Hologic Q2 2010 Earnings Call Transcript

Hologic Q2 2010 Earnings Call Transcript
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Hologic (HOLX)

Q2 2010 Earnings Call

May 03, 2010 5:00 pm ET

Executives

Robert Cascella - Chief Executive Officer, President and Director

Deborah Gordon - Vice President of Investor Relations

Steven Williamson - Senior Vice President of GYN Surgical

Glenn Muir - Chief Financial Officer, Executive Vice President of Finance & Administration, Treasurer and Director

Howard Doran - Senior Vice President of Diagnostics Products

Analysts

Peter Bye - Jefferies & Company, Inc.

William Quirk - Piper Jaffray Companies

Bill Bonello - RBC Capital Markets Corporation

Tycho Peterson - JP Morgan Chase & Co

Vincent Ricci - Wells Fargo Securities, LLC

David Lewis - Morgan Stanley

Thomas Kouchoukos - Stifel, Nicolaus & Co., Inc.

Sameer Harish - Needham & Company, LLC

Amit Bhalla - Citigroup Inc

Presentation

Operator

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» Hologic Inc. Q1 2010 Earnings Call Transcript
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Good afternoon. Welcome to the Hologic Inc. Second Quarter Fiscal Year 2010 Earnings Conference Call. My name is Nancy, and I am your operator for today's call. [Operator Instructions] I would now like to introduce Ms. Deborah Gordon, Vice President, Investor Relations, to begin the call.

Deborah Gordon

Thank you, Nancy. Good afternoon, and thank you for joining us for Hologic Second Quarter Fiscal Year 2010 Earnings Conference Call. I encourage everyone to visit Hologic's Investor Relations page of our website in order to view the PowerPoint presentation related to the comments that Glenn Muir, Hologic's Chief Financial Officer, will be making in his opening remarks. The replay of this conference call will be archived on our website through Friday, May 21. Please also note that a copy of the press release discussing our second quarter results, as well as our third quarter and fiscal year 2010 guidance, is available in the Investor Relations section of our website under the heading Financial Results.

Before we begin, I would like to remind you of our Safe Harbor statements. Certain statements made by management of Hologic Inc. during the course of this conference call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements of Hologic to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include among other those details from time-to-time in the company's filings with the Securities and Exchange Commission. We expressly disclaim any obligation or undertaking to publicly release any updates or revision to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

Also during this call, we will be discussing certain financial measures not prepared in accordance with Generally Accepted Accounting Principles, or GAAP. A reconciliation of these non-GAAP financial measures to the related GAAP financial measures can be found in Hologic's second quarter 2010 earnings release, including the financial tables in the release. Please note that today's call will consist of approximately 30 minutes of opening remarks from management followed by a 30-minute question-and-answer session. We therefore ask each participant to limit his or her questions to just one with one follow-up as necessary.

Before I turn the call over to Rob Cascella, I would like to inform you of several Investor Conferences Hologic management will be participating in this month and next. Glenn Muir will be presenting at the Citi 2010 Global Healthcare Conference on May 26 in New York City. During the second week of June, we'll be participating in the Jefferies 2010 Global Life Sciences Conference and the Ninth Annual Needham Healthcare Conference, both of which will be in New York. Lastly, on June 23, we'll be attending the Wells Fargo Securities Healthcare Conference in Boston. All of these presentations will be webcast. The details of which will be found on the IR section of our website. I would now like to turn the call over to Mr. Rob Cascella, President and Chief Executive Officer.

Robert Cascella

Thanks, Deb. Good afternoon, and thank you for dialing in to our second quarter conference call. Joining me on the call is Glenn Muir, our Executive Vice President and CFO; Howard Doran, Head of Diagnostics Group; Steve Williamson, Head of our GYN Surgical Group; and David Harding, Head of our International Businesses. All of us will be available during the question-and-answer session.

Our agenda for today's call is as follows: I will review our business performance in the recently completed second quarter and Glenn will discuss in more detail our financial results, as well as provide our guidance for the third quarter and full year. We will then open up the call for Q&A. As Deb stated, we will conclude this call in about an hour.

I'm pleased to report that, once again, our quarterly revenues exceeded and our adjusted earnings were in line with our guidance. As stated in our earnings release, Q2 of 2010 revenues were approximately $418 million, a 4% increase from Q2 of '09, and up 1.4% from Q1 sequentially. This compares favorably to our guidance of $410 million to $415 million.

Our second quarter growth was broad based with Breast Health, Diagnostic, Surgical and Service revenues, all contributing to the increase over the last year's second quarter, slightly offset by a decline in Skeletal Health. For the first time since the economic contraction began, Breast Health posted positive year-over-year revenue growth, largely due to an increase in service revenues, related to our larger installed base of digital mammography systems and to a lesser extent, to sales of our 2D/3D Selenia Dimensions and our Eviva breast biopsy product. Our revenue mix remained strongly weighted towards our Service and Consumable businesses namely, Diagnostics, Surgical and Breast Biopsy which represented approximately 75% of total revenues.

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