Hologic posts healthy Q2 due to Cytyc merger

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Hologic saw an increase in revenues and net income for its 2008 second quarter, which ended March 29, due in part to its acquisition of Cytyc in October 2007.

Second quarter fiscal 2008 revenues totaled $431 million, a 138 percent increase when compared to revenues of $181.1 million in the second quarter of 2007. The company said the increase was primarily due to the inclusion of approximately $189.2 million of revenues from the new product lines acquired in the Cytyc merger.

For quarter, Hologic reported net income of $56 million, compared with net income of $21.6 million in same quarter last year. Included in the 2008 quarter results were charges relating to the Cytyc merger of $25.1 million attributable to the amortization of intangibles and $800,000 attributable to the increase in cost of revenues relating to the write-up of acquired inventory to fair market value. 

“This quarter marks our first full quarter since we completed our acquisition of Cytyc. We are pleased with our results and proud of our accomplishments to date – most notably, the alignment of our sales resources and our expanded product offerings,” said Jack Cumming, CEO. “We are beginning to see the sales synergies we had hoped for, especially in our Breast Health segment as the combined sales force has opened up a channel of opportunity for our interventional breast solutions business. Fiscal 2008 continues to look bright as we remain committed to our financial targets.”

Hologic saw Breast Health revenues increase 41 percent to $223.3 million for the second quarter from $158 million for the same period in 2007. The increase was primarily due to continued increasing sales of Selenia systems together with R2 CAD software and the inclusion of the recently acquired MammoSite product from Cytyc, the company said.

Operating income for this business segment in the 2008 second quarter increased to $58.3 million compared to operating income of $34.4 million in the second quarter of fiscal 2007, according to Hologic.

Diagnostics revenues, which include Hologic’s ThinPrep products and Full Term Fetal Fibronectin test, totaled $124.4 million for the second quarter of 2008. The operating income for this business segment in the quarter was $36.8 million, which included a $17 million charge related to the amortization of intangible assets acquired in connection with the Cytyc merger, the company said.

GYN surgical revenues, which include the NovaSure endometrial ablation system and the Adiana complete transcervical sterilization system under development, totaled $55.2 million for the second fiscal quarter of 2008. The operating income for this business segment in the quarter was $11 million, which included a $6.8 million charge related to the amortization of intangible assets acquired in connection with the Cytyc merger, Hologic said.

For the quarter, the company said it recognized no revenues from the Breast Health, Diagnostics or GYN Surgical segments prior to the completion of its merger with Cytyc.

Hologic reported that Skeletal Health revenues increased to $28.1 million for the second quarter from $23.1 million for the same period in 2007. The company said the increase was primarily due to an increase in the number of mini C-arms sold and, to a lesser extent, an increase in the number of bone densitometry systems sold during the quarter.

The operating income for this business segment in the second quarter decreased to $50,000 compared to operating income of $400,000 in the second quarter of 2007, reflecting a charge for purchase obligations on the MRI product line of $2 million in the current quarter.

Hologic said it recently completed a two-for-one stock split in the form of a stock dividend with a record date of March 21 and a payment date of April 2.