Title: Canaccord Adams
1- Canaccord Adams
- 29th Annual Global Growth Conference
- August 13, 2009
- Glenn P. Muir
- EVP CFO
2Forward-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
3Use 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
4THE 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
5Best-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
6Agenda
What sets Hologic apart
How has the company performed
What will drive future growth
6
7Leading 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
8Largest 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
Going global leverage distribution
cross-selling
9
10Successful 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
11Financial 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
11
12Agenda
What sets Hologic apart
How has the company performed
What will drive future growth
12
13An 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
14Q3-09 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
15Four 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
16Driven 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
17Agenda
What sets Hologic apart
How has the company performed
What will drive future growth
17
18Market 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
19Existing 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
20Existing 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
21New 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
22G 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
23G 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
24G 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
25New 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
26Leverage 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
27Milestones 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
28Why 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
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