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Hologic Fiscal Q4 Revenues Rise 6 Percent

NEW YORK – Hologic reported after the close of the market on Wednesday that its fiscal fourth quarter revenues rose 6 percent year over year, driven in part by growth in its medical aesthetics and molecular diagnostics businesses.

For the three months ended Sept. 30, the firm reported total revenues of $865.8 million, up from $813.5 million a year ago and beating the average consensus Wall Street estimate of $845.7 million.

Hologic reported Q4 diagnostics revenues of $306.8 million, up 6 percent year over year from $288.9 million. The firm reported molecular diagnostics revenues of $172.1 million, up 9 percent from $158 million in Q4 2018.

Also within diagnostics, the firm reported cytology and perinatal revenues of $118 million, flat year over year, and blood screening revenues of $16.7 million, up 30 percent year over year from $12.9 million. On a conference call to discuss the firm's financial results, Hologic CEO Stephen MacMillan said cytology sales increased slightly outside the US, while perinatal sales declined. 

Q4 revenues for the firm's breast imaging products grew 6 percent year over year to $342.6 million from $322.2 million, while revenues for its skeletal health products were up 3 percent to $25 from $24.4 million. The gynecology surgical business revenues grew 7 percent to $114.5 million from $107.4 million in the prior-year quarter. Hologic's medical aesthetics product revenues rose 9 percent to $76.9 million from $70.6 million.

Hologic divested its stake in blood screening firm Grifols for $1.85 billion in early 2017. Excluding that business, total revenues for the recently completed quarter was $849.1 million, up 6 percent from $800.6 million in the year-ago quarter. Total diagnostics revenues excluding blood screening was $290.1 million, up 5 percent year over year from $276 million. 

Molecular diagnostics remains the growth driver, based on the R&D's team productivity, resulting in 19 global clearances Hologic received in FY 2019, MacMillan said. 

In 2019, the global installed base of fully automated Panther systems grew by more than 200, about the same as in 2018, and reached 1,700 with 45 percent being outside the US. Average revenue per Panther system now exceeds $240,000 a year and grew at a high-single-digit rate in fiscal year 2019, MacMillan said.

MacMillan also noted that sales of the company's Aptima women's health assays, including those for human papillomavirus, trichomoniasis, and chlamydia and gonorrhea, grew in the high-single-digit rate overall. He also noted that the firm's new products, including the quantitative viral load tests and early contributions from the Aptima vaginosis assays, drove growth.  

The company reported Q4 2019 net income of $39.9 million, or $.15 per share, compared to $50.5 million, or $.18 per share in Q4 2018. On an adjusted basis, Hologic reported EPS of $.65, equaling the analysts' average estimate of $.65 per share.

In Q4 2019, the firm’s R&D costs grew 15 percent to $60.4 million from $52.7 million in Q4 2018, and its SG&A costs fell 10 percent to $225.5 million from $251.6 million. The company reported $12.3 million in charges related to impairment of intangible assets and equipment in Q4 2019 compared to none a year ago. 

For full fiscal year 2019, Hologic's revenues rose 4 percent year over year to $3.37 billion from $3.22 billion, beating the average analyst estimate of $3.35 billion. Product revenues rose 5 percent to $2.77 billion from $2.64 billion, while service and other revenues rose 4 percent to $596 million from $574 million.

The firm reported a net loss for the year of $40.2 million, or $.15 per share, compared to a net loss of $111.3 million, or $.40 per share, in 2018. On an adjusted basis, the firm reported 2019 EPS of $2.43, short of the average analyst estimate for EPS of $2.44.

The firm's R&D costs for the year rose 6 percent to $232.2 million from $218.7 million, and its SG&A costs fell 2 percent to $897.2 million from $910.7 million. Hologic also reported a charge of $685.7 million related to impairment of goodwill in Q4 2018, compared to none in the recently completed quarter. 

Hologic ended the year with $601.8 million in cash and cash equivalents.

In fiscal Q1 2020, the firm expects revenues in the range of $835 million to $850 million; EPS in the range of $.33 to $.35; and adjusted EPS of $.59 to $.61. Prior to the release of the financial results, analysts on average were expecting $857.1 million in Q1 2020 revenues, and EPS of $.63. MacMillan also noted the firm expects potential mergers or acquisitions in the next year, with some deals possibly worth more than $100 million. 

In full fiscal year 2020, the company expects revenues of $3.45 billion to $3.50 billion; EPS of $1.59 to $1.64; and adjusted EPS of $2.60 to $2.65. Prior to the release of the financial results, analysts on average were expecting full fiscal year 2020 revenues of $3.48 billion and EPS of $2.64.

In morning trading on the Nasdaq, Hologic's shares were down 4 percent at $46.81.
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