding forward foreign
currency and option contracts, which do not qualify for hedge
accounting.
(11)
To reflect the fair value step up of
inventory sold during the period related to the Acessa Health
acquisition in fiscal 2021 and the SuperSonic Imagine and Health
Beacons acquisitions in fiscal 2020, respectively.
(12)
To reflect an estimated annual effective
tax rate of 21.75% for fiscal 2021 and fiscal 2020.
(13)
Non-GAAP earnings per share was calculated
based on 261,785 and 269,721 weighted average diluted shares
outstanding for the three months ended December 26, 2020 and
December 28, 2019, respectively.
(14)
To reflect an adjustment to remeasure the
Company's initial investment in SuperSonic Imagine pursuant to U.S.
GAAP for purchase accounting.
(15)
To reflect the amount of debt issuance
costs recorded directly to interest expense as a result of
refinancing the 2025 Senior Notes.
(16)
To reflect a discrete tax benefit for the
sale of Cynosure.
(17)
To reflect other non-operating
activity.
Reconciliation of GAAP to non-GAAP EPS Guidance:
Guidance Range
Quarter Ending March 27, 2021
Low
High
GAAP Net Income Per
Share
$
2.34
$
2.46
Amortization of acquired intangible
assets
0.27
0.27
Other charges
0.02
0.02
Tax Impact of Exclusions
(0.07
)
(0.07
)
Non-GAAP Net Income Per Share
$
2.56
$
2.68
Trailing Twelve
Months ended
December 26, 2020
Return on Invested Capital:
Adjusted Net Operating Profit After
Tax
Non-GAAP net income attributable to
Hologic
$
1,638.8
Non-GAAP provision for income taxes
471.8
Non-GAAP interest expense
106.0
Non-GAAP other income
(11.4
)
Adjusted net operating profit before
tax
$
2,205.2
Non-GAAP average effective tax rate
(1)
22.4
%
Adjusted net operating profit after
tax
$
1,710.7
Average Net Debt plus Average
Stockholders’ Equity (2)
Average total debt
$
2,918.0
Less: Average cash and cash
equivalents
(625.1
)
Average net debt
$
2,292.9
Average stockholders’ equity (3)
$
4,114.1
Average net debt plus average
stockholders’ equity
$
6,407.0
Adjusted ROIC
Adjusted ROIC (adjusted net operating
profit after tax above divided by average net debt plus average
stockholders’ equity)
26.7
%
(1)
ROIC is presented on a TTM basis; non-GAAP
effective tax rate for the three months ended March 28, 2020 was
23.8%, the three months ended June 27, 2020 was 22.75%, the three
months ended September 26, 2020 was 22.75% and the three months
ended December 26, 2020 was 21.75%.
(2)
Calculated using the average of the
balances as of December 26, 2020 and December 28, 2019.
(3)
Adjusted (increased) to eliminate the
effect of the impairment of intangible assets of $32.2 million in
fiscal 2014, the impairment of goodwill of $685.7 million and an
IPR&D asset of $46.0 million in fiscal 2018, the impairment of
intangible assets and equipment of $685.4 million in fiscal 2019
and the impairment of intangible assets and equipment of $30.2
million in fiscal 2020. The impact of the intangible asset
impairment charges is reflected net of tax.
As of
December 26, 2020
Net Leverage Ratio:
Total principal debt
$
2,793.9
Total cash
(868.7
)
Net principal debt, as adjusted
$
1,925.2
EBITDA for the last four quarters
$
2,296.5
Net Leverage Ratio
0.8
Other Supplemental Information:
Three Months Ended
December 26,
2020
December 28,
2019
Geographic Revenues
U.S.
70.7
%
74.4
%
Europe
21.0
%
12.9
%
Asia-Pacific
5.5
%
8.3
%
Rest of World
2.8
%
4.4
%
Total Revenues
100.0
%
100.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210127005843/en/
Michael Watts Vice President, Investor Relations and Corporate
Communications (858) 410-8588 Michael.watts@hologic.com
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