MARLBOROUGH, Mass., Feb. 1, 2017 /PRNewswire/ -- Hologic, Inc. (Nasdaq: HOLX) announced today the Company’s financial results for the fiscal first quarter ended December 31, 2016. GAAP diluted earnings per share (EPS) of $0.30 increased 3.4% compared to the prior year period, while non-GAAP diluted EPS of $0.52 increased 13.0%. Revenue of $734.4 million increased 5.6%, or 6.3% in constant currency terms.
“We are pleased with our first quarter financial results,” said Steve MacMillan, Hologic’s Chairman, President and Chief Executive Officer. “Revenue and earnings per share exceeded our guidance. Our international businesses continued to improve, while new products are in the early stages of adding to growth. And we completed the divestiture of our blood screening business, which we expect to accelerate top- and bottom-line growth.”
Key financial results for the fiscal first quarter are shown below:
GAAP | Non-GAAP | |||||
Q1'17 | Q1'16 | Change Increase | Q1'17 | Q1'16 | Change Increase | |
Revenues | $734.4 | $695.2 | 5.6% | $734.4 | $695.2 | 5.6% |
Gross Margin | 55.1% | 54.5% | 60 bps | 65.2% | 65.2% | 0 bps |
Operating Expenses | $258.8 | $253.0 | 2.3% | $231.1 | $221.0 | 4.6% |
Operating Margin | 19.9% | 18.1% | 180 bps | 33.7% | 33.4% | 30 bps |
Net Margin | 11.8% | 12.2% | (40 bps) | 20.2% | 19.4% | 80 bps |
Diluted EPS | $0.30 | $0.29 | 3.4% | $0.52 | $0.46 | 13.0% |
Throughout this press release, all dollar figures are in millions, except EPS. Some totals may not foot due to rounding. Unless otherwise noted, all results are compared to the corresponding prior year period. Non-GAAP presentations exclude a number of cash and non-cash items as discussed below under “Use of Non-GAAP Financial Measures.”
Revenue Detail
Revenue growth in the first quarter was led by the GYN Surgical division, while the molecular diagnostics and Breast Health franchises also performed well. As previously disclosed, and compared to the prior year period, growth rates benefited from the inclusion of extra selling days between the Christmas and New Year’s holidays.
$s in millions | Q1'17 | Q1'16 | Reported | Foreign Currency $ % | Constant | |
Cytology & Perinatal | $120.3 | $120.4 | (0.1%) | $1.4 | 1.2% | 1.1% |
Molecular Diagnostics | $139.9 | $129.6 | 7.9% | $1.1 | 0.9% | 8.8% |
Blood Screening | $65.2 | $60.7 | 7.4% | - | - | 7.4% |
Total Diagnostics | $325.4 | $310.7 | 4.7% | $2.5 | 0.8% | 5.5% |
Breast Imaging | $226.7 | $218.1 | 3.9% | $0.7 | 0.3% | 4.2% |
Interventional Breast Solutions | $44.6 | $42.1 | 6.1% | $0.1 | 0.3% | 6.4% |
Other | $2.0 | $2.0 | 0.8% | $0.0 | 1.2% | 2.0% |
Total Breast Health | $273.3 | $262.2 | 4.2% | $0.8 | 0.4% | 4.6% |
GYN Surgical | $114.8 | $98.8 | 16.2% | $0.9 | 1.0% | 17.2% |
Skeletal Health | $20.9 | $23.5 | (10.8%) | ($0.0) | 0.1% | (10.7%) |
Total | $734.4 | $695.2 | 5.6% | $4.2 | 0.7% | 6.3% |
Other quarterly revenue highlights:
- U.S. sales of $573.6 million increased 5.2%, continuing strong recent trends.
- International sales of $160.8 million increased 7.2%, or 10.0% in constant currency, led by strong growth in blood screening, molecular diagnostics and GYN Surgical. Excluding blood screening, international sales increased 2.7%, or 6.1% in constant currency.
- GYN Surgical revenue of $114.8 million increased 16.2%, or 17.2% in constant currency. MyoSure® system sales of $48.3 million increased 31.2%, or 32.1% in constant currency. NovaSure® sales of $66.4 million increased 7.7%, or 8.6% in constant currency.
- Breast Health revenue totaled $273.3 million, an increase of 4.2%, or 4.6% in constant currency. Revenue in the United States increased 5.5%, driven by increases in service revenue and new product sales that supplemented continued adoption of Hologic’s Genius 3D Mammography systems.
- In Diagnostics:
- Molecular diagnostics sales of $139.9 million increased 7.9%, or 8.8% in constant currency. Growth was driven primarily by continued strength across Aptima® women’s health products on the fully automated Panther® and Tigris® platforms, both in the United States and internationally.
- Cytology and perinatal sales of $120.3 million decreased (0.1%) on a reported basis, but increased 1.1% in constant currency.
- Blood screening revenue totaled $65.2 million, an increase of 7.4% on both a reported and constant currency basis that was driven by Zika-related sales and strong international ordering patterns.
- In Skeletal Health, revenue of $20.9 million decreased (10.8%), or (10.7%) in constant currency, primarily due to lower volumes.
Segment revenue highlights by geography are shown below:
International Change | Foreign Currency | International Change (Constant Currency) | |||
U.S. Change | (Reported) | $ | % | ||
Increase (Decrease) | |||||
Diagnostics | 2.8% | 10.0% | $2.5 | 3.0% | 13.0% |
Breast Health | 5.5% | (1.4%) | $0.8 | 1.7% | 0.3% |
GYN Surgical | 16.3% | 15.8% | $0.9 | 7.0% | 22.8% |
Skeletal Health | (23.2%) | 16.1% | $0.0 | 0.3% | 16.4% |
Total Revenues | 5.2% | 7.2% | $4.2 | 2.8% | 10.0% |
First Quarter Expense Detail
Gross margin was 55.1% on a GAAP basis, and 65.2% on a non-GAAP basis. GAAP gross margin improved by 60 basis points, while non-GAAP gross margin was flat, as a favorable product mix was offset by increased international sales and unfavorable currency fluctuations.
Operating expenses were $258.8 million on a GAAP basis, and $231.1 million on a non-GAAP basis. GAAP operating expenses increased 2.3%, while non-GAAP operating expenses increased 4.6%, mainly due to higher marketing spending, increased compensation and an additional week of expenses.
Hologic’s effective tax rate was 25.5% on a GAAP basis, and 31.0% on a non-GAAP basis.
Other Key Financial Results
GAAP net income was $86.5 million, an increase of 1.8%. Adjusted non-GAAP earnings before interest, taxes, depreciation and amortization (EBITDA) were $269.1 million, an increase of 6.8%.
Operating cash flow was $169.6 million.
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