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Hologic plans to lay off 190 workers in Europe, issues Q2 financial report

by Gus Iversen, Editor in Chief | May 08, 2024
Business Affairs Women's Health
Hologic headquarters in Massachusetts (Courtesy: Wikimedia Commons)
Hologic plans to lay off 190 workers at facilities in Finland and France as part of a decision to discontinue the manufacture and sale of certain products in the Mobidiag business in its diagnostics segment. The development activities and operations from those locations will move to San Diego, according to a May 3 filing with the Securities and Exchange Commission.

The company wrote, in part:

    During the first quarter of fiscal 2024, the company further refined its strategy for the Mobidiag business, which is within the Diagnostics reportable segment. The strategy change included the decision to discontinue the manufacture and sale of certain products, closure of its facilities in Finland and France, and to move the development activities and operations to the company’s San Diego, California location. As such, the company determined certain fixed assets lives should be shortened and that lease assets were impaired at the affected facilities, and recorded accelerated depreciation of $7.2 million and a lease asset impairment charge of $12.5 million. In connection with this plan, the company finalized its decision to terminate the employees at these locations, totaling 190.
Hologic acquired Mobidiag for approximately $808 million in 2021. It provides near-patient, molecular diagnostic instruments and tests for acute care conditions including gastrointestinal and respiratory infections, antimicrobial resistance management, and healthcare-associated infections.

2024 forecast looks bright
Hologic also reported its financial outcomes for the second quarter of fiscal 2024, which ended on March 30, 2024. The Marlborough, Massachusetts-based medical manufacturer recorded revenues of $1.018 billion, marking a slight decrease of 0.8% compared to the same quarter last year. Despite the overall revenue dip, primarily due to a decline in COVID-19 assay sales, Hologic saw organic revenue growth of 4.9% in constant currency terms, excluding COVID-19 impacts.

The company's GAAP diluted earnings per share (EPS) were $0.72, down from $0.87 in the prior-year period, reflecting a 17.2% decrease. On a non-GAAP basis, diluted EPS stood at $1.03, slightly down from $1.06 last year. These figures both surpassed the company's previous guidance, indicating better-than-expected financial performance.

Significant growth was noted in the non-COVID segments of Hologic's business. The Diagnostics segment, excluding COVID-19-related revenue, grew by 9.8% in constant currency terms. Similarly, Molecular Diagnostics experienced a 10.7% growth in organic, constant currency terms when excluding COVID-19 sales. The Surgical franchise also showed robust performance, with revenue increasing by 7.4% in constant currency, driven primarily by the MyoSure and Fluent Fluid Management systems.

Hologic's Breast Health division saw a minimal revenue decline of 0.3% in constant currency. However, excluding the impact of the SSI divestiture, revenue in this segment actually grew by 1.0%.

Operational cash flow remained strong at $292.4 million for the quarter. Additionally, the company announced the acquisition of Endomagnetics for approximately $310 million in April, aiming to expand its interventional breast business.

Looking forward, Hologic has updated its financial guidance for fiscal 2024, reflecting confidence in its ongoing operations and market strategies. The company now expects full-year revenue to be between $4 billion and $4.05 billion, with GAAP EPS forecasted between $3.45 and $3.55, and non-GAAP EPS between $4.02 and $4.12. This revised guidance indicates an optimistic outlook for the rest of the fiscal year, driven by strong margins and diversified growth beyond COVID-19-related products.

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