HOLX - Earnings call transcript Q1 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to the Hologic First Quarter Fiscal 2018 Earnings Conference Call. My name is Isaac, and I am your operator for today’s call. Today’s conference is being recorded. All lines have been placed on mute. I would now like to introduce Mike Watts, Vice President, Investor Relations and Corporate Communications, to begin the call.

Mike Watts

Isaac. you, Thank thanks fiscal and us Hologic’s for Good earnings for call. quarter XXXX first afternoon joining With are our Chief Executive me President Officer Chairman, today and Steve MacMillan, Bob McMahon, Chief Officer. company’s Financial the and Bob question-and-answer a and we’ll session. both remarks, prepared Steve then some have have

our quarter of release Investors press website. first available now redesigned Our the on is section newly

also deliver them. we will shortly website after post We our our prepared remarks to

archived Finally, a for be replay will of XX this days. call

we inform we as this Such make materially I implied. and or statements like cause earnings during in in SEC. that Before release. A differ These release, with the those well known financial results those may actual risks call, certain can during this to will involve filings you forward-looking. be begin, and unknown be found uncertainties call our that Harbor include expressed factors from in our to certain the our Also would referenced will statements to GAAP measures. Safe non-GAAP earnings be we reconciliation discussing in statement included as

any discuss otherwise on and year-over-year basis, currency, will will growth in noted. we percentage rates changes a revenue unless be be expressed Finally, that constant

to MacMillan, to call the CEO. Hologic’s like over I’d Now turn Steve

Steve MacMillan

good afternoon you Thank and Mike, everyone.

for to and posted year. of solid start pleased are good the results off Hologic’s We’re financial fiscal discuss the results for overall, quarter first XXXX. We to a

in range. growth. based believe per Morgan these Diagnostics, U.S. two unique medical J.P. earnings the based largest business, the positions Cynosure, are just of is guidance toward from of differentiated the expectations $XXX.X and products. of our revenue range exceeded performing Breast divisions, our consistent benefit We we future a Health a at health tax conference, pre-announced our we corner turning As aesthetics enjoy of And on $X.XX our And markets, and leadership on well finished above reform. share also million women’s

plan two our are demonstrates elements in paying solid important quarter strategic performance the first of the Our off.

investors business, as area First, is start-up thriving. as was now international as recently we which described a and for XXXX, an our concern great of

Specifically, divested in the Cynosure and core screening delivered international quarter. revenue, excluding franchises, the double-digit again acquired growth first blood

and that generated encouraged because more particularly for of let’s to the introduction, potential our research to sustainable have long as are pipelines for contributing pipeline very we international barren our quarter. revenue divisional a than businesses has and the products quarterly to new our a development both contribute growth the four time. that results future, now are sales. With first ago XX% years Second, And was look we R&D that review

to in period, or the sales revenue the In million million growth reminder, the a selling As rates days more benefit prior XXXX. that to basis greatest in We compared with quarter reported had extra of we recurring prior first of in depressed $XX quarter, than revenue the year period the our grew these the fact artificially lines first in added fiscal four the on estimate year currency. a States. that to X.X% constant X.X% were extra by days $XXX.X United

than we fourth in impact about in or year prior Cynosure in growth posted of increased revenue the slightly constant reported revenue X.X% and X.X% X.X% would period, first-quarter divestiture, currency, the the X.X% growth the constant days on the the accounting Excluding But acquisition have screening extra organic the or currency. basis a been for in better blood X.X% quarter.

sales of to increased helped geography, Cynosure to million first standout a efforts increased new increased was of ago. International and In we the the contribution the Cynosure. revenue Even years XX.X%, as result due blood, focused million revenue Cynosure. the States, terms and acquisition of $XXX.X leadership that earlier. of less quarter, of the very international $XXX.X excluding In deliberate primarily United by a two in began robust alluded than of with XX.X%, X.X%, again as international

by U.S. X.X%, the United and was revenue of States. impact blood, period Cynosure in but Excluding the extra remember concentrated the declined prior days year in

In quarter, three-quarters businesses, largest first well. our divisional two which represent are and Health Diagnostics, sales, performance in of of terms the nearly performing Breast

and Let’s compared been and been proven have products. other clinical alone, Breast quarters. proven mammogram the market, clearly to no mammogram has for Health, invasive more to cancers has superior start in women remain couple dense We improved detect breasts. last other based No established XX% to XX% breast where the also over with XD our of superiority results the of this leader undisputed on first foremost with

In has no breast we extensively other patients and have. initiatives, coverage. centers prosper as for direct-to-consumer effectively our referring as or manufacturer by fighting help as addition, partnered through customers by insurance with We

a comp sequential U.S. to another and in versus International reflects growth to recent sales, our from period, including purchase we the $XXX engine sales to year grew year selling Health The This XX%. the in totaled second tough robust we have extra distributor. factors, prior declined compared of sustainable add quarter. tremendous inorganic X.X% in As the however, saw over made quarter result, the market organic all the and X% overall Based quarter, building days. a acceleration first both on growth growth fourth the to of the business increase an our means, we continue Breast global X.X% our share. a these compared prior performance in period, the benefited with Spanish million consecutive XX.X%, through which marking progress

XD Health a called quarter market-leading mammography of XD systems can segment the further brand, results. strengthen systems, better are the upgrade addition, Breast in of continuum our services the thousands in are At The portfolio and so Genius the remain core significant of field XDimensions the our market, our broader care. customers more of role same products was to the first we of and encourage time, play strategies In seeing are systems Health Genius that Breast of apparent good we in new success building around adoption that today. our products and Performance. we These new a which these

represented almost sold. an we increased breast just Our our from strong of new real-time a resulted disposables products on focus XX.X% basis. which and Brevera an from system, launched. new mammography of mainly performance the interventional on third selling, we This systems And start by excellent a biopsy sales systems increased systems global portfolio and revolutionary biopsy

a of In little which biopsy our we ago, than addition, sales to more build introduced continue prone year a Affirm system, nicely.

to which turn remains a Diagnostics, let’s solid path. growth Now on

was with despite a increase screening comp. the healthy, screening prior of expectations, days business while blood was our sales headwind sales mid-single-digit growth again we sales $XX.X despite Excluding growing Fueling million $XXX.X first was of in international additional selling increased diagnostics, the revenue the this period. from high-single-digits rate Including where remained of sales posted X.X% molecular of the residual in $XXX.X the year in divested at difficult which $XXX.X Diagnostics days quarter, franchise, an million. million, line The U.S. X.X%. increased million headwind, prior-year a versus blood

leaders HPV, global utilization and automated instrument, health our which As growth women’s fully our and trichomonas. driven increasing of system, chlamydia the long by gonorrhea, Panther was assays, in Aptima molecular been and have diagnostics in recent for testing quarters,

diagnostics to steadily healthcare sales the through of although to are molecular same remains continue for earlier our impact better their expand transmitted time, customers providing with the detection. new our tests market overall small. work testing, At We increasing, sexually disease

geographic three load the We’re six United first the for HIV, our B. the on States. exceptionally Panther hepatitis business commercialize same our most recently, to last new Fusion time, This And clearance include at in the global expansion. Diagnostics for as fueling over of well, earned continues steady positions in domestic tests proud well assay to These our hepatitis seven ability viral on us C, molecular platform, new that consolidate respiratory products system. various three products quarters, and regulatory cadence strengthen has testing and markets the new innovation to assays our

liquid mention despite the as were dynamics first from of leader, higher offset screening. in more Diagnostics, prior in selling our cytology a In surrounding products year of for $XXX.X clear days products draft sales represented slight perinatal test This we perinatal increase that and Before want leave to USPSTF X.X%, cancer of million sales guidelines the quarter. unchanged the the market cytology, ThinPrep Pap where cervical headwind are noise the period. is we

that is a driver standard we of continue tremendous cytology against not to we last believe for that and growth the decades. market want the to remain progress domestic several will made cervical over the have us, physicians women who continue care While the co-testing cancer for

significant a which the comparison. effect selling so to disappointing turn Surgical, $XXX.X is prior the primarily let’s of down Surgical extra Now sales million, quarter in with the on days a period a year consumables had business, X.X%. four year-over-year had negative

the to a recall the has posted, we continues work back single the ablation. the biggest struggled endometrial of face quarter was from of increasing product. competitive addition, year materially have Nonetheless, to In stagnant but some a grow market a quarter growth first we Surgical return and ever do MyoSure to competition benefited in to ago trajectory. for Surgical do NovaSure has nicely, a as

number and We ago, months team to is now in incentives. growth place and sales talent, put boost new a Surgical. of strategies structure six We leadership upgrading are about pursuing that in

ablation like categories NovaSure are MANUAL. more efforts expanding new key other MyoSure back market We grow where the products the are patient expanded competition our we as just market we through awareness, increased we fighting are to against directly with Advanced And and have leader.

the our Cynosure discuss quarter. in division. $XX.X me million aesthetics medical let sales new Now were

when While sequentially in up this the we $XX.X independent period, company, versus year the was fourth an significantly posted was we million as predicted. quarter, Cynosure down was the versus prior it XX.X%

right to aesthetics as potential which lot that this to of of the capitalize recognizing in work market, have remains a fully robust. a Cynosure direction, medical step we quarter’s So do the view while we on still result the

in that new In number, made talent. upgrading sales we progress our filling sales has open leadership in-line quarterly addition team to commercial good are and encouraged our positions the

that largely process be this quarter. to with expect We done

newly become our that a customers. take is to with moving forward we hired reps will committed the with confident training our fully are we and productive, team time long-term motivated, to partnership it that complete talented highly are way, re-vamped While commercial in for right program winning

impressed to be and the from innovation continue with productivity pipeline. Cynosure’s R&D emerging also We

the expect capabilities commercial totaled wrap divisional will decrease confident strength the revenue we we mini radio-frequency products industry. course the over new X.X%, our customers. the And increasing discussion, Skeletal We and the of our of mainly sales. sales over come, feedback what lines our the the been of the TempSure revenue the portfolio soft quarter, to expanding in is platform improves customers the Early we of scale, this, as expanding body new $XX.X in of by TempSure, enhance lower testing, choice women’s due demonstrate do, many like and for in are portfolio to densitometry partner aesthetics better surgical and stability already medical forward new and With needed to fields. we interest improve for TempSure a of energy-based health quarterly are platform selling, look to broadest more that tightens system To positive, into we our that parallel, are launching Fluoroscan Horizon C-arm first As to treatments an continue the and driven has example Envi, product. skin wrinkles, be fine to time, bone and from composition in however, and tissue million cellulite. coagulation, year, facial through minimizes now appearance our we up

by two well, Before on Health that largest the to and rebound. over divisions, Diagnostics, I turn summarize Cynosure let saying Bob, performing Breast me while is the are call our

continuing and These products. is to confidence business for churn is a off out us start more international future. our importantly, give to dynamics new us thriving, fiscal the XXXX, good they Our R&D and in have great organization

the Bob. hand call Now I will over to

Bob McMahon

afternoon percent good first for finish touch changes going reform, will with remarks walk guidance remarks a noted, be everyone. financial tax updated the XXXX. on results, on key I’m topics rest otherwise basis. today, on my and my income and through Steve, focus quarter our a year-over-year of In you other statement, non-GAAP then U.S. financial will Unless Thank to our including few

exceeded our described, Steve slightly we revenue are with As our quarter pleased first guidance. results, as

EPS lower on outperform healthy addition, due margin tax net the In boost us going the already enactment will forward. effective and tax helped U.S. to rate a significantly our reform line, of

quarter, right points sales jump the year, that, operating we attractive operating compared to the operating of are essentially We gross business to on at and XXXX also inclusion Cynosure in XXX March, P&L. call costs. our first drive $XXX.X continued divestiture leverage. We refinancing basis first the retired $X In goals. Cynosure, let’s remaining the Normalizing deliberate mix increased billion our reflecting margins a due with of lower very Cynosure only sheet, screening mid-single-digit leaving costs the balance margin blood tranche products. we control into declined line strengthen Total that in expenses terms. of rate, one prior to long-term to plan convertible debt our declined of all sales primarily of to the with to With associated the XX.X% quarter, and in of our notes, due in mainly the of million, base impact business and expenses very for efforts XX.X%

mix, declined well XX.X% points as of as of the margin operating Our basis blood and product to business. geographic divestiture our XXX screening due

expense royalty improved the Interest have X.X% $XX.X debt the reflecting changes million quarters. our prior an normalizing payments non-recurring period, margin year operating in quarter in the first of the increase our of basis, sequential to to a compared we benefit made structure quarter. after in for was fourth on quarter, the However, recent

our a year let’s on affected Now the end, legislation of spend two tax. Due into law to new fiscal us. U.S. late was immediately tax December, In enacted law. provisions moment

federal able income to U.S. for to was rate rate U.S. XXXX. XX% from apply blended XX%, are we a corporate lowered the First, fiscal and our to

our effective the previously rate is in non-GAAP result, we XX% As we approximately that significantly approximately lower a to be anticipated. fiscal expect which XXXX, tax XX% than

net in lower and first $XXX.X on from rate. a recorded quarter. we benefit discrete tax the addition, million basis net This performed the In U.S. liabilities tax of preliminary primarily tax re-measurement GAAP at of deferred a resulted benefit calculations a corporate

subject of imposed foreign deemed estimate treatment be of historic that to as of to approximately analysis foreign The reform is set the second reform $XX interpreted We U.S. of legislation the tax to immediately changes the changes component because to note of that the tax of on tax us related the tax our Please the earnings, the and transition affected is impact our law, million. significant subsidiaries’ was earnings. overall repatriation clarified. the and further

our discussed XX net points, decreased improvements Finally, XX.X%, the margins mix tax negative in non-GAAP were offset by as previously partially basis of effective factors rate.

range of led to of per to due prior this reform. our the earnings share increase of $X.XX, All non-GAAP year, the compared of benefits X.X% to an and tax exceeding guidance

our EPS exclude increased you If to blood have high-XX% divested range. non-GAAP were the in of impact screening would business, the

In move have financial to we to guidance, In sheet. I’ll on touch quickly our we in than Before more the few announced remaining. million and long-term balance eliminating our on in also further call we strengthen reduced convertible first on a to good continued would other that metrics. key million $XXX by recent quarter, January slightly we our goal progress months, make the $XXX debt that’s we principal,

few over we strength. to eliminated accomplishment, favorable financial time same will than and on our At the we other the positive a testament have our have conditions. debt sheet by from market past balance debt more we to quarterly the billion So underlying have to Pretty time, years. made call, capitalize changes our $X.X in structure convertible next impressive our

mid-February in Specifically of XXXX. XXXX. and $XXX the we in senior million in interest of billion $X and at will offering notes senior X.XX% bear XXXX, due in notes a mature mature mid-January, notes. to of in billion, while used at our interest $X announced proceeds private bear in be these notes million X.XX% X.XX% $XXX These refinance

us. expense debt of at our net end leverage both quarter, based position, able At maturities. and financial over ratio, reduce on to our our EBITDA, first are extend stood debt So interest strong we the for is million. equivalents debt $XXX.X times, within a This and than we net The cash of includes calculation convertible quarters range as remaining notes. recent our higher in prepare X.X retire comfortable to

of $XXX of X.X% declined improvements our million the business the Finally, year, by were first blood adjusted the prior divestiture as compared offset screening. quarter EBITDA in in base to

financial the gears shift year quarter. and second to like non-GAAP I’d discuss guidance Now our and full for

high full are the we We solid first level, our of guidance are tax increasing forecast. quarter our on based our our reiterating At results and reform. beneficial a guidance EPS U.S. updating revenue year impact and

with revenue. guidance billion, range. on revenue growth rates solid exchange currency our start quarter first maintaining and our of and X.X% single-digit of on to X.X%, with reported results, this original Based recent growth $X.XX X.X% $X.XX the billion rates, Let’s are X.X%. to mid we between translates constant to Based growth in organic

fewer less XXXX, XXXX. revenue total discussed a last quarters of screening As in organic reminder, revenue and Aesthetics defining also growth organic Medical as non-recurring royalty revenue. fiscal the as for are adjusts for we first revenue selling And quarter, the blood and two days

let’s to Now tax impact for U.S. turn reform of XXXX. the fiscal

non-GAAP updating from forecast rate XX%. of are guidance approximately significantly approximately full our We tax initial down to an XX%, year

well with as EPS of up $X.XX in are to reform to we R&D we include to to and are Aesthetics a projects. areas we initiatives plan speed marketing January, to As increasing estimate investments discussed likely range of Surgical, year early Even $X.XX, campaigns portion a tax from substantially, prior initiatives. full the up guidance as do our reinvestment, like from reinvest in future Medical initiate or $X.XX. a $X.XX discrete to These of that to growth benefits

full effective reported cash also roughly tax is guidance beneficial adds diluted year, XXX half XX.X%. of Our year our rate, and previous for and be the X.X% shares earnings results between savings for million our on to guidance of growth $X.XX, the overall. reform year. updated EPS roughly based to or flows should This updated outstanding full Tax from EPS in updated the estimate our

$XXX expect with associated retiring including now the the our one-time not free cash convertible million we mid year, recapture notes. range, fiscal this For tax in flow

second guidance XXXX. quarter fiscal let’s for Now the of turn to

which and million, growth X.X% and growth $XXX revenue of revenue to $XXX of of on constant a expect currency basis, to between We X.X% X.X% reflects reported X.X%. million

the to in We first million be expect versus few we slightly reasons. posted the a revenue for quarterly $XXX down quarter

we to first expect screening probably from divested the First, around to revenue half business sequentially, our decline quarter level. blood

the is Second, seasonally period the Surgical as March quarter reminder, Medical a businesses. and weaker than our Aesthetics December both for

bottom rates in of quarter X.X%. and reported to fiscal expect growth the This implies forecast $X.XX second EPS line, XXXX. the $X.XX we X.X% of between On of EPS

incorporated guidance of have ranges, estimates, around your into update you you our the As downsides would encourage forecast. model again we upsides to our as and we middle both

call by saying like our we Before that I’d pleased fiscal revenues to the are began exceeded XXXX. We we to with questions, slightly fiscal conclude for quarterly that with our guidance. start open year our

then In has provided With our bolster reform growth. the Please questions. call the up question. for both will questions to addition, that, opportunity ready in are earnings recent U.S. Operator, we the reinvest business the with plus related to and operator opportunistically first follow-up, I the us drive for return queue. a limit one to to open tax an to your ask

Operator

Sachs. take Thank from first with ahead. you. And we’ll go Isaac Please Goldman our question Ro

Isaac Ro

you. cytology curious, might share to I’m in well some anything as if meaningful guys. gained Curious question Thank in have you that, you had Breast you as in an addendum business Thank of any if side for side you FE. Diagnostics. you afternoon, on in on this think thought that’s that competitor and Health the through Diagnostics you fiscal I’m year, going perpetuate curious Good both you. then I’m the for share A Breast rest as on the share for quarter, there’s And curious. market that said a major the you Health changes.

Steve MacMillan

Isaac. Thanks, Sure.

overall we’re feel Breast yes, continue in to we on think very an Health, I basis. think just I share doing that well

like in a key had competitors, I a one have think decent I earlier momentum. gained – and think it might looked the little we quarter year our they half of

share. hugely pushed a I just that think back continued market we’ve in disproportionate relative and share XD to our gain overall to

So from there. I of feel great. think Nothing the over we just continued any to disruption obvious

as on well, continued just we to the front, again shares. strengthen cytology think our I

Health, movement And position much going We’re both obviously, additional good but really those help like of and don’t it’s that know, feel we areas. as in like think we forward. so strong you where there. to strong about to are I up, Breast continue in us feeling leap

Bob McMahon

this Isaac, Bob. is Hey,

the in Health that, that I being business. driven addition think in international with seeing to that’s addition by the we’re our Breast obviously U.S., in our business, to strength

internationally but driver also will to as that there we’re believe only we for the year, that, strong beyond. well. we So believe that growth And be that of rest gaining a continue through us, share not this

Isaac Ro

helpful. Thanks. That’s

give that’s easy in of very decline you follow-up comp a on Thank year-on-year numbers interested some the the just that of aside as Obviously, leadership there. term, we in the seasonality you the a And out sequential of, area kind minute, There’s on sort business. despite I’d scenes better called operational can just a Just for the focused remain you. kind people behind us over put be update? what’s the long performance. an drive change. on. Aesthetics been to But I’m going curious, an

Steve MacMillan

Sure, Isaac.

Health. particularly, had confidence You last so about for you with everybody we was team, ago Europe. I at Thornal. the And look put know much that again, on of us numbers know we businesses. the I that That you the table, think few the posting so right the place now, first of Kevin quarters in in we look we’ve we’re days around just that in six, in what, And in place. the together at feel stood for you if presidents have went and our great Cynosure. leadership Kevin has the international where Breast of team couple journey, sitting in Breast five, global you international And our Health all eight leadership are seven,

great went in got to go We’ve strength with of really the have as folks the team. over be a Cynosure team the got We’ve a the VP more Kevin stayed He’s with the that magical all he is forth. going rebuilding today, we magic it’s Breast doing us. And of think when it’s I Health. And same there And Sales. We’re thriving. still weak business.

numbers scenario, really than better heard the classic the last quarter. we getting me some numbers. where starting see the think getting good We’re are is now right better that, sometimes, certainly organization; it the to the and than that and before, here in an is numbers feel that, progress better sometimes, say organization than I that organization you’ve in And

just of to TempSure organization play We’ve over it’s that out think think the got year. today, better. this course going folks feel building much out for we The coming excited I I really the got just and But we’ve in so door. the future.

Operator

And we’ll move Jack with to Please from our next Barclays. question Meehan ahead. go

Jack Meehan

afternoon. Hi. in the to molecular start wanted side. Thanks. Good I

So LDT on an Fusion customer and utilization can I was in either give on a has system hoping the placement how you update there. changed, the of thoughts respiratory terms as just with adoption

Steve MacMillan

Jack. Sure,

We stages are very actually Fusion. early very, of in placing that

at minimis get there. this just de it the point, starting in We’re to numbers out

– think obviously even this too respiratory the late. I got year. flu and with out it So stuff, and no yet We impact

will be effect. I go year, we in to start next that think as So into

respiratory fairly that, the and more business. is molecular quarters in we to less is the what over going the do, really said a having But over Now labs coming small still Fusion in years. coming big like

Bob McMahon

I been incredibly the and positive. while Jack, is has feedback Yes, certainly, customer end small, think,

very excited sets but that driver and for less term. And a it the beyond. for about for up us so it’s we’re long XXXX XXXX, And probably very actually again, nicely growth

Steve MacMillan

Yes, very much.

Jack Meehan

you Do in mind? hold minuses pluses full your and are any the terms of today? just thoughts. year think last ranges in still And those segment-level gave there quarter, Or Great. guidance, you

Bob McMahon

every going get not giving into to we’re think habit I quarter. Yes, that the of

Surgical I little I a a given business, quarter, better our the first think feel maybe about Breast less little Health. good maybe about

is line. else everything in probably think I

Operator

JPMorgan. Peterson go to Please Tycho our question from move we’ll And next with ahead.

Tycho Peterson

I’m segment going about Thanks. having guidance. ask said that, Bob, to

from guess, as Cynosure, And pacing, mean, year. you sure half mean, talked product on you quarter, the what growth I to talk, that the that, TempSure? still should new on I from previously for maybe the the the can double-digit forma seasonably I is year pro just we track. Just want about and I given on of back second expect well, contributions in soft make

Bob McMahon

give probably mean, really I we’re TempSure. good feel going to there. Yes, not detail product-level about we

growing the of before, year. the course first the the to expect would second and half said throughout the expect of we’ve As than be of with the we Cynosure, strength half year, year stronger we

against is in fighting are the the quarter a lighter. We second where, fiscal that quarter, in seasonality first – typically,

And stronger as is so well. positives sales getting our the are organization

launching so question well and product. as And new – the as the

how that be So is making. to the overcome that going question that, we’re is good the feel to progress much of able certainly about but

Tycho Peterson

the try you products. about And comp, right. All then, just was leadership, bit. sales a new NovaSure, force on And that guess some restructuring you’ve that Steve, are in talked the new just of of new to turn products turnaround much the of I that is around to getting versus organizational and it operational new out of these business? How growth function a there? where

Steve MacMillan

turnaround. the we’re Yes, the early late in great, Tycho. in I’d innings say

think for pretty have couple making exit rebuilds quickly. moved Surgical softness changes within more that that really of probably team got that But trajectory it. fiscal I organization as good candidly, of a actually this business. year in been we quarters, we’ve a I and some We’ve key leadership think

I competitive dumb we of what fat, happy think when got I said It’s earlier. withdrawal. and a had the little reverse we the

Sometimes the organization than better numbers better the sometimes organization, the look the and looks numbers. than

the want I back build reversing more we’re really we as organization be. than to we’re future. better doing quarters Cynosure, think with couple before that, a I our And – we’re much year Surgical ago. the business the numbers where looked for of But were think now a to

Operator

Kumar go next from our to Evercore. Vijay move ahead. we’ll Please And question with

Steve MacMillan

Vijay.

Vijay Kumar

Hey, my guys. for taking question. Thanks

So maybe I’ll start off one high level, OUS. Steve, U.S. on the versus geographic,

down. just maybe OUS, about just where around Breast, think U.S. think that front, penetration level little some dynamics, view little GYN, Breast, So I given growth we converter was Diagnostics right? GYN, the U.S., a and and the in of versus I you guess, understand dynamics. of the in were the singles, they these, I’m could converter in So the U.S. rates changes headwind, are quarter, on as Because of turn right? to what there’s bit trying what

Steve MacMillan

the in U.S. on those impact U.S. the especially of accentuated the in selling businesses. was quarter fewer days most that four numbers That last year. clearly and was Vijay, the Remember, Sure. versus this disposable

feel molecular business I about we doing. the think, on is what core, good our

that States, double I high borderline in think the singles, – have If you days-adjusted very been United much it you’d digit. have possibly would

underlying there. good very some performances So

I going we and days. some fewer strengthen that. the against that as to selling weaker, think big and to clearly But Surgical was work said, do was there comp we both got

largest And think So Health, it, performing to, rate and news, double-digit that globally, that two number Breast we’ve you international good is look is in delivered we been we sustainable we’ve well. quarters pushing the that. got our aspiring really businesses, know, we’ve while, as do and it think I now Diagnostics, both a at to and the a continue really for U.S. on a expect row as a that number growth of in

Bob McMahon

Vijay, Yes. Hey, this Bob. is

Just to put some numbers to it.

remarks, in last extra majority than prepared were slightly and QX more the U.S. in said year, the we our in $XX days of million the As that significant was of

Vijay Kumar

I was little how below like from the for quarter. It Street bit one And Bob. all comments, Street was would the be looks on a delta Any softness was. guidance that $X million a versus of helpful GYN? to maybe, on where it modeled million second Cynosure? coming Or helpful. That’s this the maybe Bob, had $XX Is think,

Bob McMahon

couple as probably we think, of remarks, decreases a sequential our prepared the kind is things. I really Yes, of said in

was screening is that. Surgical business Medical in – we’re how is Aesthetics. foremost and and some looking seasonality that first The And in and how the at there blood

customers. kind seen impacted, last of years, the at bad line some several early January, in in our and you’ve if first second quarter. our have primarily, you weather from combination been the the flu, quarter-over-quarter with quarters We over and the of heard But somewhat roughly that some look of

Operator

from next Deutsche question We’ll our with Please ahead. take go Dan Leonard Bank.

Dan Leonard

on Cynosure I in Thank but start you. a competitive us up I’ll with and you looks mostly business in is question were Cynosure. you color which body, it positioning SculpSure? with assume SculpSure. context around environment ask some your like sequentially and because Can give I And every

Steve MacMillan

really some unwinding and to product focusing think, for bigger customers last now to a good how challenge year didn’t effectively, midst and path. in fix. build we’re on we how to know at that’s I Dan, certainly it sold the really some that time, been bunch I very the this we’ve some as in, our think they right think, that actions of, taking probably sold frankly whole But I use the that

gotten meantime, I women’s things positive be be do some the think I on we’ve really is could nuggets – skin. that bullish that’s restore its totally place. is, real where MonaLisa to the well of And in good health think the in show are organization both our point, as think also may got we’re real us At I it. And rightful think as we’ve that. the some growth top is SculpSure which understanding what’s around starting our to we of our hands going doing knows see this I that we frankly, what about and able traction quietly, point very as leverage a to organization key rebuild Touch, the new it’s with and for

Dan Leonard

dollars. you. follow-up. if R&D Or you’re projects then be reinvestment talking further Any Panther? could my reform in we of helpful. will color within on are Possible to about Thank And Cynosure bit accelerate? a Are elaborate going you there U.S. acceleration tax of menu the expansion on for

Steve MacMillan

across looking and R&D Sure, it at we’re and both really marketing really division.

X has we’ve is say, would might the that I And months categories but market list these to or earlier leaders. started what forth we’re overall And I activities a the might help where of number of something fairly, for bit drive businesses. put we some done as there get we the it’s well a balanced, a additional a So marketing category it fairly demand spread by say accelerating across tier various is some on things. as be wouldn’t else each really project little division

So beyond. that’s think the I up to probably affect in start XXXX stuff and to nothing revenue in going XXXX of that show kind will but dramatically

Operator

We’ll go Bill move ahead. to our from with next Quirk question Jaffray. Piper Please

Bill Quirk

Good Great. Thanks. everybody. afternoon

Steve MacMillan

Bill. Hey,

Bill Quirk

All right.

Brevera, certainly penetration here, accounts? could just help we existing or a help appreciate some high early kind Thanks. still within cycle around terms think you So bit of think Brevera particularly and about in that first I we’re of us could hoping pretty for little get then how your sales the about but where maybe us of off, was Affirm. And if I

Steve MacMillan

Sure.

dug But be Brevera it’s slightly years performed Super And is it, business start well What X.X a we us, will very a got shaking a who hoped. we his Health. long I’m call to think during cultural remiss to for honest you you, with back Watts really you, off we’re slower realized I’d say a now. NT that is that in runs ago, are we I a is And Affirm our if head. I products to off, really people would as than in And is Mike brutally organizational really I good interesting. hometown how If yet that tell and in year, start First the your launched, Bowl. time Affirm, maturity. piece where we any we Breast we have doing think And see my is And I hadn’t didn’t to in very this launched Eagles non-mammography pleased off start. in.

and of of Brevera Committee great front very unlike humming. about really Affirm thriving great out to gates that a and but is the Brevera has off more Affirm, start, with, get Capital to part the didn’t the just brings in familiar we getting which learned launch, Brevera lot the sooner, it stream. is it While disposable about is today, applied And getting a strong Brevera, a come

ongoing Breveras more revenue good to today, the about. stream going create feel really So that that get we it’s these placed we

think full fully a but frankly, figure should in I end a of it’s penetration ready I’m their terms certainly not Brevera I technology game-changing out, In mean, that that, with suite. to levels, every that, of up some probably hospital

Bob McMahon

add the Bill, Yes, maybe life life to Brevera. what little a a say I of a to table bit would flavor, than Biopsy to cycle an more just give longer is Prone Affirm that, of cycle

Steve MacMillan

back that revenue Yes, sort How and piece in mammography. the is great we build can Brevera be got examples and things want here. to installed the this around we’ve to been one saying, bigger we’ve perfect recurring strategic of gets this base we as of kinds doing is, revenue, more and the of and more of create, a,

breaking going cliff a back I think that to to about couple that really huge worried It everybody of was goes ago. us. it’s so years help

Bill Quirk

you course, I’d the of didn’t on Super remiss congratulate if Bowl. And great. be I That’s

So a the hear congrats you just guys we enjoyed that Steve. follow-up. Glad in on for quick This that, game. the tropical that brought weather is

Just potential chlamydia you in My manufacturers. but you. see I’d pricing suggest thoughts curious the thinking economics of there. about gonorrhea are on probably and to about much going pressure and not be the understanding bleed-through in hospital Thank terms of PAMA pressure, your

Steve MacMillan

those Sure. one deal of We always things worry is we about the pressures, PAMA another many and with.

increasingly, that. categories about think testing. the both, drive on in our biggest it with partnering like co-testing as well education going more force good – really, helping and to we’ve direct-to-patient, through and a OB/GYN largest our feel things piece the through things test,” is and that means a is we as the and And increasing lot combination some and of I sales things customers, getting to expanding categories especially been like, of of outreach have detailing around we the “yes

partners vendor. not lab that our we’re think a So major just seeing are I

categories as improving business we’re to We’re more well grow public drive overall as the business health. frankly, that. their than really helping And and and our

think I will think I – through be we efforts can but to spot in not there, a those. good help So say there’s we’re pressures, fight to pretty us always going our

Operator

Please next Schenkel We’ll take Cowen ahead. Doug from Company. with go question & our

Chris Lin

is actually to Lin with This a today. afternoon. I just on Doug start Chris question for want on Good Surgical.

on and you the had do building there in expect So a off year, relative difficult clearly to grow How expectations Surgical your quarter? for just MyoSure for at MyoSure was full still the rate? a days that, double-digit pronounced comparison. did that impact sales, recognizing perform to a days adjusted And

Steve MacMillan

I a Yes, much certainly good but line, be be thrive. not give product want product of still about think Generally, we the we would and detail, hope in we course continuing and for it the pretty was that line to grower to feel to careful to expect MyoSure too double-digit year.

Bob McMahon

given with as you, as the was ones Surgical consumable well side Yes, of was business. the agree we the Chris, days I probably said, the one by impacted Steve. it’s most of that But

Chris Lin

then opportunity And could focus savings? interest your force also sense viral there Okay. could U.S. in efforts and trended load the existing give you then is go just with you the tax assays now, a the maybe us from the has And for of how that just much customers how to accelerate from sales after a of the

Steve MacMillan

B Yes, early we’re piece just I’d first say in hep such days. the approved. The is the was

about going as XXXX it’s the and training be contracts given to we in just just getting sales force a really build. literally expire – else, we’re one the this they allow always in I that And think So as rolling. being the increasing slow lockups up. think, we’ve way XXXX more virals and up But and thought even everything drivers that and is build

I ways, what future. the of for bring in will lot we So great feel a just think, about those

wouldn’t now. right on, all early be So expect at sales tax force, those any reform piece affecting to

Bob McMahon

the the adoption will I system a addition Panther systems I of another continues help the to global as just that, really to drive a over loads of time. And think side, in Panther Yes, benefits utilization Chris, And the on viral grow the agree. our of basis.

Operator

And David we’ll question ahead. with Morgan next take from our Stanley. Lewis Please go

David Lewis

for Steve, Thanks you, it sales to maybe – the sell. product the appreciate and for growth but one a another improve the of initiatives Surgical, afternoon. quick like feels then rate question. Steve, in for it to taking targeted the needs like feels I Bob. sort Good force relative follow-up

third priority for MonaLisa, that product product then extent Bob. potentially be a add and to follow-up quick to And is through can that much the how So M&A? it of what

Steve MacMillan

can have an certainly they people, underperforming say better now, we a more. from still doing yet, job more Sure, would be and our to David. opportunity. they third right And they think product. that a can answer easy salesperson it is benefit They the are finding top always two the flip frankly, from and benefit The need with becomes side

to that directly, area it a another absolutely some to could them So big sell partnership acquisitions. for, there necessarily in and all be successes point, having think I more sales to we point will doors, your to of opportunities are said more is cross-referrals see little there. product Having tuck-in frankly, open starting I than but I opportunities. the think, some think do closer for MonaLisa some lookout working use with with the on there Cynosure an just the early that, your is we’re and Surgical Touch,

product So to I your line we the over able that broaden exact to coming will years, hope, point. would be

David Lewis

tax. Steven. a or quick And question of on clarification kind Thanks Okay. Bob, just

if at put million. early $XX XX%, I sort new the year? light you kind $XX this to realistic reform stage? work of the the fleck that’s the mean, called you rate that you think to around Or the the I And then think I number a think So conservative could one, implied for in of the of some that complexities where do it Is XX%, also, that million see your it’s of in out back about money reinvestments, half statutory business? really is of that you

Bob McMahon

first about right on Hey, guess Yes. the our now. yes, that, best feel David, question We regarding the pretty good that’s and XX%.

to of strengthen the the invest, some obviously, yes, like you’re And money particularly that we’re year. so it haul. ballpark, the the efforts the I of be given going and forth, But we think to to have, too investment, marketing in much throughout roughly envision don’t opportunities regarding and think that business for I disciplined. So that use changing we the in course we long do can things the

Operator

our Anthony ahead. And with question go next from take Jefferies. Petrone we’ll Please

Anthony Petrone

force on in On are I’ll those how just expect have build maybe be Thanks. out will that it to reps many right now point, training, where And at you Panther. One then sort one a follow-up Thanks. on Cynosure, sales peek when And complete? of recap Cynosure of of at. the is on where and a and this Panther.

Steve MacMillan

Sure.

we’re a feeling in I’d training. hiring go the sixth, the of where into trained. out inning hires about easily seventh Cynosure, process, it’s we’ll and productive. be one been they say through really don’t about day hit recently coming And of going have the the and think it where be relates have As But numerically. we actually good I in to immediately been Most number really And feel quarters. good and the street them

So we’d we’ve this saying that’s is which been the our here, quarter. figure to year, year, exit fiscal September July we what

and in be point I shape getting to building now think nicely by The much, that then. between team great ought much stronger. and again, we

Anthony Petrone

follow-up on A Panther.

curious like and Just the load out it looks really to there, the portfolio viral full is – you have extending.

more You’re looking a benefit. toward XXXX for

let’s for, I Just competitive conservatism launch? competitive that front, Abbott, that bake mean, say, does in on of curious the Alinity note particular? some in Anything from

Steve MacMillan

of conservative on should put opportunities including that, beneficial to I very think some time. time. here more take be virals, most as going we for little and the a probably over think Panther us of do about the these to And things. ramp products always the We’re Diagnostics the be ups Panther’s, Having we great said really to feel about

Operator

ahead. take we’ll next And from Blair. go William our Please Weinstein with question Brian

Brian Weinstein

guys. you Can hear Hey, me?

Steve MacMillan

Brian. Hey,

Brian Weinstein

I attend call. cancel still to the I’m but the thought doing today, Steve, might you you’re glad have parade that Hi,

So that. thanks for

Steve MacMillan

at it point. office, It was it that TV CNBC Mike was for better him this because because was actually watch and to worse watch Watch’s to on the

Brian Weinstein

a of like down MQSA months. it’s the looks questions I so get first. that. Hey, couple over of Recent couple last

you need and guys of So it MQSA this little difficult this, sort to do? we’re have where here? bit But can data? anything talk you that going that starting these of products is middle push in to And in the through to some through through just of pushing about is see there. point more difficulty new you just you potentially adoption Obviously, cycle else the think a

Steve MacMillan

I more as numbers. here the stuff MQSA quarter-ish the of think MQSA last much there’s some some swirly than on some also, seasonality Brian, stuff. is those it in stuff anything, The over

ability continue cycle. XD put and through I’d Performance, think think it try we our I pretty an best. of as this good, XD as especially So to help to as we’re But feeling reconcile kind our the fundamentally, them, between at I Performance, to XDimensions, push directional

you Is frankly, category But I in bringing. this well get as our benefits to getting in may Absolutely. and harder us further So and even market – material work detecting in as our we strength benefit more we’re commitment downturn it resolve the our the as in we’re any not hit and – this it curve? the out requiring the state. think, given as

So said, ago, I domestically Health today both business probably six about Breast and internationally. Bob and feel, our incrementally even both as did – better really we months than

Bob McMahon

of really what think just team one you’re saying, the to I sell. done portfolio that on I things has is build Yes, think the Steve,

all Prone those gantry system a Biopsy So best-in-class. a mammography we believe it’s converting machine. about It’s the the there. Affirm just are it’s And or System, Brevera that of not

of sell And so replacement that sales throughout really helps that the course cycle. portfolio the

Brian Weinstein

you don’t And geographies guys are you idea between rough growing did not, of know OUS Great. I then if Okay. this did. you U.S., if apologize on at, Cyno give I But different any Thank kind or hit breakout at and what you. for so point? those this

Steve MacMillan

Great.

that level But it’s strong, of – to U.S., rebuild. think not and continue relatively detail. it’s We’re has been feel going international we larger down the been at I been the

Operator

question next And Partners. our ahead. Newitter Leerink from go we’ll take with Please Richard

Richard Newitter

indications Once historically, from anywhere of Cynosure, a their is new next product, in for that the expect of product? up-and-running of notwithstanding, set of who of had for million quarter, force a and sales kind non-invasive And a the on Steve. sense kind targeting? you’re the for Surgical taking first new this I on of With expect more cellulite? appearance Thanks the core a the kind in focus could reduction can had TempSure, of give $XX a kind $XX year new generated with the this When of initial product. the health? the million women’s questions. first especially launch they you exiting indication we Thanks. then, more in product, with of us year your you’re seemingly that face of this should a couple and a something we to product, with just Is sales for

Steve MacMillan

had core think the a of – always derm strength base well. and initial now for audience, lot as clearly, more as where cosmetic much is definitely launching the TempSure we’ve the I Sure, customer its

those product-level don’t quite level. to go out to In there. think not of that down range, but are numbers of we I’m get terms But want guidance, going I wildly probably don’t specific to

as see, Well, As provide trying individual certainly going provide used detail what we’re stuff. not independent to to we’re to than to you an can go more company. down product Cynosure

Bob McMahon

And to come next regards indication, first Yes, Rich. half in and the this year throughout will the the of course those of time over year. additional

Richard Newitter

give metrics Okay. And statistics systems, maybe follow-up. been Any or one us on you utilization can of how just the SculpSure the that’s trending?

Steve MacMillan

– It by varied truthfully, it’s customer.

that think I the improve some that where well are and didn’t working and and have others, those doing We ones the back it we’re now. are going in sold to and have follow-up, candidly, we really

Bob McMahon

I Yes, long year-over-year, what key revenue is that say, a and to way Rich, go. still grow lot would to of continues PAC but the

Operator

for And thank This a you. That is all time quarter XXXX evening. fiscal first Have we earnings call. concludes today. questions the have now Hologic’s good

Hologic (HOLX) 8 Feb 182018 Q1 Earnings call transcript