HOLX - Earnings call transcript Q3 2020

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Operator

Good afternoon, and welcome to Hologic’s Third Quarter Fiscal 2020 Earnings Conference Call. My name is Cody and I’m your operator for today’s call. Today’s conference call 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. sir. ahead, go Please

Mike Watts

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

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

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

Finally, of August call be XXst. will a this replay archived through

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

non-GAAP these organic revenue. measures is of One

we Blood as Imagine currency as organic defining less the as revenue business. divested As revenue the reminder, Screening a businesses, are Cynosure SuperSonic and constant well acquired

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

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

Steve MacMillan

Thank and you, everyone. Mike, afternoon, good

results fiscal XXXX. our We’re of pleased to for the financial quarter third discuss

world even we’re rates, most our am ever we time, increased revenue long customers, Outperformance human are quarter. strengthening our this division. of last has of significant and on start the total demand so expectations very by more. than to of preserve and But, I tests There’s made officials from possible $X.XX. great the lives and in well proud regulators, the that we’ve in we a as also pleased unpredictable than uncertainty. purpose in the great regarding have our can X.X% thus that history address details, of cover a the about value a to last the the lot to decisions Panther challenging, still that with the ended painful excited organically, but Karleen with to far, to grew and but let’s and of with COVID positive beat who was contributions significantly a our human began envisioned. than seemed better to things uncertainty lived it saying elected completely COVID suppliers, the about system, facing change for XXXX. were talked driven at time. pressing and been pandemic, of or we’re of Hologic and unique impact strong, Hologic’s do COVID-XX purpose, making be the by years, of during In of To These per several fiscal very flow social and others more Indeed, couple just the inspired quickly businesses earnings the written my will We gratifying. pandemic. were very in quarter lot touched today. on the while of time do It unprecedented quicker-than-expected and share $XXX.X ultimately enable cash the results health. surgical career, night with people have our results start exhilarating more economic flow, very Never and team, most into XX%. results million Revenue day. everywhere, growth performance lives Our of months tumultuous, problem our to and health begin, best this third quarter is these more responsibility posted mission EPS our organic reflect before as of the human most time working corporate day ability every our our our healthier set the

COVID addition, late three to now our the in in quarter, exceeded rest the far cover In so COVID, surged of points the the X-K June. will provided via We’ll related Karleen results update we business. then testing highlight also the primary

the insights did helping are team when an assays, to they our First, and doctors needed. production deliver our labs where manufacturing in and diagnostic up ramp quarter amazing supply COVID chain job more of and

response Second, franchises for our COVID our international international over strengthening the enabling whole. is big short, Company And years fight difference make a the as benefits will in medium accelerate the have COVID of to our the going to diagnostic in further believe we forward. us which and turn a will long-term today, third, business

a Let’s quality an is for on tests manufacturing area exceeding demand That’s delivering of has earnings critical. even few standards. each rely unfortunate, invented of call. and highly our lot producing the with months to of is and decisions chain, the that of short are high-volume that attention core In is time critical meet In high-quality, precise high business. supply, get make products COVID start this case at COVID, test manufacturing exactingly typical a tests when weren’t performance that doesn’t to ago, unique because doctors we supply millions high-quality, on the and

a the done stories, know Although job you’d production from ramping unbelievable has whole media an never as industry the of COVID diagnostics up it capacity.

in million XX the This of May, and to recently As the as United as conduct July. performed testing than level than more times XX a COVID performed XX than March. in States. of number in tests tests been double are we tests is more total, more have the pace nation, on In about million

volumes, in this GX these countries this to fast. molecular perspective, more been combined. than XX% scaled has about Never a other For up is the test diagnostic before

than molecular diagnostic times common most the of today being test. In fact, testing done the amount about next COVID is seven greater

first soon and March, industry employees we as calls a overwhelmed be do are a were proud have with case, everywhere. runs PCR from customers In of, lot launched we we to and that on test assay its in COVID as Fusion, Hologic’s Panther striving our to more. Our

projects, closely activated we suppliers partners with three our So, around working key and immediately the world.

XX were we instruments. vast to tests began Panther Aptima manufacturing large and our technological capacity to these TMA redirect the produce for molecular First, installed a chains we human and proprietary capacity. assays developing HIV. on HPV In second base able quarter, produced infectious COVID to our leverage like our with assay COVID capacity, and our diagnostic this majority demand our a to diseases technologies of and chlamydia, of we merged Since comprising for products about COVID increase we COVID to assay. the and legacy production pandemic supply million Aptima tests for Pre-COVID, the reduced tests, run essence,

our would goal, the partner on $XXX to ago we XX us and months. shared tests lot, Second, May. an combination one-fourth in extra How Thanks including capacity six about team, essentially $XXX test Stratec that to working COVID our of Based our instruments. COVID proud Herculean that months the million at provided to sales the or on XX into a there? per out million to leading to quarter. production efforts did to United Tracking by enabled one-third second Based get more total able on manufacturing investment began exceeded fiscal we have starting were achieve the of brute we to increase set our Through roughly in force. we to third, customers, the we XX% ‘XX. molecular quarter to report X This to enabled move produce of We three ingenuity, XX expansion million. realize goal production estimate a double and quarter. average, in our results our by tests. from States earnings test of molecular during Panther This by ship XX-year delivered these diagnostics Project, to in to And the million as diagnostics COVID significantly with tests least revenue in million we or in million of to late roughly operations to double us week, call our actions, tests the a we more plan quarter, fall, this established our data production we’re third we almost about goal

that we ThinPrep Pap to of In used tubes, COVID our use constraint that of ingenuity, And testing. for reduces validated production additional us capacity we total ship specimen penetrable This of tests, terms underlying up kit one to our our and reagents, we loading collection helped one is of that validated discussed of transfer catch and with millions the use typically of the method a tests. caps, last quarter. a short-term new sample enabled

$XX investment, capital in COVID of through of we the to terms third In million spent currently expand spend production, that million quarter. $XX with about over expect to

used Some produce custom also new, caps. machinery of to penetrable install in high-speed investing new being are lines, is this filling we and to more

this As also being supported effort HHS DoD. announced and is this week, by

finance packaging over lines, terms XX% from San IS operations In on Diego. more hire force, like to in a the and areas of here, brute than Employees while at were new XX/X we producing our are employees trained XXX facility work increase. we

Overall, producing average, diagnostics our week, at above higher Kingdom, chain to COVID remaining expanded certain and able women’s our to increase of began end And plant if the accommodating quarter, on are per June. sequentially enable to our the constraints even COVID volumes provided tests at supply capabilities we in is at sales these QX more COVID actions United X.X over some fourth million have health through also least We do Manchester, on and capacity the very components. in work instrument the to while should tests. produce of strong tests potential which there

short-term, long-term response is will have whole. that medium the the benefits a Hologic point second for The as short, are In our and to obvious. diagnostic benefits COVID

the almost with XX annual end base outside XXX labs. Of TIGRIS. systems, research our growth placed access of of that United Panther we stood business our Panthers, razor-razor medium-term, strong years, shipped our women’s at and time. fully placed own full include quarter XX% are of enable by of States. in Panther we fiscal XX% and In made the the Stratec, a about our over the tests, This more X the several States, have rather other our these that virology an Over alone, this, Panther more year. blade XX from last the systems this COVID systems and assays. to business even third our testing placing turbo-charge quantitative even illustrate significant base those the estimate customers we of per now FDA-authorized XXX one will installed tests than average the that At and over number XXX by TIGRIS To older, expect record the XXX. several systems, And the These United quarter we increase than will place next workhorse replace corporate systems this of instruments June, recovers. on respiratory XXX more our expect are was new In refurbishing help Panthers doubling capacity will than over recent, will pull-through of expansion This on products, run-rate. globally mini-panels. before menu health possible at new more the than drive we our Panther, than year, our of dramatically that X,XXX Fusion quarters, overall model, we cleared production to

XX% to a or competitor, other begin testing. enabled customer new systems displaced The either of a

set and year-one their been Panther, collection. A with new customers with is measure COVID growth sample achieved the sales what we way to In drive tremendous as tracking targeting was revenue vaccines to even come live the already have here. or are adopt and associated system, of has to XXXX, when long securing we work revenue as customers as by even that specifically TOR have goes TOR seen excellent as interest revenue. Panther And system. a in nascent on they live couple a waiting more that some home record incentivize expect new we even and double customer multiple from on we focused again on we term, the and next for other opportunities contracted of call team love in One of motivated on will over well sales Tests is Record, pull-through, force, the know such tests the payout over as more are we TORs, and our COVID Based This TORs, customer same growth in and quarters. And Since over would go adoption have cleared XXXX, assay hopefully these our tests. play additional non-COVID drive dynamic internally, downstream by as our even out driving signed new them. commercialized. is a the

everyone established. Hologic to that it’s that While people may And development, important for indicate at be vaccine be vaccinated. to is many immunity and choose the duration successful rooting to strength still surveys not have of consumer note

these testing we co-exists B influenza. and will testing as COVID reasons, there such for long-term vaccines for as a For today global forecast a be also on hepatitis with basis, market just pathogens HPV,

in in difference franchises which fight want the businesses The that will years to over us international our is COVID third we point against going is forward. make our of today, turn strengthening big international enabling to reshape make the a the

little on give us you Let a that. more color

sales three infrastructure. invested low-double-digit last have molecular major growing been rates organically. businesses driver the we in international exceeding this leading have the and charge, methodically Underpinning this, leadership with growth Company, Within our been XX%. our CAGR commercial often with a growth, at years, growth Over diagnostics the base for a has

divested know Cynosure, on our enabled focus which they also businesses leaders to We the best.

worth this example, By before to about million. the secure about dozen in Verstreken that our XXXX, of our four we European the Panthers about region just base contract countries largest opportunities base, this XXX an of testing next By contracts doubled. is Jan joined the UK million quarter, in had For which $XXX COVID had Company. of president end Department of that a is with in over signed further. third the nearly revenue regional the grow has with our The however, number quarters, leveraging installed $XXX team Health, installed specifically,

going States. from quarter serve third like drive expanding the we more COVID majority COVID U.S., opportunity came other instruments shipped the third quarter alone, our is Panther revenues the robust will And of our in intense forward. United our assays, the customers global While capacity vast in States, production the capitalizing customers shares outside United to us enable XX market tests are which for the to almost teams In our the pull-through lab on globally. a of demand given lower commercial to

our the of COVID-XX highlighted me for early a to for future, appreciation strengthening testing, really of public the technology saying the people reimbursement call the that healthcare successful more making to will pandemic more and that the At conclude health of response becoming diagnostic There is stronger is diagnostics industry, diagnostics even our health and value of and to system. public over let also a based is our to the same domestically time, a our therefore is within absolutely influential quickly turning Before challenging within our diagnostics we through hope a the of In both needs. power detection, player is company by to no has and Hologic time. this Karleen, overseas. infrastructure, and this as This more the focus. our ability the effectively whole, the pandemic and respond division, and the organization importance much doubt the favorable on automation, lead that which hopefully core

to Now, Karleen. over we’ll call turn the

Karleen Oberton

guidance today, our few provide financial income walk remarks Thank and results, fourth key briefly overview reinstating everyone. and our for an the divisional financial statement, a of sales you, In I’m quarter. metrics, finish my on our afternoon, other good Steve, going by touch to through

X.X% as million sales We of $X.XX and business Organically, strong divestiture we cash. of in rest quarter as due quarter and XX%, a prudently diagnostic decisively start of COVID-XX the improved, the increasing the of me of weakness reduce of uncertainty, result to the preserve acted well assays the offset Profitability to expectations. we expenses X.X%, Let ahead pandemic. our third EPS by with third facing grew Revenue our our declined of unprecedented and Cynosure. entered results. $XXX.X summarizing

rest our the and hard our recovering the teams of expected. ingenuity However, better than two business assays, the and work our of value of COVID maximize helped is

generated As repay to precautionary which the borrowed a result, on a quarter, had enabled that measure. cash we in flow we strong million our revolver us $XXX as

stronger and Our liquidity sheet are balance ever. than

are very outstanding we these a division, introduction, all our quarter the increased for provide third XX.X% XXX.X%. an reasons, optimistic successful some For results. are where in revenue position quarter. that sales in Diagnostics, With divisional more on largest that driven we detail now molecular, by will fourth I our grew

the the our us need capacity the businesses of Outside decreased XX negatively improved went million as mentioned, division $XXX our unprecedented third health million. production was enabled base pandemic, COVID Steve generating quarter. customers, $XXX breast substantially response we revenue sales of the Global As on. with performed million ship our for in Breast increased revenue the COVID about to expectations. testing, and molecular tests XX.X%. but to in trends COVID-XX to testing, declined, of cytology by line health in quarter affected but This

million focused equipment, sales from purchases decreased in impacted of United States, $X.X by our responding SuperSonic Demand sales was routine as the negatively organically. on Imagine, or to and our for XX.X% capital many COVID-XX, delayed rescheduled reduced of pandemic, the products Excluding customers of appointments. screening especially

has as sales XX% than international less, $XX.X of declined were better declined XX.X%, begun anticipated. as the postponed. recover demand to Weekly rapidly overall decline. forecast decreased and the our quarter internal In business to procedures than revenue early in service elective However, million more sales much cushioning surgical, the close

lines. million of strong geography, sales terms tests reported the steady, in we X.X% domestic Overall, COVID and XX.X% our sales in and improvement product on offset U.S. the saw than of reported reported May reductions Cynosure impact substantial basis an organically. States, basis, so a other the as sales revenue X.X% a up more was $XXX.X of on across in XX.X%. Outside increased June. However, $XXX.X decreased divestiture of basis, of organic But on United million and more

U.S. than from many began to emerge know, earlier our you the did, countries results. COVID As pandemic helped the which

addition, international In expect assays future significant to our our be and we COVID-XX these contributors June, began to customers in growth. to shipping

of business. margin the tests the points, XXX the quarter. the Moving sales benefits basis were Gross Total lower-margin XX.X% of by the Cynosure mainly driven increased to third result COVID rest on in P&L for divestiture of of of of primarily operating million These pandemic. driven Cynosure. the divisions our divestiture the third partially offset X.X% expenses quarter, lower $XXX.X by other a of as sales decreased by in the and

quarter, by expenses were were expense, the higher with worst-case line accruals mainly significantly entering results. expectations compensation as increased incentive higher never for in planning was that This thankfully for However, driven when than our our we materialized. scenarios financial compensation

most In bad a expense associated normal breast a addition, notably in experienced we distributor in health quarter, in write-off than a higher America. Latin the with debt change

contribution Lastly, operating we future basis to this marketing made a some donor-advised on basis points programs highs. accelerated all margin fund, net Putting together, XXX spending growth. recent $XX margin XX.X%, million and points R&D increased to the XX%, bolster to Company’s XXX and both and charitable increased to

of of net expectations. per and this $XXX.X As to our non-GAAP of ahead led a share result, million, income non-GAAP $X.XX, well earnings

in we credit $XXX a was leverage operations end Before other from at flow quarter, At debt million flow, the X.X we our revolving XXXX Cash our this quarter, of financial third under very cash fourth and $XXX touch cash. on $XXX quickly of we guidance, ratio facility. on stood third had cover result. of Based the repaid strong our metrics. times, million million a I’ll quarter the few

divisions. to are we still-uncertain each of in tuck-in of conditions take believe advantage our well-positioned also acquisitions pursue We to market

growth goals deliver for changed, accelerate either to attractive an Our us have expand and business into channel continue we deals development look economic or returns, commercial helping adjacencies. leveraging near by not that existing

EBITDA X.X%. XX.X% $XXX And increase was on Finally, million increased of XX-month XX points. basis basis, ROIC an of adjusted a trailing

for for our open call expectations quarter we to fourth the like the XXXX. fiscal I Before questions, would of discuss

that pleased quarterly is wider guidance to to in pandemic, enabling While COVID-XX us we has remains provide quarter. are This environment business increased our to again, visibility ranges much uncertain compared usual. due the than last albeit

compared for to quarter $XXX the the increase This fourth the revenue divestiture of For total range of to of the period represents of constant currency to of in equates million. basis. million XXXX, to an the fiscal prior XX.X% XX.X% growth organic on revenue Cynosure, quarter. XX.X% year X.X% a to $X,XXX to expect Due we revenue

$X.XX On quarter This in and net we also the point I’d out bottom quarter. line, that implies the million other the revenue. increase XX.X% rates in XX.X%, like about growth we expect expect to EPS to significantly of to fourth to outpacing between of expenses $X.XX $XX the is year. don’t fourth approximately forecast from certain third XX.XX%, that related guidance and rebounding gains tax rate XXX on a resulted quarter, to This of investments full outstanding shares in markets million we full-year as diluted based the equity of for quarter. fourth

Now, that our of let’s demand to In we exceed COVID the to supply assays quarter divisional in fourth two our fiscal diagnostics, for expect will turn briefly XXXX. continue expectations.

As our diagnostics Revenue level. In partially a double perform or COVID to manufacturing breast year to reflecting compared domestically. third forecast prior capital us sales, pursuing cushion such And we we’ve revenue that service overall, better the quarter years. to period. decline the sales continue than that to recurring been for Steve should the should in United health, the several steeper as more to capacity efforts skeletal States outside increase said, compared and could revenue strategy increase should diversification enable

believe more We continue that from other divisions. will COVID our to pressures recover Breast than Health slowly

surgical, based In quarter while still quarter, and products demand. decline finances better continue need will for hospital of the should pent-up both clinical XX% and believe addressing shore Skeletal third range than will of up the by we Breast our that our desire or fourth the forecast So, we to their to in results Health revenue on the be more. revenue improve, customers

quarter and to we elective again. geographic pace period. expect year to regions suspend recovery, the surgical Overall, the fourth to spike are some the if COVID in remains prior this customers sales there cases procedures down around continue in of uncertainty to forced However, XX% be around compared specific especially

much As ranges, guidance you macro you middle ranges, these and you we’re why higher incorporate both of update and the dealing with. all that would at normal which encourage to remains potential we than due your forecasts, providing uncertainty virus wide let we’re upsides the to me downsides. model remind That’s

we Before and let performance for saying open remains call financial the questions, by financial the in quarter Hologic’s excellent, that rock-solid. me third was our conclude condition

to financial As describe I the it’s improved look back, situation how much hard quarter. our over the course of

an developed that to For barrier can COVID about way this down we operations an thank chain R&D new a increased supply production. and that tests, team quickly and found every to team knock just

first by said, it’s well especially I in third quarter. our we quarter. will ask fourth are Please for for queue. operator limit get to we ready better Operator, What’s to open then the doing in As did the the follow-up, expect that, that this gratifying the to With even call questions. a to good return more, related the one your question. Steve performance questions plus we

Operator

go Instructions] Thank first Please take [Operator you. ahead. Citi. question our Donnelly with Patrick from We’ll

Patrick Donnelly

Steve, start. sure guys. to where not Thanks, I’m Great.

impressive You got numbers. through a ton of

So, that. congratulations on

Steve MacMillan

team It’s Thanks. effort.

Patrick Donnelly

of But, I ahead, views testing the durability certainly talk like things bullish pretty times. I can sounds quickly looking change your that. certainly it setup can kind absolutely. is ran called these mean, But, are guys the mean, into on out kind XXXX? you How Yes, of it ‘XX? I on appreciate I obviously know, maybe in you some through you’re gave International, on focus only seems demand you fiscal into there. nicely. capacity increasing U.S. have but color you of maybe thinking opportunity, you recently. like we about good the the

to reason head Any have and better XQ from accelerate guys though on think, you numbers visibility those gave talked As talk next into today? than setup XQ. XQ don’t certainly side just Maybe we we the XQ year? have You the the testing there continue to with as June. things looks about,

Steve MacMillan

we And it. but you it March was way And the well fall looked when it Sure. around Patrick, the made in to forecasting, not. capacity here’s it, we again, long double the know, to people really as was about decision range put our at think first which hard by

Now, here’s simple the reality.

cold season. going to a into going and flu We’re be

to I is U.S., take Even up or COVID. that think only season the the the every everybody basis, going single And a fundamental still reality end vaccine getting unknowns. it’s have many to There’s tested it’s there’s also September vaccines, it’s so say coughs let’s even are for the going world. globally. not talk and else. vaccinated. people still going down comes, on person through next And traveling particularly everything we’re not months be going that to global of get and that stay from the to shut sneezes all a world we And this so at and And vaccinate to people there’s thing. getting after long can not home the just

know exactly can’t get needs everybody key right, to Testing But to I Again, help to all this. back quantify see the really look you universities, area we work. what, magnitude. at mean, think I the comfortable. is the So, get people

a prevalence or least and that, we of that another bare at as for so for announced minimum just ongoing be something probably least at really this going see beyond there’s testing screening a trail two. think And vaccine season. I vaccine, at see going they to Pfizer we else population continuing to it even voracious relates year thing the think, market believe I next well for a this I is or mean, an years. So, through

thought than not, base more well. persistent if necessarily lot think at said a a we there. that, be Having durability we there going see But, people really I we our got more businesses where fundamentally, to of far lot think as So, it’s the this beginning. is thing

Patrick Donnelly

how money maybe plugging tailwinds just big lot the then, numbers through like the just that talk international again of And the guys expectations well. other cash as testing, are you you on call bit capacity And flow orders helpful. and those just capitalizing given can expansion. there? COVID are And near-term for are? investing margin is Obviously, massive into on on to Anything a you initiatives, areas these et out marketing profile growth the cetera? quickly That’s on a side, lower

Karleen Oberton

Yes.

Karleen. is this So,

a So, couple of things.

So, for products. on yes, sure, yes, U.S. we’ve are investing the also accelerate And at capacity seen but a this in point in to future little your those our lower be what we certainly, U.S., will the on in ASPs R&D, outside than of point

Operator

take Cowen. We’ll from our next with now ahead. Lin question Chris Go

Chris Lin

Could in stated these to prepared has over Steve, capacity that increased can manufacturing manufacturing through how chain if per X.X million overcome able if would the of you you remarks, understand And are your are? constraints? your what even you increase supply work constraints some you them, week? Hologic us just much more, help

Steve MacMillan

Sure, through lot go itself. the on A The chain. used get even Panther themselves things constraints Chris. supply really that it’s of

our to don’t is that. like there other and about vendors, the Things else they’re supply you’ve acknowledgment some shortages kits buy pipette things ability even -- but that everything good, produce we we seen So, control directly. the them don’t test out that tip and they to

But, about guidance, ingredients. high little if clearly to beyond we the it’s probably some with we’re little bit too the end of we there’s a working of ancillary good our guidance sell. of We have. a So, crack And upside these even things. early feel the really manufacturers can think of

Karleen Oberton

we business Yes. think I well. if back we’re capacity, diagnostics that add would base as our increasing And just about come seeing and

on products. it’s to two be going balancing a the So, challenge

Chris Lin

ahead, XXX of QX. that that eight your sequentially systems shipment fiscal Got I it. just Stratec Panther declined could Is And your research from the give bit backlog? provide us can constraints follow-up, total forecast detail of Panther you it you the depleting in QX decline? just a you If on of placements sense lab then, in function systems? and a instrument implies in XXXX my Thank more manufacturing looking you. this placements for right, refurbished this is placed And a believe

Steve MacMillan

were they will your we we XX Chris, point, Sure. a shipped those little To ones. about said bit be refurbished lower. that of

our So, We’d of the they’re inventory a quarter. one buildings every into had We’ve coming that have. all literally bit gone. of out also didn’t little taken we

as shipped we’ve you last we shipped So, -- one. imagine, can every

customers in various came everything House Hologic, there next or else White X-XXX down So, drained whatever had us? day, were what was for time, can press I more in and As the there do joked we a promising conference inventory. that volume, back every you it’s we they

We’re But bit a we much certainly a sets building got it so sequential this progress at quarter we about will be the decline. already -- now well. up double but made of us that rate, a that

Operator

We’ll hear Morgan. Peterson Tycho JP with next from

Tycho Peterson

there’s installed for Steve, thoughts And cancer Panther a what talk any a lot just about will the about on thanks. base? pooling have syndromic then, to you think Can been little bit flu panel legacy utilization? test pooling samples. to a of talk on do larger you Hey,

Steve MacMillan

customers Sure. as Tycho, trying a with come so in we’re space, help you the as leader to well our know, FDA, and to to close this solutions. up

diagnostic a like We would ton environment an with our closely particularly come capacity, it a be with back. at be we that screening, increase there I trying else frankly a pooling, lot certainly working may in claims a think, less some that More FDA player are and more there’s get to the be that of to customers think relates and I that space. the and now still fall testing everybody as overall look help. and more universities And may that in with where right think it’s to on where help we’ll think going to it to people tested.

a we blood place will pooling and So, back there days. very our it’s going something screening think we’re become familiar to with for really

our imagine, you combo can for this as again, at as space, So, in well. it fall products combo to looking relates presence the we’re a given

continue government be think there when fronts. this year to relieved is be flu, somebody that gets to still versus going hear from bigger concern. we say -- to primary in need. be to COVID COVID it, they’re we’ll I We going to frankly all the But, be hate but is a customers going

Tycho Peterson

to bit the then, year-end? XXXX some you can in about may the about come Is that a recovery? more more think health just And the back. uptick start event, fourth women’s see you talk fiscal beyond you the could quarter? for or How follow-up, little Mammography a of that

Steve MacMillan

Yes.

not was women’s of think got we’re of chunk about We rescheduled. that I catch businesses and certainly of delayed significant of people a health kind yet, surgical think, and sure our part we’ve Julyish both strengthening, diagnostics. what a up, totally June, that seen and

out. additional this That there. So Karleen time. disposable we’re more you be as quarter much probably But, still said the be progress over any hotspots here good current will really, still sure But, that diversification that. in probably down what to somewhat particularly think the But, about real exactly our seeing that, have strengthen as feel continuing slower else. pretty climb business, yet positive business And obviously and and that the not said, be, I to we’re the well. everything the overall, have and in in as trajectory to going forecasting, we’re service some recurring having we business, Health is so and Breast that signs and revenue we

Operator

Wells Our next question with Leonard comes Fargo. from Dan

Dan Leonard

of surprise. questions surprise, couple COVID, A on

you opportunity So, capture first talked that? in Steve, with to the Panthers term. intent months? other mechanics mothball of your longer contractual, Is confident XX to you elaborate COVID how and test test acquiring the off, use you Can volume are aren’t about to that that on customers the

Steve MacMillan

couple I think a of things.

very hate health away, Panthers and but say women’s fill clear clearly will and confident really tests, our goes both U.S. as with into a Internationally, there, we’re assays. link we there’s to contractually of and we very We’re it, them to -- volume the COVID are the providing it many that linkage you internationally. COVID

board. customers So, be are there’s to coming a on lot of going new that

they showing constantly Kevin use hearing the And Thornal why of more got is. your And our fundamental screaming techs is number people couple in -- labs but a lab up loves of about was as by call Panther all Panther. it’s see clearly we’re press at Everybody want Hologic, other the haven’t you see use we reality conferences, the The showing in marketplace. to the that it. and Panther, we more everywhere, that the been up a I we’ve the governors I state, great you definition, are touring keep just how what, know out say, and

experience And people experienced and and so, seeing there, love it, more they just we’re I even getting that it. more think on

Dan Leonard

Okay. latter group, customers wins customers, you you opportunities. the for But, molecular and look about new could diagnostics. look you what to these to nascent talked competitive on are think, where diagnostic Panthers new some molecular follow-up, what demographic And hinted does That in at customer like? elaborate between then, like? TIGRIS I some my really going automated automated the this new

Steve MacMillan

had out, use patient send real in, of our And have Panther. were -- we send LetsGetChecked, back sample, nascent they’re as customer that came it our lot is locally a they company a just referenced, a base one on in to them. and our it it doing it while then opportunity. where and There’s direct in several people they they called they’re which certainly even COVID with We’ve known used people, it’s actually a products, running

are be those examples think, of that we’ll I one breaking out. So,

Operator

We’ll next Weinstein take question William Brian Blair. our next from with

Brian Weinstein

Steve, that was door guys slam just a did. that quite you

congrats So, on that.

Steve MacMillan

you. Thank

Our Panthers born to run. were

Brian Weinstein

But, were. part, bad they not nice Yes, I appreciate that. your job. on

there. we million that’s about here and week X.X that per think demand As the all

able this between supply increase have are this OUS -- OUS, in some U.S., need and details meet to you mentioned those Do at how on supply U.S. to those capacity OUS gave signed? be mentioned agreements? you allocating the the U.S. to sort the And and to you order you that You point? of guys agreements

Steve MacMillan

we’ve do know to only committed what we We Yes. -- we can make.

facility in quarters million that, the next we and beyond this where, continues our got now late more also, test. What’s and in we can up out just both is on Again, to abroad. it’s manufacturing be that’s business, full frankly, know running internationally just number having over for So, cranking and -- really June production Diego that great UK, referenced COVID Europe. included it’s in our them not is San Manchester, our plans. four the If we facility there expand that diagnostics but domestically them not XXX because is we

Brian Weinstein

or kind I get or be a that flu not? and you’re then, press be about and flu of combo to if just the a of sort here, of question true going COVID to of on of the market you separate pursuing sort bit if confirm, approved by being in on the on I to way doing two be just And the could that tests or that Panther, test committing test previous kind by a you season market would just combo flu, Okay. a you’re would how idea if thought before if test. running that from then thinking to COVID have you flu were kind would proceeding the the sure the and of little of wasn’t

Mike Watts

Springsteen Hey, reference, Brian, sorry. the that it’s I without going take think, Mike. to I’m one

have fusion -- a as couple to do the know. as a just So, today, our plus multiple we instrument One, flu as just COVID reminder, of things. ability on you

to it’ll flu side season. going speculate be important part goal impossible Obviously fall And COVID. when on are have will to So, to available. with going But that’ll that’s that the be Panther to the armamentarium. we certainly, test; is on a the an of predict. developing that’s it second run I’m for flu the not combine available

Operator

Research. question We’ll from with take Jack you. Nephron our next Meehan Thank

Jack Meehan

I’ll improve, but expect to routine the to the was comment Panther systems you continue sustains. just if testing as curious could I you. diagnostic start customers you afternoon. on Good on use Thank their theme. COVID volumes the how

hear Sorry, me? can you

Steve MacMillan

Yes.

Jack Meehan

Sorry. I the thought hear Yes. I in something could background.

how As Just customers do And you existing testing volumes is routine the expect? expect testing you there COVID systems? of the come sustains, cannibalization that use Panther the any the back?

Steve MacMillan

that all of other way, women’s having COVID the not access simultaneously, test bash, the to so health as stuff the down. can slow not stuff It’s test, magic, easy Panther. to the the you to be part with to by able know, having random It’s do the run

health. customers Company we’ve on, this both. we are core we obviously, our women’s business short that So, using it are built really for going is seeing not key And change our which to

the big well continuing customers to well are of on part we that plus both know. adding it’s volume. see health COVID of to magic But, able in within we’re you as numbers business, the all being the do providing So, I women’s additional -- part system, use and it’s our again think of our the

Karleen Oberton

COVID we on think I was add that, Panther about a just utilized. And prior talked average, would XX% had I Jack, only that to

additional So, that installed add capacity testing. base already was there within to

Jack Meehan

Steve, at all. at if hospital and it diagnostic do I M&A the around the that on with you early positioning focus on then, way? going Historically, I have further COVID-XX, your think And philosophy changes wondering labs. you Great. sense makes don’t given point-of-care everything But, regional space looked as push in if was your with in the to it closely guys think detection

Steve MacMillan

this accelerating Having surgical the little probably some Jack, as there’s is up. a as acquire. -- in to also looking us strategy, And valuations right we’re think I would said we created diagnostics, great to of that, probably we or lofty bit us of teeing some there space well some put both, see think within continuing bolt-on a that and things of you’ll with question. diagnostics have think position good that going clearly now. are been our

the now doing him in more and Thornal division here. of And bolt-on think amazing I also Kevin diagnostics and running here does business leadership So, a frankly, brings in more I several can development as running don’t you business patient years business an development this give job know, mindset. be we’re anything, do on a He tell deeper also there’s work activity it certainly of his to but flexibility. this to that. for willing in you, need with And Kevin Stryker many out having having going us business, days, his lot

Operator

question Petrone next from We’ll take our Anthony with Jefferies.

Anthony Petrone

a had I of couple Steve threw some numbers and the you on here just of math Karleen. out questions

think a that last, earlier, quarter another guess how quarters would then, but just is do for looking loaded for if we’re baked a about for And XQ. that minimum, how to I it over the evenly the strikes I Is the next coming when goes there back we in to next into in up of referenced quarter good at the you fourth million much just is a your quarter. that us as And then, Steve, point until next for just way XXX of four Should driver production capacity, it And that XXX baked Europe, Q? that it expect there, with we school? a just is next being million And at big get XQ? first so, much starting you thing XX days? into we fiscal guess, be, referenced for

Steve MacMillan

called million, which that’s international is but the Pac as set Certainly, as starting primarily just number, there. it’s well Europe, the an XXX let me straight Europe, Asia on record

about think contracts level next good I that over the the think, is laying are way that is out. the loaded a quarters fairly to way kind of four

period. clearly for we’re -- school, to we’ve back and to to get relates building this more production it ramp September-October As been trying more and to

So, September what’s seeing think we’re into expecting that I clearly baked and And that’s timeframe. guidance. this in our continued growth

Operator

We’ll here next Dan with UBS. from Brennan

Dan Brennan

think how And get U.S. if provide could the OUS testing U.S. to well the it’s somewhere hard think now. I you’re I’d know U.S. kind is COVID the the planning of do business? I guess, by as to that Steve, mentioned So, you and through is. your you testing COVID because us between a think, your what interested be low-XXs thinking goes could maybe what number help split how Any you you goes? in fall? you’re know where I of sense right testing, Where about sense, in we’re for market the

Steve MacMillan

four keeps quarters, Well, that Yes. in by of, we’ve over next terms if as be international XXX X Obviously, the of range you of a U.S. the going there’ll you to take be. more outside obviously, component you what million number well. it given effectively still it in will divide the it the and hopefully,

a to we part do late they April, -- were But, geez, XXX,XXX this I -- in to of day think exactly being market’s remember early were May, that AdvaMed has call capacity hard an know going. when it’s I and maybe So, the it country saying the tests was where maximum.

we’ve and your June. now we again, the But is in as I we’re in whole on every us not think XXish July XXX,XXX that that in April, day. be we’re probably, -- way a as XX obviously gone States XX very I goes X went day timeframe. May, in XX think, million -- puts surprised to a if we’ve over number love I XXX,XXX that I’d XXX,XXX day, it the and probably X September season. of We’re pace be and at -- in it being report million hit the to to persistent million. through in cold timeframe, United tests that It flu a in million million going about September

Dan Brennan

vaccine. one And on more you then, maybe Great. for that. Thank just

of real and that have how and the of look But, think is of see kind gave on strength about talked color to what your vaccine persistent we have it wait of a market stuff when does like. upfront the about in kind testing, persistence some consumer the even some You you and efficacy think I we’ll a the -- -- ‘XX. in you survey sense

So, you and too about HPV influenza. economic there But, given talked could rate, caused. certainly be that thinking a vaccination were has higher climate we much the that this

we investors there’s if an market So, I that adherence think some towards effective getting it. could like worry dramatically the higher get if up quickly testing dry that vaccine rather

for steady of in the which could that you how about, to So, the this watching some begin the talked think see out persistence horse. anyway, you before think get be? about to how it’s vaccine and hard put some cart data should are strong ‘XX, think the you to when and signposts we what testing we of But,

Steve MacMillan

Yes.

of of while it, be by COVID is there’s about way, I in the particularly a think people. discussions rolling coming focus United as got think States, getting the and there much for going on I that sick. XXXish a all the vaccine U.S. And think, part the people ‘XX, the has to And of you big half first of the bunch I our so out, back what keep million in enterprise, still to because global been

going this right, gone if without up not is, had how to world. cases, given Vietnam, eradicate days -- I in suddenly we’re Vietnam. persistent vaccinate to the people you just not going popped Vietnam in XX three We’re and X And today, billion heard think any

who’s to WHO if have around just way, I circulating the have what doesn’t exactly trying again, The And going mean CDC that I and common is the team crystal the don’t there the this think us I think world. means I’m -- it. some the I to God doesn’t none sense, certainly have be ball. -- is it, by So, realities, to of forbid, be get is it. first But, about vaccinated more thinking our the use have real going United who to who get probably money, to are you, getting the in where we the with honest migrant we need going be persistence people are those the in going the population all worker be to States get going have that folks suburbs, of a Not little likely to going right people and lot sure away. really and bigger? a we’re of other is to

all this there’s still going So, reasons I out thing’s why think kinds to going be to there. of be

and if it’d out, And to lockdowns I is, how comes, going don’t And to realizing. help do learn smarter, where the what officials be live diagnostics The a this the tool and so that to else. smarter even is we’re to say, such though some public to get should other at and we’ve what breaking learn helpful with before do? go to again reality and think it we a we people everything better manage. is understand how great And cope to we’re is think six better realize not of complete into five, we getting vaccine got with have next I would months start

be think kinds going I is So, there all to ways. of

right be going too we’re provide. president university to many so folks a to that now, you’re If need helpful information that

Mike Watts

to Operator, two limit questions. can question I -- squeeze squeeze think in in last we we can just Maybe each, please. two these we’ll more one

Operator

We’ll next Ma Ivy take from Bank with of question the America.

Ivy Ma

the question. on quick be I’ll So,

in color the million on tests terms per the appreciate of COVID quarter XX I So, capacity.

quarters? or in several time? So, some installed expect might during mean, I’m going persist that have that And currently to you facilities I one-four to share point-of-care from market one-third you hospitals share percentage to that, other what’s you next what on? selling curious, take do And POC this are to being would to related expect the

Steve MacMillan

Ivy. That job, about in XX getting was questions there, good

So, very impressive.

Let of as me those try I much as get to answers can.

of million which that production pretty our of building well base total clarify, we’re clearly will is be to much more off, business. the half that First for towards XX than molecular capacity our volumes, going

suggest and we production So, COVID didn’t sure was confuse just a volume. I want to make that

right In that pandemic we’re think I terms is normally battle share of competitors, real because not market The provide. -- here focused us the can on battling we now don’t battling all and this coronavirus. battle of really share, market us of our battle any while

of So, there’s business I here. for think plenty going us be going to

I it’s hard the relates to think, volume, point-of-care, point-of-care it as day, the a high manual a certainly from it people at -- But point-of-care has just the test takes. that end the super role. time to X,XXX of using

throughput, it’s XXX,XXX, as systems people to now XXX,XXX you’ve a While to volume one day, high person, people in hundreds one for XXX,XXX, have you got And get that. when right the hard country a you’re a tested, do or to tests, point-of-care it’s get quick four level of of conducting world. to tests back high test do

to going probably think, where unique of to to we’re we’re grow. point-of-care grow is I continue those So, situations to and in going one continue

Operator

from ahead. Richard Leerink. Please We’ll our go final take SVB question Newitter from

Richard Newitter

Thank of seeking trend the congrats of the if improved terms you a from you for seeing on the elaborate talk patients in de appreciate, on a Thanks little on the if of rate surgical work into Steve, business, getting out just exiting that visits, from and But, your could And visits, is the July? had it back the the me backlog standpoint? business. you just some recent as you. in can care new was exit schedule. here, Could in if what maybe, and down will, bit non-COVID specifically -- you’re Was out in part coming and mentioned I the June? or you on deferred novo the of what on kind actual procedures quarter. bit there trend, you’re squeezing June anecdotally, most weeks? I little two

Steve MacMillan

and into Yes. not two were to how to this two weeks other that. going Rich, last the we’re get weeks relative and

baked guidance. our roughly That’s being plus the our I down business dramatic a into see quarter. XX% XXish percent down surgical improvement We quarter. from think this last it’s

and seeing or have into comeback. we or little slight like a again then, goes we bit whatever, little Texas really some Florida back. lockdown have I of you think, good things then And see days a you a and

to about the got to a of but -- really feel of new. trend that good trajectory. visibility we’ve So, your forward, backlog, and to We little we visits going have don’t the we We we’re more question to combinations new both perfect part second its But there NovaSure, people versus initially. that’s MyoSure lot little back was a to see new going I be patients track do the on well. existing. have trying in coming think have -- exact don’t numbers. more a But, -- of and as fibroid with new catch-up we’re clearly, cases. That’s starting And

Operator

a (sic) XXXX Have earnings time we conference fiscal This [third] second call. evening. for the questions good quarter Hologic’s That have concludes all now today. is

Hologic (HOLX) 29 Jul 202020 Q3 Earnings call transcript