UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 1996
-------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number: 0-18281
Hologic, Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-2902449
(State of incorporation) (I.R.S. Employer Identification No.)
590 Lincoln Street, Waltham, Massachusetts 02154
(Address of principal executive offices) (Zip Code)
(617) 890-2300
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No __
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of August 1, 1996, 11,310,790 shares of the registrant's Common Stock,
$.01 par value, were outstanding.
HOLOGIC, INC. AND SUBSIDIARIES
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
June 29, 1996 and September 30, 1995............................... 3
Consolidated Statements of Income
Three and Nine Months Ended June 29, 1996
and June 24, 1995.................................................. 4
Consolidated Statement of Stockholders' Equity
Nine Months ended June 29, 1996.................................... 5
Consolidated Statements of Cash Flows
Nine Months Ended June 29, 1996
and June 24, 1995.................................................. 6
Notes to Consolidated Financial Statements......................... 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................... 10
PART II - OTHER INFORMATION.......................................... 14
SIGNATURES........................................................... 15
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
ASSETS
June 29, September 30,
1996 1995
------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents...................... $31,771,656 $7,447,813
Short-term investments......................... 28,384,210 2,492,671
Accounts receivable, less reserves of
$1,300,000 and $850,000, respectively.......... 18,700,681 11,643,883
Inventories.................................... 9,636,249 6,917,000
Prepaid expenses and other current assets...... 2,452,507 2,058,707
---------- ----------
Total current assets......................... 90,945,303 30,560,074
---------- ----------
PROPERTY AND EQUIPMENT, at cost:
Equipment...................................... 3,626,470 2,600,381
Furniture and fixtures......................... 772,970 652,446
Leasehold improvements......................... 589,011 506,495
---------- ---------
4,988,451 3,759,322
Less- Accumulated depreciation and amortization 2,728,480 2,298,168
---------- ---------
2,259,971 1,461,154
---------- ---------
Long-term investments.......................... 5,649,374 --
---------- ---------
Other assets, net............................. 2,235,864 1,840 785
---------- ---------
$101,090,512 $33,862,013
============ ===========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
June 29, September 30,
1996 1995
--------- ------------
<S> <C> <C>
CURRENT LIABILITIES:
Line of credit................................ $2,394,619 $2,058,898
Accounts payable.............................. 3,739,683 3,773,000
Accrued expenses.............................. 5,804,214 3,965,750
Deferred revenue.............................. 1,902,293 1,392,667
---------- ----------
Total current liabilities..................... 13,840,809 11,190,315
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value-
Authorized - 30,000,000 shares
Issued and outstanding - 11,303,006 and
8,244,200 shares, respectively............. 113,030 82,442
Capital in excess of par value................ 71,617,030 15,313,672
Retained earnings............................. 15,691,630 7,420,593
Cumulative translation adjustment............. (171,987) (145,009)
---------- -----------
Total stockholders' equity.................... 87,249,703 22,671,698
---------- -----------
$101,090,512 $33,862,013
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<TABLE>
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
June 29, June 24, June 29, June 24,
1996 1995 1996 1995
------- ------- -------- --------
<S> <C> <C> <C> <C>
REVENUES:
Product sales............... $21,983,232 $10,804,357 $54,050,536 $29,108,081
Other revenues.............. 845,796 496,963 2,299,193 1,423,213
----------- ----------- ----------- -----------
22,829,028 11,301,320 56,349,729 30,531,294
COSTS AND EXPENSES:
Cost of product sale ....... 9,986,252 5,669,960 25,198,033 15,905,915
Research and development.... 1,796,229 1,014,569 4,873,128 3,091,135
Selling and marketing....... 3,444,622 2,112,318 9,202,748 5,646,786
General and administrative.. 1,986,539 1,158,790 5,237,090 3,198,596
Litigation expenses......... -- 800,968 797,819 1,152,828
----------- --------- ---------- ----------
17,213,642 10,756,605 45,308,818 28,995,260
----------- ---------- ---------- ----------
Income from operations...... 5,615,386 544,715 11,040,911 1,536,034
Interest income.............. 685,738 164,012 1,434,983 446,583
Other expense................ (61,094) (91,059) (184,857) (247,619)
----------- --------- --------- ----------
Income before provision
for income taxes............ 6,240,030 617,668 12,291,037 1,734,998
PROVISION FOR INCOME TAXES... 2,300,000 130,000 4,020,000 450,000
---------- --------- ---------- ----------
Net income................. $3,940,030 $487,668 $8,271,037 $1,284,998
========== ======== ========== ==========
NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE (1).. $ .32 $ .06 $ .76 $ .15
======= ====== ====== ======
WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING (1)...12,265,234 8,819,542 10,846,084 8,817,500
(1) All share and per-share amounts have been adjusted to reflect the two-for-one
stock split effected on March 25, 1996.
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<TABLE>
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
<CAPTION>
Common Stock Capital in Cumulative Total
Number of $.01 Par Excess of Retained Translation Stockholders'
Shares Value Par Value Earnings Adjustment Equity
--------- -------- ---------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance,
September
30, 1995 8,244,200 $82,442 $15,313,672 $7,420,593 $(145,009) $22,671,698
Issuance of common
stock, net of
issuance costs
of $390,774 2,492,000 24,920 49,168,875 -- -- 49,193,795
Issuance of common
stock pursuant to
options and employee
stock purchase plan 566,806 5,668 2,314,703 -- -- 2,320,371
Compensation expense
related to issuance
of stock options -- -- 79,780 -- -- 79,780
Tax benefit from
stock options
exercised -- -- 4,740,000 -- -- 4,740,000
Net income -- -- -- 8,271,037 -- 8,271,037
Translation adjustments -- -- -- -- (26,978) (26,978)
-------- -------- --------- --------- -------- ---------
Balance,
June 29, 1996 11,303,006 $113,030 $71,617,030 $15,691,630 $(171,987) $87,249,703
========== ======== =========== =========== ========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<TABLE>
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
June 29, June 24,
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................. $8,271,037 $1,284,998
Adjustments to reconcile net
income to net cash provided by
operating activities-
Depreciation and amortization....... 553,143 420,121
Compensation expense related to
issuance of stock options........... 79,780 --
Changes in assets and liabilities-
Accounts receivable.............. (7,433,302) 172,809
Inventories...................... (2,818,229) (1,406,904)
Prepaid expenses and
other current assets............ (401,839) (513,527)
Accounts payable................. 36,242 800,764
Accrued expenses................. 1,871,029 275,272
Deferred revenue................. 528,350 562,715
------------ ----------
Net cash provided by
operating activities............ 686,211 1,596,248
------------ ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments, net. (31,540,914) (531,837)
Purchase of property and equipment....... (1,257,135) (612,634)
Increase in other assets................. (331,103) (120,674)
------------- ----------
Net cash used in
investing activities............. (33,129,152) (1,265,145)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on line of credit......... 456,329 286,514
Issuance of common stock, net............ 49,350,296 --
Issuance of common stock pursuant
to options and employee stock
purchase plans........................... 2,163,870 104,496
Tax benefit from stock options exercised. 4,740,000 --
---------- ----------
Net cash provided by
financing activities............. 56,710,495 391,010
---------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH.... 56,289 67,350
------ ------
NET INCREASE IN CASH AND
CASH EQUIVALENTS......................... 24,323,843 789,463
CASH AND CASH EQUIVALENTS,
beginning of period...................... 7,447,813 5,880,010
---------- ----------
CASH AND CASH EQUIVALENTS, end of period... $31,771,656 $6,669,473
=========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period
for income taxes...................... $1,155,117 $ 163,686
========== =========
SUPPLEMENTAL SCHEDULE OF NONCASH TRANSACTIONS:
Preferred stock investment acquired in
exchange for common stock $ -- $ 324,088
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
HOLOGIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Basis of Presentation
The consolidated financial statements of Hologic, Inc. (the Company)
presented herein have been prepared pursuant to the rules of the Securities
and Exchange Commission for quarterly reports on Form 10-Q and do not include
all of the information and note disclosures required by generally accepted
accounting principles. These statements should be read in conjunction with
the consolidated financial statements and notes thereto for the year ended
September 30, 1995, included in the Company's Form 10-K as filed with the
Securities and Exchange Commission on December 26, 1995.
The consolidated balance sheet as of June 29, 1996, the consolidated
statements of income for the three and nine months ended June 29, 1996 and
June 24, 1995, the consolidated statement of stockholders' equity for the nine
months ended June 29, 1996 and, the consolidated statements of cash flows for
the nine months ended June 29, 1996 and June 24, 1995, are unaudited but, in
the opinion of management, include all adjustments (consisting of normal,
recurring adjustments) necessary for a fair presentation of results for these
interim periods.
The results of operations for the three and nine months ended June 29,
1996 are not necessarily indicative of the results to be expected for the
entire fiscal year ending September 28, 1996.
(2) Summary of Significant Accounting Policies
The accompanying consolidated financial statements reflect the
application of certain accounting policies described in this and other notes
to the consolidated financial statements.
(a) Inventories: Inventories are stated at the lower of cost (first-
in, first-out) or market and consist of the following:
June 29, September 30,
1996 1995
---------- -------------
Raw materials and work-in-process........ $6,605,724 $4,030,275
Finished goods........................... 3,030,525 2,886,725
---------- -----------
$9,636,249 $6,917,000
Work-in-process and finished goods inventories consist of material,
labor and manufacturing overhead.
(b) Foreign Currency Translation:
Assets and liabilities of the Company's foreign subsidiaries are
translated into U.S. dollars at exchange rates in effect at the end of the
period, and revenues and expenses are translated at the weighted average
exchange rate in effect during the period. Gains and losses from foreign
currency translation are included in the stockholders' equity section under
cumulative translation adjustment. Foreign currency transaction gains and
losses arising primarily from settlement of sales transactions with the
Company's foreign subsidiaries are included in results of operations. A
transaction loss of $21,683 and $67,380 for the three and nine months ended
June 29, 1996, respectively, and transaction losses of $26,422 and $93,595 for
the three and nine months ended June 24, 1995, respectively, are included in
other expense in the accompanying consolidated statements of income.
(3) Line of Credit
The Company has an international line of credit with a bank for the
equivalent of $3,000,000, which bears interest at PIBOR plus 2.25%. The
borrowings under this line are denominated in the local currency of its
European subsidiaries and are primarily used by these subsidiaries to settle
intercompany sales.
(4) Significant Customers and Concentration of Credit Risk
In the nine months ended June 29, 1996 and June 24, 1995, the Company
had one customer who comprised 15% and 25% of product sales, respectively.
This customer had amounts due to the Company of approximately $1,950,000 at
June 29, 1996, all of which were within the payment terms of the sales.
(5) Patent Litigation
The Company incurred litigation expenses in the first quarter of fiscal
1996 and in fiscal 1995 relating primarily to a patent dispute with Lunar
Corporation ("Lunar") and, to a lesser extent, a separate patent dispute with
B.V. Optische Industrie de Oude Delft ("Oldelft"). In November 1995, a
definitive settlement agreement was reached between the Company and Lunar
settling all outstanding disputes relating to x-ray and ultrasound technology.
The complaint brought by Oldelft against the Company was dismissed in December
1995. In January 1996, Oldelft filed a motion for reconsideration of the
dismissal and amended its complaint. In April 1996, the Court denied Oldelft
its motion for reconsideration of the dismissal and in May 1996 Hologic and
Oldelft settled this matter.
(6) Stockholders' Equity
On January 26, 1996, the Company completed a secondary public offering
of an additional 2,492,000 shares (post split) of the Company's Common Stock
at a price of $19.90 per share which resulted in net proceeds (after deducting
issuance costs) of approximately $49,200,000.
On February 25, 1996, the stockholders' of the Company approved an
amendment to the Company's Certificate of Incorporation to increase the number
of shares of Common Stock authorized from 10,000,000 to 30,000,000. On March
25, 1996, the Company effected a two-for-one stock split in the form of a
stock dividend. All share and per share data in the accompanying consolidated
financial statements have been retroactively restated to reflect the stock
split.
(7) Merger with FluoroScan Imaging Systems, Inc.
On July 18, 1996, Hologic signed a definitive agreement to merge with
FluoroScan Imaging Systems, Inc. ("FluoroScan"). The transaction is intended
to be carried out by the merger of FluoroScan and a wholly-owned subsidiary of
Hologic in a tax-free stock transaction, accounted for as a pooling of
interests. The completion of this transaction is subject to approval by
FluoroScan's stockholders, completion of certain due diligence items and
regulatory approvals. FluoroScan's principal stockholders have provided the
Company with a proxy to vote in favor of this merger.
Upon consummation of the merger, Hologic will issue approximately 1.5
million shares of its common stock in exchange for all of the outstanding
shares of FluoroScan's common stock, stock warrants and stock options to
underwriters. In addition, Hologic has reserved approximately 300,000
additional shares of its common stock for issuance to holders of FluoroScan
options. Hologic and FluoroScan estimate that they will incur direct
transaction costs of approximately $1.8 million associated with the merger.
These transaction costs will be expensed in the period incurred.
PART I - FINANCIAL INFORMATION (Continued)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
HOLOGIC, INC. AND SUBSIDIARIES
Results of Operations
The Company's results of operations have and may continue to be subject
to significant quarterly variation. The results for a particular quarter may
vary due to a number of factors, including the overall state of health care
and cost containment efforts, the development status and demand for drug
therapies to treat osteoporosis, economic conditions in the Company's markets,
the timing of orders, the timing of expenditures in anticipation of future
sales, the mix of products sold by the Company, the introduction of new
products and product enhancements by the Company or its competitors and
pricing and other competitive conditions.
Revenues. Total revenues for the third quarter of fiscal 1996 increased
102% to $22,829,028 from $11,301,320 for the third quarter of fiscal 1995.
Total revenues for the current nine month period increased 85% to $56,349,729
from $30,531,294 for the first nine months of fiscal 1995. This increase was
primarily due to the increase in the total number of DXA bone densitometer
product shipments in both the Company's domestic and international markets,
particularly in the United States where product sales for the first nine
months of the year increased approximately 420% over the prior year. There
was also a shift in product sales mix to the Company's new line of bone
densitometers, the ACCLAIM [trademark] series, which the Company began
shipping in January 1995. The new ACCLAIM products have higher average
selling prices than the comparable DXA bone densitometers which they replace.
For the current quarter, sales of the ACCLAIM product accounted for over 87%
of product sales. Other revenues also increased for the current three and
nine month periods due to increases in revenue relating to medical data
management services provided to pharmaceutical companies to assist in the
collection and monitoring of clinical trial data.
Total revenues for the third quarter of fiscal 1996 increased 22% from
$18,757,068 in the immediately preceding quarter primarily due to an increase
in the number of DXA systems sold in the United States.
In the first nine months of fiscal 1996, approximately 51% of product
sales were generated in the United States, 22% in Europe, 21% in Asia, and 6%
in other international markets. In the first nine months of fiscal 1995,
approximately 19% of product sales were generated in the United States, 37% in
Europe, 34% in Asia, and 10% in other international markets.
The Company believes that the two major drivers of the growth in demand
for its bone densitometers are (i) the availability of new and effective drug
therapies to treat and prevent bone diseases, including osteoporosis, and (ii)
the availability of reimbursement to healthcare providers for bone density
measurements of patients. On September 29, 1995, the FDA cleared for
marketing Merck & Co., Inc.'s ("Merck") new bisphosphonate, Fosamax, for
treatment of established osteoporosis in post-menopausal women. The Health
Care Finance Administration, the agency which administers Medicare, increased
the recommended reimbursement rate for DXA tests to a national average of
$124, effective January 1, 1995, from $68, the original recommended
reimbursement rate which went into effect in April 1994.
Costs and Expenses. The cost of product sales decreased as a
percentage of sales to 45% in the current quarter from 52% in the third
quarter of 1995 and decreased to 46% of product sales in the first nine months
of 1996 from 55% in the comparable nine month period of 1995. In the current
quarter and nine months, these costs decreased as a percentage of product
sales primarily due to increasing shipments of the Company's new family of DXA
bone densitometers, the ACCLAIM series, a volume increase in the number of DXA
systems sold resulting in certain manufacturing efficiencies, and an increase
in sales by the Company's direct sales force (primarily in the United States)
which results in higher selling prices. The Company began selling the ACCLAIM
product in the second quarter of fiscal 1995 and has recognized higher gross
margins than on the older DXA product line from higher average selling prices
and lower labor and overhead-related manufacturing costs.
Research and development expenses increased 77% to $1,796,229 (8% of
total revenues) in the current quarter from $1,014,569 (9% of total revenues)
in the third quarter of fiscal 1995. For the current nine month period,
research and development expenses increased 58% to $4,873,128 (9% of total
revenues) from $3,091,135 (10% of total revenues) for the first nine months of
1995. The increase in research and development expenses in 1996 is primarily
due to the addition of engineering personnel and outside consultants working
on the development of new products. As a percentage of total revenues,
research and development expenses declined in the current year, reflecting
increased revenues in fiscal 1996.
Selling and marketing expenses increased 63% to $3,444,622 (16% of
product sales) in the current quarter from $2,112,318 (20% of product sales)
in the third quarter of fiscal 1995. For the current nine month period,
selling and marketing expenses increased 63% to $9,202,748 (17% of product
sales) from $5,646,786 (19% of product sales) for the first nine months of
1995. The increase in selling and marketing expenses in 1996 is primarily due
to an increase in sales personnel and related expenses, marketing and
promotional costs incurred in connection with the introduction of the ACCLAIM
series and increased sales commissions based on the higher sales volume. In
addition, the Company incurred additional costs in connection with its
strategic alliances for the development of new products and the distribution
of products through new sales channels.
General and administrative expenses increased 71% to $1,986,539 (9% of
total revenues) in the current quarter from $1,158,790 (10% of total
revenues) in the third quarter of fiscal 1995. During the first nine months
of fiscal 1996, general and administrative expenses increased 64% to
$5,237,090 (9% of total revenues) from $3,198,596 (10% of total revenues) in
the first nine months of 1995. The increase in general and administrative
expenses in fiscal 1996 is primarily due to increased headcount and other
compensation-related expenditures, and an increase in accounts receivable
reserves, which reflects the increase in accounts receivable.
Litigation expenses incurred in the first quarter of fiscal 1996 and in
fiscal 1995 were in connection with the Company's disputes with Lunar and
Oldelft. Legal expenses in connection with the patent litigation with Lunar
began in October 1994 and represent a substantial portion of the total
litigation expenses. In November 1995, a definitive agreement that provides
for the cross-licensing of certain patent rights and a non-assertion agreement
for all patents involving DXA and ultrasound technologies for a period of ten
years was reached by the Company and Lunar. The complaint brought by Oldelft
against the Company was dismissed in December 1995. In January 1996, Oldelft
filed a motion for reconsideration of the dismissal and amended its complaint.
In April 1996, the Court denied Oldelft its motion for reconsideration of the
dismissal and, in May 1996 Hologic and Oldelft settled this matter.
Interest Income. Interest income increased to $685,738 in the current
quarter from $164,012 in the same quarter of fiscal 1995 and increased to
$1,434,983 in the current nine month period from $446,583 in the comparable
period in fiscal 1995 as the Company earned a higher rate of return on a
higher investment base than in the prior year. During the second quarter of
fiscal 1996, the Company received proceeds of approximately $49,200,000 from a
public sale of Common Stock which increased the investment base. The Company
has invested these proceeds in investment grade corporate and government
securities. In fiscal 1996, the Company has also increased the number of
long-term receivables to Latin American customers which generates additional
interest income.
Other Expense. In the third quarter and for the first nine months of
fiscal 1996, the Company incurred other expenses of $61,094 and $184,857,
respectively. These expenses were slightly less than other expenses incurred
in the comparable periods of fiscal 1995 and were primarily attributable to
the interest costs on the line of credit established by the Company in the
third quarter of fiscal 1994 and, to a lesser extent, foreign currency
exchange losses arising from the Company's U.S. dollar denominated sales
transactions to its European subsidiaries. The Company's European
subsidiaries utilize the line of credit to borrow funds in their local
currencies to pay for all intercompany sales, thereby reducing the foreign
currency exposure on those transactions. To the extent that foreign currency
exchange rates fluctuate in the future, the Company may be exposed to
continued financial risk. Although the Company has established a borrowing
line denominated in the two foreign currencies (the French Franc and the
Belgian Franc) in which the subsidiaries currently conduct business to
minimize this risk, there can be no assurance that the Company will be
successful or can fully hedge its foreign currency exposure.
Provision for Income Taxes. The Company's effective tax rate for the
first nine months of fiscal 1996 was 32.7%. The Company's effective tax rate
is lower than the statutory tax rates due primarily to the utilization of tax
credits, the utilization of net operating losses in foreign jurisdictions and
tax benefits associated with the Company's foreign sales corporation. The
Company's effective tax rate increased in fiscal 1996 due to the increase in
U.S. versus international income.
Liquidity and Capital Resources
The Company has funded its operations primarily through cash flows from
operations and the issuance of securities.
At June 29, 1996, the Company's working capital was $77,104,494. At
such date, the Company had $60,155,866 in cash, cash equivalents and short-
term investments. The cash, cash equivalents and investments balance
increased approximately $55,865,000 from September 30, 1995 primarily due to
the net proceeds of approximately $49,200,000 from the public offering of
common stock in the second quarter. In addition, the cash and investments
balance increased approximately $6,665,000 primarily due to the proceeds and
tax benefits from the exercise of stock options and an increase in the
Company's current liabilities, which were partially offset by an increase in
accounts receivable and inventories. The increase in current liabilities,
accounts receivable and inventories reflects the Company's introduction of its
new ACCLAIM family of bone densitometers and the increase in sales activity.
At June 29, 1996, one customer had accounts receivable outstanding of
approximately $1,950,000, which were current within their payment terms. The
Company finances certain sales to Latin America over a two to three year time
frame. At June 29, 1996, the Company had long-term accounts receivable
outstanding of approximately $973,000 relating to these sales, which were
included in other assets. In the first nine months of fiscal 1996, the
Company purchased approximately $1,257,000 of property and equipment,
primarily computers and other equipment associated with the hiring of
additional personnel.
On July 18, 1996, the Company signed a definitive agreement to merge
with FluoroScan. Hologic and FluoroScan estimate that they will incur direct
transaction costs of approximately $1.8 million associated with the merger.
These transaction costs will be expensed in the period incurred under the
pooling-of-interests method of accounting for business combinations. As a
result, the earnings of the combined entity will be adversely affected. The
amount is a preliminary estimate only and therefore subject to change. There
can be no assurance that Hologic and FluoroScan will not incur additional
charges to reflect costs associated with the merger.
The Company does not currently have any significant capital commitments
and believes that existing sources of liquidity, including the net proceeds of
the offering, funds expected to be generated from operations and a $3.0
million credit line for use by its European subsidiaries, will provide
adequate cash to fund the Company's anticipated working capital and other cash
needs for the foreseeable future.
PART II - OTHER INFORMATION
HOLOGIC, INC. AND SUBSIDIARIES
Item 1. Legal Proceedings.
Patent Litigation. Until recently, Hologic had been involved in
litigation brought in January 1995 by B.V. Optische Industrie de Oude Delft
and two subsidiaries ("Oldelft") claiming damages relating to a prior patent
dispute. On December 14, 1995, the United States District Court for the
Southern District of New York granted Hologic's Motion to Dismiss and
dismissed all claims against Hologic. In January 1996, Oldelft filed a motion
for reconsideration of the dismissal and amended its complaint. In April
1996, the Court denied Oldelft its motion for reconsideration of the
dismissal, and in May 1996 Hologic and Oldelft settled this matter.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security-Holders.
None.
Item 5. Other Information.
On July 18, 1996, Hologic signed a definitive agreement to merge
with FluoroScan. The transaction is intended to be carried out by the merger
of FluoroScan and a wholly-owned subsidiary of Hologic in a tax-free stock
transaction, accounted for as a pooling of interests. The completion of this
transaction is subject to approval by FluoroScan's stockholders, completion of
certain due diligence items and regulatory approvals. FluoroScan's principal
stockholders have provided the Company with a proxy to vote in favor of this
merger.
Upon consummation of the merger, Hologic will issue approximately 1.5
million shares of its common stock in exchange for all of the outstanding
shares of FluoroScan's common stock, stock warrants and stock options to
underwriters. In addition, Hologic has reserved approximately 300,000
additional shares of its common stock for issuance to holders of FluoroScan
options.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits furnished:
(11) Statement Re: Computation of Earnings Per Share.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended June
29, 1996.
HOLOGIC, INC. AND SUBSIDIARIES
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 thereunto duly authorized.
Hologic, Inc.
(Registrant)
August 13, 1996 /s/ S. David Ellenbogen
- --------------- --------------------------
Date S. David Ellenbogen
Chairman and Chief Executive Officer
August 13, 1996 /s/ Glenn P. Muir
- --------------- ------------------------------
Date Glenn P. Muir
Vice President, Finance and Treasurer
(Principal Financial and Chief
Accounting Officer)
<TABLE>
HOLOGIC, INC. AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
June 29, June 24, June 29, June 24,
1996 1995 1996 1995
------- ------- ------- --------
<S> <C> <C> <C> <C>
PRIMARY:
Net income............... $3,940,030 $ 487,668 $8,271,037 $1,284,998
Weighted average
shares outstanding....... 11,163,508 8,160,142 9,853,750 8,099,442
Common stock equivalents
outstanding, pursuant to
the treasury stock method. 1,101,726 659,400 992,334 718,058
---------- --------- --------- ----------
Primary weighted average
number of common and
common equivalent
shares outstanding....... 12,265,234 8,819,542 10,846,084 8,817,500
========== ========= ========== =========
Per share amount......... $ .32 $ .06 $ .76 $ .15
===== ===== ===== =====
* All share and per-share amounts have been adjusted to reflect the two-for-one stock
split effected on March 25, 1996.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
the financial statements in the Company's quarterly report on Form 10-Q
for the period ended June 29, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 31,771,656
<SECURITIES> 34,033,584
<RECEIVABLES> 18,700,681
<ALLOWANCES> 1,300,000
<INVENTORY> 9,636,249
<CURRENT-ASSETS> 2,452,507
<PP&E> 4,988,451
<DEPRECIATION> 2,728,480
<TOTAL-ASSETS> 101,090,512
<CURRENT-LIABILITIES> 13,840,809
<BONDS> 0
<COMMON> 113,030
0
0
<OTHER-SE> 87,249,703
<TOTAL-LIABILITY-AND-EQUITY> 101,090,512
<SALES> 54,050,536
<TOTAL-REVENUES> 56,349,729
<CGS> 25,198,033
<TOTAL-COSTS> 45,308,818
<OTHER-EXPENSES> 184,857
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 12,291,037
<INCOME-TAX> 4,020,000
<INCOME-CONTINUING> 8,271,037
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,271,037
<EPS-PRIMARY> .76
<EPS-DILUTED> .76
</TABLE>
