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Hologic Fiscal Q1 Revenues Fall 9 Percent as COVID-19 Assay Sales Decline

NEW YORK – Hologic reported after the close of the market on Wednesday that revenues for its first quarter of fiscal year 2022 decreased 9 percent year over year, driven by lower sales of COVID-19 assays.

For the three months ended Dec. 25, the Marlborough, Massachusetts-based firm reported revenues of $1.47 billion compared to $1.61 billion in fiscal Q1 2021, in line with preliminary estimates and above the consensus Wall Street estimate of $1.18 billion.

In the recently completed quarter, the company booked $523 million in COVID-19 assay revenues and shipped about 26 million tests, Karleen Oberton, the firm's CFO, said on a conference call to discuss the financial results.

By comparison, Hologic booked $745 million from sales of about 30 million SARS-CoV-2 assays in Q1 2021.

Excluding revenue from COVID-19, organic revenue grew 9.0 percent year over year on a constant currency basis, the firm said.

"This quarter once again highlights the strength of our base businesses, as well as our ongoing ability to meet strong demand for COVID-19 testing, which together enable us to grow profitably in the face of uncertain market conditions," Steve MacMillan, the company's chairman, president, and CEO, said in a statement.

The firm's diagnostics division reported fiscal Q1 revenues of $950.4 million, down 16 percent compared to $1.13 billion in the prior-year quarter. Excluding COVID-19 revenues, the diagnostics division posted Q1 organic revenues of $320.8 million, up 10 percent from $291.9 million in Q1 2021.

Within diagnostics, the firm posted molecular diagnostics revenues of $813.3 million, down 18 percent from $995.3 million in fiscal Q1 2021. Blood screening revenues were $6.4 million, down 21 percent from $8.1 million in the prior-year period. Cytology and perinatal revenues were $130.7 million, up 5 percent from $124.8 million in the prior-year quarter.

During the quarter, the firm launched Panther Trax, which physically links multiple Panther instruments into a single workcell, allowing high-throughput labs to increase testing volumes without increasing staff, Hologic noted.

Signaling strength in its base diagnostics business, Hologic's annual molecular diagnostics revenues, excluding COVID revenues, are now more than $100 million higher than before the pandemic, Oberton said.

Excluding COVID-19 revenues from the current and prior-year quarters, Hologic's molecular diagnostics revenues grew 14 percent year over year in Q1 2022, driven by sales of its chlamydia-gonorrhea assay and vaginitis panel and strong demand for Panther instrumentation, Oberton said.

In other business segments, first-quarter breast health revenues were $359.3 million, up 8 percent year over year from $332.7 million; gynecologic surgical revenues were $134.3 million, up 8 percent year over year from $124.0 million; and skeletal health revenues were $27.1 million, up 9 percent year over year from $24.9 million.

Hologic reported net income attributable to the firm of $499.2 million, or $1.95 per share, compared to $654.4 million, or $2.50 per share, in the prior-year quarter. The firm reported adjusted EPS of $2.17 and beat analysts' estimates for adjusted EPS of $1.28.

In fiscal Q1 2022, the firm spent $72.8 million on R&D, up 23 percent from $59.3 million in Q1 2021, while its SG&A expenses were $265.3 million, up 21 percent from $219.5 million in fiscal Q1 2021.

Hologic reported cash and cash equivalents of $1.42 billion at the end of the quarter.

For fiscal Q2 2022, the company guided to revenues of $1.25 billion to $1.30 billion, EPS of $1.22 to $1.32, and adjusted EPS of $1.50 to $1.60.

For fiscal-year 2022, Hologic guided to revenues of $4.40 billion to $4.55 billion, compared to its previous guidance of $3.75 billion to $4.00 billion; EPS of $3.80 to $4.10, compared to previous guidance for EPS of $2.50 to $2.80; and adjusted EPS of $4.90 to $5.20, compared to previous guidance for adjusted EPS of $3.55 to $3.85.

Looking ahead, "in terms of COVID assay sales, the only certainty is that no one really knows how demand will progress for the rest of the year," Oberton said. "Therefore, as we have done for the past several quarters, we are forecasting conservatively and will act aggressively."

The company expects to book at least $400 million in COVID-19 assay revenues in fiscal Q2 2022 and at least $1 billion such revenues in full-year 2022, she added.

Though Hologic expects a decline in its mammography business revenues this year, stemming from semiconductor chip shortages, that will be "more than offset" by demand for diagnostic testing and surgical business products, Oberton said.

In Thursday morning trading on the Nasdaq, shares of Hologic were up less than 1 percent at $72.30.

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