Building a Sustainable Growth Company
November 2015
HOLX Investor Overview / November 2015
1
Safe Harbor Statement
This presentation contains forward-looking information that involves risks and uncertainties, including statements about the Company’s plans, objectives,
expectations and intentions. Such statements include, without limitation: financial or other information based upon or otherwise incorporating judgments or
estimates relating to future performance, events or expectations; the Company’s strategies, positioning, resources, capabilities and expectations for future
performance; and the Company's outlook and financial and other guidance. These statements are based upon assumptions made by the Company as of the
date hereof and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from expectations.
Risks and uncertainties that could adversely affect the Company’s business and prospects, and otherwise cause actual results to differ materially from those
anticipated, include, without limitation: the ability of the Company to successfully manage leadership and organizational changes, including the ability of the
Company to attract, motivate and retain key employees; U.S., European and worldwide economic conditions and related uncertainties; the Company’s reliance
on third‐party reimbursement policies to support the sales and market acceptance of its products, including the possible adverse impact of government
regulation and changes in the availability and amount of reimbursement and uncertainties for new products or product enhancements; uncertainties regarding
healthcare reform legislation, including associated tax provisions, or budget reduction or other cost containment efforts; changes in guidelines,
recommendations and studies published by various organizations that could affect the use of the Company’s products; uncertainties inherent in the
development of new products and the enhancement of existing products, including FDA approval and/or clearance and other regulatory risks, technical risks,
cost overruns and delays; the risk that products may contain undetected errors or defects or otherwise not perform as anticipated; risks associated with
strategic alliances and the ability of the Company to realize anticipated benefits of those alliances; risks associated with acquisitions, including, without
limitation, the Company’s ability to successfully integrate acquired businesses, the risks that the acquired businesses may not operate as effectively and
efficiently as expected even if otherwise successfully integrated; the risks that acquisitions may involve unexpected costs or unexpected liabilities; the risks of
conducting business internationally, including the effect of exchange rate fluctuations on those operations; manufacturing risks, including the Company’s
reliance on a single or limited source of supply for key components, and the need to comply with especially high standards for the manufacture of many of its
products and risks associated with utilizing third party manufacturers; the Company’s ability to predict accurately the demand for its products, and products
under development, and to develop strategies to address its markets successfully; the early stage of market development for certain of the Company’s
products; the Company’s leverage risks, including the Company’s obligation to meet payment obligations and financial covenants associated with its debt;
risks related to the use and protection of intellectual property; expenses, uncertainties and potential liabilities relating to litigation, including, without limitation,
commercial, intellectual property, employment and product liability litigation; technical innovations that could render products marketed or under development
by the Company obsolete; competition; and the Company’s ability to attract and retain qualified personnel.
The risks included above are not exhaustive. Other factors that could adversely affect the company's business and prospects are described in filings made
with the SEC. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements presented
herein to reflect any change in expectations or any change in events, conditions or circumstances on which any such statements are based.
Hologic, Aptima, Aptima Combo 2, Genius, Horizon, MyoSure, NovaSure, Panther, Selenia, The Science of Sure, ThinPrep, Tigris and associated logos, as
may be used in this presentation, are trademarks and/or registered trademarks of Hologic, Inc. and/or its subsidiaries in the United States and/or other
countries. Procleix is a trademark of Grifols Diagnostic Solutions Inc.
HOLX Investor Overview / November 2015
2
Non-GAAP Financial Measures
Hologic has presented the following non-GAAP financial measures in this presentation: revenues; gross margins; operating expenses; operating income;
interest expense; pre-tax income; net income; EPS; and adjusted EBITDA. In this presentation, Hologic defines its non-GAAP revenues to primarily include
contingent revenue earned post-acquisiton in FY13 under its blood screening collaboration that was eliminated under purchase accounting. Hologic defines
adjusted EBITDA as its non-GAAP net income plus net interest expense, income taxes, and depreciation and amortization expense included in its non-GAAP
net income. Hologic defines its non-GAAP gross margins, operating expenses, operating income, interest expense, pre-tax income and EPS to exclude, as
applicable: (i) the amortization of intangible assets and impairment of goodwill and intangible assets; (ii) acquisition-related charges and effects, such as
charges for contingent consideration, transaction costs, integration costs including retention, and credits and/or charges associated with the write-up of
acquired inventory and fixed assets to fair value, and the effect of a reduction in revenue related to contingent revenue under the Company’s blood screening
collaboration; (iii) non-cash interest expense related to amortization of the debt discount for the equity conversion option of convertible debt securities; (iv)
restructuring and divestiture charges; (v) non-cash extinguishment losses and debt transaction costs; (vi) litigation settlement charges (benefits); (vii) otherthan-temporary impairment losses on investments; and (viii) other one-time, nonrecurring, unusual or infrequent charges, expenses or gains that may not be
indicative of Hologic’s core business results; and to include income taxes related to such adjustments.
These non-GAAP financial measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.
The company’s definition of these non-GAAP measures may differ from similarly titled measures used by others.
The non-GAAP financial measures used in this press release adjust for specified items that can be highly variable or difficult to predict. The company generally
uses these non-GAAP financial measures to facilitate management’s financial and operational decision-making, including evaluation of Hologic’s historical
operating results, comparison to competitors’ operating results and determination of management incentive compensation. These non-GAAP financial
measures reflect an additional way of viewing aspects of the company’s operations that, when viewed with GAAP results and the reconciliations to
corresponding GAAP financial measures, may provide a more complete understanding of factors and trends affecting Hologic’s business.
Because non-GAAP financial measures exclude the effect of items that will increase or decrease the company’s reported results of operations, management
strongly encourages investors to review the company’s consolidated financial statements and publicly filed reports in their entirety. A reconciliation of the nonGAAP financial measures to the most directly comparable GAAP financial measures is included in the tables accompanying this release.
HOLX Investor Overview / November 2015
3
Presentation Outline
Overview
Markets and products
Financials and milestones
Financial appendix
HOLX Investor Overview / November 2015
4
Hologic Today
• Diverse, innovative healthcare products focused on early detection and intervention
– Strong position in women’s health
– Revenue of $2,705 million in FY15, with 9.9% constant currency growth
• Revenue composition FY15
By Business
Diagnostics
45%
By Type
By Geography
OUS
24%
Breast
Health
39%
US
76%
Service
16%
Capital
23%
Consumables
61%
Surgical
12%
Skeletal
4%
Note: Hologic’s fiscal year runs from October to September.
HOLX Investor Overview / November 2015
5
Investment Highlights
• US market leader in key franchises*
HOLX
<60%
Others
45%
#1
Others
25%
HOLX
~75%
#1
Others
25%
Others
30%
HOLX
~70%
#1
HOLX
~75%
#1
Others
40%
HOLX
~60%
#1
• Focused on sustainable, long-term revenue growth
– Better commercial execution
– Multiple important product cycles underway
– Untapped international opportunity
* All market shares except mammography are Hologic estimates for the US market on a unit basis in
2014. Mammography is estimated for the US market as of fiscal year-end 2015. Procleix blood
screening products are marketed globally by Hologic’s partner, Grifols.
HOLX Investor Overview / November 2015
6
Investment Highlights (cont.)
• Strong profitability and cash flows
– Near-term, primary use to pay down debt
• Long-term opportunities for margin expansion
– Operational efficiencies
– Reduce interest expense and tax rate
• New management team leading broad, deep turnaround
HOLX Investor Overview / November 2015
7
Turnaround Well Underway
Improved commercial execution generates consistent reported growth
$694
+10%
$700
$631
$626
$613
$622
$612
-3%
$625
+2%
$633
+1%
$653
+7%
$640
+3%
$703
+10%
$655
+5%
$600
$500
2013
2014
Q1
Q2
* Total GAAP revenue growth as reported with the exception of 4Q FY14. 4Q excludes ~ $20 million onetime contribution from restructuring of Roka license. Percentage changes are versus prior year periods.
2015
Q3
Q4
HOLX Investor Overview / November 2015
8
Turnaround Well Underway
Even stronger constant currency growth
+7.7%
+7.2%
1Q15
2Q15
+12.2%
+12.2%
3Q15
4Q15
+ 2.8%
+ 1.7%
+ 0.5%
1Q14
2Q14
3Q14
4Q14
-3.2%
* Total GAAP revenue growth as reported with the exception of 4Q FY14, which
excludes ~ $20 million one-time contribution from restructuring of Roka license.
Percentage changes are versus prior year periods.
HOLX Investor Overview / November 2015
9
Broad, Deep Improvement in Quarterly Revenue
2015
2014
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
Dx
Breast
Surgical
Skeletal
Total US
Dx
Breast
Surgical
Skeletal
Total OUS
Dx
Breast
Surgical
Skeletal
Worldwide
* Constant currency revenue change with the exception of 4Q FY14, which excludes ~ $20 million one-time contribution from restructuring of Roka license. Light green ovals = 0-5% growth,
mixed green ovals = 5-10% growth, dark green ovals = >10% growth. Red rectangles = decline, all compared to prior year periods.
HOLX Investor Overview / November 2015
10
Presentation Outline
Overview
Markets and products
Financials and milestones
Financial appendix
HOLX Investor Overview / November 2015
11
Breast Health Overview
• Mammography includes sales and service
of 2D digital and GeniusTM 3D systems and
ancillaries
– US: market upgrading to tomosynthesis
– OUS: opportunities to place 2D systems
• Hologic leads US market with ~60% share
FY15 Revenue
$1,063 Million
14.9% Growth*
Interventional
16%
Other
1%
– Gains from multi-faceted Genius 3D
mammography marketing campaign
• Interventional includes breast biopsy
solutions, complement to mammography
systems
• Service represents ~40% of total
Imaging
83%
– Outstanding team of field engineers
* Constant currency revenue growth.
HOLX Investor Overview / November 2015
12
Growth Driver: Genius 3D MammographyTM
• Hologic first to US market with FDA-approved product in 2011
• Four recent catalysts for faster adoption
– JAMA study confirmed clinical superiority of Hologic Genius
technology to 2D
41%
increase in
invasive breast
cancers
29%
increase in all
breast cancers
15%
decrease
in recall rates
– Favorable CMS reimbursement took effect January 1, 2015
» Pathway for private insurers to follow
– Competitive product launches boost market conversion,
illustrate our product advantages
– Multi-faceted Genius 3D mammography marketing campaign
HOLX Investor Overview / November 2015
13
Breast Tomosynthesis Opportunity
• Roughly 14,500 total digital mammography
units in US
• Hologic installed base as of September 2015
www.genius3dmammography.com
– Approximately 6,200 2D
– Approximately 2,400 Genius 3D
– 3D less than 30% of HOLX installed base
• Early stages of new product cycle
– Over time expect almost entire market to convert
– Total US market opportunity $3.5-$4 billion
• OUS markets represent long-term upside
HOLX Investor Overview / November 2015
14
Hologic Competitive Advantages
• Positive feedback from RSNA
– 71 papers and posters on breast tomosynthesis
– 68% increase in leads generated versus prior year
– Emphasized superiority of Hologic 3D tomosynthesis
to 2D, competition
HOLX Investor Overview / November 2015
15
Diagnostic Solutions Overview
• Market leader in three primary segments
– Cervical cancer
» ThinPrep liquid Pap testing
» Aptima HPV
– Sexually transmitted diseases
» Aptima molecular assays for CT, NG and trichomoniasis
FY15 Revenue
$1,212 Million
5.7% Growth*
Blood
21%
– Blood screening: Procleix assays, marketed by
partner Grifols
» HIV, HCV, HBV, West Nile virus in US
» Plus HEV in Europe, Japan
» And Parvo/HAV in plasma
Cytology &
Perinatal
39%
Molecular
40%
• Two complementary, well-respected sales teams
calling on OB/GYN physicians and labs
* Constant currency change excluding $20.1 million one-time contribution from restructuring of
Roka license in 2014.
HOLX Investor Overview / November 2015
16
Growth Driver: Panther System
• Already lead in high-volume accounts with Tigris
– Panther offers leading-edge automation to labs of
all sizes
– Increase molecular testing in hospitals
– Consolidate menu on single platform
• New product cycle has two elements
– System placements
» Shipped more than 1,000 through Q3 FY15
– Menu expansion and increasing assay pull-through
» HIV and HCV assays CE-marked in Europe
» New Fusion platform will add PCR capabilities to large
installed base
* In clinical diagnostics and blood screening markets.
HOLX Investor Overview / November 2015
17
GYN Surgical Solutions
• Product line focused on diagnosing, treating
common gynecologic conditions
• Two market-leading products that treat abnormal
uterine bleeding
FY15 Revenue
$336 Million
10.9% Growth*
Other
1%
– NovaSure
» Global Endometrial Ablation solution offering safe, fast,
customized treatment
» More than 2 million uses since FDA approval
MyoSure
35%
– MyoSure
» Hysteroscopic tissue removal solution offering incisionless, fast removal of fibroids, polyps, etc.
* Constant currency revenue growth.
NovaSure
64%
HOLX Investor Overview / November 2015
18
Skeletal Health Solutions
• Two areas of focus
– Osteoporosis screening/diagnosis and obesity
management via bone densitometer
– Orthopedic imaging via “Mini” C-Arm
• FY15 revenue of $94 million
– 6.7% year over year growth in constant currency
• Revitalized commercial operations through
Horizon new product launch and sales force
expansion
– Reversed long-term sales decline
• Now poised for innovation and segment expansion
HOLX Investor Overview / November 2015
19
Significant International Opportunities
• Business is underdeveloped outside the United States
• Hired new executive with proven track record to oversee all international
business units
-
Improving commercial capabilities, establishing registrations and reimbursement in
key markets
• Specific areas of opportunity
-
2-D mammography in developed, emerging markets
3-D upgrades in established markets
ThinPrep to replace conventional Pap
Molecular diagnostics in Europe, Japan
Surgical penetration in developed markets
Strengthen partnerships with dealers
• Integrate with international operations, tax strategy
HOLX Investor Overview / November 2015
20
Presentation Outline
Overview
Markets and products
Financials and milestones
Financial appendix
HOLX Investor Overview / November 2015
21
Revenue Highlights 4Q Fiscal 2015
• Another quarter of strong top-line growth in the U.S. and internationally
– Led by Genius 3D Mammography, molecular diagnostics and MyoSure
– ThinPrep and NovaSure franchises stable
Non-GAAP
Revenue ($M)*
4Q15
4Q14
Diagnostics
$304.2
$297.1
Reported
Change
2.4%
Breast Health
$286.3
$241.5
18.6%
21.6%
GYN Surgical
$86.8
$78.5
10.6%
12.9%
Skeletal Health
$25.5
$23.4
8.8%
13.7%
Total Revenue
$702.8
$640.5
9.7%
12.2%
US
$538.1
$479.9
12.2%
12.2%
OUS
$164.7
$160.6
2.5%
12.5%
* Total revenue on a reported basis, excluding $20.1 million one-time contribution in Diagnostics and total revenue
from restructuring of Roka license in 4Q14. Percentage changes are versus prior year periods.
CC Change
4.4%
HOLX Investor Overview / November 2015
22
Revenue Highlights Fiscal 2015
Non-GAAP
Revenue ($M)*
FY15
FY14
Reported
Change
CC Change
Diagnostics
$1,211.8
$1,166.7
3.9%
5.7%
Breast Health
$1,063.4
$944.7
12.6%
14.9%
GYN Surgical
$335.8
$307.8
9.1%
10.9%
$94.0
$91.3
3.0%
6.7%
Total Revenue
$2,705.0
$2,510.6
7.7%
9.9%
US
$2,056.3
$1,879.0
9.5%
9.5%
$648.8
$631.6
2.7%
11.0%
Skeletal Health
OUS
* Total revenue on a reported basis, excluding $20.1 million one-time contribution in Diagnostics and total revenue
from restructuring of Roka license in FY14. Percentage changes are versus prior year.
HOLX Investor Overview / November 2015
23
Financial Highlights 4Q Fiscal 2015
Non-GAAP
4Q15
Change vs.
4Q14*
YTD
FY15
Change
vs. FY14*
Revenues
$702.8
9.7%
$2,705.0
7.7%
Gross Margin
64.6%
100 bps
64.2%
110 bps
Operating Expenses
$218.7
9.9%
$835.5
7.0%
Operating Margin
33.5%
100 bps
33.3%
130 bps
Net Income
$127.1
18.9%
$484.7
19.2%
Diluted EPS
$0.43
13.2%
$1.67
14.4%
EBITDA
$250.9
10.5%
$972.3
9.9%
In millions, except EPS
* Percentage changes exclude $20.1 million one-time revenue contribution from restructuring of Roka license,
which increased gross and operating margins and added $0.05 to EPS in 4Q14.
HOLX Investor Overview / November 2015
24
2016 Financial Guidance
Full Year (Non-GAAP*)
1Q (Non-GAAP*)
In millions,
except EPS
2016
Guidance
Reported
vs. 2015
CC
vs. 2015
1Q16
Guidance
Reported
vs. 2015
CC
vs. 2015
Revenues
$2,810 - $2,840
3.9 - 5.0%
4.4 - 5.5%
$680 - 690
4.2 – 5.7%
5.7 – 7.2%
$1.80 - $1.84
7.8 - 10.2%
8.7 – 11.1%
$0.41 - $0.42
5.1 – 7.7%
7.7 – 10.3%
Diluted EPS
*Guidance provided by press release on 11/4/15. Presentation here is not, and should not be
construed as, re-affirmation of guidance. Guidance assumes diluted shares outstanding of 302-305
million for the full year and an annual effective tax rate of 34%.
HOLX Investor Overview / November 2015
25
Committed to Debt Reduction
• Free cash flow will be primarily used
to reduce debt
• Net debt* $3.1 billion as of Sept 2015
• Continuing to reduce debt ahead of
schedule
– $0.3 billion voluntary prepayment of
Term Loan B in December 2014
• Will continue to reduce leverage
Net Debt and Leverage Ratio*
5.0
$4.5
$4.0
4.0
$3.5
5.5x
3.0
$3.1
4.6x
4.0x
2.0
– Target 2.5x by FY17 year end
• New 5-year credit agreement for up to
$2.5 billion in May
• Re-financed $1.0 billion Senior Notes
in July
• Repurchased $300 million of 2010
convertible notes for $543.7 million in
4Q15
•
3.3x
1.0
0.0
FY12
FY13
FY14
FY15
Net debt is total debt minus cash; Leverage ratio is net principal debt to TTM adjusted EBITDA.
HOLX Investor Overview / November 2015
26
Transformation of Capital Structure Underway
• Lowered total debt by $1.4 billion since 2012*
5,500
• $625 million in voluntary Term Loan B prepayments
• Repaid $405 million convert in December 2013
• Repaid $300 million of $450 million convert due
2037 in 4Q15.
5,000
• Entered into new five-year secured credit
agreement in May 2015
• $1.5 billion senior Term Loan
• LIBOR + 1.75%
• New payment obligation is ~$650 million less
in 2016-17
• Upsized, $1.0 billion revolving credit facility ($175
million initially drawn) increases flexibility
• July 2015 refinanced $1.0 billion of Senior
Notes due 2022
• Interest rate lowered from 6.25% to 5.25%
• Maturity moved out two years
* Hologic’s acquisition of Gen-Probe closed in 4QFY12.
$5,036
4,500
1,485
4,000
$3,640
175
3,500
992
3,000
1,474
2,500
1,000
2,000
1,500
987
1,000
1,559
500
1,004
0
*Q4 FY12
Q4 FY15
Convert Notes
Senior Notes
Term Loan A
Term Loan B
New Term Loan A
Revolver
HOLX Investor Overview / November 2015
27
Significant Improvement in ROIC
10.9%
10.6%
10.0%
9.7%
9.3%
8.2%
8.3%
8.3%
2014
2015
Q1
ROIC, as calculated in Hologic’s quarterly earnings presentation, is presented on a
Trailing Twelve Month (TTM) basis, and is defined as adjusted net operating profit
after tax divided by average net debt plus stockholders’ equity.
Q2
Q3
Q4
HOLX Investor Overview / November 2015
28
Positive Cash Flow & EBITDA Trends
300
275
250
225
200
175
150
125
100
75
50
25
0
Q1'14
Q2'14
Q3'14
EBITDA
Free cash flow defined as operating cash flow minus capital expenditures.
Q4'14
Op Cash Flow
Q1'15
Q2'15
Q3'15
Q4'15
Free Cash Flow
HOLX Investor Overview / November 2015
30
Long-Term Opportunities
Revenue Growth
• 3D tomo rollout
• Panther placements
and menu expansion
• International growth
• Pipeline products
• Tuck-in acquisitions
Margin Expansion
• Operational
improvements
• G&A leverage
• Debt reduction
• Tax strategy
HOLX Investor Overview / November 2015
30
Presentation Outline
Overview
Markets and products
Financials and milestones
Financial appendix
HOLX Investor Overview / November 2015
31
Overview of Hologic’s Debt
Senior Term Loan A
– $1.5 billion in annual payments over the next five years:
» $75, $84, $122, $150 and $1,050 million
» LIBOR + 1.75%
– Revolving credit facility ($1.0 billion)
» $175 million initially drawn
2% convertible notes
– $150 million (2010 notes) due 2037 (was $450 million prior to Q4 paydown)
» Strike price of $23.03, callable in December 2016
» Holders are eligible to convert as stock price exceeded 130% trigger ($29.94/share)
– $370 million (2013 notes) due 2043
» Strike price of $38.59 callable in December 2017
» Currently 0% cash coupon; accretion 4%
– $500 million (2012 notes) due 2042
» Strike price of $31.18 callable in March 2018
$1 billion senior notes due 2022
– 5.25% interest
HOLX Investor Overview / November 2015
32
Business Segments Revenue Detail (unaudited)
$s in millions
Fiscal Year 2013
1Q13
12/29/12
Business Segment Revenues
Cytology & Perinatal
Molecular Diagnostics
2Q13
3/30/13
3Q13
6/29/13
4Q13
9/28/13
Full Year
$137.0
126.0
$124.9
122.2
$132.2
108.7
$124.8
113.5
$519.0
470.4
42.9
49.4
56.5
51.7
200.5
Total Diagnostics
$305.9
$296.5
$297.4
$290.0
$1,189.8
Breast Imaging
$173.8
$171.3
$182.9
$188.0
$716.0
41.1
42.6
41.4
41.2
166.3
5.9
6.2
5.7
5.0
22.8
$220.8
$220.1
$230.0
$234.2
$905.1
Surgical
$80.9
$73.7
$75.8
$76.7
$307.1
Skeletal Health
$23.7
$22.4
$22.9
$21.2
$90.2
Total Revenues
$631.4
$612.7
$626.1
$622.1
$2,492.3
Blood Screening
Interventional Breast Solutions
Other
Total Breast Health
HOLX Investor Overview / November 2015
33
Business Segments Revenue Detail (unaudited)
$s in millions
Fiscal Year 2014
1Q14
12/28/13
2Q14
3/29/14
3Q14
6/28/14
4Q14
9/27/14
Full Year
Business Segment Revenues
Cytology & Perinatal
$121.6
$119.4
$122.7
112.8
112.5
116.2
137.3*
478.8*
51.3
58.9
54.2
58.9
223.3
Total Diagnostics
$285.7
$290.8
$293.1
$317.2*
$1,186.8*
Breast Imaging
$178.0
$189.4
$192.7
$196.3
$756.5
42.9
43.2
41.4
41.4
168.8
5.6
6.1
3.9
3.8
19.4
$226.5
$238.7
$238.0
$241.5
$944.7
Surgical
$78.9
$72.0
$78.5
$78.5
$307.8
Skeletal Health
$21.4
$23.5
$23.0
$23.4
$91.3
Total Revenues
$612.4
$625.0
$632.6
$660.6*
Molecular Diagnostics
Blood Screening
Interventional Breast Solutions
Other
Total Breast Health
* Excluding the $20.1 million revenue benefit related to an amendment to the Company’s
license agreement with Roka Bioscience (all of which was in the U.S.), 4Q14 molecular
diagnostics revenue would have been $117.2 million, total diagnostics revenue would have
been $297.1 million, and total revenues would have been $640.5 million. Similarly, FY14
molecular diagnostics revenue would have been $458.7 million, total diagnostics revenue
would have been $1,166.7 million, and total revenues would have been $2510.6 million.
$121.0
$484.7
$2,530.7*
HOLX Investor Overview / November 2015
34
Business Segments Revenue Detail (unaudited)
$s in millions
Fiscal Year 2015
1Q15
12/27/14
Business Segment Revenues
Cytology & Perinatal
Molecular Diagnostics
2Q15
3/28/15
3Q15
6/27/15
4Q15
9/26/15
$120.1
119.1
$113.3
119.7
$118.1
124.6
64.9
63.7
64.2
Total Diagnostics
$304.1
$296.7
$306.9
$304.2
Breast Imaging
$197.5
$234.1
241.6
Blood Screening
Interventional Breast Solutions
$211.0
$120.8
123.2
60.2
41.9
42.7
43.3
42.4
2.6
1.8
2.1
2.3
$242.0
$255.5
$279.6
$286.3
GYN Surgical
$84.4
$79.1
$85.5
86.8
Skeletal Health
$22.3
$24.2
$22.0
25.5
Total Revenues
$652.8
$655.5
$693.9
$702.8
Other
Total Breast Health
HOLX Investor Overview / November 2015
35
Reconciliation of GAAP to Non-GAAP (unaudited)
$s in millions, except earnings per share
Twelve Months Ended
September 26, 2015
September 27, 2014
GROSS PROFIT
GAAP gross profit
Adjustments:
Amortization of intangible assets
Incremental depreciation expense
Acquisition and integration-related costs
Impairment charges
Other
Non-GAAP gross profit
GROSS MARGIN PERCENTAGE
GAAP gross margin percentage
Impact of adjustments above
Non-GAAP gross margin percentage
$1,432.7
OPERATING EXPENSES
GAAP operating expenses
Adjustments:
Amortization of intangible assets
Incremental depreciation expense
Acquisition and integration-related costs
Restructuring and divestiture charges
Impairment Charges
Other
Non-GAAP operating expenses
OPERATING MARGIN
GAAP income from operations
Adjustments to gross profit as detailed above
Adjustments to operating expenses as detailed above
Non-GAAP income from operations
Continued on next page
$1,245.5
$299.7
3.0
0.5
$1,735.9
$314.6
6.3
10.5
26.6
$1,603.5
53.0%
11.2%
64.2%
49.2%
14.2%
63.4%
$977.6
$965.8
(110.2)
(3.2)
(0.1)
(28.5)
(0.1)
$835.5
(113.8)
(4.8)
(4.6)
(51.7)
(6.9)
(2.9)
$781.1
$455.1
303.2
142.1
$900.4
$279.7
358.0
184.7
$822.4
HOLX Investor Overview / November 2015
36
Reconciliation of GAAP to Non-GAAP (unaudited)
$s in millions, except earnings per share
Twelve Months Ended
September 26, 2015
September 27, 2014
OPERATING MARGIN PERCENTAGE
GAAP operating margin percentage
Impact of adjustments above
Non-GAAP operating margin percentage
INTEREST EXPENSE
GAAP interest expense
Adjustments: Non-cash interest expense relating to convertible notes
Debt transaction charges
Non-GAAP interest expense
PRE-TAX INCOME
GAAP pre-tax earnings (loss)
Adjustments to pre-tax earnings as detailed above
Debt transaction charges
Other
Non-GAAP pre-tax income
NET INCOME
GAAP net income
Adjustments to GAAP net income (loss) as detailed above
Income tax effect of reconciling items 2
Non-GAAP net income
EARNINGS PER SHARE
GAAP earnings per share – Diluted
Adjustments to net earnings (loss) (as detailed below)
Non-GAAP earnings per share – Diluted 1
ADJUSTED EBITDA
Non-GAAP net income
Interest expense, net, not adjusted above
Provision for income taxes
Depreciation expense, not adjusted above
Adjusted EBITDA
16.8%
16.5%
33.3%
11.1%
21.4%
32.5%
$205.5
(34.9)
(9.3)
$161.3
$220.6
(37.1)
(1.0)
$182.5
$177.2
489.4
62.7
7.8
$737.1
$48.1
580.8
7.4
6.9
$643.2
$131.6
559.9
(206.8)
$484.7
$17.3
595.1
(192.7)
$419.7
$0.45
1.22
$1.67
$0.06
1.45
$1.51
$484.7
160.0
252.5
75.1
$972.3
$419.7
181.2
223.5
80.3
$904.7
1Non-GAAP earnings per share was calculated based on: 289,537 and 278,360 weighted average diluted shares outstanding for the years ended
September 26, 2015 and September 27, 2014, respectively.
2 To reflect an annual effective tax rate of 34.25% on a non-GAAP basis for the year ended September 26, 2015 and 34.75% on a non-GAAP basis
for the year ended September 27, 2014.
HOLX Investor Overview / November 2015
37
For more information:
Michael Watts
VP, Investor Relations and Corporate Communications
858-410-8588
HOLX Investor Overview / November 2015