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Canaccord Adams

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Title: Canaccord Adams


1
  • Canaccord Adams
  • 29th Annual Global Growth Conference
  • August 13, 2009
  • Glenn P. Muir
  • EVP CFO

2
Forward-Looking Statements
  • This presentation contains forward-looking
    information that involves risks and
    uncertainties, including statements regarding the
    Companys plans, objectives, expectations and
    intentions. Such statements include, without
    limitation, statements regarding the Companys
    expectations regarding Fiscal 2009 results and
    the expected continued market challenges and the
    Companys response to those challenges. 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.
    Factors that could adversely affect the Companys
    business and prospects are described in the
    Companys filings with the Securities and
    Exchange Commission. Hologic expressly disclaims
    any obligation or undertaking to release publicly
    any updates or revisions to any such statements
    to reflect any change in the Companys
    expectations or any change in events, conditions
    or circumstances on which any such statement is
    based.

2
3
Use of Non-GAAP Financial Measures
  • In addition to the financial measures prepared in
    accordance with generally accepted accounting
    principles (GAAP), we use the non-GAAP financial
    measures adjusted net income and adjusted
    earnings per share (EPS). The Company generally
    defines its non-GAAP adjusted net income and
    adjusted EPS to exclude the non-cash amortization
    of intangible assets acquired by the Company
    since 2006 and impairment of goodwill and
    intangible assets, other acquisition-related
    charges, such as charges associated with the
    write-off of acquired in-process research and
    development and the write-up of acquired
    inventory to fair value, and other one-time,
    non-recurring, unusual or unanticipated charges,
    expenses or gains and tax provisions/benefits
    related thereto. Non-GAAP adjusted net income and
    non-GAAP adjusted EPS are not measures of
    operating performance under GAAP. We believe the
    use of these non-GAAP measures help investors to
    gain a better understanding of our core operating
    results and future prospects, consistent with how
    management measures and forecasts our
    performance, especially when comparing such
    results to previous periods or forecasts. When
    analyzing our operating performance, investors
    should not consider these non-GAAP measures as a
    substitute for net income (loss) and EPS prepared
    in accordance with GAAP.

3
4
THE Global Leader in Womens Health
T H E C O N C E P T O F H O L O G I C
4
5
Best-In-Class Products
  • Screening
  • Diagnosis
  • Intervention
  • Early DetectionSaves Lives

ThinPrep Pap TestCervical Cancer
Screening CerVista HPV Test
Selenia Breast Cancer Screening

ThinPrep Imaging Cervical Cancer Screening
Suros Biopsy Systems
FullTerm Preterm Labor
MultiCareStereotactic Biopsy

NovaSure Endometrial Ablation
MammoSiteRadiation Therapy
AdianaPermanent Contraception
DiscoveryOsteoporosisScreening
5
6
Agenda
What sets Hologic apart
How has the company performed
What will drive future growth
6
7
Leading Market Positions Include
D I F F E R E N T I A T O R 1
Ranking in U.S.
Breast cancer screening
Cervical cancer screening
Preterm labor screening
Abnormal uterine bleeding
Osteoporosis screening
Radiation therapy, partial-breast
Biopsy
7
8
Largest Dedicated Womens Health Sales Force in
U.S
D I F F E R E N T I A T O R 2
Over 460US Sales Representatives
ensures best-in-classbrand recognition
8
9
And Broad International Distribution
D I F F E R E N T I A T O R 3
  • 125 countries
  • 200 sales force
  • 150 distributors

Going global leverage distribution
cross-selling
9
10
Successful Record of Strategic Acquisitions
D I F F E R E N T I A T O R 4
Impact LeveragesSales Force
New Technology/Intellectual Property
Expands ProductOffering
Acquisition
Fischer Imaging (05)
AEG Elektrofotografie (06)
R2 Technology (06)
Suros Surgical Systems (06)
BioLucent (07)
Cytyc (07)
Third Wave (08)
10
11
Financial Strength and Discipline
D I F F E R E N T I A T O R 5
gt 400M
  • Strong, predictable annual cash flow

Zero
  • Rapid payment of 540M term loans by 2010 to
    reach... (Today balance is 214M)

lt 3
  • Leverage ratio (debt/EBITDA)

gt 200M
  • Cash balance

11
12
Agenda
What sets Hologic apart
How has the company performed
What will drive future growth
12
13
An Impressive Growth Record Meets Current
Economic Slowdown
Revenue (M)
Income from Operations(M)
1,625 - 1,635
520 - 530
Adjusted excluding acquisition-related charges
Note Fiscal Year ends last Saturday in September
13
14
Q3-09 Financial Performance (Quarter Ended June
27, 2009)
Represents a non-GAAP amount. Such amount
excludes acquisition-related charges such as
amortization of intangible assets, impairment of
goodwill and intangible assets, and the increase
in costs of products sold associated with the
write-up of inventory to fair value.
14
15
Four Focused Business Segments
Breakdown of Q3-09 Revenues of 403.1M
35Diagnostics
13 Service
63.8.0M
61 Disposables
139.5M
23.1M
53.7M
174.9M
244.5M
180.1M
135.0M
65.8
104.9M
16GYN Surgical
26 Cap Ex
22.9
43Breast Health
6Skeletal Health
Disposables/Service 74 Capital Equipment 26
15
16
Driven by Leadership Positions
  • Diagnostics
  • Stable ThinPrep market share in U.S. with
    continued Imager adoption
  • Large international ThinPrep opportunity growing
    faster than U.S.
  • Promising market for newly-launched Cervista
    products and many new contracts signed
  • Complimentary with ThinPrep
  • Surgical
  • Steady in-office NovaSure utilization
  • Continued growth in Standing Monthly Order
    agreements
  • Strong demand for NovaSure procedures
  • Approval for Adiana received from the FDA in July
    2009
  • Breast Health
  • Growing U.S. market share for digital mammography
    despite current market conditions
  • Sustained 1 market share of digital mammography
    placements in U.S.
  • Continued international conversion from analog to
    digital
  • Strong demand for biopsy tools with repeated
    growth
  • Strong, recurring revenue stream from service
    contracts

16
17
Agenda
What sets Hologic apart
How has the company performed
What will drive future growth
17
18
Market Growth Provides a Strong Tailwind
G R O W T H D R I V E R 1
2.75B U.S. Womens Health Market
Market drivers
BreastHealth
  • Aging population
  • Advanced screening improves outcomes
  • Push for less invasive, less costly therapies
  • Technological advancements

33
Incontinence
12
CervicalCancer
22
10
Aesthetics
4
5
Osteo
14
Pre-natal
Gyn
We do not compete in these markets.
18
19
Existing Products Sustained Growth and Momentum
G R O W T H D R I V E R 2
Key Products Fueling Growth in U.S.
EstimatedU.S. Market
Estimated U.S. Future Market
Product
Application
Selenia/ Tomosynthesis
Breast cancerscreening
600M
gt1B
ThinPrep/ Cervista HPV
Cervical cancerscreening
700M
1B
Endometrialablation
300M
1.5B
NovaSure
Adiana
100M
1B
Contraception
Suros ATEC, Eviva and Celero
250M
500M
Biopsy systems
Preterm labor risk test
100M
300M
FullTerm
Awaiting PMA approval for U.S. market
19
20
Existing Products Potential for Future Growth
G R O W T H D R I V E R 2
Digital Mammography
  • Conversion from analog to digital
  • Hologic best-in-class product? gt60 share of new
    installations
  • Huge international opportunity digital
    penetration at lt 25 vs. 55 in U.S.
  • Replacement opportunity of HOLX systems begins in
    FY 2010
  • Selenia advantages
  • Only true direct-to-digital
  • Higher resolution - better clarity
  • Improved patient throughput and flexibility in
    workflow

20
21
New Product Launches to Accelerate Growth
G R O W T H D R I V E R 3
Breast Health
Diagnostics
GYN Surgical
Tomosynthesis 3D Mammography(2)(3)
HPV testing(1)
Adiana to market(1)(2)
FullTerm to AT RISK
NovaSure II better comfort, ease of use,
reliability
NexGen Biopsy Guidance more comfort, better
accuracy
T5000(2) better throughput, improved reliability
Image Fusion w/3D functional imaging
Integrated Imager, improved Work flow, lower cost
Adiana II improved efficiency, ease of use
Skeletal Health
Breast Health
Eviva(1) hand piece improved geometry, broader
utilization
Fracture risk improved predictability
MammoSite III better dosimetry, expanded patient
base
Body composition
(1) Recently FDA approved and launched (2)
Launched internationally (3) Awaiting FDA
approval
FA Percutaneous Extraction Device
22
G R O W T H D R I V E R 3
New Product Launches to Accelerate Growth
Product
Status
Timing of Launch
CerVista HPV Testing
FY 2009 Launched Apr-09 U.S. Launched Jan-09
O.U.S.
FDA approved in March 2009
FY 2009 Launched July-09 U.S. Launched Jan-09
Europe
Adiana Contraception
FDA approved in July 2009
ThinPrep 5000 Cervical Cancer Screening
FY 2009 Launched Dec-08 Europe
Plan to seek FDA approval
Tomosynthesis3D Mammography
At FDA
Launched Q4 FY08 O.U.S.
Work-in-Progress Awaiting FDA approval
23
G R O W T H D R I V E R 3
New Products Molecular Diagnostics Platform
  • FDA Approvals of Two Products in March 2009
  • Cervista HPV HR (high risk)
  • Designed to detect the 14 high-risk types of HPV
    that cause cervical cancer
  • First HPV DNA test approved by the FDA in more
    than 10 years
  • Cervista HPV 16/18
  • First HPV test approved for genotyping for HPV
    types 16 and 18
  • Associated with 70 of all cervical cancers in
    the U.S.
  • The HPV Market
  • 400M U.S. 50 penetrated
  • 400M O.U.S. 10 penetrated
  • Complementary with ThinPrep Pap test
  • Invader Chemistry
  • Platform for entry into 2.1B U.S. molecular
    market
  • Strong pipeline of products - Chlamydia,
    Gonorrhea
  • Utilizes existing sales channel
  • Accretive to non-GAAP EPS in FY 2010

24
G R O W T H D R I V E R 3
New Products Permanent Contraception
  • FDA Approval of the Adiana Permanent
    Contraception System in July 2009
  • Provides women with a minimally invasive,
    non-incision alternative
  • to traditional surgical approach of
    sterilization
  • Provides doctors with an easy-to-use and safe
    system of care
  • Adiana has no known perforations or expulsions
  • Polymer matrix the size of a grain of rice safe
    and effective
  • Initial revenue opportunity in U.S.
  • Estimated market today - 100M
  • Estimated initial revenue opportunity - 450M
  • Initial target - 350K procedures
  • Estimated future market - 1B

Est. U.S. Future Market 1B
Total U.S. Women with Two or More Children on
Birth Control
Est. Population
Total Sterilization Surgeries
Initial Target
Primary market Patients undergoing tubal
ligation (excluding post C-section) Secondary
market The longer term and larger group of women
using hormones
25
New Products Next Generation Digital Mammography
G R O W T H D R I V E R 3
Selenia Dimensions Digital Mammography
  • 3D visualization of breast tissue multiple
    views
  • Helps solve tissue overlap problems
  • Improved detection and lower recall rates
  • Currently working with FDA (expect to be
    first-to-market)
  • International launch in September 2008

Normal Mammogram
Tomosynthesis Slices
Work-in-Progress Awaiting FDA approval
25
26
Leverage Global Distribution
G R O W T H D R I V E R 4
Percent of Sales Outside U.S.
Future
Today
300Msales outside U.S. doubling over time
20
25
International
International
Growth Drivers
  • Increased womens health focus
  • Expanded international presence
  • Cross-selling products

Success example ThinPrep now growing at faster
pace outside U.S.
26
27
Milestones in FY 2009
  • FDA approval of two Cervista products
  • FDA approval of Adiana Permanent Contraception
    System
  • Launch of domestic and international sales of
    Cervista HPV HR, Cervista HPV 16/18, Adiana and
    Eviva for breast biopsy
  • Commencement of international sales of
    Tomosynthesis
  • Completion of new manufacturing facility in Costa
    Rica
  • Deleveraging continues - strong cash flows from
    operations

27
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Why Invest in Hologic
I N S U M M A R Y THANK YOU!
MarketLeadership
Leading global player inwomens healthcare
FinancialStrength
Innovative New Products
Market Growth
Broad Distribution
28
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