EXHIBIT 99.1
For Immediate Release | ||||
Contact: | Glenn P. Muir | Frances Crecco | ||
Executive Vice President & CFO | Manager, Investor Relations | |||
Hologic, Inc. | Hologic, Inc. | |||
(781) 999-7300 | (781) 999-7377 |
HOLOGIC ANNOUNCES SECOND QUARTER
FISCAL 2003 OPERATING RESULTS
Revenues Increase to Record High
BEDFORD, Mass., (May 6, 2003) — Hologic, Inc. (NASDAQ: HOLX) (“Hologic” or “the Company”), a leading provider of women’s diagnostic imaging systems and state-of-the-art digital radiography systems, today announced its results for the quarter ended March 29, 2003. Second quarter fiscal 2003 revenues totaled $50,336,000, an 8% increase when compared to revenues of $46,401,000 in the second quarter of fiscal 2002.
For the second quarter of fiscal 2003, Hologic reported net income of $383,000, or $0.02 per diluted share, compared with net income of $4,426,000, or $0.22 per diluted share, in the second quarter of fiscal 2002. Included in the second quarter fiscal 2002 operating results is a tax benefit of $4,423,000 relating to a tax refund which resulted from the President’s Economic Stimulus Bill. Pre-tax income increased in the current quarter to $435,000 from $3,000 in the second quarter of fiscal 2002. The Company was able to achieve this improvement despite the increased investment in sales and service in connection with the Company’s transition to a direct sales and service organization for mammography products from an independent dealer in almost one half of the U.S. market.
For the six months ended March 29, 2003, revenues totaled $99,301,000, compared to revenues of $93,986,000 in the six months ended March 30, 2002. For the six months ended March 29, 2003, Hologic incurred a net loss of $529,000, or $0.03 per diluted share, compared with net income of $2,853,000, or $0.16 per diluted share, for the comparable six month period in fiscal 2002.
During the quarter Hologic shipped a record fourteen Selenia full field digital mammography systems, eleven of which were recognized in revenue during the quarter. At the end of March 2003, the Company’s backlog for orders of Selenia had increased to forty systems.
“The second quarter represents a pivotal point in Hologic’s march toward increased profitability and control of its distribution channel,” said Jack Cumming, Chairman and CEO. “After years of relying on the efforts of a major distributor to generate more than half of our revenues for analog mammography domestically, Hologic embarked on a path
on January 1st to sell direct in over 25 major markets. During the first 90 days of this strategic initiative, order input for analog mammography surpassed the results from the previous quarter, validating our decision and reinforcing our commitment to build a full service and support network. We believe we are gaining market share and are well positioned for future growth.”
Second quarter financial overview by segment:
| · | Mammography revenues increased 10% to $19,902,000 for the second quarter of fiscal 2003 from $18,117,000 for the same period in fiscal 2002. We incurred an operating loss in the second quarter of fiscal 2003 for this business segment of $303,000 compared to operating income of $1,032,000 in the second quarter of fiscal 2002. This loss was primarily due to the significantly higher costs associated with the increase in the current quarter of field service personnel including related travel and training expenses as we transitioned to a direct sales and service organization from an independent dealer in almost one half of the U.S. market. |
| · | Osteoporosis Assessment revenues increased 23% to $18,427,000 for the second quarter of fiscal 2003, from $15,023,000 for the same period in fiscal 2002. Operating income for this business segment in the second quarter of fiscal 2003 increased 98% to $3,000,000 from $1,514,000 in the second quarter of fiscal 2002. The improvement in operating income in the current quarter was primarily due to improved gross profits from an increase in product revenue, and to a lesser extent, higher service revenues with lower costs, resulting in an overall increase in service related gross profits. These increased gross profits were offset in part by an increase in operating expenses primarily from general and administrative activities. |
| · | Digital Imaging revenues increased 23% to $6,664,000 in the second quarter of fiscal 2003 from $5,404,000 in the second quarter of fiscal 2002. The operating loss for this business segment increased to $2,965,000 in the current quarter from $2,672,000 in the second quarter of fiscal 2002. The increase in the operating loss was due to additional manufacturing costs associated with the rollout of the Selenia™ digital mammography detector and increased operating expenses. |
| · | Mini C-arm revenues decreased 10% to $4,286,000 for the second quarter of fiscal 2003 from $4,775,000 for the same period in fiscal 2002. Operating income for this business segment in the second quarter of fiscal 2003 decreased to $553,000 from $1,175,000 in the second quarter of fiscal 2002. This decrease was primarily due to higher field service expenses, lower gross profits from the decrease in product revenues and slightly higher operating expenses. |
| · | General Radiography revenues decreased 66% to $1,058,000 for the second quarter of fiscal 2003, compared to revenues of $3,082,000 for the same period in fiscal 2002. Operating income for this business segment in the second quarter of fiscal 2003 was $57,000, compared to an operating loss of $407,000 in the second quarter of fiscal |
2002. The improvement in operating income primarily reflects the elimination of the unprofitable product lines and the continuation of the service business.
Hologic’s management will host a conference call today at 10:00 a.m. (Eastern) to discuss second quarter fiscal 2003 operating results. Interested participants may listen to the call by dialing 800-946-0785 or 719-457-2661 for international callers and referencing code 503854 approximately 15 minutes prior to the call. For those unable to participate in the live broadcast, a replay will be available one hour after the call ends through May 13, 2003 at 888-203-1112 or 719-457-0820 for international callers, access code 503854. The Company will also provide a live webcast of the call on the investor relations page of the Company’s website atwww.hologic.com/investor. A replay of the call will also be available on the investor relations page of the Company’s websitewww.hologic.com/investor shortly after the completion of the live broadcast.
Hologic, Inc. is a leading developer, manufacturer and supplier of medical imaging systems dedicated to serving the healthcare needs of women, and a leading developer of state-of-the-art digital imaging technology for general radiography and mammography applications. Hologic’s resources are focused on developing systems with superior image quality and diagnostic accuracy while providing exemplary customer service. This focus has enabled the Company to capture significant market share in its core niches against large, multinational companies, while engendering intense customer loyalty. Hologic’s core business units are focused on osteoporosis assessment, mammography and breast biopsy, direct-to-digital X-ray for general radiography applications and mini C-arm imaging for orthopedic applications. Hologic’s product lines are premier brands in their markets and command leading market positions. For more information on Hologic, please visit the Company’s website atwww.hologic.com.
This News Release contains forward-looking information that involves risks and uncertainties, including statements regarding the Company’s plans, objectives, expectations and intentions. Such statements include, without limitation, statements regarding: the anticipated benefits of the Company’s direct sales and service initiative for its mammography products; the Company’s anticipated future growth, including its ability to gain market share; and the Company’s backlog. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those anticipated. The Company cannot assure that it will be able to achieve or sustain any of the benefits, including increased market share, sought through its direct sales and service initiative, or that the benefits, if any, will be sufficient to offset the increased sales, service, marketing and other costs associated with that initiative. The Company’s backlog consists of purchase orders for which a delivery schedule within the next twelve months has been specified by the customer. In certain circumstances, orders included in backlog may be canceled or rescheduled by customers without significant penalty. Therefore, backlog as of any particular date should not be relied upon as indicative of our net revenues for any future period. Other factors that could cause actual results to materially differ include, without limitation, manufacturing risks that may limit the Company’s ability to ramp-up commercial production of the
Selenia and other of the Company’s digital products, including the Company’s reliance on a single source of supply for some key components of its products as well as the need to comply with especially high standards for those components and in the manufacture of digital X-ray products in general; uncertainties inherent in the development of new products and the enhancement of existing products, including technical and regulatory risks, cost overruns and delays; the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated; the Company’s ability to predict accurately the demand for its products and to develop strategies to address its markets successfully; the early stage of market development for digital X-ray products; risks relating to compliance with financial covenants under the Company’s working capital financing and leases; technical innovations that could render products marketed or under development by the Company obsolete; competition; and reimbursement policies for the use of the Company’s products. Other factors that could adversely affect the Company’s business and prospects are described in the Company’s filings with the Securities and Exchange Commission. Hologic expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based.
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS | March 29, 2003 | September 28, 2002 | ||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 31,421 |
| $ | 45,836 |
| ||
Accounts receivable, less reserves of $4,487 and $4,565, respectively |
| 42,219 |
|
| 39,568 |
| ||
Inventories |
| 45,297 |
|
| 37,855 |
| ||
Prepaid expenses and other current assets |
| 15,636 |
|
| 14,811 |
| ||
Total current assets |
| 134,573 |
|
| 138,070 |
| ||
Property and equipment, net |
| 32,145 |
|
| 29,380 |
| ||
Intangible assets, net |
| 8,797 |
|
| 9,777 |
| ||
Goodwill, net |
| 5,989 |
|
| 5,989 |
| ||
Other assets, net |
| 849 |
|
| 1,059 |
| ||
$ | 182,353 |
| $ | 184,275 |
| |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
March 29, 2003 | September 28, 2002 | |||||||
CURRENT LIABILITIES: | ||||||||
Current portion of note payable | $ | 480 |
| $ | 480 |
| ||
Accounts payable |
| 11,011 |
|
| 10,929 |
| ||
Accrued expenses |
| 17,218 |
|
| 18,935 |
| ||
Deferred revenue |
| 8,375 |
|
| 9,254 |
| ||
Total current liabilities |
| 37,084 |
|
| 39,598 |
| ||
Notes payable, net of current portion |
| 1,827 |
|
| 2,268 |
| ||
STOCKHOLDERS’ EQUITY: | ||||||||
Common stock, $.01 par value-Authorized—30,000 shares Issued – 19,678 and 19,461 shares, respectively |
| 197 |
|
| 195 |
| ||
Capital in excess of par value |
| 142,622 |
|
| 141,405 |
| ||
Retained earnings |
| 2,621 |
|
| 3,150 |
| ||
Cumulative translation adjustment |
| (1,534 | ) |
| (1,877 | ) | ||
Treasury stock, at cost, 45 shares |
| (464 | ) |
| (464 | ) | ||
Total stockholders’ equity |
| 143,442 |
|
| 142,409 |
| ||
$ | 182,353 |
| $ | 184,275 |
| |||
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||
March 29, 2003 | March 30, 2002 | March 29, 2003 | March 30, 2002 | |||||||||||||
REVENUES: | $ | 50,336 |
| $ | 46,401 |
| $ | 99,301 |
| $ | 93,986 |
| ||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of revenues |
| 31,986 |
|
| 28,373 |
|
| 63,193 |
|
| 58,290 |
| ||||
Research and development |
| 4,891 |
|
| 4,770 |
|
| 9,652 |
|
| 10,050 |
| ||||
Selling and marketing |
| 6,942 |
|
| 6,620 |
|
| 15,823 |
|
| 13,458 |
| ||||
General and administrative |
| 6,174 |
|
| 5,500 |
|
| 11,351 |
|
| 10,257 |
| ||||
Restructuring costs |
| — |
|
| 495 |
|
| — |
|
| 2,070 |
| ||||
| 49,993 |
|
| 45,758 |
|
| 100,019 |
|
| 94,125 |
| |||||
Income (loss) from operations |
| 343 |
|
| 643 |
|
| (718 | ) |
| (139 | ) | ||||
Interest income |
| 243 |
|
| 170 |
|
| 419 |
|
| 259 |
| ||||
Interest/other expense |
| (151 | ) |
| (810 | ) |
| (176 | ) |
| (1,609 | ) | ||||
Income (loss) before provision (benefit) for income taxes |
| 435 |
|
| 3 |
|
| (475 | ) |
| (1,489 | ) | ||||
PROVISION (BENEFIT) FOR INCOME TAXES |
| 52 |
|
| (4,423 | ) |
| 54 |
|
| (4,342 | ) | ||||
Net income (loss) | $ | 383 |
| $ | 4,426 |
| $ | (529 | ) | $ | 2,853 |
| ||||
NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE: | ||||||||||||||||
Basic earnings per share | $ | .02 |
| $ | .23 |
| $ | (.03 | ) | $ | .16 |
| ||||
Diluted earnings per share | $ | .02 |
| $ | .22 |
| $ | (.03 | ) | $ | .16 |
| ||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |
| 19,580 |
|
| 18,947 |
|
| 19,528 |
|
| 17,508 |
| ||||
WEIGHTED AVERAGE NUMBER OF DILUTIVE POTENTIAL COMMON SHARES OUTSTANDING |
| 20,035 |
|
| 20,182 |
|
| 19,528 |
|
| 18,126 |
| ||||
