UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 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 December 25, 1999
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.)
35 Crosby Drive, Bedford, Massachusetts 01730
(Address of principal executive offices)
(Zip Code)
(781) 999-7300
(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 __
As of January 31, 2000 15,366,388 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
December 25, 1999 (unaudited)
and September 25, 1999 3
Consolidated Statements of Operations
Three Months Ended December 25, 1999
and December 26, 1998 (unaudited) 4
Consolidated Statements of Cash Flows
Three Months Ended December 25, 1999
and December 26, 1998 (unaudited) 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosure About Market
Risk 14
PART II - OTHER INFORMATION 15
SIGNATURES 16
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except per share data)
ASSETS
<TABLE>
<CAPTION>
December 25, September 25,
1999 1999
------------ -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............ $36,093 $36,508
Short-term investments............. 25,113 26,170
Accounts receivable, less reserves of
$3,485 and $3,480, respectively........ 27,929 28,056
Inventories.................... 18,326 17,596
Prepaid expenses and other current assets.. 2,732 6,841
------- --------
Total current assets.............. 110,193 115,171
PROPERTY AND EQUIPMENT, at cost:
Equipment............................... 16,286 15,981
Furniture and fixtures.................. 3,419 3,224
Land.................................... 10,002 10,002
Buildings and improvements.............. 29,156 28,812
Leasehold improvements.................. 603 605
------ ------
59,466 58,624
Less- Accumulated depreciation
and amortization.................. 8,791 8,154
------ -------
50,675 50,470
------ ------
Other assets, net....................... 13,637 10,129
------- -------
$174,505 $175,770
======== ========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT LIABILITIES:
Line of credit.......................... $ 422 $1,103
Accounts payable....................... 6,339 6,063
Accrued expenses........................ 10,457 10,103
Deferred revenue........................ 9,794 8,079
-------- ------
Total current liabilities............ 27,012 25,348
--------- ------
STOCKHOLDERS' EQUITY:
Preferred Stock, $.01 Par value-
Authorized - 1,623 shares
Issued - none........................ -- --
Common stock, $.01 par value-
Authorized - 30,000 shares
Issued - 15,315 and 15,303
shares, respectively................. 153 153
Capital in excess of par value.......... 109,712 109,624
Retained earnings....................... 39,571 42,440
Cumulative translation adjustment....... (1,479) (1,331)
Treasury stock, at cost, 45 shares...... (464) (464)
------- --------
Total stockholders' equity........... 147,493 150,422
------- -------
$174,505 $175,770
======== =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
December 25, December 26,
1999 1998
---------- -----------
<S> <C> <C>
REVENUES:
Product sales....................... $21,072 $23,914
Other revenue....................... 223 718
------- -------
21,295 24,632
------- -------
COSTS AND EXPENSES:
Cost of product sales............... 13,032 12,791
Research and development............ 4,712 2,458
Selling and marketing............... 5,875 5,259
General and administrative.......... 2,968 2,169
-------- ------
26,587 22,677
-------- ------
(Loss) income from operations... (5,292) 1,955
Interest income..................... 853 1,353
Other expense....................... (31) (131)
-------- -------
(Loss) income before
income taxes............... (4,470) 3,177
(BENEFIT) PROVISION FOR INCOME TAXES.. (1,600) 1,140
------- ------
Net (loss) income................ ($2,870) $2,037
========= ======
NET (LOSS) INCOME PER SHARE:
Basic............................ ($.19) $.15
====== ====
Diluted.......................... ($.19) $.15
====== ====
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING............ 15,262 13,340
====== ======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING,
ASSUMING DILUTION.................... 15,262 13,638
====== ======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
December 25, December 26,
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income........................ $(2,870) $2,037
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities-
Depreciation and amortization...... 815 357
Compensation expense related to
issuance of stock option.......... 27 60
Changes in assets and liabilities-
Accounts receivable......... 395 (3,526)
Inventories................. (730) (40)
Prepaid expenses and other
current assets............. 4,181 145
Accounts payable............ 276 4,073
Accrued expenses............ 354 (2,070)
Deferred revenue............ 1,715 1,737
------- -----
Net cash provided by
operating activities..... 4,163 2,773
------- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of held-to-maturity investments. (6,941) (7,242)
Sales and maturities of
held-to-maturity investments............ 9,226 8,083
Purchases of property and equipment....... (856) (2,873)
Decrease (increase) in other assets....... (5,191) 234
------- ------
Net cash used in
investing activities........ (3,762) (1,798)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in line of credit............ (680) (978)
Issuance of common stock pursuant to
options, stock grants and employee stock
purchase plan, including tax benefit.... -- 32
------- ------
Net cash used in financing
activities................... (680) (946)
------- -----
EFFECT OF EXCHANGE RATE CHANGES ON CASH..... (136) (16)
------- -----
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS.......................... (415) 13
CASH AND CASH EQUIVALENTS, beginning
of period................................ 36,508 48,423
------ ------
CASH AND CASH EQUIVALENTS, end of period.... $36,093 $48,436
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for
income taxes............................ $ -- $ 326
======= =========
Cash paid during the period for interest.. $ 4 $ 100
======= ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
HOLOGIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands, except per share data)
(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 25, 1999, included in the Company's Form 10-
K as filed with the Securities and Exchange Commission on
December 23, 1999.
The consolidated balance sheet as of December 25, 1999, the
consolidated statements of operations for the three months ended
December 25, 1999 and December 26, 1998 and the consolidated
statements of cash flows for the three months ended December 25,
1999 and December 26, 1998, 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 months ended
December 25, 1999 are not necessarily indicative of the results
to be expected for the entire fiscal year ending September 30,
2000.
(2) ACQUISITION
On June 3, 1999, the Company acquired Direct Radiography Corp
(DRC) and the building in which DRC conducted its operations for
an aggregate $21,901, including acquisition costs. The
Acquisition was accounted for as a purchase in accordance with
Accounting Principles Board Opinion No. 16. Accordingly, the
results of the operations of DRC have been included in the
accompanying consolidated financial statements from the date of
acquisition.
Unaudited pro forma operating results for the Company,
assuming the Acquisition of DRC occurred on September 26, 1998
are as follows:
Three Months Ended
December 26,1998
-----------------
Net sales $24,632
Net income $19
Basic and diluted net income per share $.00
(3) Inventories
Inventories are stated at the lower of cost (first-in, first-
out) or market and consist of the following:
December 25, September 25,
1999 1999
---- -----
Raw materials and work-in-process.. $12,412 $11,024
Finished goods..................... 5,914 6,572
------- -------
$18,326 $17,596
======= =======
Work-in-process and finished goods inventories consist of
material, labor and manufacturing overhead.
(4) Earnings Per Share
A reconciliation of basic and dilutive share amounts are as
follows:
<TABLE>
<CAPTION>
Three Months Ended
December 25, December 26,
1999 1998
---- ----
<S> <C> <C>
Weighted average common shares outstanding........ 15,262 13,340
Effect of dilutive stock options................. -- 298
------- ------
Weighted average common shares outstanding,
assuming dilution............................... 15,262 13,638
====== ======
</TABLE>
Diluted weighted average shares outstanding do not include
1,890 and 1,014 common-equivalent shares for the three months
ended December 25, 1999 and December 26, 1998, respectively, as
their effect would have been anti-dilutive.
(5) Line of Credit
The Company has an international line of credit with a bank
for the equivalent of $3,000, which bears interest at PIBOR plus
1.50%. 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.
(6) Concentration of Credit Risk
SFAS No. 105, Disclosure of Information about Financial
Instruments with Off-Balance-Sheet Risk and Financial Instruments
with Concentrations of Credit Risk, requires disclosure of any
significant off-balance-sheet and credit risk concentrations.
Financial instruments that subject the Company to credit risk
consist primarily of cash, short-term investments, trade accounts
receivable and long-term receivables. The Company's credit risk
is managed by investing its cash in high-quality money market
instruments, securities of the U.S. government and its agencies,
and high-quality corporate issuers. The Company has not
experienced any material losses related to receivables from
individual customers, geographic regions or groups of customers
in the X-ray and medical devices industry. Due to these factors,
no additional credit risk beyond amounts provided for, is
believed by management to be inherent in the Company's accounts
receivable.
The Company finances certain sales to Latin America over a
two-to-three year time-frame. At December 25, 1999, the Company
had total accounts receivable outstanding of approximately $6,000
relating to these sales, of which $1,000 were long-term and
included in other assets. As of December 25, 1999, the Company
has not experienced any significant change in these receivables,
however, the economic and currency related uncertainties in these
countries may increase the likelihood of non-payment.
(7) Comprehensive Income (Loss)
Statement of Financial Accounting Standards No.130,
Reporting Comprehensive Income established standards for
reporting and display of comprehensive income (loss) and its
components in the financial statements. The Company's only item
of other comprehensive income (loss) relates to foreign currency
translation adjustments, and is presented separately on the
balance sheet as required. If presented on the statement of
operations for the three months ended December 25, 1999 and
December 26, 1998, comprehensive loss would be approximately $43
and $149 higher than reported net loss, respectively, due to
foreign currency translation adjustments.
(8) Business Segments and Geographic Information
SFAS No. 131, Disclosures about Segments of an Enterprise
and Related Information. establishes standards for reporting
information regarding operating segments in annual financial
statements and requires selected information for those segments
to be presented in interim financial reports issued to
stockholders. To date, the Company has viewed its operations and
manages its business as principally three operating segments:
the manufacture and sale of Bone Assessment products, Mini-C Arm
Imaging products and Digital Imaging products. Intersegment
sales and transfers are not significant.
The accounting policies of the segments are the same as
those described in the summary of significant accounting
policies. The Company evaluates performance based on sales,
operating income (loss), net income (loss) and total assets.
Segment information for the three months ended December 25, 1999
and December 26, 1998 is as follows.
<TABLE>
<CAPTION>
Three Months Ended
December 25, December 26,
1999 1998
----- -----
<S> <C> <C>
Total revenues-
Bone Assessment $16,200 $20,414
Mini C-Arm Imaging 3,412 4,218
Digital Imaging 1,683 -
------- -------
$21,295 $24,632
======= =======
Operating income (loss)-
Bone Assessment $ (433) $ 1,330
Mini C-Arm Imaging 234 625
Digital Imaging (5,093) -
------- -------
$(5,292) $ 1,955
======= =======
Net income (loss)-
Bone Assessment $ 314 $ 1,648
Mini C-Arm Imaging 92 389
Digital Imaging (3,276) -
------- -------
$(2,870) $ 2,037
======= =======
Identifiable assets-
Bone Assessment $139,229 $159,102
Mini C-Arm Imaging 17,507 18,461
Digital Imaging 17,769 -
-------- --------
$174,505 $177,563
======== ========
Depreciation and amortization-
Bone Assessment $ 674 $ 302
Mini C-Arm Imaging 63 55
Digital Imaging 78 -
-------- ---------
$ 815 $ 357
======== =========
Capital expenditures-
Bone Assessment $ 170 $ 2,730
Mini C-Arm Imaging 11 143
Digital Imaging 675 -
-------- --------
$ 856 $ 2,873
========= ========
</TABLE>
Export sales from the United States to unaffiliated customers
primarily in Europe, Asia and Latin America during the first
quarter fiscal 2000 and 1999 totaled approximately $2,662 and
$4,195, respectively.
Transfers between the Company and its European subsidiaries
are generally recorded at amounts similar to the prices paid
by unaffiliated foreign dealers. All intercompany profit is
eliminated in consolidation.
Export product sales as a percentage of total product sales
are as follows:
Three Months Ended
December 25, 1999 December 26, 1998
---------------- ----------------
Europe 29% 23%
Asia 6 7
All others 4 8
---- -----
39% 38%
=== ====
(10) Litigation
Hologic has commenced a claim against Fleet Business
Credit Corp. (FBCC), in which Hologic seeks a declaratory
judgment with respect to the parties' respective rights and
obligations under a Master Product Financing Agreement (the
Agreement) dated September 25, 1996, as supplemented and amended.
FBCC subsequently commenced a separate action against Hologic in
state court in Illinois to recover damages allegedly arising out
of or relating to the Agreement. Neither Hologic nor FBCC has
precisely quantified the alleged potential liability of Hologic
to FBCC and Hologic is vigorously defending against the claims
asserted by FBCC.
In the ordinary course of business, the Company is party to
other various types of litigation. The Company believes it has
meritorious defenses to all claims, and, in its opinion, all
litigation currently pending or threatened will not have a
material effect on the Company's financial position or results of
operations.
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
Our 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 Company's ability to integrate the operations of Direct
Radiography Corp. successfully; the unproven nature of the
markets for digital X-ray products; the Company's ability to
predict accurately the demand for its products in these emerging
markets and to develop strategies to address these markets
successfully; uncertainties inherent in the development of new
products and the enhancement of existing products, including
technical and regulatory risks and delays; the Company's reliance
on one or only a limited number of suppliers for some key
components or subassemblies of its Direct Radiography products;
the Company's dependence on third party distributors to
commercialize its Direct Radiography products; risks related to
the discontinuance of placements of new bone densitometers under
the Company's strategic alliance program, and Hologic's
remarketing obligations and associated litigation under that
program; technical innovations that could render products
marketed or under development by Hologic obsolete; competition;
reimbursement policies for bone density testing and vertebral
fracture assessment; and regulatory approval and market
acceptance of drug therapies for osteoporosis.
Revenues. Total revenues for the first quarter of fiscal
2000 decreased 14% to $21.3 million from $24.6 million for the
first quarter of fiscal 1999. This decrease was primarily due to
a decrease in DXA bone densitometers and, to a lesser extent, a
decrease in mini c-arm and Sahara product sales in the current
quarter. Partially offsetting these decreases was the addition
of revenues from sales of our digital x-ray products from DRC.
The decrease in DXA revenues was a result of a decrease in the
total number of domestic DXA bone densitometer product shipments,
especially to the United States primary care market including
strategic alliance sales to a leasing company, and to decreased
unit prices. Other revenues decreased for the current three month
period primarily due to a decrease in revenues relating to
medical data management services provided by our medical data
management division, which we sold to Synarc in June 1999. In
connection with a merger on January 13, 2000 between Vivid and
PerkinElmer, Vivid paid Hologic approximately $2 million in
January for a fully paid-up license to our technology.
Total revenues for the first quarter of fiscal 2000
increased $1.2 million or 6% compared to the immediately
preceding quarter. In the current quarter, sales of the DXA bone
densitometers and, to a lesser extent, digital x-ray products
increased which were partially offset by a decrease in sales of
mini c-arms and a decrease of Sahara product sales, especially
through our U.S. distributor for the primary care market, when
compared to the immediately preceding quarter.
In the first quarter of fiscal 2000, approximately 61% of
product sales were generated in the United States, 29% in Europe
and 10% in other international markets. In the first quarter of
fiscal 1999, approximately 62% of product sales were generated in
the United States, 23% in Europe and 15% in other international
markets.
We expect that foreign sales in the current fiscal year will
continue to account for a substantial portion of product sales.
Continued economic and currency related uncertainty in a number
of foreign countries, especially in Asia and Latin America, could
reduce our future sales to these markets.
Costs and Expenses. The cost of product sales increased as
a percentage of product sales to 62% in the first quarter of
fiscal 2000 from 53% in the first quarter of fiscal 1999. These
costs increased as a percentage of product sales primarily due to
a decrease in the number of DXA bone densitometers sold and, to a
lesser extent, lower average selling prices. In addition, the
current quarter includes manufacturing costs of approximately
$1.6 million related to DRC, which has significant fixed
manufacturing costs and is operating significantly below
manufacturing capacity. Absent DRC, cost of product sales would
have increased to approximately 59%. The reduction in DXA sales
volume and the low sales volume of digital imaging plates
resulted in the under absorption of fixed manufacturing costs.
Research and development expenses increased 92% to $4.7
million (22% of total revenues) in the current quarter from $2.5
million (10% of total revenues) in the first quarter of fiscal
1999. This increase was primarily due to the acquisition of DRC
which added approximately $2.9 million of research and
development expenses in the current quarter.
Selling and marketing expenses increased 12% to $5.9 million
(28% of product sales) in the current quarter from $5.3 million
(22% of product sales) in the first quarter of fiscal 1999
primarily due to selling and marketing expenses of $1.1 million
at DRC which were partially offset by a decrease in sales
commissions primarily due to the lower sales volume in the
primary care market in the United States.
General and administrative expenses increased 37% to $3.0
million (14% of total revenues) in the first quarter of fiscal
2000 compared to $2.2 million (9% of total revenues) in the first
quarter of fiscal 1999. This increase was primarily due to the
addition of approximately $600,000 of general and administrative
expenses related to DRC in the current quarter.
Total costs and expenses related to DRC totaled
approximately $6.2 million for the three months ended December
25, 1999. We expect to continue to incur significant costs and
expenses at DRC for the foreseeable future as efforts are placed
on developing and commercializing our digital radiography
systems.
Interest Income. Interest income decreased to $850,000 in
the current quarter from $1.3 million in the first quarter of
fiscal 1999. This decrease was due to a lower investment base
than in the prior year, primarily due to the use of cash for the
DRC acquisition and building renovations during fiscal 1999.
Other Expense. In the first quarters of fiscal 2000 and
1999, we incurred other expenses of approximately $31,000 and
$131,000, respectively. These expenses include foreign currency
transaction losses and interest costs on a bank line of credit
used by our European subsidiaries to borrow funds in their local
currencies to pay for intercompany sales, thereby reducing the
foreign currency exposure on those transactions. To the extent
that foreign currency exchange rates fluctuate in the future, we
may be exposed to continued financial risk. Although we have
established a borrowing line of credit denominated in the two
foreign currencies, the French Franc and the Belgian Franc, in
which the subsidiaries currently conduct business to minimize
this risk, we cannot assure that we will be successful or can
fully hedge our outstanding exposure.
Provision for Income Taxes. In fiscal 2000, we have a
benefit for income taxes as a result of the current year's loss
which the Company believes will be realizable in the future. Our
effective tax rate was 36% in the first quarter of fiscal 1999
which was lower than the statutory tax rates due primarily to the
favorable Federal and state tax treatment afforded our foreign
sales corporation and the favorable state tax treatment of a
portion of our interest income.
Liquidity and Capital Resources
At December 25, 1999, working capital was approximately $83
million, and cash, cash equivalents and short-term investments
totaled $61 million. The cash, cash equivalents and short-term
investments balance decreased approximately $2 million from
September 25, 1999 primarily due to the net loss of $2.9 million.
Included in other assets were marketable securities with
maturities exceeding one year totaling $1.7 million. We finance
certain sales to Latin America over a two-to-three year time-
frame. At December 25, 1999, we had total accounts receivable
outstanding of approximately $6 million relating to these sales,
of which $1 million were long-term and included in other assets.
As of December 25, 1999, we have not experienced any significant
change in these receivables, however, the economic and currency
related uncertainties in these countries may increase the
likelihood of non-payment. In the first quarter of 2000, we
purchased approximately $900,000 of property and equipment, which
consisted primarily of computers and information systems
equipment.
In connection with a fee-per-scan program offered for our
DXA bone densitometers, we have entered into a remarketing
agreement whereby we have agreed to perform certain remarketing
activities and to cover certain losses incurred by the leasing
company up to 10% of the total fee-per-scan contracts funded.
Under the Strategic Alliance Program, we installed approximately
$60.6 million in units since 1996. As of December 25, 1999,
approximately 30% of these systems were awaiting remarketing
after having been returned, net of remarketed or converted units.
This fee-per-scan program was terminated in February 1999. The
leasing company purchased all the DXA densitometers covered under
these contracts from us. We reserved for potential losses under
these contracts during the fee-per-scan program term by deferring
revenue of an amount approximately equal to 10% of the contracts
funded, our maximum recourse under the arrangement. We are in
litigation that we initiated with the leasing company through a
declaratory judgement action regarding the extent of our
respective obligations under this contract. The leasing company
is seeking unspecified compensatory damages and other relief. We
believe that the claims are groundless and are vigorously
defending ourselves. Nevertheless, litigation can be expensive
and time consuming. While we believe that the outcome will not
have a material adverse effect on our business, we cannot
guarantee the outcome of this litigation. An unfavorable outcome
or prolonged litigation could materially harm our business,
results of operations or financial condition.
Except as set forth above, we do not have any significant
capital commitments. We believe that existing sources of
liquidity will provide adequate cash to fund our anticipated
working capital and other cash needs for the foreseeable future.
Year 2000 Readiness; Year 2000 Problems Could Disrupt Our
Business
The year 2000 problem is the potential for system and
processing failure of date-related data as the result of computer-
controlled systems using two digits rather than four digits to
define the applicable year. This could result in system failure
or miscalculations causing disruptions of operations, including,
among other things, temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Problems associated with the year 2000 may not become apparent
until some time after January 2000.
We have evaluated our internal software and products for
year 2000 problems. We believe that our products and business
will not be substantially affected by the year 2000 problem and
that we have no significant exposure to liabilities related to
the year 2000 problem for the products that we have sold. We
have also communicated with others, including vendors, suppliers
and customers whose computer systems' functionality could
directly impact our operations.
Although we believe our planning efforts are adequate to
address our year 2000 concerns, undetected year 2000 problems may
cause us to experience negative consequences or significant
costs. We cannot be sure that our vendors, suppliers, customers
or businesses that we may acquire, will not experience similar
consequences or costs. Such consequences or costs could
adversely affect our business.
Item 3. Quantitative and Qualitative Disclosure About
Market Risk.
Financial Instruments, Other Financial Instruments, and
Derivative Commodity Instruments. SFAS No. 107, Disclosure of
Fair Value of Financial Instruments, requires disclosure about
fair value of financial instruments. Financial instruments
consist of cash equivalents, short and long-term investments,
accounts receivable, accounts payable and debt obligations. The
fair value of these financial instruments approximates their
carrying amount.
Primary Market Risk Exposures. Our primary market risk
exposures are in the areas of interest rate risk and foreign
currency exchange rate risk. We incur interest expense on loans
made under a line of credit at the Europe Interbank Offered Rate.
At December 25, 1999, our outstanding borrowings under the line
of credit were approximately $400,000.
Substantially all of our sales outside the United States are
conducted in U.S. dollar denominated transactions. We operate
two European subsidiaries which incur expenses denominated in
local currencies. However, we believe that these operating
expenses will not have a material adverse effect on our business,
results of operations or financial condition.
PART II - OTHER INFORMATION
HOLOGIC, INC. AND SUBSIDIARIES
Item 1. Legal Proceedings.
No material developments.
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.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits furnished:
(27) Financial Data Schedule
(b) Reports on Form 8-K:
None.
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)
February 7, 2000 /s/ S. David Ellenbogen
- ---------------- ----------------------------
Date S. David Ellenbogen
Chairman and Chief Executive
Officer
February 7, 2000 /s/ Glenn P. Muir
- ------------------ ---------------------
Date Glenn P. Muir
Vice President, Finance and Treasurer
(Principal Financial and Chief
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS IN THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR
THE PERIOD ENDED DECEMBER 25, 1999.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> DEC-25-1999
<CASH> 36,093
<SECURITIES> 25,113
<RECEIVABLES> 27,929
<ALLOWANCES> 3,485
<INVENTORY> 18,326
<CURRENT-ASSETS> 110,193
<PP&E> 59,466
<DEPRECIATION> 8,791
<TOTAL-ASSETS> 174,505
<CURRENT-LIABILITIES> 27,012
<BONDS> 0
0
0
<COMMON> 153
<OTHER-SE> 147,340
<TOTAL-LIABILITY-AND-EQUITY> 174,505
<SALES> 21,072
<TOTAL-REVENUES> 21,295
<CGS> 13,032
<TOTAL-COSTS> 26,587
<OTHER-EXPENSES> 31
<LOSS-PROVISION> 1,600
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (4,470)
<INCOME-TAX> (2,870)
<INCOME-CONTINUING> (2,870)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,870)
<EPS-BASIC> (.19)
<EPS-DILUTED> (.19)
</TABLE>
