-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JuxJrU+YNbQnE03GkTWWaDuuzV4QIVUVnd736AUScUf+OXHGAzFL/DGFigdS46Ge JOM9tPUuXCxjpyGWS9p70Q== 0000859737-96-000012.txt : 19960814 0000859737-96-000012.hdr.sgml : 19960814 ACCESSION NUMBER: 0000859737-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960629 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOLOGIC INC CENTRAL INDEX KEY: 0000859737 STANDARD INDUSTRIAL CLASSIFICATION: X-RAY APPARATUS & TUBES & RELATED IRRADIATION APPARATUS [3844] IRS NUMBER: 042902449 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18281 FILM NUMBER: 96610422 BUSINESS ADDRESS: STREET 1: 590 LINCOLN ST CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6178902300 MAIL ADDRESS: STREET 1: 590 LINCOLN STREET CITY: WALTHAM STATE: MA ZIP: 02154 10-Q 1 BODY OF 10Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 29, 1996 ------------- or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 0-18281 Hologic, Inc. (Exact name of registrant as specified in its charter) Delaware 04-2902449 (State of incorporation) (I.R.S. Employer Identification No.) 590 Lincoln Street, Waltham, Massachusetts 02154 (Address of principal executive offices) (Zip Code) (617) 890-2300 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of August 1, 1996, 11,310,790 shares of the registrant's Common Stock, $.01 par value, were outstanding. HOLOGIC, INC. AND SUBSIDIARIES INDEX Page PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets June 29, 1996 and September 30, 1995............................... 3 Consolidated Statements of Income Three and Nine Months Ended June 29, 1996 and June 24, 1995.................................................. 4 Consolidated Statement of Stockholders' Equity Nine Months ended June 29, 1996.................................... 5 Consolidated Statements of Cash Flows Nine Months Ended June 29, 1996 and June 24, 1995.................................................. 6 Notes to Consolidated Financial Statements......................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................................... 10 PART II - OTHER INFORMATION.......................................... 14 SIGNATURES........................................................... 15 PART I - FINANCIAL INFORMATION Item 1. Financial Statements HOLOGIC, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
ASSETS June 29, September 30, 1996 1995 ------- ------------ CURRENT ASSETS: Cash and cash equivalents...................... $31,771,656 $7,447,813 Short-term investments......................... 28,384,210 2,492,671 Accounts receivable, less reserves of $1,300,000 and $850,000, respectively.......... 18,700,681 11,643,883 Inventories.................................... 9,636,249 6,917,000 Prepaid expenses and other current assets...... 2,452,507 2,058,707 ---------- ---------- Total current assets......................... 90,945,303 30,560,074 ---------- ---------- PROPERTY AND EQUIPMENT, at cost: Equipment...................................... 3,626,470 2,600,381 Furniture and fixtures......................... 772,970 652,446 Leasehold improvements......................... 589,011 506,495 ---------- --------- 4,988,451 3,759,322 Less- Accumulated depreciation and amortization 2,728,480 2,298,168 ---------- --------- 2,259,971 1,461,154 ---------- --------- Long-term investments.......................... 5,649,374 -- ---------- --------- Other assets, net............................. 2,235,864 1,840 785 ---------- --------- $101,090,512 $33,862,013 ============ =========== LIABILITIES AND STOCKHOLDERS' EQUITY June 29, September 30, 1996 1995 --------- ------------ CURRENT LIABILITIES: Line of credit................................ $2,394,619 $2,058,898 Accounts payable.............................. 3,739,683 3,773,000 Accrued expenses.............................. 5,804,214 3,965,750 Deferred revenue.............................. 1,902,293 1,392,667 ---------- ---------- Total current liabilities..................... 13,840,809 11,190,315 ---------- ---------- STOCKHOLDERS' EQUITY: Common stock, $.01 par value- Authorized - 30,000,000 shares Issued and outstanding - 11,303,006 and 8,244,200 shares, respectively............. 113,030 82,442 Capital in excess of par value................ 71,617,030 15,313,672 Retained earnings............................. 15,691,630 7,420,593 Cumulative translation adjustment............. (171,987) (145,009) ---------- ----------- Total stockholders' equity.................... 87,249,703 22,671,698 ---------- ----------- $101,090,512 $33,862,013 ============ ============ The accompanying notes are an integral part of these consolidated financial statements.
HOLOGIC, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended June 29, June 24, June 29, June 24, 1996 1995 1996 1995 ------- ------- -------- -------- REVENUES: Product sales............... $21,983,232 $10,804,357 $54,050,536 $29,108,081 Other revenues.............. 845,796 496,963 2,299,193 1,423,213 ----------- ----------- ----------- ----------- 22,829,028 11,301,320 56,349,729 30,531,294 COSTS AND EXPENSES: Cost of product sale ....... 9,986,252 5,669,960 25,198,033 15,905,915 Research and development.... 1,796,229 1,014,569 4,873,128 3,091,135 Selling and marketing....... 3,444,622 2,112,318 9,202,748 5,646,786 General and administrative.. 1,986,539 1,158,790 5,237,090 3,198,596 Litigation expenses......... -- 800,968 797,819 1,152,828 ----------- --------- ---------- ---------- 17,213,642 10,756,605 45,308,818 28,995,260 ----------- ---------- ---------- ---------- Income from operations...... 5,615,386 544,715 11,040,911 1,536,034 Interest income.............. 685,738 164,012 1,434,983 446,583 Other expense................ (61,094) (91,059) (184,857) (247,619) ----------- --------- --------- ---------- Income before provision for income taxes............ 6,240,030 617,668 12,291,037 1,734,998 PROVISION FOR INCOME TAXES... 2,300,000 130,000 4,020,000 450,000 ---------- --------- ---------- ---------- Net income................. $3,940,030 $487,668 $8,271,037 $1,284,998 ========== ======== ========== ========== NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE (1).. $ .32 $ .06 $ .76 $ .15 ======= ====== ====== ====== WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (1)...12,265,234 8,819,542 10,846,084 8,817,500 (1) All share and per-share amounts have been adjusted to reflect the two-for-one stock split effected on March 25, 1996. The accompanying notes are an integral part of these consolidated financial statements.
HOLOGIC, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
Common Stock Capital in Cumulative Total Number of $.01 Par Excess of Retained Translation Stockholders' Shares Value Par Value Earnings Adjustment Equity --------- -------- ---------- -------- ----------- ------------- Balance, September 30, 1995 8,244,200 $82,442 $15,313,672 $7,420,593 $(145,009) $22,671,698 Issuance of common stock, net of issuance costs of $390,774 2,492,000 24,920 49,168,875 -- -- 49,193,795 Issuance of common stock pursuant to options and employee stock purchase plan 566,806 5,668 2,314,703 -- -- 2,320,371 Compensation expense related to issuance of stock options -- -- 79,780 -- -- 79,780 Tax benefit from stock options exercised -- -- 4,740,000 -- -- 4,740,000 Net income -- -- -- 8,271,037 -- 8,271,037 Translation adjustments -- -- -- -- (26,978) (26,978) -------- -------- --------- --------- -------- --------- Balance, June 29, 1996 11,303,006 $113,030 $71,617,030 $15,691,630 $(171,987) $87,249,703 ========== ======== =========== =========== ========== =========== The accompanying notes are an integral part of these consolidated financial statements.
HOLOGIC, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended June 29, June 24, 1996 1995 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income............................. $8,271,037 $1,284,998 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization....... 553,143 420,121 Compensation expense related to issuance of stock options........... 79,780 -- Changes in assets and liabilities- Accounts receivable.............. (7,433,302) 172,809 Inventories...................... (2,818,229) (1,406,904) Prepaid expenses and other current assets............ (401,839) (513,527) Accounts payable................. 36,242 800,764 Accrued expenses................. 1,871,029 275,272 Deferred revenue................. 528,350 562,715 ------------ ---------- Net cash provided by operating activities............ 686,211 1,596,248 ------------ --------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of short-term investments, net. (31,540,914) (531,837) Purchase of property and equipment....... (1,257,135) (612,634) Increase in other assets................. (331,103) (120,674) ------------- ---------- Net cash used in investing activities............. (33,129,152) (1,265,145) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings on line of credit......... 456,329 286,514 Issuance of common stock, net............ 49,350,296 -- Issuance of common stock pursuant to options and employee stock purchase plans........................... 2,163,870 104,496 Tax benefit from stock options exercised. 4,740,000 -- ---------- ---------- Net cash provided by financing activities............. 56,710,495 391,010 ---------- ------- EFFECT OF EXCHANGE RATE CHANGES ON CASH.... 56,289 67,350 ------ ------ NET INCREASE IN CASH AND CASH EQUIVALENTS......................... 24,323,843 789,463 CASH AND CASH EQUIVALENTS, beginning of period...................... 7,447,813 5,880,010 ---------- ---------- CASH AND CASH EQUIVALENTS, end of period... $31,771,656 $6,669,473 =========== ========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for income taxes...................... $1,155,117 $ 163,686 ========== ========= SUPPLEMENTAL SCHEDULE OF NONCASH TRANSACTIONS: Preferred stock investment acquired in exchange for common stock $ -- $ 324,088 ========= ========= The accompanying notes are an integral part of these consolidated financial statements.
HOLOGIC, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Basis of Presentation The consolidated financial statements of Hologic, Inc. (the Company) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended September 30, 1995, included in the Company's Form 10-K as filed with the Securities and Exchange Commission on December 26, 1995. The consolidated balance sheet as of June 29, 1996, the consolidated statements of income for the three and nine months ended June 29, 1996 and June 24, 1995, the consolidated statement of stockholders' equity for the nine months ended June 29, 1996 and, the consolidated statements of cash flows for the nine months ended June 29, 1996 and June 24, 1995, are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of results for these interim periods. The results of operations for the three and nine months ended June 29, 1996 are not necessarily indicative of the results to be expected for the entire fiscal year ending September 28, 1996. (2) Summary of Significant Accounting Policies The accompanying consolidated financial statements reflect the application of certain accounting policies described in this and other notes to the consolidated financial statements. (a) Inventories: Inventories are stated at the lower of cost (first- in, first-out) or market and consist of the following: June 29, September 30, 1996 1995 ---------- ------------- Raw materials and work-in-process........ $6,605,724 $4,030,275 Finished goods........................... 3,030,525 2,886,725 ---------- ----------- $9,636,249 $6,917,000 Work-in-process and finished goods inventories consist of material, labor and manufacturing overhead. (b) Foreign Currency Translation: Assets and liabilities of the Company's foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the end of the period, and revenues and expenses are translated at the weighted average exchange rate in effect during the period. Gains and losses from foreign currency translation are included in the stockholders' equity section under cumulative translation adjustment. Foreign currency transaction gains and losses arising primarily from settlement of sales transactions with the Company's foreign subsidiaries are included in results of operations. A transaction loss of $21,683 and $67,380 for the three and nine months ended June 29, 1996, respectively, and transaction losses of $26,422 and $93,595 for the three and nine months ended June 24, 1995, respectively, are included in other expense in the accompanying consolidated statements of income. (3) Line of Credit The Company has an international line of credit with a bank for the equivalent of $3,000,000, which bears interest at PIBOR plus 2.25%. The borrowings under this line are denominated in the local currency of its European subsidiaries and are primarily used by these subsidiaries to settle intercompany sales. (4) Significant Customers and Concentration of Credit Risk In the nine months ended June 29, 1996 and June 24, 1995, the Company had one customer who comprised 15% and 25% of product sales, respectively. This customer had amounts due to the Company of approximately $1,950,000 at June 29, 1996, all of which were within the payment terms of the sales. (5) Patent Litigation The Company incurred litigation expenses in the first quarter of fiscal 1996 and in fiscal 1995 relating primarily to a patent dispute with Lunar Corporation ("Lunar") and, to a lesser extent, a separate patent dispute with B.V. Optische Industrie de Oude Delft ("Oldelft"). In November 1995, a definitive settlement agreement was reached between the Company and Lunar settling all outstanding disputes relating to x-ray and ultrasound technology. The complaint brought by Oldelft against the Company was dismissed in December 1995. In January 1996, Oldelft filed a motion for reconsideration of the dismissal and amended its complaint. In April 1996, the Court denied Oldelft its motion for reconsideration of the dismissal and in May 1996 Hologic and Oldelft settled this matter. (6) Stockholders' Equity On January 26, 1996, the Company completed a secondary public offering of an additional 2,492,000 shares (post split) of the Company's Common Stock at a price of $19.90 per share which resulted in net proceeds (after deducting issuance costs) of approximately $49,200,000. On February 25, 1996, the stockholders' of the Company approved an amendment to the Company's Certificate of Incorporation to increase the number of shares of Common Stock authorized from 10,000,000 to 30,000,000. On March 25, 1996, the Company effected a two-for-one stock split in the form of a stock dividend. All share and per share data in the accompanying consolidated financial statements have been retroactively restated to reflect the stock split. (7) Merger with FluoroScan Imaging Systems, Inc. On July 18, 1996, Hologic signed a definitive agreement to merge with FluoroScan Imaging Systems, Inc. ("FluoroScan"). The transaction is intended to be carried out by the merger of FluoroScan and a wholly-owned subsidiary of Hologic in a tax-free stock transaction, accounted for as a pooling of interests. The completion of this transaction is subject to approval by FluoroScan's stockholders, completion of certain due diligence items and regulatory approvals. FluoroScan's principal stockholders have provided the Company with a proxy to vote in favor of this merger. Upon consummation of the merger, Hologic will issue approximately 1.5 million shares of its common stock in exchange for all of the outstanding shares of FluoroScan's common stock, stock warrants and stock options to underwriters. In addition, Hologic has reserved approximately 300,000 additional shares of its common stock for issuance to holders of FluoroScan options. Hologic and FluoroScan estimate that they will incur direct transaction costs of approximately $1.8 million associated with the merger. These transaction costs will be expensed in the period incurred. PART I - FINANCIAL INFORMATION (Continued) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations HOLOGIC, INC. AND SUBSIDIARIES Results of Operations The Company's results of operations have and may continue to be subject to significant quarterly variation. The results for a particular quarter may vary due to a number of factors, including the overall state of health care and cost containment efforts, the development status and demand for drug therapies to treat osteoporosis, economic conditions in the Company's markets, the timing of orders, the timing of expenditures in anticipation of future sales, the mix of products sold by the Company, the introduction of new products and product enhancements by the Company or its competitors and pricing and other competitive conditions. Revenues. Total revenues for the third quarter of fiscal 1996 increased 102% to $22,829,028 from $11,301,320 for the third quarter of fiscal 1995. Total revenues for the current nine month period increased 85% to $56,349,729 from $30,531,294 for the first nine months of fiscal 1995. This increase was primarily due to the increase in the total number of DXA bone densitometer product shipments in both the Company's domestic and international markets, particularly in the United States where product sales for the first nine months of the year increased approximately 420% over the prior year. There was also a shift in product sales mix to the Company's new line of bone densitometers, the ACCLAIM [trademark] series, which the Company began shipping in January 1995. The new ACCLAIM products have higher average selling prices than the comparable DXA bone densitometers which they replace. For the current quarter, sales of the ACCLAIM product accounted for over 87% of product sales. Other revenues also increased for the current three and nine month periods due to increases in revenue relating to medical data management services provided to pharmaceutical companies to assist in the collection and monitoring of clinical trial data. Total revenues for the third quarter of fiscal 1996 increased 22% from $18,757,068 in the immediately preceding quarter primarily due to an increase in the number of DXA systems sold in the United States. In the first nine months of fiscal 1996, approximately 51% of product sales were generated in the United States, 22% in Europe, 21% in Asia, and 6% in other international markets. In the first nine months of fiscal 1995, approximately 19% of product sales were generated in the United States, 37% in Europe, 34% in Asia, and 10% in other international markets. The Company believes that the two major drivers of the growth in demand for its bone densitometers are (i) the availability of new and effective drug therapies to treat and prevent bone diseases, including osteoporosis, and (ii) the availability of reimbursement to healthcare providers for bone density measurements of patients. On September 29, 1995, the FDA cleared for marketing Merck & Co., Inc.'s ("Merck") new bisphosphonate, Fosamax, for treatment of established osteoporosis in post-menopausal women. The Health Care Finance Administration, the agency which administers Medicare, increased the recommended reimbursement rate for DXA tests to a national average of $124, effective January 1, 1995, from $68, the original recommended reimbursement rate which went into effect in April 1994. Costs and Expenses. The cost of product sales decreased as a percentage of sales to 45% in the current quarter from 52% in the third quarter of 1995 and decreased to 46% of product sales in the first nine months of 1996 from 55% in the comparable nine month period of 1995. In the current quarter and nine months, these costs decreased as a percentage of product sales primarily due to increasing shipments of the Company's new family of DXA bone densitometers, the ACCLAIM series, a volume increase in the number of DXA systems sold resulting in certain manufacturing efficiencies, and an increase in sales by the Company's direct sales force (primarily in the United States) which results in higher selling prices. The Company began selling the ACCLAIM product in the second quarter of fiscal 1995 and has recognized higher gross margins than on the older DXA product line from higher average selling prices and lower labor and overhead-related manufacturing costs. Research and development expenses increased 77% to $1,796,229 (8% of total revenues) in the current quarter from $1,014,569 (9% of total revenues) in the third quarter of fiscal 1995. For the current nine month period, research and development expenses increased 58% to $4,873,128 (9% of total revenues) from $3,091,135 (10% of total revenues) for the first nine months of 1995. The increase in research and development expenses in 1996 is primarily due to the addition of engineering personnel and outside consultants working on the development of new products. As a percentage of total revenues, research and development expenses declined in the current year, reflecting increased revenues in fiscal 1996. Selling and marketing expenses increased 63% to $3,444,622 (16% of product sales) in the current quarter from $2,112,318 (20% of product sales) in the third quarter of fiscal 1995. For the current nine month period, selling and marketing expenses increased 63% to $9,202,748 (17% of product sales) from $5,646,786 (19% of product sales) for the first nine months of 1995. The increase in selling and marketing expenses in 1996 is primarily due to an increase in sales personnel and related expenses, marketing and promotional costs incurred in connection with the introduction of the ACCLAIM series and increased sales commissions based on the higher sales volume. In addition, the Company incurred additional costs in connection with its strategic alliances for the development of new products and the distribution of products through new sales channels. General and administrative expenses increased 71% to $1,986,539 (9% of total revenues) in the current quarter from $1,158,790 (10% of total revenues) in the third quarter of fiscal 1995. During the first nine months of fiscal 1996, general and administrative expenses increased 64% to $5,237,090 (9% of total revenues) from $3,198,596 (10% of total revenues) in the first nine months of 1995. The increase in general and administrative expenses in fiscal 1996 is primarily due to increased headcount and other compensation-related expenditures, and an increase in accounts receivable reserves, which reflects the increase in accounts receivable. Litigation expenses incurred in the first quarter of fiscal 1996 and in fiscal 1995 were in connection with the Company's disputes with Lunar and Oldelft. Legal expenses in connection with the patent litigation with Lunar began in October 1994 and represent a substantial portion of the total litigation expenses. In November 1995, a definitive agreement that provides for the cross-licensing of certain patent rights and a non-assertion agreement for all patents involving DXA and ultrasound technologies for a period of ten years was reached by the Company and Lunar. The complaint brought by Oldelft against the Company was dismissed in December 1995. In January 1996, Oldelft filed a motion for reconsideration of the dismissal and amended its complaint. In April 1996, the Court denied Oldelft its motion for reconsideration of the dismissal and, in May 1996 Hologic and Oldelft settled this matter. Interest Income. Interest income increased to $685,738 in the current quarter from $164,012 in the same quarter of fiscal 1995 and increased to $1,434,983 in the current nine month period from $446,583 in the comparable period in fiscal 1995 as the Company earned a higher rate of return on a higher investment base than in the prior year. During the second quarter of fiscal 1996, the Company received proceeds of approximately $49,200,000 from a public sale of Common Stock which increased the investment base. The Company has invested these proceeds in investment grade corporate and government securities. In fiscal 1996, the Company has also increased the number of long-term receivables to Latin American customers which generates additional interest income. Other Expense. In the third quarter and for the first nine months of fiscal 1996, the Company incurred other expenses of $61,094 and $184,857, respectively. These expenses were slightly less than other expenses incurred in the comparable periods of fiscal 1995 and were primarily attributable to the interest costs on the line of credit established by the Company in the third quarter of fiscal 1994 and, to a lesser extent, foreign currency exchange losses arising from the Company's U.S. dollar denominated sales transactions to its European subsidiaries. The Company's European subsidiaries utilize the line of credit to borrow funds in their local currencies to pay for all intercompany sales, thereby reducing the foreign currency exposure on those transactions. To the extent that foreign currency exchange rates fluctuate in the future, the Company may be exposed to continued financial risk. Although the Company has established a borrowing line denominated in the two foreign currencies (the French Franc and the Belgian Franc) in which the subsidiaries currently conduct business to minimize this risk, there can be no assurance that the Company will be successful or can fully hedge its foreign currency exposure. Provision for Income Taxes. The Company's effective tax rate for the first nine months of fiscal 1996 was 32.7%. The Company's effective tax rate is lower than the statutory tax rates due primarily to the utilization of tax credits, the utilization of net operating losses in foreign jurisdictions and tax benefits associated with the Company's foreign sales corporation. The Company's effective tax rate increased in fiscal 1996 due to the increase in U.S. versus international income. Liquidity and Capital Resources The Company has funded its operations primarily through cash flows from operations and the issuance of securities. At June 29, 1996, the Company's working capital was $77,104,494. At such date, the Company had $60,155,866 in cash, cash equivalents and short- term investments. The cash, cash equivalents and investments balance increased approximately $55,865,000 from September 30, 1995 primarily due to the net proceeds of approximately $49,200,000 from the public offering of common stock in the second quarter. In addition, the cash and investments balance increased approximately $6,665,000 primarily due to the proceeds and tax benefits from the exercise of stock options and an increase in the Company's current liabilities, which were partially offset by an increase in accounts receivable and inventories. The increase in current liabilities, accounts receivable and inventories reflects the Company's introduction of its new ACCLAIM family of bone densitometers and the increase in sales activity. At June 29, 1996, one customer had accounts receivable outstanding of approximately $1,950,000, which were current within their payment terms. The Company finances certain sales to Latin America over a two to three year time frame. At June 29, 1996, the Company had long-term accounts receivable outstanding of approximately $973,000 relating to these sales, which were included in other assets. In the first nine months of fiscal 1996, the Company purchased approximately $1,257,000 of property and equipment, primarily computers and other equipment associated with the hiring of additional personnel. On July 18, 1996, the Company signed a definitive agreement to merge with FluoroScan. Hologic and FluoroScan estimate that they will incur direct transaction costs of approximately $1.8 million associated with the merger. These transaction costs will be expensed in the period incurred under the pooling-of-interests method of accounting for business combinations. As a result, the earnings of the combined entity will be adversely affected. The amount is a preliminary estimate only and therefore subject to change. There can be no assurance that Hologic and FluoroScan will not incur additional charges to reflect costs associated with the merger. The Company does not currently have any significant capital commitments and believes that existing sources of liquidity, including the net proceeds of the offering, funds expected to be generated from operations and a $3.0 million credit line for use by its European subsidiaries, will provide adequate cash to fund the Company's anticipated working capital and other cash needs for the foreseeable future. PART II - OTHER INFORMATION HOLOGIC, INC. AND SUBSIDIARIES Item 1. Legal Proceedings. Patent Litigation. Until recently, Hologic had been involved in litigation brought in January 1995 by B.V. Optische Industrie de Oude Delft and two subsidiaries ("Oldelft") claiming damages relating to a prior patent dispute. On December 14, 1995, the United States District Court for the Southern District of New York granted Hologic's Motion to Dismiss and dismissed all claims against Hologic. In January 1996, Oldelft filed a motion for reconsideration of the dismissal and amended its complaint. In April 1996, the Court denied Oldelft its motion for reconsideration of the dismissal, and in May 1996 Hologic and Oldelft settled this matter. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security-Holders. None. Item 5. Other Information. On July 18, 1996, Hologic signed a definitive agreement to merge with FluoroScan. The transaction is intended to be carried out by the merger of FluoroScan and a wholly-owned subsidiary of Hologic in a tax-free stock transaction, accounted for as a pooling of interests. The completion of this transaction is subject to approval by FluoroScan's stockholders, completion of certain due diligence items and regulatory approvals. FluoroScan's principal stockholders have provided the Company with a proxy to vote in favor of this merger. Upon consummation of the merger, Hologic will issue approximately 1.5 million shares of its common stock in exchange for all of the outstanding shares of FluoroScan's common stock, stock warrants and stock options to underwriters. In addition, Hologic has reserved approximately 300,000 additional shares of its common stock for issuance to holders of FluoroScan options. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits furnished: (11) Statement Re: Computation of Earnings Per Share. (b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended June 29, 1996. HOLOGIC, INC. AND SUBSIDIARIES SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Hologic, Inc. (Registrant) August 13, 1996 /s/ S. David Ellenbogen - --------------- -------------------------- Date S. David Ellenbogen Chairman and Chief Executive Officer August 13, 1996 /s/ Glenn P. Muir - --------------- ------------------------------ Date Glenn P. Muir Vice President, Finance and Treasurer (Principal Financial and Chief Accounting Officer) HOLOGIC, INC. AND SUBSIDIARIES STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE (Unaudited)
Three Months Ended Nine Months Ended June 29, June 24, June 29, June 24, 1996 1995 1996 1995 ------- ------- ------- -------- PRIMARY: Net income............... $3,940,030 $ 487,668 $8,271,037 $1,284,998 Weighted average shares outstanding....... 11,163,508 8,160,142 9,853,750 8,099,442 Common stock equivalents outstanding, pursuant to the treasury stock method. 1,101,726 659,400 992,334 718,058 ---------- --------- --------- ---------- Primary weighted average number of common and common equivalent shares outstanding....... 12,265,234 8,819,542 10,846,084 8,817,500 ========== ========= ========== ========= Per share amount......... $ .32 $ .06 $ .76 $ .15 ===== ===== ===== ===== * All share and per-share amounts have been adjusted to reflect the two-for-one stock split effected on March 25, 1996.
EX-27 2
5 This schedule contains summary financial information extracted from the the financial statements in the Company's quarterly report on Form 10-Q for the period ended June 29, 1996. 9-MOS SEP-28-1996 JUN-29-1996 31,771,656 34,033,584 18,700,681 1,300,000 9,636,249 2,452,507 4,988,451 2,728,480 101,090,512 13,840,809 0 113,030 0 0 87,249,703 101,090,512 54,050,536 56,349,729 25,198,033 45,308,818 184,857 0 0 12,291,037 4,020,000 8,271,037 0 0 0 8,271,037 .76 .76
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