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Hologic Fiscal Q4 Revenues Fall 2 Percent on Lower COVID-19 Assay Sales

NEW YORK – Hologic reported after the close of the market on Monday that its fiscal fourth quarter revenues fell 2 percent year over year, driven by a drop in molecular diagnostic and COVID-19 assay sales.

For the three months ended Sept. 25, the firm reported total revenues of $1.32 billion, down from $1.35 billion a year ago, but beating analysts' average estimate of $1.04 billion.

The Marlborough, Massachusetts-based company's Q4 product revenues dropped 5 percent year over year to $1.14 billion from $1.20 billion, while service and other revenues rose 24 percent to $178.7 million from $144.5 million.

Hologic reported Q4 diagnostics revenues of $836.8 million, down 11 percent year over year from $939.0 million. Excluding its divested blood screening business, diagnostics revenues were $820.5 million, down 12 percent from $930.3 million a year ago. 

"We believe we are well positioned for success regardless of the future direction of the pandemic," Stephen MacMillan, Hologic's chairman, president, and CEO, said in a conference call to discuss the firm's financial results. "If [the pandemic] drags on, we have shown that we can respond aggressively and generate financial upside … and when the pandemic subsides, we can rely on a base business that has never been stronger or more diversified than it is today."

Since the beginning of the pandemic, Hologic has placed more than 130 million RT-PCR tests with its customers in more than 50 countries, MacMillan said.

Excluding fiscal Q4 COVID-19 test sales and revenues for COVID-related products such as instruments and collection kits, Hologic posted revenue growth of 12 percent year over year in the recently completed quarter, MacMillan said.

The firm expects acquisitions it completed this year, including molecular diagnostic companies Biotheranostics, Diagenode, and Mobidiag, to generate more than $150 million in revenue in 2022.

"Although these acquisitions are slightly dilutive to near-term [earnings per share], we expect them to accelerate our top-line growth rate," MacMillan said.

In Q4, Hologic placed 167 Panther molecular diagnostics instruments, reaching about 650 placements for the year, ahead of its forecast. Its Panther installed base stands at more than 1,500 in the US and almost 2,900 worldwide.

Within diagnostics, molecular diagnostics revenues totaled $704.5 million, down 14 percent from $818.9 million in Q4 2020; cytology and perinatal revenues were $116.0 million, up 4 percent from $111.4 million in the prior-year quarter; and blood screening revenues were $16.3 million, up 87 percent year over year from $8.7 million.

Outside of its diagnostics business Hologic's Q4 breast health product revenues rose 16 percent year over year to $334.2 million from $289.2 million, while its skeletal health product revenues were up 27 percent to $23.6 million from $18.6 million. Gynecology surgical revenues rose 22 percent to $122.0 million from $100.2 million in the prior-year quarter.

The company reported Q4 net income of $328.8 million, or $1.28 per share, compared to a net income of $493.6 million, or $1.88 per share, in Q4 2020. On an adjusted basis, Hologic reported EPS of $1.61, beating analysts' average estimate of $1.01 per share.

The firm’s R&D costs rose 34 percent year over year to $76.5 million in Q4 from $57.0 million, and its SG&A costs rose 33 percent year over year to $294.5 million from $221.4 million.

For full fiscal year 2021, Hologic's revenues rose 49 percent year over year to $5.63 billion from $3.78 billion, beating analysts' average estimate of $5.34 billion. Product revenues rose 54 percent to $4.97 billion from $3.23 billion, while service and other revenues rose 21 percent to $665.0 million from $549.4 million.

The firm reported a net income for the year of $1.87 billion, or $7.21 per share, compared to a net income of $1.11 billion, or $4.21 per share, in 2020. Adjusted EPS for fiscal 2021 was $8.41 and beat the consensus Wall Street estimate of $7.79.

The firm's R&D costs for the year rose 24 percent to $276.3 million from $222.5 million, and its SG&A costs rose 18 percent to $994.4 million from $840.3 million.

Hologic ended the fiscal year with $1.17 billion in cash and cash equivalents.

In fiscal Q1 2022, the firm expects revenues between $1.10 billion and $1.15 billion; EPS between $.88 and $.98; and adjusted EPS between $1.15 and $1.25.

For its full fiscal year 2022, the firm expects revenues between $3.75 billion and $4.00 billion; EPS between $2.50 and $2.80; and adjusted EPS between $3.55 and $3.85.

In early Tuesday morning trading on the Nasdaq, shares of Hologic were down more than 2 percent to $71.12.

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