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Hologic's Q4 Revenues Rise 26 Percent on Gen-Probe Contribution

NEW YORK (GenomeWeb News) – Hologic reported after the close of the market Monday that its fourth-quarter 2012 revenues climbed 26 percent year over year with a large chunk of that increase due to Gen-Probe's sales contribution.

The Bedford, Mass.-based diagnostics, medical imaging, and surgical products firm reported total revenues of $588.5 million for the three months ended Sept. 29, up from $467.0 million for the fourth quarter of 2011. It beat the consensus Wall Street estimate of $581.6 million.

Hologic said that Gen-Probe contributed $89.5 million to that revenue growth, which doesn't include an $11.6 million adjustment for contingent revenue earned and received under Gen-Probe's alliance with Novartis following the acquisition date, which was eliminated under US generally accepted accounting principles as a result of the effects of purchase accounting. Excluding Gen-Probe's contribution, Hologic's fourth-quarter revenues were up around 7 percent year over year.

The firm acquired Gen-Probe for $3.8 billion this past summer, and around two months of Gen-Probe's sales were included in Hologic's fourth quarter.

Hologic President and CEO Rob Cascella said on a conference call following the release of the financial results that Gen-Probe's Panther molecular diagnostics system, which launched in the US a few months ago, now has a worldwide installed base of more than 200 units. The system was introduced in Europe about a year-and-a-half ago.

"We believe that a target of 1,000 Panther units installed by the end of '15 is most doable," he said.

He said the firm also is "highly focused on leveraging our 700 unit Tigris installed base to promote organic growth in several key product areas," including chlamydia trachomatis and Neisseria gonorrhoeae with the Aptima Combo 2 assay, as well as the Aptima Trichomonas vaginalis and Aptima HPV tests.

The firm said that its legacy diagnostics business grew 9 percent on increased ThinPrep sales and growth in its existing molecular diagnostic product lines.

Overall, its diagnostics business brought in total revenues of $253.5 million, while the firm reported Breast Health revenues of $230.3 million, GYN Surgical revenues of $79.7 million, and Skeletal Health revenues of $25.1 million.

In addition, Hologic said that currency translation reduced its Q4 sales by around $6.1 million.

Hologic swung from a profit to a loss due to several items. It reported a net loss of $77.8 million, or $.29 per share, compared to net income of $27.6 million, or $.10 per share, for the fourth quarter of 2011. Among the items that hit its bottom line were $24.8 million in amortization of intangible assets, $16.7 million of restructuring and divestiture costs, $5.8 million in impairment of goodwill, and $4.5 million in acquired in-process research and development.

On an adjusted basis, Hologic had net income of $98.3 million, or $.37 per share, for the quarter, matching analysts' consensus estimate and compared to adjusted net income of $88.8 million, or $.34 per share, for Q4 2011.

Hologic's R&D costs jumped 63 percent year over year to $47.1 million from $28.9 million, and its SG&A expenses climbed 55 percent to $178 million from $114.8 million.

For Fiscal Year 2012 Hologic posted revenues of $2.0 billion, up around 12 percent from $1.79 billion for FY 2011.

Its net loss for the year was $73.6 million, or $.28 per share, versus a profit of $157.2 million, or $.59 per share, for FY 2011. On an adjusted basis, its net income for FY 2012 was $367.8 million, or $1.38 per share, compared to $335.5 million, or $1.27 per share, for FY 2011.

Analysts, on average, had expected sales of $1.88 billion and EPS of $1.38.

The firm's R&D spending for the year increased to $131 million from $116.7 million, and its SG&A spending rose to $542.3 million from $444.5 million.

Hologic finished the quarter and fiscal year with $566.1 million in cash and cash equivalents.

The firm said that it expects FY 2013 non-GAAP revenues of between $2.61 billion and $2.64 billion with non-GAAP adjusted EPS of $1.56 to $1.58. The guidance factors in expected interest expense of $180 million related to financing for the Gen-Probe acquisition and around $25 million for the medical device excise tax that is scheduled to go into effect on Jan. 1, 2013.

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