Hologic (HOLX) 8-K Results of Operations and Financial Condition

Hologic, Inc.

2008 Fourth Quarter and

Annual Performance             

at                            

September 27, 2008

•

Financial results

•

Company highlights

•

First quarter and fiscal year 2009 outlook

Exhibit 99.3

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

2

Safe Harbor Statement

Safe Harbor Statement

Safe Harbor Statement

This

presentation

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

Company’s

backlog

and

any

implication

that

the

Company’s

backlog

may

be

indicative

of

future

sales;

the

Company’s

expectations

regarding

product

development

and

opportunities

for

growth;

the

Company’s

expectation

regarding

the

contribution

of

Third

Wave

Technologies;

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.

The

Company’s

backlog

consists

of

purchase

orders

for

which

delivery

is

scheduled

within

the

next

twelve

months,

as

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

the

Company’s

revenues

for

any

future

period.

Other

risks

and

uncertainties

that

could

adversely

affect

the

Company’s

business

and

prospects

include

without

limitation:

U.S.

and

general

worldwide

economic

conditions

and

related

uncertainties,

including

the

recent

global

financial

turmoil

and

associated

economic

downturn;

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;

the

Company’s

ability

to

integrate

its

acquisitions

and

business

combinations

effectively;

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

newly

introduced

products

may

contain

undetected

errors

or

defects

or

otherwise

not

perform

as

anticipated;

manufacturing

risks,

including

the

Company’s

reliance

on

a

single

source

of

supply

for

key

components,

and

the

need

to

comply

with

especially

high

standards

for

the

manufacture

of

many

of

its

products;

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

early

stage

of

market

development

for

certain

of

the

Company’s

products;

the

risk

of

adverse

events

and

product

liability

claims;

risks

related

to

the

use

and

protection

of

intellectual

property;

expenses

and

uncertainties

relating

to

litigation;

technical

innovations

that

could

render

products

marketed

or

under

development

by

the

Company

obsolete;

competition;

general

future

legislative,

regulatory,

or

tax

changes;

the

risks

of

conducting

business

internationally,

including

the

effect

of

exchange

rate

fluctuations

on

those

operations;

financing

risks,

including

the

Company’s

obligation

to

meet

financial

covenants

and

payment

obligations

under

the

Company’s

financing

arrangements

and

leases;

and

the

Company’s

ability

to

attract

and

retain

qualified

personnel.

The

risks

included

above

are

not

exhaustive.

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.

The

Company

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,

Adiana,

AEG,

Cytyc,

BioLucent,

FullTerm,

MammoSite,

Novasure,

R2,

Suros,

Selenia,

Dimensions,

ThinPrep

and

Third

Wave

and

associated

logos

are

trademarks

and/or

registered

trademarks

of

Hologic,

Inc.

and/or

its

subsidiaries

in

the

United

States

and/or

other

countries.

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

3

Q4-08 and FY-08 Overview

Quarter and Year Ended September 27, 2008

1,683 systems

•

Up from 1,189 in FY-07

452 systems

•

Up from 351 in Q4-07

•

Up from 429 in Q3-08

Record Sales of Selenias

$155.3 million

Q4’08 Adjusted EBITDA*

Non-GAAP adjusted net income of

$294.7 million (GAAP net loss of

$385.6 million)*

•

Non-GAAP adjusted net income up $190.0

million or 181.6% vs. FY-07

Non-GAAP adjusted net income of

$77.2 million (GAAP net loss of

$144.4 million)*

•

Non-GAAP adjusted net income up $44.3 million

or 134.8% vs. Q4-07

Net Income*

$1,674.5 million

•

Up $936.1 million or 126.8% vs. FY-07

$442.5 million

•

Up $239.9 million or 118.5% vs. Q4-07

•

Up $13.0 million or 3.0% vs. Q3-08

Record Revenues

FY 2008

Q4 2008

Key Performance Metrics

*-

See reconciliation of GAAP net (loss) income and EPS to non-GAAP adjusted net income and EPS and to adjusted EBITDA

on pages 7-10 of this presentation.

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

4

Q4-08 and FY-08 Overview

Q4-08 and FY-08 Overview

Quarter and Year Ended September 27, 2008 (continued)

Quarter and Year Ended September 27, 2008 (continued)

Additional Key Performance Metrics and FY 2008 Events:

•

Balance Sheet

•

Backlog of $360.4 million as of Sept. 27, 2008 (46.3% related to Breast Health and 49.4%

related to Surgical and Diagnostics)

•

Term Loan Balance reduced to $465 million as of September 27, 2008 ($540 million borrowed

in July to fund Third Wave acquisition)

•

Strategic

•

Cytyc merger completed on October 22, 2007 with successful integration and continued

synergies realized/to be realized

•

Third Wave acquisition completed on July 24, 2008 with integration in process and synergies

realized/to be realized

•

Three products (four PMA filings) with the FDA

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

5

Acquisition of Third Wave Technologies in Q4’08

Acquisition of Third Wave Technologies in Q4’08

(acquired on July 24, 2008)

(acquired on July 24, 2008)

The Transaction

•

$600M cash purchase –

July 24, 2008

•

$540M term loans to finance

The Company

•

Patented molecular diagnostics platform

•

Two PMAs filed for HPV tests

The HPV Market

•

$400M U.S. –

50% penetrated

•

$400M O.U.S. –

10% penetrated

Rationale

Complementary with ThinPrep Pap testing product

Platform for entry into U.S. molecular market ($2.1B)

Leverages existing sales channels

Promising technology, strong product differentiators

Expected to be accretive to non-GAAP EPS in FY 2010

Strong pipeline of products under development

–

Chlamydia, Gonorrhea, HAI (hospital acquired infections)

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

6

Q4-08 Financial Performance

Q4-08 Financial Performance

Quarter Ended September 27, 2008

Quarter Ended September 27, 2008

(unaudited)

(unaudited)

($s in millions)

Costs

and

expenses

include:

•

Amortization of acquired intangibles-

$32.0M, $3.9M and $30.6M in Q4’08, Q4’07 and Q3’08, respectively

•

Stock-based compensation-

$6.2M, $1.4M and $7.0M in Q4’08, Q4’07 and Q3’08, respectively

•

Restructuring charge-

$6.4M in Q3’08

•

Write-up of inventory to FMV-$3.9M in Q4’08

•

In-process research and development-

$195.2M in Q4’08

Non-GAAP*

Q4-08

Q4-08

Q4-07

change

Q3-08

change

Revenues

$442.5

$442.5

$202.6

118.4%

$429.5

3.0%

Gross margin

60.9%

54.3%

48.1%

         6.2

57.0%

       (2.7)

Operating Expenses

$126.6

$328.8

$51.0

544.7%

$137.1

139.8%

Pre-Tax Income (Loss)

$122.2

($109.3)

$47.7

(329.1%)

$94.9

(215.2%)

Net Income (Loss)

$77.2

($144.4)

$32.1

(549.8%)

$61.4

(335.2%)

Diluted EPS

$0.30

($0.56)

$0.29

(294.5%)

$0.24

(335.0%)

GAAP

* Represents a non-GAAP amount. Such amount excludes acquisition-related charges such as

amortization of intangible assets, the increase in costs of products sold associated with the write-up

of inventory to fair value and in-process research and development.  See  reconciliation of GAAP

to non-GAAP net income on pages 7 and 9 of this presentation.

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

7

Footnotes are included on a following slide

Reconciliation of GAAP Net (Loss) Income and EPS to Non-GAAP Adjusted Net Income and EPS and to Adjusted EBITDA

(unaudited -

in thousands, except EPS)

GAAP

Non-GAAP

GAAP

Non-GAAP

REVENUES

442,512

$      

-

$            

442,512

$   

202,564

$   

-

$          

202,564

$   

COSTS AND EXPENSES:

Cost of revenues

176,570

(3,933)

(1)

172,637

102,326

102,326

Cost of revenues –amoritz. of intangibles

25,661

(25,426)

(2)

235

2,724

(2,460)

(2)

264

  Total cost of revenues

202,231

(29,359)

172,872

105,050

(2,460)

102,590

Gross profit

240,281

29,359

269,640

97,514

2,460

99,974

Gross margin %

54.3%

60.9%

48.1%

49.4%

Research and development

20,944

-

20,944

11,262

-

11,262

Selling and marketing

67,793

-

67,793

23,321

-

23,321

General and administrative

38,293

(480)

(3)

37,813

14,994

-

14,994

Amortization of acquired intangible assets

6,542

(6,542)

(2)

-

1,439

(1,439)

(2)

-

Acquired in-process research and

development

195,200

(195,200)

(5)

-

-

-

-

  Total operating expenses

328,772

(202,222)

126,550

51,016

(1,439)

49,577

Total costs and expenses

531,003

(231,581)

299,422

156,066

(3,899)

152,167

(Loss) income from operations

(88,491)

231,581

143,090

46,498

3,899

50,397

Interest income

                 800

-

800

1,185

-

1,185

Interest and other (expense) income, net

          (21,643)

-

(21,643)

48

-

48

(Loss) income before provision for income

taxes

(109,334)

231,581

122,247

47,731

3,899

51,630

Provision for income taxes

35,041

9,995

(8)

45,036

15,621

3,121

(9)

18,742

Net  (loss) income 

(144,375)

$    

221,586

$    

77,211

$     

32,110

$     

778

$          

32,888

$     

Net (loss) income per common and common

equivalent share*:

Basic

$           (0.56)

$         0.30

$         0.30

$         0.30

Diluted

$           (0.56)

$         0.30

(10)

$         0.29

$         0.30

Adjustments

Adjustments

Three Months Ended

Three Months Ended

September 27, 2008

September 29, 2007

* Reflects 2-for-1 stock split on April 2, 2008

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

8

Non-GAAP adjusted net income

77,211

$                

Adjustments

Interest expense, net

19,011

Provision for income taxes

45,036

Depreciation and amortization, not adjusted above

14,000

Adjusted EBITDA

155,258

$              

Three Months

Ended

September 27, 2008

Reconciliation

of

GAAP

Net

(Loss)

Income

and

EPS

to

Non-GAAP

Adjusted

Net

Income

and

EPS

and

to

Adjusted EBITDA (continued)

(unaudited -

in thousands, except EPS)

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

9

Reconciliation

of

GAAP

Net

(Loss)

Income

and

EPS

to

Non-GAAP

Adjusted

Net

Income

and

Non-GAAP

Adjusted

EPS

(unaudited -

in thousands, except EPS)

GAAP

Non-GAAP

GAAP

Non-GAAP

REVENUES

1,674,498

$   

-

$            

1,674,498

$  

738,368

$   

-

$          

738,368

$    

COSTS AND EXPENSES:

Cost of revenues

686,670

(46,301)

(1)

640,369

381,777

-

381,777

Cost of revenues - amortiz. of intangibles

95,310

(94,291)

(2)

1,019

11,262

(10,194)

(2)

1,068

  Total cost of revenues

781,980

(140,592)

641,388

393,039

(10,194)

382,845

Gross profit

892,518

140,592

1,033,110

345,329

10,194

355,523

Gross margin %

53.3%

61.7%

46.8%

48.1%

Research and development

81,421

-

81,421

44,381

-

44,381

Selling and marketing

261,525

-

261,525

85,520

-

85,520

General and administrative

147,405

(5,405)

(3)(4)

142,000

62,092

-

62,092

Amortization of acquired intangible assets

25,227

(25,227)

(2)

-

5,584

(5,584)

(2)

-

Restructuring

6,383

(6,383)

(6)

-

-

-

-

Impairment of acquired intangible assets

2,900

(2,900)

(7)

-

-

-

-

Acquired in-process research and development

565,200

(565,200)

(5)

-

-

-

-

Total operating expenses

1,090,061

(605,115)

484,946

197,577

(5,584)

191,993

Total costs and expenses

1,872,041

(745,707)

1,126,334

590,616

(15,778)

574,838

(Loss) income from operations

(197,543)

745,707

548,164

147,752

15,778

163,530

Interest income

               4,528

-

4,528

2,815

-

2,815

Interest and other expense, net

          (86,128)

-

(86,128)

(2,078)

-

(2,078)

(Loss) income before provision for income taxes

(279,143)

745,707

466,564

148,489

15,778

164,267

Provision for income taxes

106,476

65,406

(8)

171,882

53,911

5,718

(9)

59,629

Net (loss) income 

(385,619)

$     

680,301

$    

294,682

$     

94,578

$     

10,060

$     

104,638

$    

Net (loss) income per common and common

equivalent share*:

Basic

$           (1.57)

$            1.20

$         0.88

$           0.98

Diluted

$           (1.57)

$            1.18

(10)

$         0.86

$           0.95

Adjustments

Adjustments

Twelve Months Ended

Twelve Months Ended

September 27, 2008

September 29, 2007

Footnotes are included on a following slide

* Reflects 2-for-1 stock split on April 2, 2008

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

10

Reconciliation

of

GAAP

Net

(Loss)

Income

and

EPS

to

Non-GAAP

Adjusted

Net

Income

and

Non-

GAAP

Adjusted

EPS

-

Continued

(unaudited)

(1) To exclude the increase in cost of revenues resulting from the write-up of acquired Cytyc and Third Wave inventory sold during fiscal

2008.

(2) To exclude the on-going, non-cash amortization of the intangible assets acquired since fiscal

2006.

(3) To exclude the stock-based compensation associated with the termination of former Third Wave executives in the fourth quarter of fiscal 2008.

(4) To exclude stock-based compensation related to the acceleration of vesting and the modification of the terms of certain equity awards as a result

of the merger with Cytyc in the

first quarter of fiscal 2008.

(5) To exclude the non-cash expense associated with the write-off of the acquired in-process research and development related to the merger with Cytyc and the acquisition of Third

Wave in fiscal 2008.

(6) To exclude restructuring charges consisting of cash and stock-based compensation related to the resignation of the Company’s Executive Chairman in May 2008.

(7) To exclude the non-cash expense associated with the write-off of certain intangible assets acquired from Cytyc in the first fiscal quarter of 2008.

(8) To reflect an estimated effective tax rate of 36.8% on a non-GAAP basis.

(9) To reflect an estimated effective tax rate of 36.3% on a non-GAAP basis.

(10) Non-GAAP diluted earnings per share was calculated based on 259,242 and 250,569 weighted average diluted shares outstanding for the three and twelve months ended

September 27, 2008, respectively.

The Company has presented the following non-GAAP financial measures: adjusted net income; adjusted EPS; and adjusted EBITDA. As set forth in the applicable reconciliation

tables above, non-GAAP adjusted net income and non-GAAP adjusted EPS excludes the following items from GAAP net income and EPS: (i) non-cash expenses associated with the

Company’s recent acquisitions, including the amortization and write-off of intangible assets, stock-based compensation expense associated with the termination of acquired

employees, acceleration of the vesting or other modification of the terms of equity awards as a result of an acquisition, and the write-off of acquired research and development; (ii)

the increase in cost of revenues resulting from the write-up of acquired inventory sold during the applicable period and (iii) restructuring charges. The Company’s non-GAAP

adjusted EBITDA excludes from its GAAP net income (i) the items excluded in its calculation of adjusted net income, (ii) interest expense, net, (iii) provision for income taxes, and

(iv) its depreciation and amortization expense not otherwise excluded in calculating its adjusted net income. The Company believes the use of non-GAAP adjusted net income and

non-GAAP EPS are useful to investors in comparing the results of operations in fiscal 2008 to the comparable period in fiscal 2007 by eliminating certain of the more significant

effects of the acquisitions that took place since fiscal 2006. These measures also reflect how the Company manages the business internally and sets operational goals, and forms the

basis of certain of its management incentive programs. In addition to the adjustments set forth in the calculation of its adjusted net income, its adjusted EBITDA eliminates the effects

of financing, income taxes and the accounting effects of capital

spending. As with the items eliminated in its calculation of adjusted net income, these items may vary for different

companies for reasons unrelated to the overall operating performance of a company’s business. The items excluded in its calculation of its adjusted EBITDA presented herein are also

excluded in the calculation of its adjusted EBITDA under its senior secured borrowing arrangements and used by the Company and its lenders in determining its compliance with its

financial covenants under those arrangements. When analyzing the

Company’s operating performance, investors should not consider these non-GAAP financial measures as a

substitute for net income or EPS prepared in accordance with GAAP.

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

11

Consolidated Balance Sheet Data

At Quarter End

(unaudited -

in millions)

Sound balance sheet coupled with strong

generation of cash flows.

September 27, 2008

September 29, 2007

Cash

$99.3

$100.4

Working Capital

352.7

220.6

Total Assets

$8,134.6

$1,066.3

Long Term Liabilities

3,151.5

82.0

Total Liabilities

3,492.4

260.6

Stockholders' Equity

$4,642.3

$805.7

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

12

282

328

351

384

418

429

452

16

11

3

27

27

44

50

54

64

71

97

111

154

193

228

35

37

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Selenia Highlights:

555 sold in FY06

1,189 sold in FY07

1,683 sold in FY08

Number of Selenias Sold*

Number of Selenias Sold*

Full Field Digital Mammography

Full Field Digital Mammography

2004

2006

2007

2008

2003

2005

*

For

fiscal

years

ended

last

Saturday

in

Sept

.

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

13

MQSA U.S. Scorecard*

(Mammography Quality Standards Act of 1992)

Total Certified Facilities

8,827

Total Accredited Units

13,360

Certified Facilities with FFDM Units

3,896      44.1%

Accredited FFDM Units

5,913      44.3%

Total U.S. Annual 

Mammography Procedures

36.3 million

Hologic U.S. Installed Base (as of 9/27/08)

2,973     52.2%

(of FFDM units)

*(http://www.fda.gov/cdrh/mammography/scorecard-statistics)

Certified Statistics as of November 1, 2008

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

14

Q4-08 Segment Highlights

Total Breast Health

(Includes

Mammography,

R2,

Suros,

Mammopad,

DRC,

AEG

and

MammoSite

products)

(unaudited)

($s in millions)

4

th

quarter highlights:

•

BH revenues represent 50% of total revenues

•

Increase in Selenia

product sales to 452, an increase of 101 over Q4’07 and an increase of 23 over Q3’08

•

Includes $7.0M of amortization of intangibles (vs. $4.1M and $7.1M in Q4’07 and Q3’08, respectively)

•

Includes $2.0M of stock-based compensation (vs. $1.2M and $2.7M in Q4’07 and Q3’08, respectively)

Q4-08

Q4-07

% change

Q3-08

% change

Revenues

$221.0

$177.0

24.9%

$219.5

0.7%

Gross margin

49.5%

51.4%

            (1.9)

51.5%

            (2.0)

Operating income

$54.3

$48.1

12.9%

$56.4

(3.7%)

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

15

Q4-08 Segment Highlights

Q4-08 Segment Highlights

Diagnostics

Diagnostics

(Includes ThinPrep, Full Term and Third Wave products)

(Includes ThinPrep, Full Term and Third Wave products)

(unaudited)

(unaudited)

($s in millions)

4

th

quarter

highlights:

•

Diagnostics revenues represent 30% of total revenues

•

Includes $19.0M of amortization of intangibles (vs. $0 and $17.6M in Q4’07 and Q3’08, respectively)

•

Includes $3.0M of stock-based compensation (vs. $0 and $2.4M in Q4’07 and Q3’08, respectively)

•

Includes $3.9M charge resulting from the write-up of inventory acquired from Third Wave and sold during fiscal 2008

•

Includes $195.2M of in-process R&D associated with the Third Wave acquisition

Q4-08

Q4-07

% change

Q3-08

% change

Revenues

$133.7

$126.6

5.6%

Gross margin

58.9%

62.4%

            (3.5)

Operating (loss) income

($163.2)

$35.8

(555.9%)

- New Segment

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

16

Q4-08 Segment Highlights

GYN Surgical

(Includes

NovaSure

and

Adiana

products)

(unaudited)

($s in millions)

4

th

quarter

highlights:

•

GYN Surgical revenues represent 14% of total revenues

•

Includes $6.2M of amortization of intangibles (vs. $0 and $6.1M in Q4’07 and Q3’08, respectively)

•

Includes $0.8M stock-based compensation (vs. $0 and $1.5M in Q4’07 and Q3’08, respectively)

•

Includes $0 restructuring charge (vs. $0 and $2.4M in Q4’07 and Q3’08, respectively)

Q4-08

Q4-07

% change

Q3-08

% change

Revenues

$59.7

$56.3

6.0%

Gross margin

70.5%

74.0%

            (3.5)

Operating income

$18.2

$12.2

49.2%

- New Segment

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

17

Q4-08 Segment Highlights

Skeletal Health

(Includes Osteoporosis, Mini C-arm, Extremity MRI and General Radiography products)

(unaudited)

($s in millions)

4

th

quarter

highlights:

•

6% of total revenues

•

Includes $0.4M stock-based compensation (vs. $0.3 and $0.4M in Q4’07 and Q3’08, respectively)

Q4-08

Q4-07

% change

Q3-08

% change

Revenues

$28.1

$25.6

9.8%

$27.1

3.7%

Gross margin

36.3%

25.4%

            10.9

40.5%

            (4.2)

Operating (loss) income

$2.2

($1.6)

237.5%

$3.2

(31.3%)

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

18

GAAP Guidance for Q1-09 (Quarter ending December 27, 2008)

Expected effective tax rate reflects the benefit from the reinstatement of the

Federal Research and Development Tax Credit.

33%

N/A

N/A

Effective tax rate

($1.66)

$31.7

$490.6

45.2%

$371.4

Q1

2008

Actual

Interest on $1.725 billion convertible notes and new term loans of $540 million

(borrowed July ’08) is approximately $19 million, including the amortization

of deferred financing costs. Q1 ’08 included significantly higher term loans to

fund the Cytyc acquisition in October ’07 and outstanding convertible notes

held by Cytyc pre-acquisition and assumed by Hologic in the acquisition.

$20

$19.8

Interest expense

($0.56)

$328.8

54.3%

$442.5

Q4

2008

Actual

EPS*

Operating

expenses

Gross margins         

Revenues

($s in millions,

except EPS)

2008 EPS includes acquisition-related charges incurred in connection with the

merger with Cytyc in Q1’08 and the acquisition of Third Wave in Q4’08. 

Q1’09

EPS

includes

an

expected

net

loss

of

approximately

$0.04

from

Third

Wave.

Non-GAAP adjusted EPS for Q1’09 is expected to be approximately $0.29 -

$0.30. See reconciliation of GAAP to non-GAAP expected EPS for Q1’09 on

page 20 of this presentation.

2008 operating expenses include acquisition-related charges incurred in

connection with the merger with Cytyc in Q1’08 and the acquisition of Third

Wave in Q4’08. Expected operating expenses in Q1 ’09 include amortization

of intangibles of approximately $13 million.

Expecting

gross

margins

to

hold

relatively

flat.

Expected

gross

margins

for

Q1

2009

include

amortization

of

intangibles

of

approximately

$36

million.

Includes

current

core

products

only-

no

contribution

from

PMA

products

awaiting FDA approval.

Commentary

$0.16 -

$0.17

$149 -

$151

53% -

54%

$441 -

$443

Q1 2009

Guidance

* EPS for Q1’08 reflects 2 for 1 stock split on April 2, 2008

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

19

GAAP Guidance for 2009 (Fiscal Year ending September 26, 2009)

GAAP Guidance for 2009 (Fiscal Year ending September 26, 2009)

Expected effective tax rate reflects the benefit from the reinstatement of the Federal

Research and Development Tax Credit.

35.25%

N/A

Effective tax rate

$0.73 -

$0.75

$78

$605

-

615

54%

$1,825 -

$1,850

Fiscal 2009

Guidance

Both years include interest expense relating to the $1.725B convertible notes

(approximately $9M per quarter), plus related amortization of deferred financing costs

of approximately $1.5M per quarter.

$84.9

Interest expense

Diluted EPS

Operating

expenses

Gross margins          

Revenues

($s in millions,

except EPS)

2008 EPS includes acquisition-related charges incurred in connection with the merger

with Cytyc and the acquisition of Third Wave. Fiscal 2009 EPS includes an expected net

loss of approximately $0.12 from the full year results of Third Wave, excluding any

contribution for an FDA approval of the HPV PMA.

Non-GAAP

adjusted

EPS

for

fiscal

2009

is

expected

to

be

approximately

$1.22

-

$1.24.

See reconciliation of GAAP to non-GAAP expected EPS for fiscal 2009 on page 20 of this

presentation.

2008 operating expenses include acquisition-related charges incurred in connection with

the merger with Cytyc and the acquisition of Third Wave. Expected operating expenses

in fiscal 2009 include amortization of intangibles of approximately $53 million.

Expecting gross margins to hold relatively flat. Expected gross margins for fiscal 2009

include amortization of intangibles of approximately $143 million.

Fiscal

2009

revenues

are

expected

to

increase

to

between

$1.825

billion

to

$1.850

billion,

driven primarily by an increase in revenues in our diagnostic segment, including the

recently

acquired

Third

Wave

products,

and

from

growth

in

our

NovaSure

product

line.

This revenue guidance is for Hologic’s currently approved and marketed products and

does not include any contribution from the PMA products currently being reviewed by

the FDA.

Commentary

($1.57)

$1,090.1

53.3%

$1,674.5

Fiscal

2008

Actual

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

20

Reconciliation of Future Non-GAAP Adjusted Earnings

Reconciliation of Future Non-GAAP Adjusted Earnings

and Earnings per Share to GAAP

and Earnings per Share to GAAP

Explanatory Notes:

(1) To exclude the on-going, non-cash amortization of the intangible assets acquired.

(2) To reflect an estimated effective tax rate of 33% for the first fiscal quarter of 2009.

(3) To reflect an estimated effective tax rate of 35.25% for the

full year of fiscal 2009.

(4) To reflect estimated diluted weighted average shares outstanding of 260,000 and 261,000 for the first quarter and full

year of fiscal 2009, respectively.

Three Months Ended

Diluted Earnings

Twelve Months Ended

Diluted Earnings

December 27, 2008

Shares

per Share

September 26, 2009

Shares

per Share

(In thousands, except per share amounts)

Projected GAAP net income

$42,300 -

$44,800

260,000

$0.16 -

$0.17

$190,900 -

$195,900

261,000

$0.73 -

$0.75

Adjustments:

Cost of revenues -

amortization of acquired

Intangible Assets

36,300

(1)

143,400

(1)

Amortization of acquired intangible assets

12,600

(1)

53,000

(1)

Income tax effect of reconciling items

(16,200)(2)

(69,300)(3)

Projected non-GAAP net income

$75,000 -

$77,500

260,000

(4)

$0.29 -

$0.30

$318,000 -

$323,000

261,000

(4)

$1.22 -

$1.24

Provided

November

11,

2008

as

part

of

an

oral

presentation

and

is

qualified

by

such,

contains

forward-looking

statements,

actual

results

may

vary

materially

from

any

forward

looking

information

provided–

Hologic

disclaims

any

duty

to

update.

21

Q4 and FY ’08 Summary

•

Strong Results

–

Revenues and earnings guidance met or exceeded

–

Record Selenia full field digital mammography systems installed and recognized as revenue

–

First

Selenia

Dimensions

“Tomosynthesis/3-D”

digital

mammography

systems

installed

and

recognized

as

revenue in Q4 in international market

–

Paid off $600 million Term Loan borrowed on October 22, 2007 to fund Cytyc acquisition

–

$540M Term Loan in July 2008 to fund Third Wave acquisition reduced to $465M as of FYE

•

Continued Growth

–

Progress with three products (four PMA filings) currently under review with FDA

–

Merger with Cytyc Corporation on October 22, 2007

–

Acquisition of Third Wave Technologies on July 24, 2008

–

Increased international penetration

•

Products

–

A total of nine best in class products

–

Broader distribution channels and expanded sales force

–

Continued product development