Hologic Management Discusses Q3 2012 Results - Earnings Call Transcript

Hologic (HOLX)

Q3 2012 Earnings Call

July 30, 2012 5:00 pm ET

Executives

Deborah R. Gordon - Vice President of Investor Relations

Robert A. Cascella - Chief Executive Officer, President and Director

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

Peter K. Soltani - Senior Vice President and General Manager of Breast Health Line of Business

Analysts

Isaac Ro - Goldman Sachs Group Inc., Research Division

Tycho W. Peterson - JP Morgan Chase & Co, Research Division

Vijay Kumar - ISI Group Inc., Research Division

Brian Weinstein - William Blair & Company L.L.C., Research Division

Amit Bhalla - Citigroup Inc, Research Division

Richard Newitter - Leerink Swann LLC, Research Division

Jayson T. Bedford - Raymond James & Associates, Inc., Research Division

William R. Quirk - Piper Jaffray Companies, Research Division

Anthony Petrone - Jefferies & Company, Inc., Research Division

Lennox Ketner - BofA Merrill Lynch, Research Division

Jeremy Feffer - Cantor Fitzgerald & Co., Research Division

Jonathan P. Groberg - Macquarie Research

Presentation

Operator

Good day, everyone, and welcome to the Hologic Inc. Third Quarter Fiscal 2012 Earnings Conference Call. My name is Kelsie, and I'm your operator for today's conference. In addition, today's conference is being recorded. [Operator Instructions] And now I would like to introduce Deborah Gordon, Vice President, Investor Relations, to begin the conference. Please go ahead, Ms. Gordon.

Deborah R. Gordon

Thank you, Kelsie. Good afternoon, and thank you for joining us for Hologic's third quarter fiscal 2012 earnings call. The replay of this call will be archived on our website through Friday, August 17, and a copy of our press release discussing our third quarter results, as well as our fourth quarter and fiscal 2012 guidance, is available in the Overview section of the Investor Relations section of Hologic's website. Also in that section is a PowerPoint presentation related to the comments that will be made during today's opening remarks.

Before we begin, I would like to inform you that certain statements made by Hologic during the course of this call may constitute forward-looking statements. These statements involve known and unknown risks and uncertainties that may cause the actual results to be materially different from any future results implied by such statements. Such factors include those referenced in our Safe Harbor statement, in our third quarter fiscal 2012 earnings release and in the company's filings with the SEC.

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 also be found in our third quarter earnings release, including the financial tables in the release. Please note, today's call will consist of 30 minutes of opening remarks from management, followed by a 30-minute question-and-answer session. We do need to limit each participant's question to just one, with one related follow-up as necessary. However, please feel free to go back into queue, and if time permits, we'll be more than happy to take your questions at that time.

I would now like to turn the call over to Rob Cascella, President and Chief Executive Officer.

Robert A. Cascella

Thanks, Deb. Good afternoon, and thank you for dialing in to our third quarter earnings call. Joining me on today's call are Glenn Muir, our Executive Vice President and CFO; Peter Soltani, our General Manager of Breast Health; and David Harding, General Manager of International Operations.

Today, I'm going to summarize our third quarter performance, update you on the market adoption of our Dimensions 3D tomo system and provide a brief review on some of our other key businesses. Glen will then discuss the financial results in greater detail and provide color on our fourth quarter and fiscal 2012 guidance. We will then open up the call for 30 minutes of Q&A.

Before I start on the quarter, I would like to provide a brief update on the status of the Gen-Probe acquisition. I want to remind everyone, we are not closed yet, so my comments will be limited to the events involving the transaction. The Gen-Probe shareholder vote will occur tomorrow, July 31, and closing of the transaction is expected on August 1. As we announced on July 11, Carl Hull, CEO of Gen-Probe, will remain with Hologic for a minimum of 15 months. He will serve as General Manager of the combined diagnostic franchise, which will include both the cytology and Molecular businesses.

I'm also pleased to tell you that the majority of Gen-Probe key senior leadership are also being retained, as well as many other key employees throughout the organization. Although Glenn will report more thoroughly, I must comment we were thrilled with the success of our financing efforts and believe our effective borrowing rate on this transaction is an indication on the power of the combination of these 2 leading companies. With respect to the integration planning and implementation, I again couldn't be more pleased. It has been an intense 2 months of effort on the parts of Hologic and Gen-Probe. We've had over 100 people as part of 15 functional and 6 cross-functional teams focused on all aspects of integration, day one priorities, future goal setting and synergies. In addition, we've been assisted by E&Y and Mackenzie, [ph] who both played extremely valuable roles in this process.

Our value drivers are focused primarily on commercial requirements, product development priorities, sales force rationalization and the international rollout of products. We are extremely pleased at how well the teams have work together on very tough strategic and emotional issues. The success of these plans will have much, much more to do with the revenue synergies that we have discussed in earlier presentations. We are leveraging the Hologic global distribution infrastructure for these wonderful world-class products. In short, I am even more enthusiastic about this transaction. We are confident in our growth projections and firmly believe the revenue synergies made available by this combination are even more attractive than originally expected.

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