– Revenue of $1.471 Billion, GAAP Diluted EPS
of $1.95, and Non-GAAP Diluted EPS of $2.17 All Significantly
Exceed Expectations –
– Broad-Based Organic Revenue Growth of 9%
Excluding COVID; Each Division Above 8% Global Growth Excluding
COVID –
– Company Significantly Increases Full-Year
Revenue and EPS Guidance –
Hologic, Inc. (Nasdaq: HOLX) announced today the Company’s
financial results for the fiscal first quarter ended December 25,
2021.
“In our first quarter of fiscal 2022, excluding COVID-19, we
delivered robust revenue growth across all of our franchises,” said
Steve MacMillan, the Company’s chairman, president and chief
executive officer. “Each of our divisions grew faster than our
long-term revenue growth target, and profitability also was well
above estimates. This quarter once again highlights the strength of
our base businesses, as well as our ongoing ability to meet strong
demand for COVID-19 testing, which together enable us to grow
profitably in the face of uncertain market conditions.”
Recent Highlights
- Revenue of $1.471 billion decreased (8.6%) for the quarter, or
(8.2%) in constant currency, driven by lower sales of COVID-19
assays compared to the prior year period. Revenue, however, was
significantly higher than the Company’s guidance of $1.1 to $1.15
billion provided last quarter.
- Excluding revenue from COVID-19, organic revenue grew 9.0% on a
constant currency basis, comparing favorably to the Company’s
long-term goal of 5% to 7% growth.
- Global revenue for the Company’s Breast Health and GYN Surgical
divisions grew 8.0% and 8.3%, or 8.4% and 8.2% in constant
currency, respectively, highlighting strong, broad-based
execution.
- Global diagnostics revenue of $950.4 million decreased (15.8%),
or (15.2%) in constant currency, driven by lower sales of COVID-19
assays. Excluding COVID-19 revenues, however, global diagnostics
revenue grew 10.2% on an organic, constant currency basis.
Similarly, global molecular diagnostics revenue of $813.3 million
declined (18.3%), or (17.8%) in constant currency, yet grew 14.1%
on an organic, constant currency basis excluding COVID-19
revenues.
- Closed the acquisition of Bolder Surgical, which provides
advanced energy vessel sealing surgical devices, for approximately
$160 million.
- Launched Panther® Trax, which physically links multiple
Panther instruments together into a single, powerful workcell,
allowing high-throughput labs to increase testing volumes without
increasing staff.
- Cash flow from operations remained strong in the first quarter
at $564.2 million.
- Repurchased 2.3 million shares for $167 million.
- Added to Dow Jones Sustainability Index North America,
Newsweek’s list of America’s most responsible companies, and the
Drucker Institute’s list of most effectively managed
companies.
- Published the Company’s annual sustainability report, “A Global
Force for Good,” detailing our environmental, social and governance
achievements in 2021.
Key financial results for the fiscal first quarter are shown in
the table below.
GAAP
Non-GAAP
Q1’22
Q1’21
Change
Increase
(Decrease)
Q1’22
Q1’21
Change
Increase
(Decrease)
Revenues
$1,471.1
$1,609.8
(8.6%)
$1,471.1
$1,609.8
(8.6%)
Gross Margin
67.0%
73.3%
(630 bps)
72.1%
77.2%
(510 bps)
Operating Expenses
$345.0
$294.9
17.0%
$333.9
$274.5
21.6%
Operating Margin
43.6%
55.0%
(1,140 bps)
49.4%
60.2%
(1,080 bps)
Net Margin
33.9%
40.6%
(670 bps)
37.7%
46.6%
(890 bps)
Diluted EPS
$1.95
$2.50
(22.0%)
$2.17
$2.86
(24.1%)
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 excludes the divested Blood Screening business, as well as
the acquired Biotheranostics, Diagenode, Mobidiag and Bolder
businesses. Revenue from acquired businesses is generally included
in organic revenue starting a year after the acquisition.
Revenue Detail
Increase (Decrease)
$ in millions
Q1’22
Q1’21
Global
Reported
Change
Global
Constant
Currency
Change
U.S.
Reported
Change
International
Reported
Change
International
Constant
Currency
Change
Diagnostics
Cytology & Perinatal
$130.7
$124.8
4.7%
5.2%
1.1%
11.1%
12.5%
Molecular Diagnostics
$813.3
$995.3
(18.3%)
(17.8%)
(21.8%)
(10.8%)
(9.2%)
Blood Screening
$6.4
$8.1
(21.0%)
(21.0%)
(21.0%)
N/A
N/A
Total Diagnostics
$950.4
$1,128.2
(15.8%)
(15.2%)
(19.4%)
(8.1%)
(6.5%)
Organic Diagnostics ex. COVID-19
$320.8
$291.9
9.9%
10.2%
11.1%
7.2%
8.2%
Breast Health
Breast Imaging
$282.3
$267.7
5.5%
5.9%
2.9%
13.6%
15.3%
Interventional Breast Solutions
$77.0
$65.0
18.5%
18.8%
12.7%
51.2%
52.7%
Total Breast Health
$359.3
$332.7
8.0%
8.4%
5.0%
18.6%
20.3%
GYN Surgical
$134.3
$124.0
8.3%
8.2%
8.1%
8.8%
8.4%
Skeletal Health
$27.1
$24.9
8.8%
9.7%
11.0%
5.5%
7.7%
Total
$1,471.1
$1,609.8
(8.6%)
(8.2%)
(11.0%)
(2.8%)
(1.3%)
Organic (definition above)
$1,430.7
$1,601.7
(10.7%)
(10.2%)
(12.6%)
(6.1%)
(4.6%)
Organic ex. COVID-19
$840.9
$773.4
8.7%
9.0%
7.8%
11.6%
12.8%
Other Financial
Highlights
- U.S. revenue of $1,012.4 million decreased (11.0%).
International revenue of $458.7 million decreased (2.8%), or (1.3%)
in constant currency. Organically, U.S. revenue of $987.5 million
decreased (12.6%), while international revenue of $443.2 million
decreased (6.1%), or (4.6%) in constant currency.
- GAAP gross margin of 67.0% decreased (630) basis points.
Non-GAAP gross margin of 72.1% decreased (510) basis points. The
decrease in gross margin was primarily due to a decline in COVID-19
assay sales compared to the prior year period.
- GAAP operating margin of 43.6% decreased (1,140) basis points.
Non-GAAP operating margin of 49.4% decreased (1,080) basis points.
The decrease in operating margin was primarily due to a decline in
COVID-19 assay sales compared to the prior year period.
- GAAP net income attributable to Hologic of $499.2 million
decreased (23.7%). Non-GAAP net income attributable to Hologic of
$554.7 million decreased (26.0%). Adjusted non-GAAP earnings before
interest, taxes, depreciation and amortization (EBITDA) was $752.3
million, a decrease of (24.8%).
- COVID-19 revenues, which consist of COVID-19 assay revenue of
$522.8 million and related revenue and revenue from discontinued
products of $67.1 million, decreased (28.8%), or (28.2%) in
constant currency.
- Total principal debt outstanding at the end of the first
quarter was $3.1 billion. The Company ended the quarter with cash
and equivalents of $1.421 billion, and a net leverage ratio (net
debt over adjusted EBITDA) of 0.6.
- On a trailing 12 months basis, adjusted Return on Invested
Capital (ROIC) of 29.4% increased 270 basis points compared to the
prior year period.
Financial Guidance for Second Quarter
and Full-Year Fiscal 2022
“We are raising our full-year revenue and EPS guidance
significantly,” said Karleen Oberton, Hologic’s chief financial
officer. “Our new guidance reflects an increase to full-year
revenue by $600 million and non-GAAP EPS by $1.35 at the midpoint.
We expect upside from COVID-19 testing, plus organic growth in our
base Diagnostics and Surgical businesses, to offset headwinds from
supply chain challenges in our Breast Health business.”
Hologic’s financial guidance for the second quarter and full
year 2022 is shown in the table below. The guidance is based on a
full year non-GAAP tax rate of approximately 21.5%, and diluted
shares outstanding of 256 million for the full year. Constant
currency guidance assumes that foreign exchange rates are the same
in fiscal 2022 as in fiscal 2021. Organic revenue guidance is in
constant currency and excludes the divested Blood Screening
business. Revenue from acquired businesses is generally included in
organic revenue guidance starting a year after the acquisition.
Therefore, in fiscal 2022, Biotheranostics and Diagenode will
become part of organic revenue in the fiscal third quarter,
Mobidiag will become part of organic revenue in the fiscal fourth
quarter, and Bolder is excluded from organic revenue for the full
year.
Current Guidance
Previous Guidance
Guidance $
Reported %
Increase
(Decrease)
Constant Currency
% Increase
(Decrease)
Organic % Increase
(Decrease)
Guidance $
Fiscal
2022
Revenue
$4,400 - $4,550
(21.9%) to (19.2%)
(20.9%) to (18.2%)
(22.0%) to (19.3%)
$3,750 - $4,000
GAAP EPS
$3.80 - $4.10
(47.3%) to (43.1%)
$2.50 - $2.80
Non-GAAP EPS
$4.90 - $5.20
(41.7%) to (38.2%)
$3.55 - $3.85
Q2 2022
Revenue
$1,250 - $1,300
(18.7%) to (15.5%)
(17.2%) to (14.0%)
(18.8%) to (15.5%)
GAAP EPS
$1.22 - $1.32
(48.7%) to (44.5%)
Non-GAAP EPS
$1.50 - $1.60
(42.1%) to (38.2%)
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; organic revenues excluding COVID related 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. Organic
revenue excludes the divested Blood Screening business, as well as
the acquired Biotheranostics, Diagenode, Mobidiag, and Bolder
businesses. Revenue from acquired businesses is generally included
in organic revenue starting a year after the acquisition. Organic
revenue excluding COVID-19 is organic revenue less COVID assay
revenue, COVID-related sales of instruments, collection kits and
ancillaries, as well as license revenue, and discontinued products.
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) adjustments to record
contingent consideration at fair value; (iii) additional expenses
resulting from the purchase accounting adjustment to record
inventory at fair value; (iv) restructuring and divestiture charges
and facility closure and consolidation charges, including
accelerated depreciation, 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 the 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 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 and losses resulting from
the sale of investments; (xii) the one-time discrete impacts
related to internal restructurings 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.
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 2022. Interested participants may listen to the call by
dialing 800-289-0720 (in the U.S. and Canada) or +1 323-701-0160
(for international callers) and referencing access code 1667821.
Participants may also click here to join. Participants should dial
in 5-10 minutes before the call begins. A replay will be available
approximately two hours after the call ends through Friday, March
4, 2022. The replay numbers are 888-203-1112 (U.S.) or +1
719-457-0820 (international), access code 1667821, PIN 3270. 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;
disruption of supply chains, including the availability of critical
raw materials and components, including integrated circuits, or
more commonly referred to as chips, as well as cost inflation in
materials, packaging and transportation; 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; 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; 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 25, 2021
December 26, 2020
Revenues:
Product
$
1,303.3
$
1,455.4
Service and other
167.8
154.4
Total revenues
1,471.1
1,609.8
Cost of revenues:
Product
318.1
284.5
Amortization of acquired intangible
assets
74.9
61.6
Service and other
91.8
83.3
Gross profit
986.3
1,180.4
Operating expenses:
Research and development
72.8
59.3
Selling and marketing
147.4
128.0
General and administrative
117.9
91.5
Amortization of acquired intangible
assets
10.8
10.1
Contingent consideration fair value
adjustments
(4.1
)
4.6
Restructuring and divestiture charges
0.2
1.4
Total operating expenses
345.0
294.9
Income from operations
641.3
885.5
Interest income
0.5
0.4
Interest expense
(25.7
)
(28.1
)
Debt extinguishment losses
(0.7
)
(21.6
)
Other income (expense), net
6.5
(3.8
)
Income before income taxes
621.9
832.4
Provision for income taxes
122.7
179.0
Net income
$
499.2
$
653.4
Net loss attributable to noncontrolling
interest
—
(1.0
)
Net income attributable to
Hologic
$
499.2
$
654.4
Net income per common share
attributable to Hologic:
Basic
$
1.97
$
2.53
Diluted
$
1.95
$
2.50
Weighted average number of shares
outstanding:
Basic
253,499
258,605
Diluted
256,070
261,785
HOLOGIC, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In millions)
December 25, 2021
September 25, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
1,420.8
$
1,170.3
Accounts receivable, net
975.6
942.7
Inventories
518.3
501.2
Other current assets
591.5
554.5
Total current assets
3,506.2
3,168.7
Property, plant and equipment, net
554.3
564.7
Goodwill and intangible assets, net
4,979.9
4,940.8
Other assets
244.7
245.7
Total assets
$
9,285.1
$
8,919.9
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term debt
$
248.7
$
313.0
Accounts payable and accrued
liabilities
837.9
815.8
Deferred revenue
192.1
198.0
Total current liabilities
1,278.7
1,326.8
Long-term debt, net of current portion
2,819.6
2,712.2
Deferred income taxes
242.9
250.5
Other long-term liabilities
424.8
411.8
Total stockholders' equity
4,519.1
4,218.6
Total liabilities and stockholders’
equity
$
9,285.1
$
8,919.9
HOLOGIC, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
(in millions)
Three Months Ended
December 25, 2021
December 26, 2020
OPERATING ACTIVITIES
Net income
$
499.2
$
653.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
22.3
21.1
Amortization of acquired intangibles
85.7
71.7
Stock-based compensation expense
18.7
18.6
Deferred income taxes
(21.9
)
(12.0
)
Debt extinguishment losses
0.7
21.6
Other adjustments and non-cash items
5.7
29.5
Changes in operating assets and
liabilities, excluding the effect of acquisitions:
Accounts receivable
(48.1
)
(175.5
)
Inventories
(17.4
)
(21.2
)
Prepaid income taxes
(4.6
)
8.9
Prepaid expenses and other assets
0.3
(18.3
)
Accounts payable
(13.8
)
4.6
Accrued expenses and other liabilities
42.4
58.1
Deferred revenue
(5.0
)
(10.5
)
Net cash provided by operating
activities
564.2
650.0
INVESTING ACTIVITIES
Acquisition of businesses, net of cash
acquired
(157.3
)
(4.9
)
Capital expenditures, net
0.8
(32.4
)
Increase in equipment under customer usage
agreements
(17.0
)
(12.4
)
Other activity
—
(0.2
)
Net cash used by investing activities
(173.5
)
(49.9
)
FINANCING ACTIVITIES
Proceeds from long-term debt, net of
issuance costs
1,491.2
—
Repayments of long-term debt
(1,387.5
)
(18.8
)
Proceeds from senior notes, net of
issuance costs
—
936.3
Repayment of senior notes
—
(970.8
)
Repayment under revolving credit line
—
(250.0
)
Payment of acquired long-term debt
(63.6
)
—
Repurchase of common stock
(167.0
)
(101.3
)
Proceeds from issuance of common stock
pursuant to employee stock plans
6.4
23.3
Payment of minimum tax withholdings on net
share settlements of equity awards
(22.4
)
(46.4
)
Payments under finance lease
obligations
(0.6
)
(0.5
)
Net cash used in financing activities
(143.5
)
(428.2
)
Effect of exchange rate changes on cash
and cash equivalents
3.3
(4.2
)
Net increase in cash and cash
equivalents
250.5
167.7
Cash and cash equivalents, beginning of
period
1,170.3
701.0
Cash and cash equivalents, end of
period
$
1,420.8
$
868.7
HOLOGIC, INC.
RECONCILIATION OF GAAP TO
NON-GAAP RESULTS
(Unaudited)
(In millions, except earnings per
share and margin percentages)
Reconciliation of GAAP Revenue to
Organic Revenue
Three Months Ended
December 25, 2021
December 26, 2020
Consolidated GAAP Revenue
$
1,471.1
$
1,609.8
Less: Blood Screening revenue
(6.4
)
(8.1
)
Less: Revenue from Biotheranostics,
Diagenode, Mobidiag and Bolder
(34.0
)
—
Organic Revenue
$
1,430.7
$
1,601.7
Less: COVID19 Assays
(522.8
)
(745.3
)
Less: COVID19 Related revenue *
(64.8
)
(77.7
)
Less: Discontinued Product revenue
(2.3
)
(5.3
)
Organic Revenue excluding COVID
revenues
$
840.9
$
773.4
*Revenues related to COVID assay sales for
instruments, collection kits and ancillaries, as well as license
revenue related to COVID assay sales.
Three Months Ended
December 25, 2021
December 26, 2020
Gross Profit:
GAAP gross profit
$
986.3
$
1,180.4
Adjustments:
Amortization of acquired intangible assets
(1)
74.9
61.6
Integration/consolidation costs (7)
—
0.3
Fair value write-up of acquired inventory
sold (10)
—
0.9
Non-GAAP gross profit
$
1,061.2
$
1,243.2
Gross Margin Percentage:
GAAP gross margin percentage
67.0
%
73.3
%
Impact of adjustments above
5.1
%
3.9
%
Non-GAAP gross margin percentage
72.1
%
77.2
%
Operating Expenses:
GAAP operating expenses
$
345.0
$
294.9
Adjustments:
Amortization of acquired intangible assets
(1)
(10.8
)
(10.1
)
Transaction expenses (2)
(0.7
)
(0.5
)
MDR expenses (8)
(2.0
)
(2.0
)
Contingent consideration adjustments
(5)
4.1
(4.6
)
Integration/consolidation costs (7)
(0.9
)
(1.8
)
Restructuring and divestiture charges
(7)
(0.2
)
(1.4
)
Non-income tax charge (6)
(0.6
)
—
Non-GAAP operating expenses
$
333.9
$
274.5
Operating Margin:
GAAP income from operations
$
641.3
$
885.5
Adjustments to gross profit as detailed
above
74.9
62.8
Adjustments to operating expenses as
detailed above
11.1
20.4
Non-GAAP income from operations
$
727.3
$
968.7
Operating Margin Percentage:
GAAP income from operations margin
percentage
43.6
%
55.0
%
Impact of adjustments above
5.8
%
5.2
%
Non-GAAP operating margin percentage
49.4
%
60.2
%
Pre-Tax Income:
GAAP pre-tax income
$
621.9
$
832.4
Adjustments to pre-tax earnings as
detailed above
86.0
83.2
Debt extinguishment losses (4)
0.7
21.6
Debt transaction costs (13)
1.8
5.8
Equity method investment write-off (3)
4.3
—
Unrealized (gains) losses on foreign
currency contracts (9)
(8.1
)
14.0
Non-GAAP pre-tax income
$
706.6
$
957.0
Net Income Attributable to
Hologic:
GAAP net income
$
499.2
$
653.4
Adjustments:
Amortization of acquired intangible assets
(1)
85.7
71.7
Restructuring and
integration/consolidation costs (7)
1.1
3.5
MDR expenses (8)
2.0
2.0
Acquisition related expenses and
adjustments (2) (10)
0.7
1.4
Contingent consideration adjustments
(5)
(4.1
)
4.6
Debt extinguishment loss and transaction
costs (4) (13)
2.5
27.4
Non-income tax charge (6)
0.6
—
Non-operating (benefit) charges (3)
(9)
(3.8
)
14.0
Income tax effect of reconciling items
(11)
(29.2
)
(29.1
)
Non-GAAP net income
$
554.7
$
748.9
Net loss attributable to non-controlling
interest
—
(0.7
)
Net income attributable to Hologic
$
554.7
$
749.6
Net Income Percentage:
GAAP net income percentage
33.9
%
40.6
%
Impact of adjustments above
3.8
%
6.0
%
Non-GAAP net income attributable to
Hologic percentage
37.7
%
46.6
%
Earnings Per Share Attributable to
Hologic:
GAAP earnings per share - Diluted
$
1.95
$
2.50
Adjustment to net income (as detailed
above)
0.22
0.36
Non-GAAP earnings per share – diluted
(12)
$
2.17
$
2.86
Adjusted EBITDA:
Non-GAAP net income
$
554.7
$
749.6
Interest expense, net, not adjusted
above
23.4
21.9
Provision for income taxes
151.9
208.1
Depreciation expense, not adjusted
above
22.3
21.1
Adjusted EBITDA
$
752.3
$
1,000.7
Explanatory Notes to Reconciliations:
(1)
To reflect non-cash expenses
attributable to the amortization of acquired intangible assets.
(2)
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.
(3)
To write off an equity method
investment acquired in the Mobidiag acquisition.
(4)
To reflect a debt extinguishment
loss from refinancing the Credit Agreement in first quarter of
fiscal 2022 and the refinancing of the 2025 Senior Notes during
fiscal 2021.
(5)
To reflect adjustments to the
estimated contingent consideration liabilities related to the
Acessa Health acquisition, which is payable upon meeting defined
revenue growth metrics.
(6)
To reflect non-income tax charge
in the first quarter of fiscal 2022 related to settling a prior
years' audit matter.
(7)
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, settlements of litigation and indemnification
provisions for legal and tax matters that existed as of the date of
disposition.
(8)
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.
(9)
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.
(10)
To reflect the fair value step up
of inventory sold during the period related to the Acessa Health
acquisition in fiscal 2021.
(11)
To reflect an estimated annual
effective tax rate of 21.50% for fiscal 2022 and 21.75% for fiscal
2021.
(12)
Non-GAAP earnings per share was
calculated based on 256,070 and 261,785 weighted average diluted
shares outstanding for the three months ended December 25, 2021 and
December 26, 2020, respectively.
(13)
To reflect the amount of debt
issuance costs recorded directly to interest expense as a result of
refinancing the Credit Agreement in first quarter of fiscal 2022
and the refinancing of the 2025 Senior Notes during fiscal
2021.
Reconciliation of GAAP to non-GAAP EPS
Guidance:
Guidance Range
Guidance Range
Quarter Ending March 26, 2022
Year Ending September 24,
2022
Low
High
Low
High
GAAP Net Income Per
Share
$1.22
$1.32
$3.80
$4.10
Amortization of acquired intangible
assets
0.33
0.33
1.32
1.32
Restructuring, Integration and Other
charges
0.02
0.02
0.07
0.07
Tax Impact of Exclusions
(0.07)
(0.07)
(0.29)
(0.29)
Non-GAAP Net Income Per Share
$1.50
$1.60
$4.90
$5.20
Trailing Twelve Months
ended
December 25, 2021
Return on Invested Capital:
Adjusted Net Operating Profit After
Tax
Non-GAAP net income attributable to
Hologic
$
1,989.3
Non-GAAP provision for income taxes
541.5
Non-GAAP interest expense
89.4
Non-GAAP other income
5.4
Adjusted net operating profit before
tax
$
2,625.6
Non-GAAP average effective tax rate
(1)
21.4
%
Adjusted net operating profit after
tax
$
2,063.5
Average Net Debt plus Average
Stockholders’ Equity (2)
Average total debt
$
2,916.4
Less: Average cash and cash
equivalents
(1,144.7
)
Average net debt
$
1,771.7
Average stockholders’ equity (3)
5,244.8
Average net debt plus average
stockholders’ equity
$
7,016.5
Adjusted ROIC
Adjusted ROIC (adjusted net operating
profit after tax above divided by average net debt plus average
stockholders’ equity)
29.4
%
(1) ROIC is presented on a TTM basis;
non-GAAP effective tax rate for the three months ended March 27,
2021 was 21.22%, the three months ended June 26, 2021 was 21.5%,
the three months ended September 25, 2021 was 21.5% and the three
months ended December 25, 2021 was 21.5%.
(2) Calculated using the average of the
balances as of December 25, 2021 and December 26, 2020.
(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 25, 2021
Net Leverage Ratio:
Total principal debt
$
3,098.7
Total cash
(1,420.8
)
Net principal debt, as adjusted
$
1,677.9
EBITDA for the last four quarters
$
2,708.0
Net Leverage Ratio
0.6
Other Supplemental Information:
Three Months Ended
December 25, 2021
December 26, 2020
Geographic Revenues
U.S.
68.8 %
70.7 %
Europe
20.1 %
21.0 %
Asia-Pacific
8.1 %
5.5 %
Rest of World
3.0 %
2.8 %
Total Revenues
100.0 %
100.0 %
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220202005323/en/
Ryan Simon Vice President, Investor Relations
Ryan.Simon@hologic.com (858) 410-8514
Francis Pruell Director, Investor Relations
Francis.Pruell@hologic.com (508) 263-8628
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