HOLX - Earnings call transcript Q3 2019

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

Operator

Good afternoon and welcome to the Hologic Incorporated Third Quarter Fiscal 2019 Earnings Conference Call. My name is Eduardo and I am your operator for today's call. Today's conference call is being recorded. All lines have been placed on mute.

I would like now to introduce Mr. Investor Corporate President the to Vice call. Watts, Relations Communications and begin Mike you. Thank

Mike Watts

Good for Steve we'll me session. Thank Hologic's and our remarks, Chairman you, afternoon Eduardo. then Karleen and thanks both MacMillan, company's fiscal Oberton, have earnings and prepared CEO; Steve Financial third XXXX question-and-answer joining Karleen call. have are With Officer. a today Chief the President and quarter for us some

our website. third the of Our press Investors available release on now quarter is section

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

through Finally, -- this a replay call of August, will XXrd. be me, archived October excuse through

and begin, I'd actual that we be certain call may you that will statements risks we forward-looking. These Before known uncertainties to during involve this like cause make statements inform unknown and expressed our materially in SEC. that's with statement or Such differ Safe in in factors included referenced to from and include filings the release implied. those results Harbor the our earnings those

we certain in during our will found Also be earnings be measures. call non-GAAP A to can discussing this release. GAAP reconciliation financial

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

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

Steve MacMillan

good results. and Thank you, strong fifth our Hologic's quarter to pleased of XXXX, overall results discuss everyone. Mike, afternoon, for We're financial fiscal third of the consecutive consistent quarter

earnings in results that Surgical These also throughout performance our share Molecular continues division recent to $X.XX started of our continue that businesses per non-GAAP Breast were XXXX. businesses positive our strong and our million growth revenue the the we're and periods, to core $XXX.X was guidance. and momentum above of happy Similar revenue driven to build Health Total strengthen. Diagnostics largest both by of

four each time, has progress on of growth. can degrees to drive varying the levers this we pull our made strategic During to divisions

these and the both we opportunities to on Let the of illustrate progress ahead. me touch each have made

Panther by enabled devices. test strong XD best-in-class molecular instrument, teams States and liquid our in our diagnostics and has the surgical our suit, First, and been products United commercial ThinPrep such systems, NovaSure excellent our execution Genius our MyoSure as sales our Mammography pap

Across effectively our These market to as our pricing, executing for maintain one and on customers the number shares, success. we with overall foundation products and premium drive these core we partner our are brands, are build financial demand. strategy

That's since we end lower in strategic markets, in. shares more high need other come three do have market to growth. domestic growth But where already levers we to drive some the attractive

years grow have where to we more we we markets headroom start, do much To worked expand over last several into the have international to hard shares than domestically.

some it way, long United has grower. export our emerged Today, as recall of consistent Not was startup the States described outside a very leadership our strong solid strength deliberate efforts to thanks that a and as or ago to build as business. basically business I said and treated may you channel an another international

of our our for financials. of R&D assets. all to established Third, have healthy time around of in doubled divisions revitalized and product and build innovation the have several our beginning core significant down are our R&D cadence changes years pipelines our first Today, the innovation we to results benefit after on capabilities, a

in compared revenue and the For to total more $XXX our example about totaled recently than This XX% of products ago. sales a more represented of year launched million quarter. XX% grew third than

and our we the care. operate supplement tuck-in all organic three to to further across acquisitions the enable Breast of last growth, diversify around announced revenue our our have continuum to us Health core year patient And built fourth over

our important Health. in smaller deals not sheet, growth balance just will be our Breast the part of of strength hopefully we Given cash future these an and and flows believe

grew results currency revenue and X.X% in introduction Within to businesses that discuss ahead million our let's this $XX.X to with the we $XXX.X of quarter off deals. Focal Faxitron million third in contributed acquired detail. constant and of are our With a more these expectations. start Revenue good

business of constant declined currency. the blood points $XXX.X growth which third in X.X% Excluding an XX quarter, in sequentially revenue to grew sales our from million This of divested acceleration compared rate. second our quarter screening basis was

In terms quarter. X.X% a of domestic of the sales increased geography, $XXX.X third in healthy million

U.S. Excluding quarter. our fourth divested Blood accelerating for would X.X% the have consecutive Screening growth business again been

as build franchises bases. our largest Breast again around and Health we Molecular Our charge to Panther once Genius led Diagnostics installed and the continue

early steady also are the year. we see improve that to began last pleased U.S. progress our again continuing Additionally, Surgical business

the This States, performance, to but little constant increased due recent Health. slower mainly macroeconomic quarters small and growth a was solid in $XXX.X challenges business of is the million Outside X.X% currency. in our political American sales which Latin Breast mostly United was a than

and well. have broadly Excluding More Diagnostics grew the States higher. Latin growth America, about total OUS Medical low to as returned would outside Aesthetics Surgical basis points growth United been XXX digits double and both

provide divisional Now detail on revenue let me results. our some more

start business solid in with underlying $XXX.X expectations finished the million, of X.X% prior increase our against where year Breast Let's Health our remain Health quarter Global third strong. with sales inline comparable. a Breast a biggest totaled tough trends and

has is ever care steadier of than across products As diversified said with times we globe. Breast it patient market-leading many today the and Health before, our around have been innovative continuum much and the division more

X.X%. some annualization geography, with mainly the order as X.X%. challenges tender driven sales wins mentioned Health sales of quarter increasing by was Latin year drove strong very In declined in revenue Breast as Health America timing. I and growth by of prior This well terms OUS the the a Breast that domestic earlier in

we driven X.X% sales sales selling imaging, sales XD focus systems grew on and portfolio. growing while increased In In subsegments, increased our imaging our XD of by X.X% XDimensions interventional Genius Performance new terms of gantries. our as strongly

contributed did our and Faxitron to have products themselves capital from Clarity clearly also nicely business. products new growth the XD, at of SmartCurve our as new portfolio. innovative established Intelligent acquired heart These now Other imaging including HD revenue

quarter than from headwind our on focus constraints benefited discussed. well lower In These have due acquired Brevera as portfolio results sales revenue a supply third as our our from offset we from positives to previously interventional the Focal business. selling more

Before ultrasound a in acquisition I minute goals. deployment fairly million Diagnostics, and points. at call want This SSI very innovator pending or value small our technology. enterprise cart-based spend on roughly a our our French SuperSonic of leverages of to existing capital tuck-in turn to I with Imagine $XX deal consistent is It's an

our to albeit some also be expected accretive EPS term. dilution It's to growth with revenue near slight in the rate, to

Breast full for technology the to patient wanted ultrasound while is continuum as Health care. in of a We have expand across used the

a which the sell Imagine ultrasound single-digit the portable high and been previously at done a small distribution to cart-based We market will scanner us to deal rate. enter growing larger has had enable further Viera SuperSonic acquiring

best-in-class SSI's Having believe Aixplorer represents evaluated in space the excellent product MACH highlighted several targets image this XX that newest years, quality. few the by over we technology past

support SSI So our will reputation for products. clinically-differentiated providing

as mammography MACH a breasts biopsies supplement dense help to The with screening and guide to used women XX and also for is surgeries.

channel. strong an the SSI's opportunity Importantly, our less of in than leverage provides to is United excellent sales States which XX% domestic revenue generated

like XX Over Genius, time onto can into can develop layer bit that hopeful and we a which and platform MACH upgrades. differentiation the significant we software one hardware clinical are that enjoys a

Board the This cash XX% in shares close to shares From in hopefully and Then file deal company. will of a in the to offer will SSI's to days. the obtain give us a first next acquire we controlling about a and fiscal few the XXXX. process enable seats perspective, we of the our expect purchase interest us remaining quarter tender

$XXX.X million in Now X.X% let's the of turn increased revenues a where to quarter. Diagnostics, strong

the Excluding here X.X%. remains our based Blood Screening increased on R&D and sales physician-based growth sales from driver which of sophistication lab XX quarters our now which consecutive U.S. divested quarter, declined revenue clearances in the productivity our Diagnostics even an team the has business in teams. better earned Molecular the of and

In worldwide comp. time a double quarter challenging into currency year in sales quarter, $XXX.X XX.X%, double-digit digits constant grew XX.X%, XX growth for of third prior molecular the the of Internationally, XXth despite the our consecutive quarters. million grew molecular well

Although already molecular This shares and in still how a to sales high collaboratively categories, drive total reflects our seeing franchise, piece performance in established work in there. are molecular And volumes of international enjoy better X.X%. small strong we the assay especially largest customers care key market with we very although ones grew categories. is patient our we U.S., our testing

molecular Panther instruments. HPV was terms on of broad-based and of of growth consolidated in for health In solidly. Aptima our our gonorrhea, trichomonas automated assays customers fully product, all women's installed largest quarter increased large testing chlamydia Sales as base the

Fusion. led viral doubled by are new addition still relatively load small, and by tests sales Panther the of In they in products quantitative our quarter although more than Diagnostics

at shares by Blood last divested was cervical sales were remains of and were outside Screening Cytology in than States, our business Cytology the to challenged high our although the year. million longer small cancer million revenue testing cytology decreased quarter, to flat. a on growth sales Moving intervals. to United perinatal Diagnostics the perinatal and increased slightly this sales in $XX.X related United due in the $XXX.X increase In all third Elsewhere higher XX.X% market States market while X.X%. expected compared

a with agreements and under Grifols. revenue have low-margin products transition this reminder, As we mainly reflects services

the fourth $XX further total our million million decline We revenue fiscal in year. Screening for about expect will XXXX Blood about $XX quarter to and

let Surgical mention me transition GYN our discuss leadership Diagnostics. we Before in

know you As in another a CEO at June. accepted West Tom probably position company

even Kevin Thornal of our him are as Tom Diagnostics excited more and happy division. for President that succeeded We has

years well guided businesses, have The a Diagnostics fit leadership progress business Cynosure believe record led made of will with of division our we development. few difficult many track our today already already he so leadership turnaround He know, accelerate is Health and Kevin the will process. we well and performing you fresh strengthening through Kevin's ago great especially strong in team. European As a a Breast has stabilization

increased be are increased way products that And System Fluent and to XXXX. under of by bottomed leadership development strengthening Fluid we we MyoSure Thanks on are sales let's Hysteroscope. Surgical where business products efforts million eight and gears this Omni excited Now have sales cadence on cover GYN steady introducing a a force. quarter of X.X%, internal healthy both grower since quarters. $XXX.X fastest based foundation our and our Management growth licensing. a new first the related continues built as to the on the continues in more improvement in new such and in This shift new of our

X.X%. Now sales let's consecutive decline turn for improvement declined to of XX% second $XX quarter. we the of of Aesthetics revenue this and signs Despite saw about additional consolidated Medical where million represented

sales of who as single-digit grew at and of replaced leadership the its stabilized under growth Anderson quarters President force sales declines. OUS U.S. Kevin division. Our of consecutive Eric the of four posted now sequential low consecutive after a third And rate quarter has

So believe have we way our long footing. we still find we a are to go Cynosure, at to beginning

To based briefly, round density of out skeletal discussion and growth solid revenue bone on of systems million grew testing. sales for X.X% our $XX.X composition DXA body the

to Building for out new revitalized products Diagnostics, quarter States good of brands results especially consecutive acquisitions quarter and effectively while Breast up, more. pipelines in United market we So third are from integrating the represent expanding looking tuck-in our our R&D Health leading wrap and our fifth our churning performance. on in internationally,

Overall more opportunities which future. us, we in know of many us we gives but are ahead confidence well, have executing our that still

to turn me call let Karleen. Now the over

Karleen Oberton

on third through Steve, then In the Thank afternoon, a walk finish income to guidance results financial good statement, key basis my fourth the with in quarter today, my touch year-over-year on financial as quarter. other constant I'm a our metrics and percentage noted otherwise focus XXXX everyone. and you, rest non-GAAP well updated on changes of our remarks few remarks will going be will as for currency. Unless

million described, in operating third businesses improved, Health Both $X.XX net guidance. as Molecular with our strong quarter of benefited We Breast $XXX.X margins as division. improved from are results Steve revenue performance we recent by exceeded Diagnostics, pleased Surgical results our and reversing As EPS of trends. largest our and our well and as

our with stock. acquire priorities by million accordance by of SuperSonic agreeing also to repurchasing $XX strategic We in deployed capital and

despite been has performance foreign overall upward through guidance the of incremental three are and an our as a Our result, headwind. fiscal very solid quarters exchange we year tweaking financial

trade third especially XX.X% XXX that mix strong the margins year me prior With Gross China, points let due product related dollar, service to the tariffs basis our was by primarily to introduction, This to for period. P&L of reviewing performance decreased in compared the U.S. increased and Cynosure's start costs. quarter. sales

we points improve Compared to headwind of one-time XX the gross mentioned the by of FX got however, headwinds basis the about quarter margins quarter worse. last second as but XXXX, did some sequentially dissipated,

product ramp we the mix, of ahead, to product absorption quarter and efforts. the cost sales due improved ongoing Looking new reduction margins our benefits, fourth in better expect

X.X% Total Moving the on. expenses in quarter. of million decreased third operating $XXX.X

However, internal innovation pipeline reflecting G&A. has especially But excluding Faxitron -- is discipline than as and more remain fully in strong Focal, we operating to funding said expenses Steve declined discipline and been X.X%, never our today. R&D productive committed expense it

strong the increased Based and first XX of top-line since operating also points our on sequentially to improvements in XX.X% quarter. level in by basis third operating discipline, the XXXX. the Operating margin improved best quarter of margin

net the our quarter, from outweighed currency hedges as benefits third than interest XX.X% expenses $XX.X a in totaled year million Other expense. higher less ago

similar the expect Given hedge the gains dollar, U.S. quarter. fourth in strengthening we

eliminating theoretically Our if currency reset as constant. any currency gains hedges will stay move into XXXX, we

XX our increased to the XXXX. quarter since basis compared result first of Finally, year XX.X% net best prior points period, the of margin

and to better we had slightly margins lower addition effective also lower other tax expenses, operating In rate. a

All net our of million net of very remains $X.XX, which in and quarter per third led share guidance. profitability $XXX.X income Overall non-GAAP healthy. to earnings non-GAAP our exceeded the this

repurchased few on shares quarter, a financial EPS. In third for stock $XX shares we of Now million, helping our metrics. million other our boosting X.X I'll quickly reduce touch and outstanding the

include quarter buyback capital. have we more investment million on authorization. work, shares to remaining little flows XX.X the used doesn't of money. been than that strong was of great convertible million a had As $XXX Since our our retire more we $XXX of back for than cash buying put XXXX debt cash has we to use even million, our in the This stock which a and end,

recognizing leverage our stood timing times As at we which the cleaned on of level, remain the buyback end fluctuate activity. We of lowered and overall also this could ratio third X.X up our the balance around comfortable quarter. sheet, we the acquisitions ratio, that based at

flow Finally, quarter. third the we in generated $XXX million of free cash

us enables Our tuck-in share strongest acting cash also acquisitions, our on flow to pursue while repurchase authorization. simultaneously

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

our revenue Based As of are does third raising quarter we impact slightly updated low our not our of end acquisition forecast. and pending of a good our on currency include the reminder, SuperSonic our guidance results, guidance the Imagine. EPS increasing constant

Let's start with revenue.

X.X% from increasing billion, which sales constant our of to our approximately we of $X.XXX $XX results, to billion are As and on previously divested million quarter currency a to screening blood revenue reminder, growth guided third represented to $X.XXX business. $X.XXX guidance between of $X.XXX X.X%. Based our includes revenue we billion billion, which

forecast exchange Based much initial our better of called currency X.X%. on recent our to X.X% last for of revenue rates, growth translates This growth into to is guidance, constant guidance our and than XXXX than X.X%. X.X% which better new

modeling you For materially remind year. dollar U.S. strengthened purposes, me fiscal let prior has to that our compared

fiscal $XX recent our rates, reduce that million on based roughly of guidance. will to estimate in an by incremental million headwind revenue previous more fact, $X In This exchange relative XXXX. than currency reported we fluctuations is

confident and in Despite about businesses our growth to control feel this, expenses. core our ability we

a We we guidance our As growth. year, result, EPS of better made of represents to for X.X% net is guidance, $X.XX X.X%. low which as $X.XX for have expect raising EPS which a even EPS now reinvestments we our are reported to worsening the effect absorbed the growth end This and $X.XX between and was of headwind $X.XX, than XXXX initial future of the slightly. currency

million the $XXX effective reflects XX%. updated year in million in approximately revenue quarter this of only to prior guidance based shares rate tax shares year Compared fiscal this remaining quarter. of a fourth period the about full outstanding an implies one of year, With diluted annual and X.X% million our on growth is XXX to This on basis. $XXX X.X% constant to guidance currency of

On reflects of to a growth guidance basis, revenue reported our X.X% X.X%.

implies the quarter, revenue fourth and growth expenses. of On we higher is the expect XX.X%. $X.XX this on very based in just line, of the quarterly the in Obviously, year growth earlier of $X.XX between timing than strong XX.X% which EPS to bottom and EPS

our is blood don't the period, the the As impact. fourth occurred a of weaker reminder, finally, this revenue Independence although holiday, than day so expect seasonally significant Aesthetics expect Also a over XXXX one months. selling year mentioned we prior screening level. has fewer that revenue Day as in recall the And decline always Medical we from summer Steve to third quarter quarter

our rates exchange and encourage middle upsides forecasts have as we incorporate As the you we of as foreign recent model ranges, at tried ranges potential as your set update to to downsides. realistic well guidance that you

call the Breast are future the franchises These our drive and saying for the performance well in of XXXX by our quarter solid conclude along growth place. have businesses we driving strategies and let strengthening. Before we Diagnostics with we the Surgical growth positioned questions, pleased Molecular third in international open with me that Health given with are to

strong operating quarter margin continue are revenue our improved and to we we work annual this put and slightly. and cash all our to acquisitions on in Based the repurchases. tuck-in raising EPS through and share flows Both guidance net

With call a questions questions. Please then question. operator to for are return one that, the the ready ask the limit related we queue. your to open follow-up, will Operator, plus I and to the first for

Operator

Vijay All Kumar right. from first We'll ahead. take our Please Evercore go from question ISI.

Vijay Kumar

two here. what was Breast Congratulations with just really quarter guys. seems Steve. right? really environment one quick And Steve. be Hey, to ones, This strong. start – I'll CapEx nice on on the just I'm drove this. Maybe strong. Congratulations, on a maybe Health, curious

seeing regulation you FDA on also how And is was or strong Breast uplift up dense had that the on on CapEx breasts. the Health more book order of comment environment side? shaping seeing, there? could some the you Are from this some you So maybe you're

Steve MacMillan

Sure, Vijay.

– think looks I the capital pretty good right in capital certainly hospitals spending now.

to I We gearing on about number we that what are think breast density with feel the to do can, else as put customers good up an continue the that certainly it's hard to they're purchases. conversations exact to have that. nobody but able XD, is, make legislation

a are plays And dense more dense an clearly it only driving breasts has FDA as disclosing And – towards for just more there's the indication XD breasts. we legislation as advantage. reminder density, and our for people, breast to approved that

we're of and edge feel certainly So we leading technology the I like there. think winning been we've on the

So to better, at is be comes and the say it's market. us. good that orders selling piece and to really place value best continuing trends, for get to To the ahead, we just our second but I would in far don't get your the order better with continue good team the a overall proposition too product look on

Karleen Oberton

portfolio would of as activity I beyond think of capability our And that products come as our Yes. just continuing building I the add revenue. selling in gantry are the environment, teams and capital service the in to up kind continuing growth well

Vijay Kumar

Just Steve. to onto add that

elements If on growth you you. turn Are lay now you're laggards being piece claim Thank in some better. see deals we Aesthetics where good And annualize It will corner. layering tuck-in to the place all this at the the that of up, and can has asset? Hologic done GYN execution gotten mid-single year. was a to a which different next you've

Steve MacMillan

Sure, Vijay.

inherited five Breast right really good. Pete first old him. feel reminding to a too to He's of Health strategic or we I traditional are growth us been we think it curve business want consider showed in now. it want the really ahead Obviously, have been not exactly of that days running – are. XXXX, Valenti our you on get years for we he's we XXXX. be a far When I business to where and get plan – careful with would ourselves decelerating, declining the

numbers the We board. want keep putting to just on

I chase I we where think to to and candidly, a few we of are. some trying trying ourselves a we numbers little got ago, were years think ahead proclaim

numbers of think we'll strong to keep getting the I we speaking fit themselves, for at markets, and the and back there. let show day, think the execution I our in where end

So thank you.

Vijay Kumar

Thanks, guys.

Operator

from Schenkel now [Operator question go ahead. Instructions] Please Doug our next from Cowen. We'll take

Chris Lin

health more Doug has just virology a Hey, molecular customers This today. Panther remarks for of are mentioned afternoon. Thanks good you that it Panther? growth. diagnostics Steve questions. your and Could in for been taking elaborate and driver you assays my Specifically, Chris is on that on customers a consolidating onto bit assays prepared consolidating comment? are that onto women's

Steve MacMillan

bits it's our of – expand primarily, continuing Sure. What just It's assays. growing to women's both. health

United a wonderful States. As we stuff of women's probably XX truthfully, as FDA health of the And more still expanded kicking-in. health our women's and about we the mentioned, I'd virology some quarter. certainly to say of assays Panthers bit is straight quarters keeps think giving got more clearances little the it's But getting in yeah, way every line think sort this it's the the degree I that and to gift

Panthers revenue. We labs. have in Panther quarter is each more keep And we more every placing generally the that doing

So a virals, it's of And coming installed where got what's of an – more some plus build. have almost in its X.X% you menu And shares strong market really United – force just more then sort of nine and through. already. of we driving growth the that's to the health base women's a States, continuing more and multiplier here of combination

Karleen Oberton

see our the the on more that the leverage proposition ability the Panther, menu, customers to of talked I it's Steve our as – that is add we And what for I the a about And add Panther. seeing out Yeah. menu just to elements the think in value get the lot value said that he of would customers that's expand Panther. we're they what also

Chris Lin

to million can million. million just $X QX incremental beat about is only headwind. to I an by like $XX You $X year revenue you guidance full fiscal FX by guidance about And revenue go increased Okay. million, but Looks guidance? back $X

$X guidance million reduced year would that you to by this So million. $XX imply underlying full about

revenue you Thank bit the just us help you. So a more? bridge could guidance

Karleen Oberton

Yeah.

might I so it And look way. just at different little a

half we the to overall we're the are has FX. second incremental increased at year, our half If year you from midpoint the last of now. absorbing where second the of for our the guide, at while guidance It looked

think I how original extremely guide. revenue have again, So, indicated in We're raised half with high went of overall that would at quarter. year and quarter prior we've we guidance the QX the second QX pleased that the gave pleased fourth

Chris Lin

you. Thank Okay.

Operator

question We'll from Raj Denhoy take from now Please our Jefferies. next ahead. go

Unidentified Analyst

for Raj. Thanks. in Anthony

a little maybe Thanks. the the revenue just more little quick on just just deal maybe SuperS asset a a underlying XXXX? on growth a contribution have of follow-up I'll bit that and business and And profile couple into So profile maybe margin detail on fiscal on expected year Diagnostics. of bit that and the next as we move then

Steve MacMillan

we to to Sure $XX-ish looks into high we're deal, in too be double-digit a in and generally did going Anthony. Until close that think, getting But about revenue growing the million details. they it's what we low XXXX avoid at the in rate. far

that ultimately we'll as and we consolidate more close the once deal, So on little we give a information.

won't feel its it million it'll But at $XX-ish in plus don't at fully of as and -- our the quarter itself. talked as have We rate point. level, have good I first but thinking revenue the frankly about, technology we're about some probably really we highest think until drop growth about underlying we it closed

revenue big And most the of is right a now outside reminder United their as States.

hands bit chomping get revenue us to brings it there is their U.S. and nice sales it. a So our on force

we of an us. exciting a it'll So clear new be product double-digit think grower for

Unidentified Analyst

bit a little just front. the That's share Diagnostics. helpful. Maybe very on just on And

side. around you share sounds the out of consider there doing when anything So well competitors that be the just on a Molecular on certainly Europe U.S.? recent it whether But in in are launches volumes number

Steve MacMillan

Yes.

I grew way think share our about business molecular XX%. the think we international is

grew over business U.S. Our X%.

we're much than that without probably And with we'll ergo anybody. specific the think market up faster knowing shares. I I pretty growing think stack

Mike Watts

It's Anthony. Yes. Mike,

despite drive good think to those think team is a testing very underlying kind demand the guidelines in key to what with and drive high things. categories, the of job shares has those working and of I of our doing really done most I customers

shares pretty even are business already helped the the high. So us grow that's though

Unidentified Analyst

Thanks.

Mike Watts

Thanks Anthony.

Operator

question We'll JPMorgan. now Peterson the take from ahead. next Please from Tycho go

Tycho Peterson

you in thanks. I commented just GYN Hey, those break Steve you MyoSure? out. steady didn't NovaSure on progress and Surg you Can hear U.S. touch

Steve MacMillan

Tycho. Sure

stopped I think I the MyoSure we Invader continued to think strong giving and piece. be really

I overall it is be it. double-digit great business. love the think But I declining think level. the the little trajectory clearly that still MyoSure way is still bit to high NovaSure of singles a feeling probably was grower, about a We'd about in better. like

Mike Watts

new well And reminder between Hysteroscope. And we've is as a drive new and are system introduced Omni -- there new as called and to growth are fluid the as are some MyoSure management well. products our helping clearly clearly Fluent related those which those

Tycho Peterson

a then couple And on SSI, of things.

markets the got You then Clarius of gastroenterology And a Curious other obviously together? in you vascular, those system how used distribution. fit deal that lot had for cart-based areas. before their gets

about I'm So curious areas? about nonmammography-based of how you're thinking some of those kind

Steve MacMillan

Sure.

to the space. mammography in going clearly be is focus just Our

could the the clear that with with we will or technology, it's that but think opportunities partner area. breast our And in if compatible So focus whatever always there's be Viera. beyond I

bigger think cart-based degree drivers as So as portable of the to the a I we'll a is to now option cart-based option. here. well both have And revenue be a frankly, going large

learning haven't we've get space really a think I offering more more excited cart-based the and the had. chance about So and to been have Thanks that to we Tycho.

Tycho Peterson

thanks. Okay,

Operator

We'll Jack ahead. now go next from Barclays. take Please Meehan your question from

Jack Meehan

modeling. you. around one international go that Faxitron And Health America. to Latin the also back commentary the How and in segment, out? Focal to curious just Do from the break much you was Good quarter? the Thank was Want Breast afternoon. contribution

pressured? whether that that's stays color that more in bit the the you and little quarter resolved a guidance think Just going on assume do fourth fourth quarter? Does

Karleen Oberton

Karleen. it's Jack,

QX $XX the the contributed And million about almost think over well, XX%. they was business bit to I So this is had and movement see prior QX assumes Breast large international Focal we've down tenders that we the I QX again, general in think well of I period LatAm just we'd guided it in well as – be a quarter. we international That but improvement from will as, Health think in piece year-over-year. smallest obviously guidance revenue repeat When down of for year the some Faxitron from of indicated you didn't Health, just our think Breast that in of some did as while clearly orders And little business. year.

Jack Meehan

up at one Health. service I Q in on it quarter If that like And the about just follow-up looks X% the million Great. the from more revenue then $XXX year-over-year. was look the Breast

down. that So slowed

of Just just in call update out give there And to terms you the an just to anything curious you service some if and the maybe that. where think related of cycle. us are and in software was upgrades

Karleen Oberton

Yes.

I see. the is we on think growth So, in with I we think what -- line service expectation

think of new here the cycle as we I year lapse period we contract have until in revenue warranties place we nuances gantries, the go with have will and for the a re-up. service one they under a customers is

kind growth single-digit low that So is what of we expect.

Operator

question take Dan Please next from Deutsche Bank. We now our go Leonard ahead. from will

Dan Leonard

Karleen. what you. on Thank besides gross was so margin -- couple driver? for currency? any And A the Karleen, there foreign variance of the was in quarter downside if

Karleen Oberton

currency say mix would beyond tariffs, the I was Cynosure. the and in specifically foreign other and Yes. the

Cynosure gross those women's comp I'd last So rest products product health was of portfolio the call from had a year higher if the margin perspective profile you think what a than the of the which about QX height business.

and some I higher say driver was service mentioned that would So biggest costs. second we the obviously then

Dan Leonard

defend that. talk line they'll and that be year-on-year objective? going margin Could versus focus well the about margins variance I slightly looks only still to Okay. it been also you've you in mean, gross to opposed the downside down year-over-year. would previously XXXX address And able Is was than I more down have being on as specifically to forward? and that thought plan trying gross like

Karleen Oberton

Yes.

So, talked the of for quarter. one strengthening mentioned and what from I original coupled with about margin drivers margins, gross what I I which the U.S. that our think increasing we dollar impacted guide think had line biggest the is I've think last has

improved about as service I both also leads is and to in income a have to here despite operating our discipline we're what's the But results. have quarter improve. headwinds our So had at well drive margin expense on is think number do look last you onetime gross we our have when teams ability items, important facing equally still margin of continuing that costs focused that with higher but operating is what margin to net to strong some talked we which

Dan Leonard

you. Thank Okay.

Operator

Please from from next now go Piper Bill question We'll Jaffray. Quirk our ahead. take

Dan Macek-Alwell

within This going figure. that for It How on I your utilization? It on figure. terms comments about growing to like that sounds Thanks. is customers Bill. it's of utilization you forward thinking drive in like sounds Great. a appreciate Dan you're working with Panther well Thanks. are instruments.

Mike Watts

at our of formerly we update Dan, it's year. end the number fiscal that Mike. Yes, try to

being intuition per probably give that a I number. in is year-over-year won't utilization of been single-digit high mean the kind generally So specific we Panther right. I But range that's your you mean growing box.

some there's there. So good progress

Dan Macek-Alwell

high said double-digit outperforming. to know I And heading follow how growth one the it's Okay. been consistently another rate Molecular maybe you've you Great. are about up. into on guys fourth just quarter. then quarter longer That's digits, Thanks. pretty term? then, and the another single And but over that thinking then

So touch that. could on you if Thanks just you.

Steve MacMillan

Yes.

we lower else. and doing be we growth, singles better singles there. we and think end about of we're for probably to But long-term feel as plan bit well very a double-digit ready environment a high But the to try wouldn't think especially a it certainly with I like it helps. high that deliver competitive to continue call and little everything

Dan Macek-Alwell

Okay. Great. Thanks.

Steve MacMillan

Great. Thanks.

Operator

America now De Derik We'll Merrill question Bank our take you. next Bruin Thank Lynch. from from of

Ivy Ma

for Thank Ivy Hi, Ma for my today. question. taking you on this is Derik

SSI one I on have follow-up So on and have Cynosure. a

know that there? additional or targeting conservative be to to and to wanted any Thanks. color see I Understand guided more the is slight if next there's SSI just dilutive for for you breakeven year, so consideration So, year. EBITDA wanted

Steve MacMillan

net it us, we income, EBITDA. we When reported not bring into

So on breakeven a be -- basis. while on money losing they EBITDA may basis, the operating on an they're

in difference the that's And So there. our hands... obviously

Karleen Oberton

that I changed or strategically think of we've investments kind It's spend kind as different Yes. had. a don't pointed out of profitability habits just they metric. Steve

Mike Watts

think context I we you, -- said our there or very P&L. next be X% in manageable remind Ivy, think think that that's release think just dilutive year for of so. in to overall the the less the original was would expectation what I We than I press

Steve MacMillan

call. be year to position we next in for able probably we'll the in next a guidance when on that give And incorporate Yes. to

Ivy Ma

on and on the congrats Thanks. segment the Cynosure launch for for of contouring the thoughts the new And for the rest year for next outlook Any product updated recently. year?

Steve MacMillan

Karleen. ahead, Go

Karleen Oberton

happy create we products, -- that going they're drivers to force. excitement new although, I we're think just was the don't currently meaningful think be I as big with of growth launch say pleased that I some looked we're that, stabilization. going Really with the able sales to the to

the comp. expect much to on I division growth, we think exit but as weaker return year, we a to albeit the

So at right now. we're feel good where about

Ivy Ma

Great. Thank you.

Operator

Lewis go And I'll question Stanley. next from your David ahead. take Morgan from Please

Mason Austen

for HI. today. for I just This want the touch is Thanks Surgical. to question. Mason David on taking on

coming dynamics the moving I if just the you year. with competitor with and talk new market wondering you the NovaSure was segment Cerene. could the forward fiscal to next Thanks. how with competitive a in think have about You about

Steve MacMillan

Sure, Mason. Yes.

Cerene. the we're continue and we the about feel clinical package We've to think looked for direction generating. I that good the at results

a As you may there. and of questions lot going know, stuff there's business over of on company a around and that lot

So customers we our going. where on good feel just focusing we're our about keep innovation on and

Mason Austen

potentially much. into full the expect on back you this just be interventional and the referenced on wondering was you an I when you And potentially as constraints very a weighing update Thanks Thanks. supply. that could as quarter. if supply to provide break results out to Brevera to

Steve MacMillan

later think, year. fiscal -- full in XXXX into said, supply I going until not back probably small is or to we've our as fiscal next XXXX We're really scheme. the impact the on -- in level Yes. of into grand won't rather, of get fairly But end the we be

Mason Austen

much. very Thanks right. All

Steve MacMillan

Great.

Operator

Richard Leerink. take I'll next Newitter Please go your from question And SVB from ahead.

Jaime Morgan

Jaime is question. This Rich. quick for on A

break So any out Aesthetics. think I directional heard I you didn't within of on growth subsegment commentary the Medical

was provide between of could on sort commentary women's if the and any different skin, you So trends health. wondering body I

Steve MacMillan

breakouts tell little But, I'll to business. size down the overall, the providing of the letter of was that significantly the out. XX end when months was health FDA because nicely. year, the last almost over ago, se, Women's like day not the came given per the day, At we're you, skin up was

year doing time a line So we and last very down bit. at well this is women's the body health the were segment with

Jaime Morgan

you're U.S. there. Okay, great. within you saw And sequential saying then, that improvement some just the

curious. just So

launched You guys beginning initiatives marketing of were had mentioned the at some that last quarter.

of Just wondering initiatives. my talking strength if questions. is the some from that coming Thanks for those marketing of

Steve MacMillan

Yes.

we supplemented two organization, I There's got of of SculpSure. some campaign the great Shields leadership the really on a Cynosure, sales hit particularly combination lot where good great have think, on We we've long-term good, the company a on the most teams of of positives it's the spot the force And about it with been that. of a Brooke that coming seasoned really and before feel a lot from we veterans things. has are of sales the the frankly acquired veterans out ground. pre now,

over then really So in that'll it's the teams new bringing a next of kick marketing year. the and really in pipeline products of start combination on place and a focused to

Operator

Brennan from our take from go UBS. ahead. We will Dan last now question Please

Dan Brennan

Steve, ask Mike. I breast. on Thanks and the guess, first question Karleen Great. Thanks. to wanted I

strength contribution to the about how us about is just rate. that the little growth out each you there of or Genius newer of kind should of the segment you're can bit versus a runway through Just sustain on If and walk dimensions the gantries' kind type what of profile? those think this and seeing you don’t we mind, wondering

Steve MacMillan

Sure.

overall, think, the and by really bulk now. have the become of performance sale the far XDimensions XD I

banner. dimensions XDPerformance, slightly a is think high good days X,XXX and performance defeatured I more X,XXX, also providing new end products, the the both of XDimensions the to the with the us But Genius really still both go our So customers. end to both and end lower high the given way the largely old XD X,XXX opportunities Performance under slightly and on

Karleen Oberton

the I about of installed us would to us would per penetration since convert add as runway. about XD talked to from give placements X,XXX XD I'd to cadence X,XXX runaway own nice just And X,XXX gives gantry from perspective, our we've well and I to a think, say gantries XD, market more that overall steady base roughly XXXX year as

Dan Brennan

one. then And that. for just final one Thanks

Just on the front. M&A

just today. in color it Sounds like the going on stands you And to wondering Steve, like the remind your a terms see any lot. what's like tuck-ins kind maybe were to size? the Thanks are something pipeline just bigger us forward. of of focus But extent appetite as

Steve MacMillan

Dan. Sure

we're thinking, acquisition. not Probably given that about million a we're any a year. million on cash $XXX free in okay, than I think to we're not generally generating -- while stated policy, year $XXX more spending of thinking

disciplinary. I think it's a good of kind

anything not kind thinking. we're of that's it I And of in should be million deviated more policy B. think of certainly starts from, So never a frame a a think much kind to range formal couple the hundred a in I with hunting versus XXX, that but

So you. thank

Operator

Thank now the Fiscal a you. Quarter questions That Call. for now -- XXXX today. is all Earnings the Hologic's this concludes have Third good Have This time evening. we is

Hologic (HOLX) 31 Jul 192019 Q3 Earnings call transcript