Monday, Hologic, Inc. (HOLX), a premium diagnostics and surgical products company, reported a swing to profit in the fourth quarter, primarily on a decline in expenses. Adjusted earnings dropped from last year, but came in ahead of Street estimates by a penny. Revenues for the quarter also declined from last year, yet came in ahead of expectations.
Hologic reported a third quarter net income of $34.94 million or $0.13 per share, compared with a net loss of $144.37 million or $0.56 per share in the fourth quarter a year-ago.
Adjusted net income for the fourth quarter decreased 6.2% to $72.44 million or $0.28 per share from $77.2 million or $0.30 per share in the fourth quarter of fiscal 2008. On average, twenty analysts polled by Thomson Reuters estimated earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter declined 9% to $402.76 million from $442.51 million in the year-ago quarter. Eighteen Wall Street analysts had a consensus revenue estimate of of $398.27 million for the quarter.
Revenue decrease for the quarter was primarily attributed to a decline in sales of Selenia systems from last year, due to the current economic environment and reductions in hospital capital spending.
Skeletal Health product revenues declined $5.9 million, partially offset by growth in Diagnostics and GYN Surgical product sales of $14.7 million as compared to the year-ago period. This included an increase of $3.7 million from Third Wave, which the company acquired in July 2008 and a $8.7 million increase in service and other revenues related to increased installed base of Selenia full field digital mammography systems.
Cost of revenues for the quarter declined to $156.71 million from $176.57 million last year. The cost of revenues - amortization of intangible assets increased to $39.24 million from $25.66 million year-ago. Research and development expenses increased to $22.70 million from $20.94 million in the year-ago period, while selling and marketing expenses declined to $56.57 million from $67.79 million in the prior year period. General and administrative expenses declined to $38.17 million from $38.29 million.
Restructuring charge for the quarter was $797 thousand during the quarter. There was no acquired in-process research and development charge during the quarter, while there was a charge of $195.20 million in the year-ago quarter. Net interest and other expenses declined during the quarter to $15.62 million from $21.64 million year-ago.
Segment-wise, Breast Health revenues totaled $174.8 million for the fourth quarter, compared with $221.0 million a year ago, primarily due to a decline in Selenia system sales, which were negatively impacted by product mix and configuration differences. The decrease was partially offset by an increase in service revenues related to the increased installed base of Selenia full field digital mammography systems and, to a lesser extent, an increase in revenues from its breast biopsy products.
Diagnostics revenues, which include the company's ThinPrep products, fetal fibronectin test, and Third Wave products, totaled $138.7 million, compared with $133.7 million in the prior-year period. Third Wave revenues during the quarter were $9.7 million, compared with $5.9 million a year-ago.
GYN Surgical revenues totaled $67.3 million, compared with $59.7 million for the fourth quarter year-ago due to the higher number of NovaSure systems sold.
Skeletal Health revenues decreased to $22.0 million from $28.1 million year-ago due to decreased system sales of the mini C-arm and osteoporosis assessment product lines, which continue to face the difficult capital equipment buying environment and ongoing effects of the reduction in reimbursement for osteoporosis assessment exams in the U.S.
Hologic said that it expects first quarter fiscal 2010 revenues to be approximately $400 million to $405 million and earnings in the range of $0.06 - $0.08 per share. Non-GAAP adjusted earnings is anticipated to be approximately $0.24 - $0.26 per share in the first quarter.
Seventeen Street analysts expect the company to report earnings of $0.30 per share on revenues of $413.89 million for the first-quarter.
The company expects fiscal 2010 revenues in the range of $1.625 billion - $1.650 billion. Earnings are anticipated in the range of $0.42 - $0.46 per share, with non-GAAP earnings projected in the range of $1.15 - $1.19 per share . Analysts expect the company to report earnings of $1.24 per share on revenues of $1.69 billion for fiscal year 2010.
The company has promoted Robert Cascella as chief executive officer, only the third, in Hologic's 23-year history. Cascella has over 25 year of industry experience and has served as president and chief operating officer since 2003. Jack Cumming, who previously served as chairman and chief executive officer, will remain chairman of the Board and a member of the executive management team.
For the year-to-date period, net loss widened to $2.17 billion or $8.48 per share, compared with $385.61 million or $1.57 per share in the year-ago period. Adjusted net income for the twelve month period increased 2.4% to $301.71 million, compared with $294.65 million last year. Earnings per share declined to $1.17 from $1.18 in the year-ago period. Year-to-date revenues declined 2.2% to $1.63 billion from $1.67 billion year-ago.
HOLX closed Monday's last trade on the Nasdaq at $15.32, up $0.19 or 1.26%. In after hours the stock traded down $0.67 or 4.37%.
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