HOLOGIC INC Q4 FY2023 earnings call

• Capital Allocation: Prioritize M&A and share repurchases. Deployed $238M in Q4 2023 to buy back 3.2M shares, $150M in Q1 2024 for 2.2M shares, announced $500M ASR, and paid down $250M of higher variable interest rate debt. - Organic Growth: 2023 organic revenue ex-COVID was 15.6%, every division grew >13%, international growth >20%. - Division Highlights: Breast health gantry recovery, diagnostics molecular growth driven by Panther install base and Biotheranostics, surgical MyoSure and Fluent growth, international business growth north of 28% ex-COVID in Q4.

Diagnostics: Q4 global revenue $416.4 million, declined 20.6% including COVID, but excluding COVID assay and related revenues, grew 10.2% in the quarter. Molecular diagnostics grew 15% ex-COVID in Q4, and 18.9% ex-COVID for the year. Breast Health: Q4 total revenue $352.8 million, increased 27.4%. Surgical: Q4 revenue $148 million, increased 10.6%, full year organic growth 15.8% ex-Boulder. Skeletal: Q4 revenue $28 million, increased 15.9%. Revenue contributions: Diagnostics ~44% of total, Breast Health ~37%, Surgical ~16%, Skeletal ~3%.

• Fiscal 2024 Q1: Total revenue expected $960M - $985M, EPS $0.92 - $0.97. - Full Year 2024: Revenue $3.92B - $4.02B, EPS $3.90 - $4.10. Factors: 4 less selling days ($40M headwind), divestiture of SSI ultrasound ($20M headwind), FX ($20M headwind). Divisions expected to grow within 5%-7% framework, with breast health benefiting from backlog, diagnostics molecular growth continuing, and surgical growth from MyoSure, Fluent, and international.

• USPSTF Guidelines: Minimal impact but still a factor, with no change expected to forecasts. - FDA LDT Regulation: Potential long-term impact, but not immediate, with no material effect on business in next few years. - Supply Chain: Elevated costs from semiconductor chips previously procured, but working through higher cost inventory.

Q: What's the impact of USPSTF and FDA LDT regulation on Hologic's business?

A: Steve MacMillan stated USPSTF has minimal impact, and FDA LDT regulation won't affect the business over the next few years.

Q: How is Panther utilization driving growth?

A: Ryan Simon mentioned growth is from placing more assays on Panthers, expanding Fusion footprint, and growing assay volumes.

Q: Is the share repurchase program a change in capital allocation priorities?

A: Steve MacMillan said it's not a change, but an opportunistic move due to favorable stock valuation while continuing to look for external M&A.