Hologic - Investor Relations

HOLOGIC, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) ASSETS
	September 30, 2006	September 24, 2005
CURRENT ASSETS:
Cash and cash equivalents.......................................	$ 29,923	$ 113,994
Accounts receivable, net..........................................	108,566	57,742
Inventories...............................................................	93,477	44,520
Prepaid expenses and other current assets................	74,790	12,119
Total current assets..............................................	306,756	228,375
Property and equipment, net....................................	61,723	33,329
Intangible assets, net..............................................	158,160	5,162
Goodwill, net..........................................................	341,319	6,285
Other assets, net....................................................	4,306	6,688
	$872,264	$279,839

LIABILITIES AND STOCKHOLDERS' EQUITY
	September 30, 2006	September 24, 2005
CURRENT LIABILITIES:
Accounts payable................................................	$ 26,443	$ 14,163
Accrued expenses...............................................	66,835	25,237
Line of credit........................................................	55,000	-
Short Term Loan..................................................	2,287	-
Deferred revenue..................................................	30,903	16,360
Total current liabilities......................................	181,468	55,760
Note payable net of current portion..........................	6,795	-
Deferred service obligations - long term...................	6,630	4,774
Deferred tax liabilities - long term...........................	69,093	1,471
Other long term liabilities.......................................	2,528	-
Total long term liabilities.......................................	85,046	6,245
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value- Authorized - 90,000 shares Issued – 52,645 and 44,295 shares, respectively..	526	443
Capital in excess of par value..............................	532,255	172,642
Retained earnings..............................................	73,875	46,452
Cumulative translation adjustment.......................	(442)	(1,239)
Treasury stock, 45 shares at cost.......................	(464)	(464)
Total stockholders' equity...............................	605,750	217,834
	$872,264	$279,839

HOLOGIC, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data)
	Three Months Ended		Twelve Months Ended
	Sept. 24, 2005	Sept. 24, 2005	Sept. 30, 2006	Sept. 24, 2005
REVENUES:.............................................	$154,055	$78,217	$462,680	$287,684

COSTS AND EXPENSES:
Cost of revenues.........................................	86,232	46,264	264,364	174,659
Cost of revenues - amortization of intangible assets......................................................	2,670	228	4,784	911
Research and development.........................	10,006	4,324	28,294	18,617
Selling and marketing................................	21,072	8,905	55,910	34,199
General and administrative.........................	15,395	7,087	42,551	26,667
Amortization of acquired intangible assets......................................................	1,113	-	1,631	-
Net gain on sale of intellectual property....................................................	(5,093)	-	(5,093)	-
Acquired in-process research and development..............................................	15,100	-	19,900	-
	146,495	66,808	412,341	255,053
Income from operations..........................	7,560	11,409	50,339	32,631

Interest income.........................................	628	857	4,082	2,219

Interest and/other(expense), net.................	(661)	(151)	(1,198)	(155)
Income before provision for income taxes..................................	7,527	12,115	53,223	34,695

Provision for Income Taxes.....................	9,000	2,639	25,800	6,439
Net income (loss)...............................	$ (1,473)	$ 9,475	$ 27,423	$28,256

Net income per common and common equivalent share:
Basic....................................	$ (0.03)	$ 0.22	$ 0.59	$ 0.66
Diluted..................................	$ (0.03)	$ 0.20	$ 0.56	$ 0.63

Weighted average number of common shares outstanding:
Basic.....................................	50,933	44,067	46,512	42,824
Diluted...................................	50,933	46,324	48,620	45,126

(1) Stock-based Compensation included in Costs and Expenses:
Cost of revenues.................................	$ 169	$ -	481	$ -
Research and development..................	212	-	519	-
Selling and marketing..........................	120	-	351	-
General and administrative...................	1,011	-	2,600	-
	$ 1,512	$ -	$ 3,951	$ -

HOLOGIC, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income (Unaudited) (In thousands)
	Three Months Ended September 30, 2006			Twelve Months Ended September 30, 2006
	GAAP	Adjustments	Non-GAAP	GAAP	Adjustments	Non-GAAP
REVENUES:	$154,055		$154,055	$462,680		$462,680

COSTS AND EXPENSES:
Cost of revenues..............	86,232	(169)(1)	86,063	264,364	(481)(1)	263,883

Cost of revenues - amortization of intangible assets................	2,670	(2,442)(2)	228	4,784	(3,873)(2)	911

Research and development.........	10,006	(212)(1)	9,794	28,294	(519)(1)	27,775

Selling and marketing............	21,072	(120)(1)	20,952	55,910	(351)(1)	55,559

General and administrative.......	15,395	(1,011)(1)	14,384	42,551	(2,600)(1)	39,951
Amortization of acquired intangible assets................	1,113	(1,113)(2)	-	1,631	(1,631)(2)	-
Net gain on sale of intellectual property...............	(5,093)	5,093(3)	-	(5,093)	5,093(3)	-
Acquired in-process research and development.........	15,100	(15,100)(4)	-	19,900	(15,100)(4)	-
					(600)(5)
					(4,200)(6)
	146,495	(15,074)	131,421	412,341	(24,262)	388,079
Income from operations...........	7,560	15,074	22,634	50,339	24,262	74,601
Interest income...............	628		628	4,082		4,082
Interest and other income (expense), net.....................	(661)		(661)	(1,198)		(1,198)
Income before provision for income taxes.................	7,527	15,074	22,601	53,223	24,262	77,485
Provision for income taxes.....	9,000	(1,900)(7)	7,100	25,800	(330)(7)	25,470
Net income (loss)................	$ (1,473)	$ 16,974	$ 15,501	$ 27,423	$ 24,592	$ 52,015
__________________
(1) - (7) see explanatory notes on following pages

HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income
(Unaudited)
(In thousands, expect per share data)

The Company has provided net income on a non-GAAP basis for the fourth quarter and year to date for fiscal 2006 excluding acquisition related charges, stock compensation expense and a net gain on the sale of intellectual property. A reconciliation of this non-GAAP financial measure to the Company’s net income/(loss) for the fourth quarter and full year of fiscal 2006 is set forth in the supplemental schedule above. The Company believes that this non-GAAP measure is useful to investors in comparing the results of operations in fiscal 2006 to the comparable period in fiscal 2005 by eliminating certain of the more significant effects of the acquisitions and dispositions that took place in fiscal 2006, as well as the Company’s adoption of FASB Statement 123R at the beginning of fiscal 2006. When analyzing the Company’s operating performance, investors should not consider this non-GAAP measure as a substitute for net income (loss) prepared in accordance with GAAP.

(1) To exclude the impact of stock based compensation expense in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 123R. Effective September 25, 2005 , Hologic adopted SFAS No. 123R and elected not to apply this new accounting standard to its prior years’ financial statements. Prior to such date, Hologic disclosed in the notes to its financial statements what the related expense and impact to earnings per share (EPS) would have been (i.e. on a pro forma basis) had it elected to expense the fair value of employee stock options in accordance with SFAS No. 123. For the three and twelve months ended September 30, 2006, the total pro forma pre-tax expense for all stock based compensation expense in accordance with SFAS No. 123 was $1,512 and $3,951, respectively, resulting in dilution to GAAP EPS of $0.03 and $0.08 per share, respectively, on a pro forma basis. The non-cash charge for stock based compensation expense in fiscal 2007 is currently estimated to be approximately $6,500, pre-tax.

(2) To exclude the ongoing, non-cash amortization of the intangible assets acquired during fiscal 2006. The non-cash charge for the amortization of these assets in fiscal 2007 is currently estimated to be approximately $16,000 pre-tax.

(3) To exclude the net reduction in operating expenses resulting from the sale of Mammotest intellectual property acquired from Fischer Imaging to Siemens for $6,500 less an impairment charge of $1,400 to the carrying value of the underlying technology.

(4) To exclude the non-cash expense associated with writing off the acquired in-process research and development related to the R2 and Suros acquisitions in the fourth quarter of fiscal 2006 in the amounts of $10,200 and $4,900, respectively.

(5) To exclude the non-cash expense associated with writing off the acquired in-process research and development related to the AEG acquisition in the third quarter of fiscal 2006.

(6) To exclude the non-cash expense associated with writing off the acquired in-process research and development related to the acquisition of the Fischer Imaging intellectual property in the first quarter of fiscal 2006.

(7) To reflect the tax effect of the above adjustments, except for the non-tax write-off of the acquired in-process research and development related to the AEG , R2 and Suros acquisitions. (See (4), (5) and (6) above).