Hologic Inc.

Radiating with product diversity in X-ray

Business

Founded in 1986 by current Chairman S. David Ellenbogen and Jay Stein, Ph.D., Hologic Inc. began its medical imaging path by developing proprietary X-ray and ultrasound bone analyzer systems. Today, the company has more than 8,000 worldwide installations of its QDR series of? X-ray densitometers and Sahara ultrasound sonometers in place.

In October 1995, Hologic benefited greatly from the FDA’s decision to clear for marketing Merck & Co. Inc.’s (Whitehouse Station, N.J.) Fosamax, the first agency-cleared drug for the treatment of osteoporosis. Hologic sales doubled the year after Fosamax received FDA clearance.

The company began its expansion plan in September 1996 by merging with FluoroScan Imaging Systems Inc. (Northbrook, Ill.). The transaction set the stage for additional broadening of Hologic’s product portfolio beyond bone densitometry. FluoroScan, now a subsidiary of Hologic, specializes in the manufacture and distribution of low-intensity, real-time mini C-arm X-ray imaging devices and equipment.

In June 1999, Hologic took another major step, as it ventured for the first time into digital radiography with its acquisition of Direct Radiography Corp. (DRC of Newark, Del.) in a transaction worth approximately $20 million. DRC became a wholly-owned subsidiary of Hologic, continuing with its manufacture and marketing of amorphous selenium flat-panel technology. The acquisition included DRC’s 168,000 sq. ft. research and development, manufacturing and administrative site in Newark.

The third significant change in Hologic occurred in September 2000, when the company completed its purchase of Trex Medical Corp. (Danbury, Conn.) for $55 million. Trex’s product portfolio includes X-ray mammography systems under the Lorad name, mobile X-ray systems, specialized medical X-ray imaging equipment for cardiac catheterization laboratories, digital radiographic/fluoroscopic systems, and electrophysiology and general radiography products.

TRADED
Hologic trades on the Nasdaq under the ticker symbol HOLX. The stock’s 52-week high is $11 pershare; its 52-week low is $4.06. Through mid-January, Hologic’s share price was in the range of $5.50.

In fiscal year 2000, ending Sept. 30, revenues increased to $93.7 million, compared with $84.1 million in FY99, on the strength of new product introductions. Acquisition-related charges, however, prompted a net loss for the company of $18.6 million, compared with a net loss of $3.7 million in FY99. Excluding acquisition-related charges, the net loss for FY2000 was $10 million.

In FY2000, Hologic’s Direct Radiography subsidiary generated revenues of $5.98 million, while the business unit posted an estimated net loss of $13 million. Excluding that net loss and acquisition-related charges from its purchase of Trex Medical in September 2000, Hologic achieved income of approximately $3 million in FY2000. Hologic’s core business of bone densitometry and mini C-arm imaging systems were profitable in all four fiscal quarters.

Please refer to the February 2001 issue for the complete story. For information on article reprints, contact Martin St. Denis