UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 6, 2012
HOLOGIC, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
| 0-18281 | 04-2902449 | |
| (Commission File Number) | (I.R.S. Employer Identification No.) |
| 35 Crosby Drive, Bedford, MA | 01730 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(781) 999-7300
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On November 12, 2012, Hologic, Inc., a Delaware corporation (the “Company”), issued a press release announcing its financial results for the fourth quarter and year ended September 29, 2012. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.
Limitation on Incorporation by Reference. The information furnished in this Item 2.02, including the press release attached hereto as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such a filing.
Cautionary Note Regarding Forward-Looking Statements. Except for historical information contained in the press release attached as an exhibit hereto, the press release contains forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary notes in the press release regarding these forward-looking statements.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Approval of Base Salaries
On November 6, 2012, the Compensation Committee of the Board of Directors of the Company approved increased base salaries for certain named executive officers of the Company (for whom disclosure was required in the Company’s Definitive Proxy Statement on Schedule 14A for its 2012 annual meeting of stockholders) as follows: $927,000 for Robert A. Cascella, President and Chief Executive Officer; $600,000 for Glenn P. Muir, Executive Vice President, Finance and Administration, and Chief Financial Officer; $400,000 for Peter K. Soltani, Senior Vice President and General Manager, Breast Health; and $400,000 for David P. Harding, Senior Vice President and General Manager, International. These new base salaries were made effective as of October 1, 2012.
Adoption of 2013 Short-Term Incentive Plan
On November 6, 2012, the Compensation Committee approved the Company’s 2013 Short-Term Incentive Plan (the “STIP”). The STIP provides performance-based awards for eligible employees, subject to a maximum limit, as described in more detail below. Targeted payout levels will be achieved at a combination of corporate, divisional and/or individual goals established for each participant. An individual’s bonus components and the weighting of those components are determined by such individual’s title and/or role.
The maximum bonus payouts will be 200% of targeted payout levels (e.g., an individual with a targeted payout level of 50% of annual base salary target would be eligible for a 100% payout). Upon adoption of the STIP, the Compensation Committee also approved separate bonus pools totalling $4.5 million for fiscal 2013 to be adjusted and allocated at the discretion of the Compensation Committee. The Compensation Committee reserves the right, in its sole discretion, to decrease any bonus payouts to any participant under the STIP regardless of the level of corporate, divisional and/or individual goals that have been achieved.
Targeted payout levels for each of the named executive officers under the STIP as measured by a percentage of base salary are as follows: Mr. Cascella, 120%; Mr. Muir, 85%; and Senior Vice Presidents, 50%.
The above description of the STIP does not purport to be complete and it is qualified in its entirety by reference to the STIP, a copy of which is attached to this report as Exhibit 10.1 and is incorporated herein by reference.
Adoption of 2013 Synergy Bonus Plan
On November 6, 2012, the Compensation Committee approved the Company’s 2013 Synergy Bonus Plan (the “Synergy Plan”). The Synergy Plan provides performance-based awards for eligible employees, subject to a maximum limit, as described in more detail below. Targeted payout levels will be based upon the achievement of cost synergy goals established by the Compensation Committee.
The maximum bonus payouts will be 170% of targeted payout levels (e.g., an individual with a targeted payout level of 50% of annual base salary target would be eligible for an 85% payout). The Compensation Committee reserves the right, in its sole discretion, to decrease any bonus payouts to any participant under the Synergy Plan regardless of the level of cost synergy goals that have been achieved.
Targeted payout levels for named executive officers under the Synergy Plan are as follows: Mark J. Casey, Senior Vice President, Chief Administrative Officer, General Counsel and Secretary, $200,000; and Mr. Harding, $125,000. Messrs. Cascella and Muir are not eligible to receive awards under the Synergy Plan.
The above description of the Synergy Plan does not purport to be complete and it is qualified in its entirety by reference to the Synergy Plan, a copy of which is attached to this report as Exhibit 10.2 and is incorporated herein by reference.
Form of Market Stock Unit Award Agreement
On November 6, 2012, the Compensation Committee approved a form of market stock unit (“MSU”) award agreement. Under the MSU award agreement, the number of MSU’s that will vest for each MSU granted will be determined at the time of vesting based upon the market price of the Company’s common stock at that time. A copy of this form is attached to this report as Exhibit 10.3 and is incorporated herein in its entirety by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit Number |
Description | |
| 99.1 | Press release dated November 12, 2012 of Hologic, Inc. announcing its financial results for the fourth quarter and year ended September 29, 2012. | |
| 10.1 | Hologic, Inc. 2013 Short-Term Incentive Plan. | |
| 10.2 | Hologic, Inc. 2013 Synergy Bonus Plan. | |
| 10.3 | Form of Market Stock Unit Award Agreement. |
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 hereunto duly authorized.
| Date: November 13, 2012 | HOLOGIC, INC. | |
| By: | /S/ GLENN P. MUIR | |
| Glenn P. Muir | ||
| Executive Vice President, Finance and | ||
| Administration, and Chief Financial Officer | ||
HOLOGIC, INC.
2013 HOLOGIC SHORT-TERM INCENTIVE PLAN
(the “STIP”)
Performance-Based Compensation
Reference is made to the Hologic, Inc. 2008 Equity Incentive Plan previously approved by the Company’s Stockholders (the “2008 Plan”). Capitalized terms used herein and not otherwise defined shall have the same meanings as set forth in the 2008 Plan. It is intended that the awards granted hereunder (the “Awards”) to persons who are or may become Covered Employees for the applicable period qualify, to the extent consistent therewith, as Annual Incentive Awards under Section 7 of the 2008 Plan and, to the extent applicable, “performance-based compensation” under Section 162(m) of the Internal Revenue Code (the “Code”). Without limiting the foregoing, it is further intended that if all or a portion of an Award to any Covered Employee does not so qualify (either as an Annual Incentive Award or performance based compensation), it shall not effect the qualification of that portion of an Award that would otherwise so qualify, or otherwise reduce a participant’s Award hereunder. The terms and conditions of the 2008 Plan, including without limitation the individual award limits set forth therein, shall apply to any Award, or portion thereof, that shall qualify as an Annual Incentive Award thereunder. With respect to any Awards hereunder intended to qualify as performance based compensation for a Covered Employee under Section 162(m) of the Code, in the event of any inconsistencies between the 2008 Plan and this document or any other document evidencing the Award, the terms of the 2008 Plan shall control.
Administration
The STIP will be administered by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”). The Compensation Committee, in its sole discretion, shall have the authority to grant and amend Awards, to adopt, amend and repeal rules relating to the STIP and to interpret and correct the provisions of the STIP and any Award. The Compensation Committee shall have authority, subject to the express limitations of the STIP and the 2008 Plan, (i) to construe and determine the respective Awards and the STIP, (ii) to prescribe, amend and rescind rules and regulations relating to the STIP and any Awards, (iii) to determine the terms and provisions of the respective Awards, which need not be identical, (iv) to create sub-plans hereunder necessary to comply with laws and regulations of any foreign country in which the Company may seek to grant an Award, and (v) to make all other determinations in the judgment of the Compensation Committee necessary or desirable for the administration and interpretation of the STIP. The Compensation Committee may correct any defect or supply any omission or reconcile any inconsistency in the STIP or Award in the manner and to the extent it shall deem expedient to carry the STIP or any Award into effect and it shall be the sole and final judge of such expediency. All decisions by the Compensation Committee shall be final and binding on all interested persons. Neither the Company nor any member of the Compensation Committee shall be liable for any action or determination relating to the STIP.
To the extent permitted by applicable law, the 2008 Plan or the listing standards of any exchange upon which the Company’s Common Stock may be listed, the Committee may delegate any or all of its powers under the STIP, as it relates to the determination of Awards and eligibility under the STIP (other than Awards made to executive officers), to one or more committees or subcommittees of the Compensation Committee or the Board, or to one or more executive officers of the Company; provided, however, that unless otherwise expressly provided, no such delegation of authority shall limit the Compensation Committee’s discretionary authority to alter the amount or payment of any Award to any participant as set forth herein, and any Awards made to any executive officers of the Company (including without limitation any Covered Employee), including without limitation the achievement of target performance objectives, shall be subject to the final review and approval of the Compensation Committee.
Eligibility
Unless otherwise determined by the Compensation Committee, which retains sole discretion of eligibility under the STIP, the eligible participants under the STIP shall include the Company’s officers, vice presidents, operational directors, managers and such other employees that have been identified by management as key contributors. Notwithstanding anything to the contrary in the foregoing, unless otherwise approved by the Compensation Committee, participants shall not include persons, including officers, who are otherwise participating in a Company commission-based plan.
Targets
Subject to the discretion of the Compensation Committee as set forth herein, targeted payout levels (“Targeted Payout Levels”) will be achieved at a combination of corporate, divisional and/or individual goals established for each participant, as well as discretionary allocations established by the Committee. A participant’s bonus components and the weighting of those components are determined by such participant’s title and/or role.
Funding
Subject to the discretion of the Compensation Committee, aggregate funding of the STIP will be based upon the level of the Company’s achievement of the general corporate financial goals established for the STIP. The Company shall not have any obligation to establish any separate fund or trust or other segregation of assets to provide for payments under the STIP.
Maximum and Minimum Bonus Payout; No Right to Employment
The maximum bonus payouts will be 200% of Targeted Payout Levels (e.g., a participant with a Targeted Payout Level of 50% of annual base salary target would be eligible for a 100% payout). The Compensation Committee reserves the right, in its sole discretion, to decrease any bonus payouts to any participant under the STIP, regardless of the level of bonus targets that have been achieved (or bonus levels that have been estimated), including, without limitation, to reduce or provide for no bonus payout to a participant even though one or more targets under the STIP have been achieved. Neither the STIP, nor any action taken pursuant to the STIP, will be construed as giving any employee any right to continued employment with the Company or any of its subsidiaries.
STIP Nonexclusive
Nothing in this STIP shall preclude the Company from granting any bonus or other award to a person, who is likely to be a Covered Employee or otherwise, that is not intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code upon such terms and conditions as may be determined by the Board or the Committee, without regard to the limitations set forth in this STIP.
HOLOGIC, INC.
HOLOGIC 2013 SYNERGY BONUS PLAN
(the “Synergy Plan”)
Performance-Based Compensation
Reference is made to the Hologic, Inc. 2008 Equity Incentive Plan previously approved by the Company’s Stockholders (the “2008 Plan”). Capitalized terms used herein and not otherwise defined shall have the same meanings as set forth in the 2008 Plan. It is intended that the awards granted hereunder (the “Awards”) to employees of the Company, that may include Covered Employees who have contributed to the Company’s acquisition and integration of Gen-Probe with and into the Company, to the extent consistent therewith, as Annual Incentive Awards under Section 7 of the 2008 Plan and, to the extent applicable, “performance-based compensation” under Section 162(m) of the Internal Revenue Code (the “Code”). Without limiting the foregoing, it is further intended that if all or a portion of an Award to any Covered Employee does not so qualify (either as an Annual Incentive Award or performance based compensation), it shall not affect the qualification of that portion of an Award that would otherwise so qualify, or otherwise reduce a participant’s Award hereunder. The terms and conditions of the 2008 Plan, including without limitation the individual award limits set forth therein, shall apply to any Award, or portion thereof, that shall qualify as an Annual Incentive Award thereunder. With respect to any Awards hereunder intended to qualify as performance based compensation for a Covered Employee under Section 162(m) of the Code, in the event of any inconsistencies between the 2008 Plan and this document or any other document evidencing the Award, the terms of the 2008 Plan shall control.
Administration
This 2013 Synergy Bonus Plan (the “Synergy Plan”) will be administered by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”). The Compensation Committee, in its sole discretion, shall have the authority to grant and amend Awards, determine eligibility of any employee to participate in the Synergy Plan, to adopt, amend and repeal rules relating to the Synergy Plan and to interpret and correct the provisions of the Synergy Plan and any Award. The Compensation Committee shall have the authority, subject to the express limitations of the Synergy Plan and the 2008 Plan, (i) to construe and determine the respective Awards and the Synergy Plan, (ii) to prescribe, amend and rescind rules and regulations relating to the Synergy Plan and any Awards, (iii) to determine the terms and provisions of the respective Awards, which need not be identical, (iv) to create sub-plans hereunder necessary to comply with laws and regulations of any foreign country in which the Company may seek to grant an Award, and (v) to make all other determinations in the judgment of the Compensation Committee necessary or desirable for the administration and interpretation of the Synergy Plan. The Compensation Committee may correct any defect or supply any omission or reconcile any inconsistency in the Synergy Plan or Award in the manner and to the extent it shall deem expedient to carry the Synergy Plan or any Award into effect and it shall be the sole and final judge of such expediency. All decisions by the Compensation Committee shall be final and binding on all interested persons. Neither the Company nor any member of the Compensation Committee shall be liable for any action or determination relating to the Synergy Plan.
To the extent permitted by applicable law, the 2008 Plan or the listing standards of any exchange upon which the Company’s Common Stock may be listed, the Committee may delegate any or all of its powers under the Synergy Plan, as it relates to the determination of Awards and eligibility under the Synergy Plan (other than Awards made to executive officers), to one or more committees or subcommittees of the Compensation Committee or the Board, or to one or more executive officers of the Company; provided, however, that unless otherwise expressly provided, no such delegation of authority shall limit the Compensation Committee’s discretionary authority to alter the amount or payment of any Award to any participant as set forth herein, and any Awards made to any executive officers of the Company (including without limitation any Covered Employee), including without limitation the achievement of target performance objectives, shall be subject to the final review and approval of the Compensation Committee.
Eligibility
Unless otherwise determined by the Compensation Committee, which retains sole discretion of eligibility under the Synergy Plan, the eligible participants under the Synergy Plan shall include the Company’s officers (other than the Company’s Chief Executive Officer, Chief Financial Officer and Senior Vice President and General Manager of Diagnostics, each of whom shall not be eligible for an Award under the Synergy Plan), vice presidents, operational directors, managers and such other employees that have been identified by management as key contributors to the due diligence, integration, and synergistic company savings in conjunction with the Gen-Probe acquisition. Notwithstanding anything to the contrary in the foregoing, unless otherwise approved by the Compensation Committee, participants may include persons, including officers, who are otherwise participating in a Company commission-based plan.
Targets
Subject to the discretion of the Compensation Committee as set forth herein, targeted payout levels (“Targeted Payout Levels”) will be based upon the achievement of cost synergy goals established by the Committee. A participant’s Targeted Bonus Level is determined by such participant’s role and influence in achieving the synergy goals.
Funding
Subject to the discretion of the Compensation Committee, the Synergy Plan is an unfunded plan and is based upon the level of the Company’s achievement of cost synergies established for the Synergy Plan. The Company shall not have any obligation to establish any separate fund or trust or other segregation of assets to provide for payments under the Synergy Plan.
Maximum and Minimum Bonus Payout; No Right to Employment
The maximum bonus payouts will be determined by the Compensation Committee but will generally not exceed 170% of Targeted Payout Levels. The Compensation Committee reserves the right, in its sole discretion, to decrease any bonus payouts to any participant under the Synergy Plan, regardless of the level of bonus targets that have been achieved (or bonus levels that have been estimated), including, without limitation, to reduce or provide for no bonus payout to a participant even though one or more targets under the Synergy Plan have been achieved. Neither the Synergy Plan, nor any action taken pursuant to the Synergy Plan, will be construed as giving or otherwise promising any eligible employee hereunder the right to continued employment with the Company or any of its subsidiaries.
Payment
Based on projected achievement of cost synergies, the Company will make a payment to eligible employees under the Synergy Plan for FY 2012 performance on or about November 2012, subject to an eligible employee being employed by the Company on the date of payment. The amount of payments for FY 2012 performance shall reduce the bonus pool for FY 2013 and the total of both FY 2012 and 2013 payments shall not exceed 170% of the Targeted Payout Levels. It is anticipated that the FY 2012 payout will be approximately $2 million of the total budgeted pool at target. Based on projected achievement of cost synergies, the Company will make a payment to eligible employees under the Synergy Plan for FY 2013 performance on or about November 2013, subject to an eligible employee being employed by the Company on the date of payment. If an eligible employee terminates employment with the Company prior to an applicable payment date, he/she shall irrevocably forfeit any rights to receive a payment under the Synergy Plan.
Synergy Plan Nonexclusive
Nothing in this Synergy Plan shall preclude the Company from granting any bonus or other award to a person, who is likely to be a Covered Employee or otherwise, that is not intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code upon such terms and conditions as may be determined by the Board or the Committee, without regard to the limitations set forth in this Synergy Plan.
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Notice of Grant of Market Stock Units and Market Stock Unit Award Agreement
|
Hologic, Inc. ID: 04-2902449 35 Crosby Drive Bedford, MA 01730
|
|
Grantee Name |
Plan: 2008 Equity Incentive Plan (the “Plan”) |
Effective , you (the “Grantee”) have been granted an award of market stock units (“MSUs”) of Hologic, Inc. (the “Company”). The MSUs are granted pursuant to the terms and conditions of the Plan, referenced above, and the market stock unit award agreement (the “MSU Award Agreement”) provided herewith.
Subject to the terms and conditions of the MSU Award Agreement and the Plan, and achievement of the performance targets set forth in the 2012 Long-Term Performance Program (“2012 LTP Overview”), the MSUs will vest on the third anniversary of the grant date (the “Restriction Lapse Date”), entitling you to receive one share of the Company’s common stock for each MSU so vested.
By your signature and the Company's signature below, you and the Company agree that these MSUs are granted under and governed by the terms and conditions of the Plan and the MSU Award Agreement.
| Hologic, Inc. | Date | ||
| Electronic Signature | Acceptance Date | ||
Hologic, Inc.
Market Stock Unit Award Agreement
Market Stock Unit Award Agreement (the “Award Agreement”) pursuant to the Hologic, Inc. 2008 Equity Incentive Plan, as it may be amended from time to time (the “Plan”).
WITNESSETH:
WHEREAS, the Company and the Grantee desire to enter into an agreement whereby the Company will grant the Grantee Market Stock Units (“MSUs”) in respect of the Company’s Common Stock, $.01 par value per share (the “Common Stock”), as set forth in the Notice of Grant of Market Stock Units to which this Award Agreement is attached (the “Award Notice”).
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Grantee agree as follows:
1. Grant of MSUs. Pursuant to the terms and conditions of this Award Agreement and the Plan (which is incorporated herein by reference), the Company hereby grants to the Grantee the number of MSUs as provided in the Award Notice. The shares of Common Stock covered by these MSUs are sometimes hereinafter referred to as the “MSU Shares”.The number and class of securities and vesting schedule of the MSUs are subject to adjustment as set forth in this Award Agreement, the Plan and the 2012 LTP Overview. In the event of a conflict between the terms and conditions of the Plan and this Award Agreement, the terms and conditions of the Plan shall prevail. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Plan.
2. Market Stock Units. Each MSU entitles the Grantee to receive from the Company one share of Common Stock for each MSU Share vested as of a Vesting Date (as defined below) in accordance with the terms of this Award Agreement and the Plan. As soon as practical after a Vesting Date, the Company shall deliver the MSU Shares which have vested on that date.
3. Vesting. Subject to achievement of the performance targets set forth in the 2012 LTP Overview, the MSUs granted hereby will vest on the earlier to occur of (i) the third anniversary of the Grant Date as provided in the Award Notice, or (ii) the termination of the Grantee’s Service (as defined below) as a result of the death or Permanent Disability (as defined in Section 22(e)(3) of the Code) of the Grantee, provided that in each such case the Grantee has remained in continuous Service through such date or termination, as applicable (the “Vesting Date”). The calculation of the number of MSUs that will vest on the Vesting Date is based upon the price of the Company’s Common Stock, as specified in the 2012 LTP Overview, which is incorporated in this document by reference. In the event and to the extent that any MSUs granted or otherwise eligible to be issued hereunder do not vest on the Vesting Date, including the failure of the price of the Company’s Common Stock to equal or exceed the threshold price of the Company’s Common Stock, in accordance with this Award Agreement and the 2012 LTP Overview, then such MSUs shall be immediately forfeited. In the event and to the extent that the threshold price of the Company’s Common Stock is exceeded based on the calculation described in the 2012 LTP Overview, then an additional number of MSUs will vest as provided in the 2012 LTP Overview; provided, however, that in no event shall the number of MSUs that vest on the Vesting Date exceed 200% of the number of MSUs granted under this Award Agreement without regard to any adjustments provided by the 2012 LTP Overview. For purposes of this Agreement, the term “Service” shall mean service as a Service Provider to the Company; and the term “Service Provider” shall mean an employee, officer or director of the Company or an Affiliate of the Company or a consultant currently providing services to the Company or an Affiliate of the Company. Whether a termination of Service shall have occurred for purposes of this Agreement shall be determined by the Company, which determination shall be final, binding and conclusive. If the Grantee’s Service is terminated prior to the Vesting Date, then the unvested MSUs shall terminate and Grantee shall have no further rights hereunder.
4. Nontransferability. The MSUs granted pursuant to this Agreement may not be transferred without the consent of the Company, other than by will or the laws of descent and distribution.
5. No Rights Other Than Those Expressly Created. Neither this Award Agreement, the MSUs, nor any action taken hereunder shall be construed as (i) giving the Grantee any right to be retained in the Service of, or continue to be affiliated with, the Company, (ii) giving the Grantee any equity or interest of any kind in any assets of the Company, or (iii) creating a trust of any kind or a fiduciary relationship of any kind between the Grantee and the Company. As to any claim for any unpaid amounts or distributions under this Award Agreement, any person having a claim for payments shall be an unsecured creditor. The Grantee shall not have any of the rights of a stockholder with respect to any MSU Shares until such time as the underlying MSU has been vested and the MSU Shares have been issued.
6. Compliance with Laws.
(a) Withholding of Taxes. Pursuant to applicable federal, state, local or foreign laws, the Company may be required to collect or withhold income or other taxes from Grantee upon the Vesting Date or at some other time. The Company may require, upon the Vesting Date, or demand, at such other time as it may consider appropriate, that the Grantee pay the Company the amount of any taxes which the Company may determine is required to be collected or withheld, and the Grantee shall comply with the requirement or demand of the Company.
(b) Securities Law Compliance. Upon vesting (or partial vesting) of the MSUs granted hereunder, the Grantee shall make such representations and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company to issue or transfer the MSU Shares in compliance with the provisions of applicable federal or state securities laws. The Company, in its discretion, may postpone the issuance and delivery of MSU Shares until completion of such registration or other qualification of such shares under any federal or state laws, or stock exchange listing, as the Company may consider appropriate. In addition, the Company may require that prior to the issuance or transfer of MSU Shares, the Grantee enter into a written agreement to comply with any restrictions on subsequent disposition that the Company deems necessary or advisable under any applicable federal and state securities laws. The MSU Shares issued hereunder may be legended to reflect such restrictions.
(c) General. No MSU Shares shall be issued upon vesting of an MSU granted hereunder unless and until the Company is satisfied, in its sole discretion, that there has been compliance with all legal requirements applicable to the issuance of such MSU Shares.
7. Miscellaneous.
(a) 409A Compliance. The Company may, in its sole and absolute discretion, delay payments hereunder or make such other modifications with respect to the issuance of stock hereunder as it reasonably deems necessary to comply with Section 409A of the Code and interpretative guidance thereunder.
(b) Discretion of the Committee. Unless otherwise explicitly provided herein, the Board of Directors of the Company, or an authorized committee thereof, shall make all determinations required to be made hereunder, including determinations required to be made by the Company, and shall interpret all provisions of this Award Agreement and the underlying MSUs, as it deems necessary or desirable, in its sole and unfettered discretion. Such determinations and interpretations shall be binding on and conclusive to the Company and the Grantee.
(c) Amendment. This Award Agreement may only be modified or amended by a writing signed by both parties.
(d) Notices. Any notices required to be given under this Award Agreement shall be sufficient if in writing and if sent by certified mail, return receipt requested, and addressed as follows:
if to the Company:
Hologic, Inc.
35 Crosby Dr.
Bedford, MA 01730
Attention: Chief Financial Officer
if to the Grantee:
As set forth in the records of the Company
or to such other address as either party may designate under the provisions hereof.
(e) Entire Agreement. This Award Agreement shall supersede in its entirety all prior undertakings and agreements of the Company and Grantee, whether oral or written, with respect to the MSUs granted hereunder; provided however that nothing herein shall supersede any prior written employment agreement, change of control agreement or other similar written agreement (“Prior Agreement”), if any, that may provide, in certain circumstances, for acceleration of vesting of equity awards granted to the Grantee. For the avoidance of doubt, the parties hereby confirm that the MSUs granted hereunder shall be considered and treated restricted stock under any such Prior Agreement for purposes of determining whether any such vesting is accelerated, and the amount of shares that vest pursuant to this MSU shall be calculated as set forth in the 2012 LTP Overview.
(f) Successors and Assigns. The rights and obligations of the Company under this Award Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company.
(g) Applicable Law; Severability. All rights and obligations under this Award Agreement shall be governed by the laws of the State of Delaware. In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in this Award Agreement shall be unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it enforceable, and as so limited shall remain in full force and effect. In the event that such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Award Agreement shall nevertheless remain in full force and effect.
(h) Paragraph Headings; Rules of Construction. The paragraph headings used in this Award Agreement are for convenience or reference, and are not to be construed as part of this Award Agreement. The parties hereto acknowledge and agree that the rule of construction to the effect that any ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Award Agreement.
(i) Electronic Copies. The Company may choose to deliver certain materials relating to the Plan in electronic form. By accepting this Award Agreement, the Grantee consents and agrees that the Company may deliver the Plan prospectus and the Company’s annual report to Grantee in an electronic format. If at any time Grantee would prefer to receive paper copies of these documents, the Company will provide such copies upon request.
(j) No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of the party, unless explicitly provided for herein. No single or partial exercise of any right, power or remedy under this Award Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder.
(k) Counterparts. The Award Notice to which this Award Agreement is a part may be executed in multiple counterparts, including by electronic or facsimile signature, each of which shall be deemed in original but all of which together shall constitute one and the same instrument.
Hologic Announces Fourth Quarter and Fiscal 2012 Operating Results
Year-over-Year Revenue Growth in All Four Operating Segments
BEDFORD, Mass., Nov. 12, 2012 /PRNewswire/ -- Hologic, Inc. (Hologic or the Company) (NASDAQ: HOLX), a leading developer, manufacturer and supplier of premium diagnostics products, medical imaging systems and surgical products dedicated to serving the healthcare needs of women, today announced its results for the fourth fiscal quarter and fiscal year ended September 29, 2012.
Highlights of the Quarter Include:
Highlights Subsequent to the Quarter Include:
A reconciliation of historical GAAP to non-GAAP results is included as an attachment to this press release.
Fourth Quarter Fiscal 2012 Operating Results Overview:
Fourth quarter fiscal 2012 revenues totaled $588.5 million, net of a purchase accounting adjustment which reduced revenues by $11.6 million. This purchase accounting adjustment related to contingent revenue earned and received under Gen-Probe's collaboration agreement with Novartis. The $11.6 million in cash was subsequently collected by Hologic following the acquisition. Excluding the effect of this purchase accounting adjustment, non-GAAP adjusted revenues were $600.2 million, an increase of 28.5% (29.8% on a constant currency basis) compared to revenues of $467.0 million in the fourth quarter of fiscal 2011. This increase primarily resulted from: (i) the inclusion of Gen-Probe non-GAAP adjusted revenues of $101.1 million from the date of acquisition (August 1, 2012); (ii) a combined increase in Hologic's legacy Diagnostics revenues of $13.5 million, or 9.0%, primarily from international ThinPrep sales, as well as growth in the molecular diagnostics product lines; (iii) growth in Breast Health revenues of $11.2 million, or 5.1%, driven by a $10.5 million, or 14.5%, increase in service revenue primarily related to the Company's increased installed base of digital mammography systems; (iv) an increase in GYN Surgical revenues of $5.7 million, or 7.7%, from growth in sales of both the MyoSure hysteroscopic tissue removal (MyoSure) and the NovaSure endometrial ablation (NovaSure) systems, partially offset by the Company's decision in the second quarter to discontinue sales of its Adiana permanent contraception (Adiana) system; and (v) an increase in Skeletal Health revenues of $1.7 million, or 7.2%. The impact on revenues from changes in foreign currencies as compared to the fourth quarter of fiscal 2011 was a reduction of approximately $6.1 million.
Excluding the revenue contribution from the Company's acquisition of Gen-Probe during the quarter, revenues were $499.1 million as compared to the Company's guidance provided on July 30, 2012 of $485 million, representing an increase of $32.0 million, or 6.9% (7.9% on a constant currency basis), compared to revenues in the fourth quarter of fiscal 2011.
For the fourth quarter of fiscal 2012, the Company reported a net loss of $77.8 million, or $0.29 per diluted share, compared with net income of $27.6 million, or $0.10 per diluted share, in the fourth quarter of fiscal 2011.
The Company's non-GAAP adjusted net income increased 10.8% to $98.3 million, or $0.37 per diluted share, in the fourth quarter of fiscal 2012 compared to $88.8 million, or $0.34 per diluted share, for the same period in the prior year. The Company's fiscal 2012 and 2011 fourth quarter non-GAAP adjusted net income primarily excludes: (i) a non-cash charge of $90.9 million and $60.5 million, respectively, attributable to the amortization of intangible assets; (ii) non-cash interest expense of $16.5 million and $18.5 million, respectively, related to the Company's Convertible Notes; (iii) acquisition-related costs of $38.5 million and $0.4 million, respectively; (iv) a net charge to operating expenses of $40.4 million and $11.3 million, respectively, attributable to contingent consideration related to certain of the Company's acquisitions. The Company's non-GAAP adjusted net income for the fourth quarter of fiscal 2012 also primarily excludes a reduction to Gen-Probe's revenues of $11.6 million as a result of the effect of a purchase accounting adjustment related to Gen-Probe's collaboration with Novartis and charges of: (i) $16.7 million related to restructuring and divestiture; (ii) $19.9 million (non-cash) related to the fair value write-up of acquired inventory sold; (iii) $2.5 million (non-cash) of additional depreciation expense related to the fair value write-up of acquired fixed assets; (iv) $5.8 million (non-cash) for the impairment of goodwill related to the Company's MammoSite reporting unit as a result of changes in estimates; and (v) $4.5 million for acquired in-process research and development. Both periods also include income taxes related to such adjustments.
For the twelve months ended September 29, 2012, revenues totaled $2.0 billion, an increase of 11.9% (12.6% on a non-GAAP adjusted basis, excluding the $11.6 million purchase accounting adjustment), compared to revenues of $1.79 billion in the twelve months ended September 24, 2011. This increase resulted from: (i) the inclusion of Gen-Probe revenues of $89.5 million ($101.1 million on a non-GAAP basis) from the date of acquisition; (ii) a combined increase in Hologic's legacy Diagnostics revenues of $57.3 million, or 10.0%, primarily from international ThinPrep sales, as well as growth in the molecular diagnostics product lines; (iii) growth in Breast Health revenues of $50.2 million, or 6.1%, driven by a $27.8 million, or 10.1%, increase in service revenues and a $22.4 million, or 4.1%, increase in product revenues primarily related to sales of the Company's 2D and 3D Dimensions digital mammography systems; (iv) an increase in GYN Surgical revenues of $12.6 million, or 4.2%, primarily related to growth in sales of the MyoSure system, partially offset by a decrease in NovaSure and Adiana system sales (excluding Adiana revenues in both periods, GYN Surgical revenues increased $23.5 million, or 8.4%); and (v) an increase in Skeletal Health revenues of $3.7 million, or 4.1%, primarily due to an increase in both Mini C-Arm and bone densitometry system sales.
For the twelve months ended September 29, 2012, the Company reported a net loss of $73.6 million, or $0.28 per diluted share, compared with net income of $157.2 million, or $0.59 per diluted share, in the twelve months ended September 24, 2011. The Company's non-GAAP adjusted net income increased 9.6% to $367.8 million, or $1.38 per diluted share, in the twelve months ended September 29, 2012 compared to $335.5 million, or $1.27 per diluted share, for the same period in the prior year. The Company's non-GAAP adjusted net income for the twelve months of fiscal 2012 and 2011 primarily excludes: (i) a non-cash charge of $273.9 million and $235.8 million, respectively, attributable to the amortization of intangible assets; (ii) non-cash interest expense of $68.5 million and $72.9 million, respectively, related to the Company's Convertible Notes; (iii) a net charge to operating expenses of $119.5 million and $12.0 million, respectively, attributable to contingent consideration related to certain of the Company's acquisitions; (iv) acquisition-related costs and charges of $45.6 million and $2.3 million, respectively; (v) a non-cash loss of $42.3 million and $29.9 million, respectively, on the exchange of Convertible Notes; (vi) a net gain of $12.4 million and $84.5 million, respectively, included as a credit within operating expenses, related to the Company's agreement to sell the rights of the Makena assets; and (vii) a non-cash charge of $19.9 million and $3.3 million, respectively, related to the fair value write-up of acquired inventory sold. The Company's non-GAAP adjusted net income for the twelve months of fiscal 2012 also primarily excludes a reduction to Gen-Probe's revenues of $11.6 million as a result of the effect of a purchase accounting adjustment related to Gen-Probe's collaboration with Novartis and charges of: (i) $17.0 million related to restructuring and divestiture; (ii) $19.5 million related to the Company's decision in the second quarter to discontinue sales of the Adiana product; (iii) $2.5 million (non-cash) of additional depreciation expense related to the fair value write-up of acquired fixed assets; (iv) $5.8 million (non-cash) for the impairment of goodwill related to the Company's MammoSite reporting unit as a result of changes in estimates; and (v) $4.5 million for acquired in-process research and development. Both periods also include income taxes related to such adjustments.
Non-GAAP adjusted revenues, non-GAAP adjusted net income, non-GAAP adjusted earnings per diluted share (non-GAAP adjusted EPS), and adjusted EBITDA are non-GAAP financial measures. The Company's definitions of these non-GAAP financial measures, and the reconciliations of these historical measures to the Company's comparable GAAP financial measures for the periods presented, are set forth in the supplemental information attached to this press release. When analyzing the Company's operating performance, investors should not consider these non-GAAP measures as a substitute for the comparable financial measures prepared in accordance with GAAP.
"We are very pleased with our execution during fiscal 2012. We finished the year with a strong quarter that included revenue growth in all four of our business segments," said Rob Cascella, President and Chief Executive Officer. "Hologic is at the onset of two major product growth cycles with Dimensions 3D breast tomosynthesis and PANTHER automation. The addition of the Gen-Probe product line establishes Hologic as a leader in the diagnostics market. With our current portfolio, development pipeline and established global infrastructure, we are well-positioned for continued growth in fiscal 2013 and beyond."
Fourth Quarter Fiscal 2012 Revenue Overview by Segment (As Compared to the Fourth Quarter Fiscal 2011):
Gen-Probe Acquisition and Related Financing:
On August 1, 2012, the Company completed its acquisition of Gen-Probe for a total net purchase price of approximately $3.8 billion. Gen-Probe is now a wholly-owned subsidiary of Hologic and its results of operations are reported within the Company's Diagnostics business segment from the date of acquisition. Concurrent with the completion of the acquisition, Hologic closed a private placement of $1.0 billion in aggregate principal amount of its 6.25% Senior Notes due 2020. Separately, the Company closed on its $2.8 billion of Senior Secured Credit Facilities, including an undrawn $300 million revolving credit facility. The blended interest yield on the Company's total financing for the Gen-Probe acquisition was approximately 4.80%, including the amortization of the original issue discount (OID) and excluding the impact of deferred financing costs.
New Product:
On October 12, 2012, the FDA approved the Company's APTIMA HPV 16 18/45 Genotype Assay for use on its TIGRIS system. Hologic's APTIMA HPV 16 18/45 Genotype Assay is the first test FDA-approved for genotyping human papillomavirus (HPV) types 16, 18 and/or 45, which are associated with approximately 80% of all invasive cervical cancers worldwide. Detecting these HPV types provides health care professionals with more information regarding a patient's risk of subsequently developing cervical cancer. The APTIMA HPV Assay received FDA approval in 2011 and was CE marked in 2008.
FDA Panel Review of C-View:
On October 24, 2012, the Radiological Devices Panel of the FDA voted that the expanded indications for use of Hologic's Dimensions 3D mammography system to allow Hologic's C-View synthesized 2D images in place of traditional 2D images in breast cancer screening are safe, effective and the benefits outweigh the risks. Sale of the 3-D version of this system in the United States remains subject to FDA approval. The C-View synthesized 2D software module is commercially available outside the United States, including countries in Europe, Latin America and Asia.
Radiology Community Votes Digital Breast Tomosynthesis "Hottest Clinical Procedure" of 2012 for Third Consecutive Year:
In October 2012 and for the third consecutive year, the readers and editors of the leading radiology portal, AuntMinnie.com, named digital breast tomosynthesis the "hottest clinical procedure" in radiology for 2012 in their annual event recognizing excellence in medical imaging. AuntMinnie.com provides a forum for radiology professionals to acknowledge the contributions of their peers to the field of medical imaging. Candidates are nominated by AuntMinnie.com members and are selected by a panel of experts in the field through two rounds of voting. AuntMinnie.com provides a comprehensive community Internet site for radiologists and related professionals in the medical imaging industry and features the latest news and information about medical imaging.
Financial Guidance:
The Company's guidance includes current operations, including revenues from its approved/cleared products and its recently acquired businesses.
First Quarter Fiscal 2013 (Quarter Ending December 29, 2012):
Fiscal 2013 (Year Ending September 28, 2013):
Hologic may not generate expected revenues and may incur expenses or charges, realize income or gains, or execute acquisitions or dispositions in fiscal 2013 that could cause actual results to vary from the guidance above. In addition, the Company is continuing to monitor the effects of the U.S., European and general worldwide economic and regulatory conditions and related uncertainties, including the implementation of healthcare cost containment measures and healthcare reform legislation, as well as foreign currency fluctuations, which, along with other uncertainties facing the Company's business including those referenced elsewhere herein and its filings with the Securities and Exchange Commission, could adversely affect anticipated results.
Conference Call and Webcast:
Hologic's management will host a conference call on Monday, November 12, 2012, at 5:00 p.m. (Eastern) to discuss fourth quarter and fiscal year 2012 operating results. Interested participants may listen to the call by dialing 877-856-1958 or 719-325-4810 for international callers and referencing code 9845290 approximately 15 minutes prior to the call. For those unable to participate in the live broadcast, a replay will be available one hour after the call ends through Friday, November 30, 2012, at 888-203-1112 or 719-457-0820 for international callers, access code 9845290. The Company will also provide a live webcast of the call. Interested participants may access the webcast on the Company's website at www.hologic.com/investors-overview. A PowerPoint presentation related to the conference call has been posted to the site.
About Hologic, Inc.:
Hologic, Inc. is a leading developer, manufacturer and supplier of premium diagnostic products, medical imaging systems, and surgical products. The Company operates four core business units focused on breast health, diagnostics, GYN surgical and skeletal health. With a comprehensive suite of technologies and a robust research and development program, Hologic is committed to improving lives. The Company is headquartered in Massachusetts. For more information, visit www.hologic.com.
Hologic, Adiana, APTIMA, C-View, Dimensions, Gen-Probe, MyoSure, NovaSure, PANTHER, ThinPrep and TIGRIS and associated logos are trademarks and/or registered trademarks of Hologic, Inc. and/or its subsidiaries in the United States and/or other countries.
Forward-Looking Statement Disclaimer:
This News Release 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 included herein based upon or otherwise incorporating judgments or estimates relating to future performance, events or expectations; the Company's positioning and expectations for future growth; the anticipated benefits of the Gen-Probe acquisition; and the Company's outlook and financial and other guidance. These forward-looking 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 those anticipated.
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: U.S., European and general 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 the recently enacted or future 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 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, including the risks and challenges associated with the Company's recent acquisition of Gen-Probe and operations in China; 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; 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; the risks of conducting business internationally, including the effect of exchange rate fluctuations on those operations; 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 combined company's business and prospects are described in the filings made by the Company 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, INC. | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
(In thousands) | ||||||
September 29, 2012 | September 24, 2011 | |||||
ASSETS | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ 566,126 | $ 712,869 | ||||
Accounts receivable, net | 409,333 | 318,712 | ||||
Inventories | 367,191 | 230,544 | ||||
Deferred income tax assets | 11,715 | 39,607 | ||||
Prepaid expenses and other current assets | 208,649 | 41,168 | ||||
Total current assets | 1,563,014 | 1,342,900 | ||||
Property and equipment, net | 507,998 | 238,666 | ||||
Intangible assets, net | 4,301,250 | 2,090,807 | ||||
Goodwill | 3,942,779 | 2,290,330 | ||||
Other assets | 162,067 | 46,077 | ||||
$ 10,477,108 | $ 6,008,780 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Accounts payable | $ 87,223 | $ 63,467 | ||||
Accrued expenses | 380,003 | 325,327 | ||||
Deferred revenue | 129,688 | 120,656 | ||||
Current portion of long-term debt | 64,435 | - | ||||
Total current liabilities | 661,349 | 509,450 | ||||
Long-term debt, net of current portion | 4,971,179 | 1,488,580 | ||||
Deferred income tax liabilities | 1,771,585 | 957,426 | ||||
Deferred service obligations- long term | 13,714 | 9,467 | ||||
Other long-term liabilities | 98,250 | 106,962 | ||||
Total long-term liabilities | 6,854,728 | 2,562,435 | ||||
STOCKHOLDERS' EQUITY: | ||||||
Common stock | 2,656 | 2,625 | ||||
Additional paid-in capital | 5,396,657 | 5,303,713 | ||||
Accumulated deficit | (2,443,554) | (2,369,920) | ||||
Accumulated other comprehensive income | 6,790 | 1,995 | ||||
Treasury stock, at cost | (1,518) | (1,518) | ||||
Total stockholders' equity | 2,961,031 | 2,936,895 | ||||
$ 10,477,108 | $ 6,008,780 | |||||
HOLOGIC, INC. | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
(Unaudited) | |||
(In thousands, except per share data) | |||
Three Months Ended | |||
September 29, 2012 | September 24, 2011 | ||
REVENUES | |||
Product sales | $ 492,954 | $ 385,995 | |
Service and other revenues | 95,594 | 81,050 | |
588,548 | 467,045 | ||
COSTS AND EXPENSES (1): | |||
Cost of product sales | 196,410 | 135,326 | |
Cost of product sales – amortization of intangible assets | 66,072 | 45,978 | |
Cost of service and other revenues | 51,749 | 42,542 | |
Research and development | 47,094 | 28,877 | |
Selling and marketing | 89,947 | 75,112 | |
General and administrative | 88,723 | 39,732 | |
Contingent consideration | 40,399 | 11,316 | |
Amortization of intangible assets | 24,832 | 14,492 | |
Restructuring and divestiture | 16,687 | (71) | |
Impairment of goodwill | 5,826 | - | |
Acquired in-process research and development | 4,500 | - | |
Other expenses | 12 | 320 | |
632,251 | 393,624 | ||
(Loss) income from operations | (43,703) | 73,421 | |
Interest expense | (56,673) | (29,079) | |
Other income (expense), net | 2,412 | (2,736) | |
(Loss) income before provision for income taxes | (97,964) | 41,606 | |
(Benefit) provision for income taxes | (20,197) | 14,037 | |
Net (loss) income | $ (77,767) | $ 27,569 | |
Net (loss) income per share: | |||
Basic | $ (0.29) | $ 0.11 | |
Diluted | $ (0.29) | $ 0.10 | |
Weighted average number of shares outstanding: | |||
Basic | 264,938 | 262,164 | |
Diluted | 264,938 | 264,878 | |
(1) Stock-based compensation included in costs and expenses during the three months ended September 29, 2012 was $2,120 for cost of revenues, $1,640 for research and development, $2,121 for selling and marketing, $4,831 for general and administrative and $3,500 for restructuring. Stock-based compensation included in costs and expenses during the three months ended September 24, 2011 was $1,069 for cost of revenues, $1,219 for research and development, $1,468 for selling and marketing and $4,471 for general and administrative. | |||
HOLOGIC, INC. | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
(Unaudited) | |||
(In thousands, except per share data) | |||
Year Ended | |||
September 29, 2012 | September 24, 2011 | ||
REVENUES | |||
Product sales | $ 1,657,728 | $ 1,478,340 | |
Service and other revenues | 344,924 | 311,009 | |
2,002,652 | 1,789,349 | ||
COSTS AND EXPENSES (1): | |||
Cost of product sales | 616,839 | 521,189 | |
Cost of product sales – amortization of intangible assets | 201,864 | 177,456 | |
Cost of service and other revenues | 189,512 | 167,523 | |
Research and development | 130,962 | 116,696 | |
Selling and marketing | 322,314 | 286,730 | |
General and administrative | 220,042 | 158,793 | |
Contingent consideration | 119,497 | 11,986 | |
Amortization of intangible assets | 72,036 | 58,334 | |
Restructuring and divestiture | 17,515 | (71) | |
Impairment of goodwill | 5,826 | - | |
Acquired in-process research and development | 4,500 | - | |
Gain on sale of intellectual property, net | (12,424) | (84,502) | |
Other expenses | 452 | 770 | |
1,888,935 | 1,414,904 | ||
Income from operations | 113,717 | 374,445 | |
Interest expense | (140,287) | (114,846) | |
Other income (expense), net | 7,256 | (2,322) | |
Debt extinguishment loss | (42,347) | (29,891) | |
(Loss) income before provision for income taxes | (61,661) | 227,386 | |
Provision for income taxes | 11,973 | 70,236 | |
Net (loss) income | $ (73,634) | $ 157,150 | |
Net (loss) income per share: | |||
Basic | $ (0.28) | $ 0.60 | |
Diluted | $ (0.28) | $ 0.59 | |
Weighted average number of shares outstanding: | |||
Basic | 264,041 | 261,099 | |
Diluted | 264,041 | 264,305 | |
(1) Stock-based compensation included in costs and expenses during the twelve months ended September 29, 2012 was $5,722 for cost of revenues, $5,328 for research and development, $7,355 for selling and marketing, $18,667 for general and administrative and $3,500 for restructuring. Stock-based compensation included in costs and expenses during the twelve months ended September 24, 2011 was $4,602 for cost of revenues, $4,852 for research and development, $5,954 for selling and marketing, and $20,064 for general and administrative. | |||
HOLOGIC, INC. | |||||
RECONCILIATION OF GAAP REVENUES, EPS AND NET (LOSS) INCOME TO NON-GAAP ADJUSTED REVENUES, EPS, NET INCOME AND EBITDA | |||||
(Unaudited) | |||||
(In thousands, except earnings per share) | |||||
Three Months Ended | |||||
September 29, 2012 | September 24, 2011 | ||||
REVENUES | |||||
GAAP revenues | $ 588,548 | ||||
Adjustment related to Novartis collaboration | 11,606 | ||||
Non-GAAP adjusted revenues | $ 600,154 | (1) | |||
(LOSS) EARNINGS PER SHARE | |||||
GAAP (loss) earnings per share- Diluted | $ (0.29) | $ 0.10 | |||
Adjustments to net (loss) income (as detailed below) | 0.66 | 0.24 | |||
Non-GAAP adjusted earnings per share- Diluted | $ 0.37 | (2) | $ 0.34 | (2) | |
NET (LOSS) INCOME | |||||
GAAP net (loss) income | $ (77,767) | $ 27,569 | |||
Adjustments: | |||||
Contingent revenue from Novartis collaboration | 11,606 | - | |||
Amortization of intangible assets | 90,904 | 60,470 | |||
Contingent consideration | 40,399 | 11,316 | |||
Non-cash interest expense relating to convertible notes | 16,514 | 18,470 | |||
Acquisition-related costs | 38,513 | 367 | |||
Restructuring and divestiture costs | 16,697 | (71) | |||
Fair value write-up of acquired inventory sold | 19,918 | - | |||
Impairment of goodwill | 5,826 | - | |||
In-process research and development | 4,500 | - | |||
Fair value adjustment for depreciation expense | 2,503 | - | |||
Other (benefits) charges | (425) | 320 | |||
Income tax effect of reconciling items | (70,854) | (3) | (29,655) | (3) | |
Non-GAAP adjusted net income | $ 98,334 | $ 88,786 | |||
EBITDA | |||||
Non-GAAP adjusted net income | $ 98,334 | $ 88,786 | |||
Interest expense, net, not adjusted above | 39,766 | 9,887 | |||
Provision for income taxes | 50,657 | 43,692 | |||
Depreciation expense, not adjusted above | 21,241 | 17,908 | |||
Adjusted EBITDA | $ 209,998 | $ 160,273 | |||
EXPLANATORY NOTES: | |||||
(1) To reflect a fair value adjustment recorded in purchase accounting relating to contingent revenue earned and received under the Novartis collaboration post acquisition which was eliminated under purchase accounting.
(2) Non-GAAP adjusted earnings per share was calculated based on 268,106 and 264,878 weighted average diluted shares outstanding for the three months ended September 29, 2012 and September 24, 2011, respectively.
(3) To reflect an annual effective tax rate of 34.0% and 33.2% on a non-GAAP basis for the three months ended September 29, 2012 and September 24, 2011, respectively. | |||||
HOLOGIC, INC. | |||||
RECONCILIATION OF GAAP REVENUES, EPS AND NET (LOSS) INCOME TO NON-GAAP ADJUSTED REVENUES, EPS, NET INCOME AND EBITDA | |||||
(Unaudited) | |||||
(In thousands, except earnings per share) | |||||
Year Ended | |||||
September 29, 2012 | September 24, 2011 | ||||
REVENUES | |||||
GAAP revenues | $ 2,002,652 | ||||
Adjustment related to Novartis collaboration | 11,606 | ||||
Non-GAAP adjusted revenues | $ 2,014,258 | (1) | |||
(LOSS) EARNINGS PER SHARE | |||||
GAAP (loss) earnings per share- Diluted | $ (0.28) | $ 0.59 | |||
Adjustments to net (loss) income (as detailed below) | 1.66 | 0.68 | |||
Non-GAAP adjusted earnings per share- Diluted | $ 1.38 | (2) | $ 1.27 | (2) | |
NET (LOSS) INCOME | |||||
GAAP net (loss) income | $ (73,634) | $ 157,150 | |||
Adjustments: | |||||
Contingent revenue from Novartis collaboration | 11,606 | - | |||
Amortization of intangible assets | 273,900 | 235,790 | |||
Contingent consideration | 119,497 | 11,986 | |||
Non-cash interest expense relating to convertible notes | 68,532 | 72,908 | |||
Acquisition-related costs | 45,633 | 2,316 | |||
Non-cash loss on convertible notes exchange | 42,347 | 29,891 | |||
Restructuring and divestiture | 17,036 | (71) | |||
Fair value write up of acquired inventory sold | 19,918 | 3,298 | |||
Adiana closure costs | 19,543 | - | |||
Impairment of goodwill | 5,826 | - | |||
In-process research and development | 4,500 | - | |||
Fair value adjustment for depreciation expense | 2,503 | - | |||
Gain on sale of intellectual property, net | (12,424) | (84,502) | |||
Other charges | 452 | 3,215 | |||
Income tax effect of reconciling items | (177,478) | (3) | (96,500) | (3) | |
Non-GAAP adjusted net income | $ 367,757 | $ 335,481 | |||
EBITDA | |||||
Non-GAAP adjusted net income | $ 367,757 | $ 335,481 | |||
Interest expense, net, not adjusted above | 68,887 | 39,864 | |||
Provision for income taxes | 189,451 | 166,736 | |||
Depreciation expense, not adjusted above | 69,348 | 68,946 | |||
Adjusted EBITDA | $ 695,443 | $ 611,027 | |||
EXPLANATORY NOTES: | |||||
(1) To reflect a fair value adjustment recorded in purchase accounting relating to contingent revenue earned and received under the Novartis collaboration post acquisition which was eliminated under purchase accounting.
(2) Non-GAAP adjusted earnings per share was calculated based on 266,795 and 264,305 weighted average diluted shares outstanding for the year ended September 29, 2012 and September 24, 2011, respectively.
(3) To reflect an annual effective tax rate of 34.0% and 33.2% on a non-GAAP basis for the year ended September 29, 2012 and September 24, 2011, respectively. | |||||
Future GAAP EPS may be affected by changes in ongoing assumptions and judgments relating to the Company's acquired businesses, and may also be affected by nonrecurring, unusual or unanticipated charges, expenses or gains, all of which are excluded in the calculation of non-GAAP adjusted EPS as described in this press release. It is therefore not practicable to reconcile non-GAAP adjusted EPS guidance to the most comparable GAAP measure.
Use of Non-GAAP Financial Measures:
The Company has presented the following non-GAAP financial measures in this press release: adjusted revenues; adjusted net income; adjusted EPS; and adjusted EBITDA. The Company defines adjusted EBITDA as its non-GAAP adjusted net income plus interest expense, net, income taxes, and depreciation and amortization expense included in its non-GAAP adjusted net income. The Company defines its non-GAAP adjusted revenues to include contingent revenue earned under the Novartis collaboration post-acquisition which was eliminated under purchase accounting. The Company defines its non-GAAP adjusted net income and adjusted EPS to exclude: (i) the amortization of intangible assets; (ii) acquisition-related charges and effects, such as charges for contingent consideration (comprised of (a) adjustments for changes in the fair value of the contingent consideration liabilities initially recorded as part of the purchase price of an acquisition as required by GAAP, and (b) contingent consideration that is tied to continuing employment of the former shareholders and employees which is recorded as compensation expense), 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 the write-up of acquired unbilled accounts receivable to fair value; (iii) non-cash interest expense related to amortization of the debt discount for convertible debt securities; (iv) divestiture and restructuring charges; (v) non-cash loss on exchange of convertible notes; (vi) litigation settlement charges (benefits); (vii) other-than-temporary impairment losses on investments; and (viii) other one-time, nonrecurring, unusual or infrequent charges, expenses or gains that may not be indicative of the Company's core business results; and include income taxes related to such adjustments.
The Company believes the use of non-GAAP adjusted net income is useful to investors by eliminating certain of the more significant effects of its acquisitions and related activities, non-cash charges resulting from the application of GAAP to convertible debt instruments with cash settlement features, charges related to debt extinguishment losses, investment impairments, litigation settlements, and divestiture and restructuring initiatives. These measures also reflect how Hologic manages its businesses internally. In addition to the adjustments set forth in the calculation of the Company's non-GAAP adjusted net income and adjusted EPS, its non-GAAP adjusted EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending. As with the items eliminated in its calculation of non-GAAP adjusted net income, these items may vary for different companies for reasons unrelated to the overall operating performance of a company's business. When analyzing the Company's operating performance, investors should not consider these non-GAAP financial measures as a substitute for net (loss) income prepared in accordance with GAAP.
Investor Relations and Media Contacts: | |
Deborah R. Gordon | Al Kildani |
Vice President, Investor Relations | Senior Director, Investor Relations |
(781) 999-7716 | (858) 410-8653 |
deborah.gordon@hologic.com | al.kildani@hologic.com |