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Coronavirus Pandemic Expected to Significantly Disrupt Hologic Q2 Revenues

NEW YORK – Citing the effects of the coronavirus pandemic, Hologic said Tuesday that it expects to report total revenues of $756.1 million for its fiscal second quarter, down 8 percent from $818.4 million in Q2 2019.

The firm also withdrew its 2020 financial guidance due to the uncertain economic impact on its business of the COVID-19 pandemic.

"Our second quarter revenue results reflect the strong underlying momentum that has been building at Hologic over the last few years and give us confidence that we will emerge from the current COVID-19 pandemic as a stronger company," Steve MacMillan, the company's chairman, president, and CEO, said in a statement. However, he noted that disruptions caused by the coronavirus pandemic "had a significant negative impact on sales in late March, as elective procedures and appointments were deferred and our customers focused on responding to the pandemic. It has become clear that a lynchpin of that response is increasing diagnostic testing for the virus."

For the quarter ended March 28, the firm expects to post Diagnostics revenues of $319.2 million, up 8 percent year over year from $296.7 million a year ago. Total Diagnostics revenues excluding its divested blood screening business are expected to be $304 million, up 7 percent from $283.3 million. Hologic anticipates posting Breast Health revenues of $307.8 million, down 4 percent compared to $321.5 million a year earlier. The company expects no revenues for its Medical Aesthetics business, which it divested in December 2019, but reported $73.8 million for the business in Q2 2019.

In fiscal Q2 2020, Hologic expects to report $105.4 million in revenues for its GYN Surgical business, up 3 percent year over year from $102.2 million, and it anticipates reporting $23.7 million in Skeletal Health revenues, down 2 percent from $24.2 million in Q2 2019.

Notably, sales of Breast Health products were weaker than expected as customers focused on responding to COVID-19 and restricted access to their facilities in order to limit the virus’ spread, the firm said. In addition, sales of GYN Surgical and Diagnostics products suffered from the deferral of elective procedures and physician office visits.

Hologic said it expects factors associated with the COVID-19 pandemic to continue to have a significant negative impact on its future revenue, especially in the third quarter of fiscal 2020. The company said it is implementing measures to reduce expenses across the organization. However, because the scope and duration of the COVID-19 pandemic are uncertain, it cannot currently quantify the net financial effect and is accordingly withdrawing its financial guidance for the second quarter and full year 2020, the firm said.

Lower-than-expected revenues are anticipated to negatively affect gross margin in the second quarter, resulting in earnings per share below the company’s prior expectations, Hologic said.

In January, the company had narrowed its full-year fiscal 2020 guidance to revenues of between $3.24 billion and $3.27 billion. The firm had guided to Q2 revenues of $770 million to $780 million, EPS of between $.40 and $.42, and adjusted EPS in the range of $.61 to $.63.

Hologic said it will report full financial results for Q2 2020 on April 29.

In early morning trading on the Nasdaq, Hologic shares were up more than 7 percent at $38.44.

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