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) August 5, 2013
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 August 5, 2013, Hologic, Inc. issued a press release announcing its financial results for the third quarter ended June 29, 2013. 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 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 note 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.
Glenn P. Muir resigned from the Board of Directors of Hologic, Inc. effective August 5, 2013. Mr. Muir will continue to serve as Executive Vice President, Finance and Administration, and Chief Financial Officer of Hologic, Inc.
Attached as Exhibits 10.1 and 10.2 are forms of equity award agreement covering the restricted stock units and option to purchase Hologic, Inc. common stock, respectively, contemplated by the employment letter by and between John W. Cumming and Hologic, Inc. previously filed on a Form 8-K with the U.S. Securities and Exchange Commission on July 19, 2013.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number |
Description | |
| 10.1 | Form of Restricted Stock Unit Award Agreement. | |
| 10.2 | Form of Stock Option Award Agreement. | |
| 99.1 |
Press release dated August 5, 2013 of Hologic, Inc. announcing its financial results for the third quarter ended June 29, 2013. |
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: August 5, 2013 | HOLOGIC, INC. | |||
| By: |
/S/ GLENN P. MUIR
| |||
| Glenn P. Muir | ||||
Executive Vice President, Finance and Administration, and Chief Financial Officer | ||||
|
Notice of Grant of Restricted Stock Units and |
Hologic, Inc. ID: 04-2902449 35 Crosby Drive Bedford, MA 01730
|
| Participant Name | Plan: 2008 Amended Equity Incentive Plan |
Effective GRANT DATE you have been granted an award of SHARES GRANTED restricted stock units (“RSUs”) of Hologic, Inc. (the “Company”). The RSUs are granted pursuant to the terms and conditions of the Plan, referenced above, and the restricted stock unit award agreement (the “RSU Agreement”) provided herewith.
Subject to the terms and conditions of the RSU Agreement and the Plan, 25% of the RSUs will vest on each of the first four anniversaries of the grant date (each a “Restriction Lapse Date”), entitling you to receive one share of the Company’s common stock for each RSU so vested.
By your signature and the Company's signature below, you and the Company agree that these RSUs are granted under and governed by the terms and conditions of the Plan and the RSU Agreement.
| Hologic, Inc. | Date | |
| Electronic Signature |
Acceptance Date |
Hologic, Inc.
Restricted Stock Unit Award Agreement
Restricted 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”).
W I T N E S S E T H:
WHEREAS, the Company and the Grantee desire to enter into an agreement whereby the Company will grant the Grantee Restricted Stock Units (“RSUs”) 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 Restricted 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 RSUs. 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 RSUs as provided in the Award Notice. The shares of Common Stock covered by these RSUs are sometimes hereinafter referred to as the “RSU Shares”. The number and class of securities and vesting schedule of the RSUs are subject to adjustment as set forth in the Plan. 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. Restricted Stock Units. Each RSU entitles the Grantee to receive from the Company (i) one share of Common Stock for each RSU Share vested as of a Vesting Date (as defined below) and (ii) the right to receive notional dividend equivalents, if any, each 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 RSU Shares which have vested on that date.
3. Dividend Equivalents. Until the Vesting Date, whenever dividends are paid or distributed with respect to the Common Stock, the Grantee shall be entitled to receive notional dividend equivalents (the “Dividend Equivalents”) in an amount equal in value to the amount of the dividend or property distributed on a single share of Common Stock, multiplied by the number of RSUs credited to the Grantee’s account as of the record date for such dividend or distribution. Payment of the notional dividend equivalents paid on RSUs will be withheld by the Company and shall be delivered to the Grantee as of the Vesting Date, if and only to the extent that the RSUs have vested as of said date, as set forth in paragraph 4.
4. Vesting. The RSUs granted hereby will vest on the earlier to occur of (i) the Restriction Lapse Dates as provided in the Award Notice with respect to the number of shares as provided in the Award Notice for each such date, or (ii) in their entirety on the termination of the Grantee’s Service (as defined below) as a result of the death or Permanent Disability (as defined in Section 23(e)(3) of the Code) of the Grantee, or the termination of the Grantee as the Company’s Chief Executive Officer by the Company other than for Cause, provided that in each such case under this clause (ii) the Grantee has remained in continuous Service through such date or termination, as applicable (the “Vesting Date”). 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 RSUs shall terminate and Grantee shall have no further rights hereunder, including without limitation any rights to receive any Dividend Equivalents as set forth in paragraph 3.
5. Nontransferability. The RSUs 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.
6. No Rights Other Than Those Expressly Created. Neither this Award Agreement, the RSUs, 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 RSU Shares or any Dividend Equivalents until such time as the underlying RSU has been vested and the RSU Shares have been issued.
7. 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 RSUs 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 RSU 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 RSU 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 RSU 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 RSU Shares issued hereunder may be legended to reflect such restrictions.
(c) General. No RSU Shares shall be issued or Dividend Equivalents distributed upon vesting of an RSU 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 RSU Shares and/or distribution of such Dividend Equivalents.
8. 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 RSUs, 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 RSUs granted hereunder; provided however that nothing herein shall supersede any prior written employment or other similar written agreement, if any, that may provide, in certain circumstances, for acceleration of restricted stock units granted to the Grantee.
(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, Inc. Notice
of Grant of Stock Options
|
Hologic, Inc. ID: 04-2902449 35 Crosby Drive Bedford, MA 01730
|
| Participant Name | Plan: 2008 Amended Equity Incentive Plan |
Effective, GRANT DATE you have been granted a Non-Qualified Stock Option (the “Option”) to buy SHARES GRANTED of Hologic, Inc. (the “Company”) common stock at GRANT PRICE. The Option is granted pursuant to the terms and conditions of the Plan, referenced above, and the option agreement (the “Option Agreement”) provided herewith.
Subject to the terms and conditions of the Option Agreement and the Plan, the Option will vest 20% on each of the first five anniversaries of the grant date, such that the Option will be fully vested on the fifth anniversary of the grant date. Unless sooner terminated pursuant to the terms of the Option Agreement or the Plan the Option will expire on EXPIRATION DATE [SEVEN YEARS FROM ISSUE DATE].
By your signature and the Company's signature below, you and the Company agree that the Option is granted under and governed by the terms and conditions of the Plan and the Option Agreement.
| Hologic, Inc. | Date | |
| Electronic Signature |
Acceptance Date |
HOLOGIC, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Non Qualified Stock Option Agreement (the “Option Agreement”) pursuant to the Hologic, Inc. 2008 Equity Incentive Plan, as it may be amended from time to time (the “Plan”).
W I T N E S S E T H:
WHEREAS, the Company and the Optionee desire to enter into an agreement whereby the Company will grant the Optionee an option (the “Option”) to purchase shares of the Company’s Common Stock, $.01 par value per share (the “Common Stock”), as set forth in the Notice of Grant of Stock Options to which this Award Agreement is attached (the “Award Notice”); and
WHEREAS, this Option is intended to qualify as a “Non-Qualified Stock Option”, which is a stock option which does not qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Optionee agree as follows:
1. Grant of Option.
Pursuant to the terms and conditions of this Option Agreement and the Plan (which is incorporated herein by reference), the Company hereby grants to the Optionee an Option to purchase shares of Common Stock (the “Option Shares”) as provided in the Award Notice. The exercise price at which the Option Shares may be purchased (the “Option Exercise Price”) and the vesting schedule of the Option are set forth in the Award Notice. The number and class of securities, vesting schedule and exercise price per share subject to this Option are subject to adjustment as set forth in the Plan. In the event of a conflict between the terms and conditions of the Plan and this Option 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. Vesting of Option.
Subject to the provisions of the Plan, Section 3 of this Option Agreement and the right of the Company to accelerate the date upon which any or all of this Option would otherwise become exercisable, the Optionee shall be entitled to exercise this Option with respect to all or a portion of the percentage or number of the Option Shares provided in the Award Notice. Notwithstanding the foregoing, in the event that the Optionee’s Service (as defined below) is terminated as a result of the death or Permanent Disability (as defined in Section 23(e)(3) of the Code) of the Optionee, or the Optionee is terminated by the Company as the Company’s Chief Executive Officer other than for cause (as defined in the Plan) the Option shall become fully vested upon such termination. 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.
Notwithstanding any provision of this Option Agreement to the contrary, in no event may this Option be exercised after the Expiration Date set forth in the Award Notice.
3. Termination of Service.
If the Optionee’s Service is terminated (a “Termination”), then unless otherwise provided in this Option Agreement or the Plan, this Option may be exercised as to all shares with respect to which Optionee could exercise this Option on the date of Termination, and which shares have not been previously purchased, until the earlier of the Expiration Date, or: ninety (90) days after the Termination; or such other date as determined by the Company, and there shall be no further vesting of the Option after such Termination; provided, however, in the case of a Termination by reason of death or Permanent Disability, or the termination of the Optionee by the Company as the Company’s Chief Executive Officer other than for cause, this option may be exercised as to all shares subject to this Option that have not been previously purchased until the Expiration Date set forth in the Award Notice.
Notwithstanding the foregoing, in the case of a Termination for cause, the ability to exercise this Option may be terminated on such earlier date as the Company may specify, and such date may be set so as to prevent the Optionee from further exercising any portion of this Option.
4. Nontransferability; Persons Able to Exercise.
The Option may not be transferred other than by will or the laws of descent and distribution. During the life of the Optionee, only the Optionee may exercise this Option. If the Optionee dies while still employed by the Company, or the periods specified in Section 3, this Option may be exercised by the Optionee’s executors, administrators, legatees or distributees, provided that such person or persons comply with the provisions of this Option applicable to the Optionee.
5. Method of Exercising Option.
The Option may be exercised, in whole or in part, by written notice to the Company, containing an executed Notice of Exercise in the form of Attachment A, provided that the Company, in its discretion, may modify or augment these requirements as provided in Section 7 of this Option Agreement, or where appropriate because a person other than the Optionee is exercising the Option pursuant to Section 4. The written notice specified in this Section must be accompanied by payment of the Option Exercise Price for the shares being purchased. Payment shall be made in cash, unless the Company, in its sole discretion, authorizes payment to be made in shares of Common Stock of the Company, a combination of such shares and cash. As soon as practical after receipt of this notice and payment, the Company shall deliver the purchased Option Shares. In the event this Option is exercised by any person other than the Optionee, the notice shall be accompanied by appropriate proof of the right of such person to exercise this Option.
6. No Rights Other Than Those Expressly Created.
Neither this Option, the Option Agreement nor any action taken hereunder shall be construed as (i) giving the Optionee any right to be retained in the Service of, or continue to be affiliated with, the Company, (ii) giving the Optionee 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 Optionee and the Company. As to any claim for any unpaid amounts under this Option, any person having a claim for payments shall be an unsecured creditor. The Optionee shall not have any of the rights of a stockholder with respect to any Option Shares until such time as this Option has been exercised and Option Shares have been issued.
7. 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 Optionee upon the grant of this Option, the exercise of this Option, or at some other time. The Company may require, as a condition to the exercise of this Option, or demand, at such other time as it may consider appropriate, that the Optionee pay the Company the amount of any taxes which the Company may determine is required to be collected or withheld, and the Optionee shall comply with the requirement or demand of the Company.
(b) Securities Law Compliance. Upon exercise (or partial exercise) of this Option, the Optionee 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 Option 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 Option Shares upon any exercise of this Option 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 Option Shares upon exercise of this Option, the Optionee 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 Option Shares issued hereunder may be legended to reflect such restrictions.
(c) General. No Option Shares shall be issued upon exercise of this Option 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 Option Shares.
8. Miscellaneous.
(a) Non-Qualified Option. The Option hereby granted is not intended to be an “incentive stock option” as that term is defined in Section 422 of the Internal Revenue Code.
(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 Option and Option Agreement, 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 Optionee.
(c) Amendment. This Option may only be modified or amended by a writing signed by both parties.
(d) Notices. Any notices required to be given under this Option 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 Optionee:
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 Option Agreement shall supersede in its entirety all prior undertakings and agreements of the Company and Optionee, whether oral or written, with respect to this option; provided however that nothing herein shall supersede any prior written employment or other similar written agreement, if any, that may provide, in certain circumstances, for acceleration or extension of options granted to the Optionee.
(f) Successors and Assigns. The rights and obligations of the Company under this Option 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 Option 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 Option 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 Option Agreement shall nevertheless remain in full force and effect.
(h) Paragraph Headings; Rules of Construction. The paragraph headings used in this Option Agreement are for convenience or reference, and are not to be construed as part of this Option or Option 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 Option Agreement.
(i) Electronic Copies. The Company may choose to deliver certain materials relating to the Plan in electronic form. By accepting this option, you consent and agree that the Company may deliver the Plan prospectus and the Company’s annual report to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide you with 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 Option 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 Option 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 Option Agreement is attached and incorporated by reference 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 Third Quarter Fiscal 2013 Operating Results
BEDFORD, Mass., Aug. 5, 2013 /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, with an emphasis on serving the healthcare needs of women, today announced its results for the third fiscal quarter ended June 29, 2013.
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.
Third Quarter Fiscal 2013 Operating Results Overview:
Third quarter fiscal 2013 revenues totaled $626.1 million, an increase of 33.2% compared to revenues of $470.2 million in the third quarter of fiscal 2012.
The increase in revenues compared to the same period in the prior year was driven primarily by:
The overall revenue increase was partially offset by lower year-over-year sales of:
Foreign currencies had a negligible impact on revenues compared with the third quarter of fiscal 2012.
Third quarter fiscal 2013 net loss was $11.0 million, or $0.04 per diluted share, compared with net income of $23.6 million, or $0.09 per diluted share, in the third quarter of fiscal 2012. Third quarter fiscal 2013 non-GAAP net income was $103.2 million, or $0.38 per diluted share, an increase of 11.5% and 8.6%, respectively, compared to $92.6 million, or $0.35 per diluted share, for the same period in the prior year.
For the nine months ended June 29, 2013, revenues totaled $1.87 billion. Excluding the effect of a net adjustment of $(19.7) million, primarily related to a purchase accounting adjustment recorded for contingent revenue earned and received under Gen-Probe's collaboration agreement with Novartis, non-GAAP revenues were $1.89 billion, an increase of 33.6% compared to revenues of $1.41 billion for the nine months ended June 23, 2012.
For the nine months ended June 29, 2013, Hologic reported a net loss of $58.9 million, or $0.22 per diluted share, compared with net income of $4.1 million, or $0.02 per diluted share, for the nine months ended June 23, 2012. The Company's non-GAAP net income of $298.9 million, or $1.10 per diluted share, for the nine months ended June 29, 2013, increased 10.9% and 8.9%, respectively, compared to $269.4 million, or $1.01 per diluted share, for the same period in the prior year.
The following non-GAAP financial measures are included in this press release: revenues, net income, earnings per diluted share (EPS), and adjusted EBITDA. 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 pleased our third quarter revenues were in-line with and our EPS exceeded guidance. Although we have lowered expectations for the remainder of the fiscal year, I am confident we have the necessary platforms and breadth of assets to drive organic growth and deliver strong profitability," said Jack Cumming, President and Chief Executive Officer. "We are committed to improving our performance and execution in order to capitalize on the opportunities in the changing market landscape and position Hologic for success. Our customers worldwide are embracing our 3D breast tomosynthesis technology, and we continue to extend our market leadership position in molecular diagnostics. We are focused on strategies that will allow us to return capital to our shareholders, while still capitalizing on the many opportunities that lie ahead. We are very well positioned to deliver enhanced value for our customers, patients and shareholders."
Third Quarter Fiscal 2013 Revenue Overview by Segment (As Compared to the Third Quarter Fiscal 2012):
Highlights:
Hologic Appoints Jack W. Cumming President and Chief Executive Officer:
On July 18, 2013, the Company announced that Jack Cumming was named President and Chief Executive Officer of Hologic. Mr. Cumming joined Hologic in 2001 and served as Chief Executive Officer from 2001 to 2009. During the last four years, Mr. Cumming served as Global Strategic Advisor for Hologic.
Hologic and Quest Diagnostics (Quest) Form Strategic Alliance:
On June 6, 2013, the Company and Quest jointly announced a strategic alliance to more broadly offer testing based on Hologic's Aptima family of products, as well as to co-develop and promote advanced diagnostic solutions to improve women's health. Under the agreement, Quest is transitioning to a broader offering of services, which includes FDA-approved or cleared assays for HPV, HPV genotyping, chlamydia, gonorrhea and trichomonas vaginalis. In addition, Quest continues to utilize Hologic's leading line of ThinPrep liquid-based cytology products. The agreement is non-exclusive with an initial term of five years.
Hologic's 3D Dimensions Breast Tomosynthesis System Places First in KLAS Annual Survey of Mammography Equipment Users:
KLAS, a research firm specializing in monitoring and reporting on the performance of healthcare vendors, announced that Hologic's 3D Dimensions breast tomosynthesis, 2D Selenia, and 2D Dimensions mammography systems placed first, second and third, respectively, in the digital mammography category in the KLAS annual survey of healthcare executives and clinicians. This is the fourth year in a row that users have ranked a Hologic digital mammography system highest in the category.
Product Approvals and Clearances:
On July 23, 2013, the Company announced FDA approval of its Aptima HPV assay on its Panther system. The Aptima HPV test is performed with Hologic's ThinPrep liquid cytology specimen and can be tested before and after it has been processed for cytology testing on the Company's ThinPrep 2000 system. The addition of the Aptima HPV assay to the Panther's women's health testing menu extends the ability of low- to high-volume laboratories to run multiple tests from a single specimen, on a cost-effective, highly-flexible, and fully-automated molecular testing platform.
On July 15, 2013, the Company announced that it expanded its interventional and imaging solutions for breast health with the launch of the world's first 3D breast biopsy option. This technology was developed for the Company's Affirm upright breast biopsy guidance system, which is used in conjunction with both the 2D and 3D Dimensions mammography systems. This new biopsy technique has numerous advantages over traditional stereotactic biopsy procedures, including helping users locate lesions seen only on tomosynthesis images and lesions that are better visualized using 3D imaging, as well as faster lesion targeting and reduced patient procedure time.
Improved Balance Sheet and Financial Flexibility with Refinancing and Partial Repayment of Term B:
On August 2, 2013, the Company entered into a Refinancing Amendment No. 2 (Credit Agreement Amendment 2) that reduced the interest rate on its Term B by 75 basis points (from 3.50% plus LIBOR with a 1.00% floor to 2.75% plus LIBOR with a 1.00% floor). In conjunction with the refinancing, the Credit Agreement Amendment 2 also amends the restrictive covenants in the Credit Agreement to increase the Company's capacity to repurchase shares and issue dividends. In addition, on August 2, 2013, the Company voluntarily prepaid $200 million of the Term B. In connection with this prepayment, the Company will incur a one-time charge to earnings in the fourth quarter of $6 million to write-off certain deferred financing costs and debt discount. Immediately following the completion of this prepayment, the principal amount outstanding on the Term B was approximately $1.285 billion. Hologic estimates the reduction in the interest rate, coupled with the lower loan balance, will result in lower cash interest expense of approximately $19 million per year.
Significant Peer-Reviewed Studies:
Dr. Rose U.S. Tomosynthesis Study.
On May 23, 2013, the results of the first large U.S. clinical study on the use of Tomosynthesis in a clinical site were published in the American Journal of Roentgenology. The study, "Implementation of Breast Tomosynthesis in a Routine Screening Practice: An Observational Study," compared the outcomes of 2D mammography screening exams that were interpreted prior to the introduction of Hologic's 3D Dimensions tomosynthesis system, with screening exams after the introduction of 3D mammography into the practice. The study found that the use of Hologic's 3D Dimensions tomosynthesis screening resulted in a 38% reduction in recall rates and a 35% increase in cancer detection rates, including a 53% increase in invasive cancer detection. The study was led by Dr. Stephen L. Rose, M.D. and is the first large U.S. breast cancer screening analysis to be published in a
peer-reviewed journal.
Yale University School of Medicine Study on the Impact of 3D Tomosynthesis on Patient Recall Rates.
On July 30, 2013, a new study by Dr. Brian Haas and his colleagues at Yale University School of Medicine found a 10% increase in cancer detection and a 30% decrease in the overall recall rate when Hologic's Tomosynthesis technology was used in breast cancer screening. The study was published on-line in advance of print in Radiology.
The findings in these studies are consistent with and supplementary to other recent clinical studies on the benefits of Hologic's 3D Dimensions, including the Oslo Tomosynthesis Screening Trial (published in Radiology online in advance of print on January 7, 2013 and in print on April 4, 2013) and the Screening Tomosynthesis or Mammography (STORM) trial in Italy (published in The Lancet Oncology online in advance of print on April 25, 2013).
The Company's guidance includes current operations, including revenues from its approved/cleared products and its recently acquired businesses.
Fourth Quarter Fiscal 2013 (Quarter Ending September 28, 2013):
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, August 5, 2013, at 5:00 p.m. (Eastern) to discuss third quarter fiscal year 2013 operating results. Interested participants may listen to the call by dialing 888-287-5536 or 719-325-2493 for international callers and referencing code 9198877 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, August 23, 2013, at 888-203-1112 or 719-457-0820 for international callers, access code 9198877. 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 will be 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, with an emphasis on serving the healthcare needs of women. 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, Affirm, Aptima, Dimensions, Eviva, Gen-Probe, MyoSure, NovaSure, Panther, Selenia and ThinPrep 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 strategies, positioning, resources, capabilities, and expectations for product revenues, future growth delivering enhanced value to its customers, and/or unlocking value for and the return of capital to its shareholders; the anticipated benefit of its strategic alliance with Quest the anticipated benefits of the Gen-Probe acquisition, including anticipated synergies; the anticipated timing of a reimbursement code for tomosynthesis and any other governmental or regulatory approvals or clearances; 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: the ability of the Company to successfully manage recent and ongoing leadership and organizational changes, including the ability of the Company to attract, motivate and retain key employees; 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 strategic alliances and the ability of the Company to realize anticipated benefits of those alliances; risks associated with acquisitions, including without limitation, the Company's ability to successfully integrate acquired businesses, the risks that the acquired businesses may not operate as effectively and efficiently as expected even if otherwise successfully integrated, the risks that acquisitions may involve unexpected costs or unexpected liabilities, including the risks and challenges associated with the Company's recent acquisition of Gen-Probe and operations in China; the risks of conducting business internationally; the risk of adverse exchange rate fluctuations on the Company's international activities and businesses; 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; and competition.
The risks included above are not exhaustive. Other factors that could adversely affect the 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.
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| June 29, 2013 |
| September 29, 2012 |
ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents | $ 964,385 |
| $ 566,126 |
Accounts receivable, net | 400,428 |
| 409,333 |
Inventories | 306,019 |
| 367,191 |
Deferred income tax assets | - |
| 11,715 |
Prepaid expenses and other current assets | 80,513 |
| 208,649 |
Total current assets | 1,751,345 |
| 1,563,014 |
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Property and equipment, net | 501,861 |
| 507,998 |
Intangible assets, net | 3,987,157 |
| 4,301,250 |
Goodwill | 3,939,172 |
| 3,942,779 |
Other assets | 153,668 |
| 162,067 |
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| $ 10,333,203 |
| $ 10,477,108 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Current portion of long-term debt | $ 657,370 |
| $ 64,435 |
Accounts payable | 74,115 |
| 87,223 |
Accrued expenses | 359,311 |
| 380,003 |
Deferred revenue | 126,609 |
| 129,688 |
Deferred income tax liabilities | 41,518 |
| - |
Total current liabilities | 1,258,923 |
| 661,349 |
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Long-term debt, net of current portion | 4,347,300 |
| 4,971,179 |
Deferred income tax liabilities | 1,553,698 |
| 1,771,585 |
Deferred service obligations- long term | 22,436 |
| 13,714 |
Other long-term liabilities | 154,212 |
| 98,250 |
Total long-term liabilities | 6,077,646 |
| 6,854,728 |
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Total stockholders' equity | 2,996,634 |
| 2,961,031 |
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| $ 10,333,203 |
| $ 10,477,108 |
HOLOGIC, INC.
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| Three Months Ended | ||
June 29, 2013 |
| June 23, 2012 | |
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REVENUES |
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Product sales | $ 529,953 |
| $ 384,593 |
Service and other revenues | 96,183 |
| 85,635 |
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| 626,136 |
| 470,228 |
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COSTS AND EXPENSES (1): |
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Cost of product sales | 187,612 |
| 134,062 |
Cost of product sales – amortization of intangible assets | 75,990 |
| 45,280 |
Cost of product sales – impairment of intangible assets | 1,714 |
| - |
Cost of service and other revenues | 51,062 |
| 46,246 |
Research and development | 47,779 |
| 26,229 |
Selling and marketing | 82,911 |
| 76,368 |
General and administrative | 60,476 |
| 43,421 |
Amortization of intangible assets | 28,678 |
| 15,733 |
Contingent consideration | 22,072 |
| 2,226 |
Restructuring and divestiture charges | 6,690 |
| 136 |
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| 564,984 |
| 389,701 |
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Income from operations | 61,152 |
| 80,527 |
Interest expense | (67,162) |
| (25,593) |
Other (expense) income, net | (913) |
| 73 |
(Loss) income before income taxes | (6,923) |
| 55,007 |
Provision for income taxes | 4,027 |
| 31,413 |
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Net (loss) income | $ (10,950) |
| $ 23,594 |
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Net (loss) income per share: |
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Basic | $ (0.04) |
| $ 0.09 |
Diluted | $ (0.04) |
| $ 0.09 |
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Weighted average number of shares outstanding: |
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Basic | 269,430 |
| 264,609 |
Diluted | 269,430 |
| 267,294 |
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(1) Stock-based compensation included in costs and expenses during the three months ended June 29, 2013 was $1,677 for cost of revenues, $1,717 for research and development, $2,208 for selling and marketing, $4,754 for general and administrative and $463 for restructuring and divestiture. Stock-based compensation included in costs and expenses during the three months ended June 23, 2012 was $1,220 for cost of revenues, $1,210 for research and development, $1,840 for selling and marketing and $4,484 for general and administrative. |
HOLOGIC, INC.
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| Nine Months Ended | ||
June 29, 2013 |
| June 23, 2012 | |
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REVENUES |
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Product sales | $ 1,579,323 |
| $ 1,164,774 |
Service and other revenues | 290,838 |
| 249,330 |
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| 1,870,161 |
| 1,414,104 |
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COSTS AND EXPENSES (1): |
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Cost of product sales | 617,165 |
| 420,429 |
Cost of product sales – amortization of intangible assets | 227,010 |
| 135,792 |
Cost of product sales – impairment of intangible assets | 1,714 |
| - |
Cost of service and other revenues | 153,515 |
| 137,763 |
Research and development | 148,909 |
| 83,868 |
Selling and marketing | 265,379 |
| 232,367 |
General and administrative | 179,689 |
| 131,759 |
Amortization of intangible assets | 85,871 |
| 47,204 |
Contingent consideration | 91,785 |
| 79,098 |
Gain on sale of intellectual property, net | (53,884) |
| (12,424) |
Restructuring and divestiture charges | 23,085 |
| 828 |
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| 1,740,238 |
| 1,256,684 |
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Income from operations | 129,923 |
| 157,420 |
Interest expense | (215,292) |
| (83,614) |
Other income, net | 592 |
| 4,844 |
Debt extinguishment loss | (3,247) |
| (42,347) |
(Loss) income before income taxes | (88,024) |
| 36,303 |
(Benefit) provision for income taxes | (29,088) |
| 32,170 |
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Net (loss) income | $ (58,936) |
| $ 4,133 |
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Net (loss) income per share: |
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Basic | $ (0.22) |
| $ 0.02 |
Diluted | $ (0.22) |
| $ 0.02 |
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Weighted average number of shares outstanding: |
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Basic | 267,983 |
| 263,742 |
Diluted | 267,983 |
| 266,359 |
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(1) Stock-based compensation included in costs and expenses during the nine months ended June 29, 2013 was $5,234 for cost of revenues, $5,600 for research and development, $6,976 for selling and marketing, $16,434 for general and administrative and $7,654 for restructuring and divestiture. Stock-based compensation included in costs and expenses during the nine months ended June 23, 2012 was $3,602 for cost of revenues, $3,688 for research and development, $5,234 for selling and marketing and $13,836 for general and administrative. |
HOLOGIC, INC.
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| Three Months Ended | |||||
June 29, 2013 |
| June 23, 2012 | ||||
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(LOSS) INCOME PER SHARE |
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GAAP (loss) income per share - Diluted | $ (0.04) |
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| $ 0.09 |
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Adjustment to net loss (as detailed below) | 0.42 | (1) |
| 0.26 |
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Non-GAAP income per share – Diluted | $ 0.38 |
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| $ 0.35 | (1) | |
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NET LOSS |
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GAAP net (loss) income | $ (10,950) |
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| $ 23,594 |
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Adjustments: |
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Amortization of intangible assets | 104,668 | (2) |
| 61,013 | (2) | |
Contingent consideration | 22,072 | (3) |
| 2,226 | (3) | |
Non-cash interest expense relating to convertible notes | 11,638 | (4) |
| 15,119 | (4) | |
Acquisition and integration-related costs | 5,928 | (5) |
| 5,078 | (5) | |
Restructuring and divestiture charges | 6,690 | (6) |
| 136 | (6) | |
Fair value adjustment to depreciation expense | 3,109 | (7) |
| - |
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Impairment of intangible assets | 1,714 | (8) |
| - |
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Adiana closure costs | - |
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| 1,696 | (9) | |
Other charges, net | 2,915 | (10) |
| (12) | (10) | |
Income tax effect on reconciling items | (44,553) | (11) |
| (16,276) | (12) | |
Non-GAAP net income | $ 103,231 |
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| $ 92,574 |
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ADJUSTED EBITDA |
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Non-GAAP net income | $ 103,231 |
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| $ 92,574 |
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Interest expense, net, not adjusted above | 55,220 |
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| 9,593 |
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Provision for income taxes | 48,580 |
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| 47,689 |
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Depreciation expense, not adjusted above | 20,427 |
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| 15,926 |
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ADJUSTED EBITDA | $ 227,458 |
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| $ 165,782 |
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Explanatory Notes: |
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(1) Non-GAAP earnings per share was calculated based on 272,531 and 267,294 weighted average diluted shares outstanding for the three months ended June 29, 2013 and June 23, 2012, respectively. |
(2) To reflect a non-cash charge attributable to the amortization of intangible assets. |
(3) To reflect a net charge to operating expenses attributable to contingent consideration related to certain of the Company's acquisitions. |
(4) To reflect certain non-cash interest expense related to the Company's Convertible Notes. |
(5) To reflect certain costs associated with the Company's acquisition(s) and integration plans. |
(6) To reflect restructuring and other net divestiture charges. |
(7) To reflect a non-cash fair value adjustment for additional depreciation expense related to the fair value write-up of fixed assets acquired from Gen-Probe. |
(8) To reflect a non-cash impairment charge related to developed technology. |
(9) To reflect the write-off of certain assets and related charges as a result of the Company's decision in fiscal 2012 to cease commercialization of the Adiana product. |
(10) To reflect the net impact from miscellaneous transactions during the period. |
(11) To reflect an estimated annual effective tax rate of 32.0% on a non-GAAP basis. |
(12) To reflect an annual effective tax rate of 34.0% on a non-GAAP basis. |
HOLOGIC, INC.
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| Nine Months Ended | |||||
June 29, 2013 |
| June 23, 2012 | ||||
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REVENUES |
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GAAP revenues | $ 1,870,161 |
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Adjustment related to Novartis collaboration and other, net | 19,704 | (1) |
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Non-GAAP revenues | $ 1,889,865 |
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(LOSS) INCOME PER SHARE |
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GAAP (loss) income per share- Diluted | $ (0.22) |
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| $ 0.02 |
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Adjustments to net loss (as detailed below) | 1.32 |
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| 0.99 |
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Non-GAAP income per share- Diluted | $ 1.10 | (2) |
| $ 1.01 | (2) | |
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NET LOSS |
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GAAP net (loss) income | $ (58,936) |
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| $ 4,133 |
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Adjustments: |
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Contingent revenue from Novartis collaboration and other, net | 19,704 |
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| - |
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Amortization of intangible assets | 312,881 | (3) |
| 182,996 | (3) | |
Contingent consideration | 91,785 | (4) |
| 79,098 | (4) | |
Non-cash interest expense relating to convertible notes | 40,903 | (5) |
| 52,018 | (5) | |
Acquisition and integration-related costs | 18,880 | (6) |
| 6,982 | (6) | |
Restructuring and divestiture charges | 23,085 | (7) |
| 828 | (7) | |
Fair value write up of acquired inventory sold | 52,397 | (8) |
| - |
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Fair value adjustment to depreciation expense | 8,987 | (9) |
| - |
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Gain on sale of intellectual property, net | (53,884) | (10) |
| (12,424) | (11) | |
Debt extinguishment loss | 3,247 | (12) |
| 42,347 | (13) | |
Debt transaction costs | 6,414 | (14) |
| - |
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Impairment of intangible assets | 1,714 | (15) |
| - |
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Adiana closure costs | - |
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| 19,980 | (16) | |
Other charges, net | 1,404 | (17) |
| 89 | (17) | |
Income tax effect of reconciling items | (169,726) | (18) |
| (106,624) | (19) | |
Non-GAAP net income | $ 298,855 |
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| $ 269,423 |
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ADJUSTED EBITDA |
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Non-GAAP net income | $ 298,855 |
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| $ 269,423 |
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Interest expense, net, not adjusted above | 167,204 |
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| 29,121 |
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Provision for income taxes | 140,638 |
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| 138,794 |
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Depreciation expense, not adjusted above | 60,043 |
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| 48,107 |
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ADJUSTED EBITDA | $ 666,740 |
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| $ 485,445 |
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Explanatory Notes: |
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(1) To primarily 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.
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(4) To reflect a net charge to operating expenses attributable to contingent consideration related to certain of the Company's acquisitions. |
(5) To reflect certain non-cash interest expense related to the Company's Convertible Notes. |
(6) To reflect certain costs associated with the Company's acquisition(s) and integration plans. |
(7) To reflect restructuring and other net divestiture charges. |
(8) To reflect a non-cash adjustment recorded for the fair value write-up of inventory acquired from Gen-Probe and sold during the current reporting period. |
(9) To reflect a non-cash fair value adjustment for additional depreciation expense related to the fair value write-up of fixed assets acquired from Gen-Probe. |
(10) To reflect a net gain resulting from the $60 million cash payment received from KV Pharmaceuticals (KV) in final settlement of an agreement, net of costs associated with this transaction. |
(11) To reflect a gain resulting from payments received related to the sale of the Company's Makena assets to KV, net of costs associated with this transaction. |
(12) To reflect a non-cash loss related to the Credit Agreement amendment for those creditors who opted not to participate in the refinancing. |
(13) To reflect a non-cash loss on the Convertible Notes Exchange during the related period. |
(14) To reflect third-party transaction costs associated with the debt changes. |
(15) To reflect a non-cash impairment charge related to developed technology. |
(16) To reflect the write-off of certain assets and related charges as a result of the Company's decision in fiscal 2012 to cease commercialization of the Adiana product. |
(17) To reflect the net impact from miscellaneous transactions during the period. |
(18) To reflect an estimated annual effective tax rate of 32.0% on a non-GAAP basis. |
(19) To reflect an annual effective tax rate of 34.0% on a non-GAAP basis. |
Future Non-GAAP Adjustments:
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 EPS as described in this press release. It is therefore not practicable to reconcile non-GAAP 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: revenues; net income; EPS; and adjusted EBITDA. The Company defines its non-GAAP revenues to primarily include contingent revenue earned under the Novartis collaboration post-acquisition which was eliminated under purchase accounting. The Company defines adjusted EBITDA as its non-GAAP net income plus net interest expense, income taxes, and depreciation and amortization expense included in its non-GAAP net income. The Company defines its non-GAAP net income and 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 primarily related to contingent revenue under the Novartis collaboration, described above; (iii) non-cash interest expense related to amortization of the debt discount for convertible debt securities; (iv) restructuring and divestiture charges; (v) non-cash extinguishment losses and debt transaction costs; (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 revenues is useful to investors as it eliminates certain effects of purchase accounting on its recognition of revenue. The Company believes the use of non-GAAP 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 restructuring and divestiture initiatives. These non-GAAP 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 net income and EPS, its 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 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 income prepared in accordance with GAAP.
Investor Relations and Media Contacts: | |
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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 |