Building a Sustainable Growth Company · Hologic believes the use of nonGAAP revenues is useful to investors as it eliminates certain effects of purchase accounting on - its recognition

Jefferies Healthcare Conference / June 3, 2015

Building a Sustainable Growth CompanyJefferies Healthcare ConferenceJune 3, 2015


Safe Harbor StatementThis presentation contains forward-looking information that involves risks and uncertainties, including statements about the Company’s plans, objectives, expectations and intentions. Such statements include, without limitation: financial or other information based upon or otherwise incorporating judgments or estimates relating to future performance, events or expectations; the Company’s strategies, positioning, resources, capabilities and expectations for future performance; and the Company's outlook and financial and other guidance. These statements are based upon assumptions made by the Company as of the date hereof and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from expectations.Risks and uncertainties that could adversely affect the Company’s business and prospects, and otherwise cause actual results to differ materially from those anticipated, include, without limitation: the ability of the Company to successfully manage leadership and organizational changes, including the ability of the Company to attract, motivate and retain key employees; U.S., European and worldwide economic conditions and related uncertainties; the Company’s reliance on third‐party reimbursement policies to support the sales and market acceptance of its products, including the possible adverse impact of government regulation and changes in the availability and amount of reimbursement and uncertainties for new products or product enhancements; uncertainties regarding healthcare reform legislation, including associated tax provisions, or budget reduction or other cost containment efforts; changes in guidelines, recommendations and studies published by various organizations that could affect the use of the Company’s products; uncertainties inherent in the development of new products and the enhancement of existing products, including FDA approval and/or clearance and other regulatory risks, technical risks, cost overruns and delays; the risk that products may contain undetected errors or defects or otherwise not perform as anticipated; risks associated with strategic alliances and the ability of the Company to realize anticipated benefits of those alliances; risks associated with acquisitions, including, without limitation, the Company’s ability to successfully integrate acquired businesses, the risks that the acquired businesses may not operate as effectively and efficiently as expected even if otherwise successfully integrated; the risks that acquisitions may involve unexpected costs or unexpected liabilities; the risks of conducting business internationally, including the effect of exchange rate fluctuations on those operations; manufacturing risks, including the Company’s reliance on a single or limited source of supply for key components, and the need to comply with especially high standards for the manufacture of many of its products; the Company’s ability to predict accurately the demand for its products, and products under development, and to develop strategies to address its markets successfully; the early stage of market development for certain of the Company’s products; the Company’s leverage risks, including the Company’s obligation to meet payment obligations and financial covenants associated with its debt; risks related to the use and protection of intellectual property; expenses, uncertainties and potential liabilities relating to litigation, including, without limitation, commercial, intellectual property, employment and product liability litigation; technical innovations that could render products marketed or under development by the Company obsolete; competition; and the Company’s ability to attract and retain qualified personnel.The risks included above are not exhaustive. Other factors that could adversely affect the company's business and prospects are described in filings made with the SEC. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements presented herein to reflect any change in expectations or any change in events, conditions or circumstances on which any such statements are based.Hologic, Aptima, Aptima Combo 2, Genius, Horizon, MyoSure, NovaSure, Panther, Selenia, The Science of Sure, ThinPrep, Tigris and associated logos, as may be used in this presentation, are trademarks and/or registered trademarks of Hologic, Inc. and/or its subsidiaries in the United States and/or other countries. Procleix is a trademark of Grifols Diagnostic Solutions Inc.

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Non-GAAP Financial MeasuresHologic has presented the following non-GAAP financial measures in this presentation: revenues; gross margins; operating expenses; operating income; interest expense; pre-tax income; net income; EPS; and adjusted EBITDA. In this presentation, Hologic defines its non-GAAP revenues to primarily include contingent revenue earned post-acquisiton in FY13 under its blood screening collaboration that was eliminated under purchase accounting. Hologic defines adjusted EBITDA as its non-GAAP net income plus net interest expense, income taxes, and depreciation and amortization expense included in its non-GAAP net income. Hologic defines its non-GAAP gross margins, operating expenses, operating income, interest expense, pre-tax income and EPS to exclude, as applicable: (i) the amortization of intangible assets and impairment of goodwill and intangible assets; (ii) acquisition-related charges and effects, such as charges for contingent consideration, transaction costs, integration costs including retention, and credits and/or charges associated with the write-up of acquired inventory and fixed assets to fair value, and the effect of a reduction in revenue related to contingent revenue under the Company’s blood screening collaboration; (iii) non-cash interest expense related to amortization of the debt discount for the equity conversion option of convertible debt securities; (iv) restructuring and divestiture charges; (v) non-cash extinguishment losses and debt transaction costs; (vi) litigation settlement charges (benefits); (vii) other-than-temporary impairment losses on investments; and (viii) other one-time, nonrecurring, unusual or infrequent charges, expenses or gains that may not be indicative of Hologic’s core business results; and to include income taxes related to such adjustments.

Hologic believes the use of non-GAAP revenues is useful to investors as it eliminates certain effects of purchase accounting on its recognition of revenue, as well as other unusual or non-recurring items. Hologic believes the use of non-GAAP net income is useful to investors by eliminating certain of the more significant effects of its acquisitions and related activities, non-cash charges resulting from the application of GAAP to convertible debt instruments with cash settlement features, charges related to debt extinguishment losses, investment impairments, litigation settlements, and restructuring and divestiture initiatives. These non-GAAP measures also reflect how Hologic manages its businesses internally. In addition to the adjustments set forth in the calculation of Hologic’s non-GAAP net income and EPS, its adjusted EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending. As with the items eliminated in its calculation of non-GAAP net income, these items may vary for different companies for reasons unrelated to the overall operating performance of a company’s business. When analyzing Hologic’s operating performance, investors should not consider these non-GAAP financial measures as a substitute for net income prepared in accordance with GAAP.

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Presentation Outline

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Overview

Markets and products

Financials and milestones


•Diverse, innovative healthcare products focused on early detection and intervention–Strong position in women’s health–Revenue of $2.5 billion in FY14*

•Revenue composition in 1H FY15

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Breast Health 38%

Surgical 12%

Skeletal 4%

Diagnostics 46%

By Business

OUS 25%

US 75%

By Geography

Consumables63%

Capital21%

Service 16%

By Type

Hologic Today

* All figures are annual and exclude ~ $20 million one-time contribution from restructuring of Roka license in 2014. Hologic’s fiscal year runs from October to September.


Investment Highlights

•US market leader in key franchises*

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* All market shares are Hologic estimates for the US market on a unit basis in 2014. Procleix blood screening products are marketed globally by Hologic’s partner, Grifols.

• Improving sustainable, long-term revenue growth– Multiple important product cycles underway– Untapped international opportunity

Others45%

HOLX>55%

#1 #1 #1 #1 #1 #1

Others40%

HOLX~60%

Others30%

HOLX~70%

Others 25%

HOLX~75%

Others30%

HOLX~70%

Others25%

HOLX~75%


•Strong profitability and cash flows–Near-term, primary use to pay down debt

•Long-term opportunities for margin expansion–Reduce interest expense and tax rate

•New management team leading broad, deep turnaround–Focusing on better resource and capital allocation, executional

excellence

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Investment Highlights (cont.)

Jefferies Healthcare Conference / June 3, 2015 8

Evidence of the Turnaround

* Total GAAP revenue growth as reported with the exception of 4Q FY14. 4Q excludes ~ $20 million one-time contribution from restructuring of Roka license. Percentage changes are versus prior year periods.

$631$612-3%

$653+7%

$613

$625+2%

$655+5%

$626

$633+1%

$622

$640+3%

$500

$600

$700

2013 2014 2015

Q1 Q2 Q3 Q4

Improved commercial execution generates consistent reported growth


Evidence of the Turnaround

Even stronger constant currency growth

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-3.2%

+ 1.7%+ 0.5%

+ 2.8%

+7.7% +7.2%

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15

* Total GAAP revenue growth as reported with the exception of 4Q FY14, which excludes ~ $20 million one-time contribution from restructuring of Roka license. Percentage changes are versus prior year periods.


Broad Improvement in Quarterly Revenue

* Constant currency revenue change with the exception of 4Q FY14, which excludes ~ $20 million one-time contribution from restructuring of Roka license. Light green ovals = 0-5% growth, mixed green ovals = 5-10% growth, dark green ovals = >10% growth. Red rectangles = decline, all compared to prior year periods.



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Overview




Breast Health Overview

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FY14 Revenue$945 Million

Interventional18%

Imaging80%

Other 2%

• Mammography includes sales and service of 2D digital and Genius 3D systems and ancillaries– US: market upgrading to tomosynthesis– OUS: opportunities to place 2D systems

• Hologic leads US market with ~55% share

• Interventional includes breast biopsy solutions, complement to mammography systems

• Service represents ~40% of total– Outstanding team of field engineers

* Represents FY14 data


Growth Driver: Genius 3D Mammography

•Hologic first to US market with FDA-approved product in 2011•Four recent catalysts for faster adoption

–JAMA study confirmed clinical superiority of Genius technology to 2D

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41% increase in

invasive breast cancers

29% increase in all breast cancers

15% decrease

in recall rates

– Favorable CMS reimbursement took effect January 1, 2015»Pathway for private insurers to follow

– Competitive product launches boost market conversion, illustrate our product advantages

– Multi-faceted Genius 3D mammography marketing campaign


Breast Tomosynthesis Opportunity

•More than 13,000 total digital mammography units in US

•Hologic installed base–Approximately 6,000 2D–Approximately 1,800 Genius 3D

•Early stages of new product cycle–Over time expect almost entire market

to convert–Less than 15% penetrated today–Genius consumer marketing campaign

in October 2014»850,000+ consumer interactions

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www.genius3dmammography.com

•Future tomosynthesis US market opportunity $3.5-$4 billion•OUS markets represent long-term upside


Diagnostic Solutions Overview

•Market leader in three primary segments–Cervical cancer

»ThinPrep liquid Pap testing»Aptima HPV

–Sexually transmitted diseases»Aptima molecular assays for CT, NG and trichomoniasis

–Blood screening: Procleix NAT assays, marketed by partner Grifols»HIV, HCV, HBV, West Nile virus in US»HEV in Europe, Japan»Parvo/HAV in plasma, Europe

•Two complementary, well-respected sales teams calling on OB/GYNs and labs

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FY14 Revenue$1,167 Million*

Blood19%

Molecular39%

Cytology & Perinatal

42%

* Total revenue for 2014 excludes ~ $20 million one-time contribution from restructuring of Roka license. Represents FY14 segment mix.


Growth Driver: Panther System

•Already lead in high-volume accounts with Tigris–Panther offers leading-edge automation to

labs of all sizes–Increase molecular testing in hospitals–Consolidate menu on single platform

•New product cycle has two elements–System placements

»Closing in on 1,000 goal by end of FY15–Menu expansion and increasing assay

pull-through»First viral load assay recently launched»New Fusion platform will add PCR capabilities to large installed base

16* In clinical diagnostics and blood screening markets.


GYN Surgical Solutions

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FY14 Revenue$308 Million

MyoSure28%

Other1%

NovaSure71%

• Product line focused on diagnosing, treating common gynecologic conditions

• Two market-leading products that treat abnormal uterine bleeding– NovaSure

»Endometrial ablation solution offering safe, fast, customized treatment

»More than 2 million uses since FDA approval

– MyoSure»Tissue removal solution offering incision-

less, fast removal of fibroids, polyps, etc.


•Two areas of focus–Osteoporosis screening/diagnosis and

obesity management via bone densitometer

–Orthopedic imaging via “Mini” C-Arm•FY14 revenue of $91 million•Revitalized commercial operations through Horizon new product launch and sales force expansion–Reversed long-term sales decline

•Now poised for innovation and segment expansion

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Skeletal Health Solutions


Significant International Opportunities

•Hologic is underdeveloped outside the United States•Hired new executive with proven track record to oversee all international business units

•Specific areas of opportunity- 2-D mammography in developed, emerging markets- 3-D upgrades in established markets- ThinPrep to replace conventional Pap- Molecular diagnostics in Europe, Japan- Strengthen partnerships with dealers

• Integrate with international operations, tax strategy

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Overview




Revenue Highlights 2Q Fiscal 2015

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Non-GAAP

Revenue ($M) 2Q15 2Q14 Reported Change CC Change

Diagnostics $296.7 $290.8 2.0% 4.1%

Breast Health $255.5 $238.7 7.0% 9.4%

GYN Surgical $79.1 $72.0 9.8% 11.9%

Skeletal Health $24.2 $23.5 3.3% 8.1%

Total Revenue $655.5 $625.0 4.9% 7.2%

US $495.2 $463.6 6.8% 6.8%

OUS $160.3 $161.4 (0.7%) 8.0%

• Another quarter of strong top-line growth in all four businesses–Led by 3D mammography, blood screening, US molecular diagnostics, GYN Surgical

–Continued stabilization in ThinPrep, NovaSure


Financial Highlights 1H Fiscal 2015

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Non-GAAP

In millions, except EPS 1Q15 Change vs. 1Q14 2Q15 Change vs.

2Q14

Revenues $652.8 6.6% $655.5 4.9%

Gross Margin 63.3% 10 bps 63.4% 90 bps

Oper. Expenses $198.5 1.2% $195.9 4.3%

Oper. Margin 32.9% 170 bps 33.5% 110 bps

Net Income $111.6 18.6% $118.9 15.3%

Diluted EPS $0.39 15.4% $0.41 10.9%

EBITDA $233.1 9.2% $238.6 7.3%


Non-GAAP* Non-GAAP*

In millions,except EPS 2014 2015

GuidanceReportedvs. 2014

CCvs. 2014

3Q15 Guidance

Reportedvs. 2014

CCvs. 2014

Revenues $2,511 $2,600-$2,620 3.6-4.4% 5.8-6.6% $645-$655 2.0-3.5% 4.7-6.3%

Gross Margin 63.1%

Oper. Expenses $781

Oper. Margin 32.8%

Net Income $407

Diluted EPS $1.46 $1.57-$1.59 7.5-8.9% 11.6-13.0% $0.38 -

$0.39 2.7 - 5.4% 8.1 -10.8%

* Total revenue for FY14 excludes ~ $20 million one-time contribution from restructuring of Roka license. Guidance provided by press release on 4/29/15. Presentation here is not, and should not be construed as, re-affirmation of guidance. Guidance assumes diluted shares outstanding of 289 million for the full year and an annual effective tax rate of 34.25%.

2015 Financial Guidance


Committed to Debt Reduction

•Free cash flow will be primarily used to reduce debt

•Net debt* $3.3 billion at mid-FY15– $0.6 billion in debt payments during fiscal

2014, including $0.1 billion voluntary prepayment of Term Loan B

•Continuing to reduce debt ahead of schedule– $0.3 billion voluntary prepayment of

Term Loan B in December 2014

•Will continue to reduce leverage over next several years– Target to reach 2.5x by FY17 year end

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• Net debt is total debt minus cash; Leverage ratio is net principal debt to TTM adjusted EBITDA.

• ** As of YTD March for fiscal 2015 only.

$4.5$4.0

$3.5 $3.3

0.0

1.0

2.0

3.0

4.0

5.0

FY12 FY13 FY14 1H15

Net Debt and Leverage Ratio*

5.5x

3.6x4.0x

4.6x


Goals for Fiscal Year 2015

•Continue turnaround momentum

•Achieve revenue and EPS guidance

•Continue paying down debt

•Define innovation roadmaps for each business

•Establish a clear performance-driven culture led by new senior team

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* Financial goals per guidance provided by press release on 11/5/14. Presentation here is not, and should not be construed as, re-affirmation of guidance. Guidance assumes 286 million diluted shares outstanding and tax rate of 34.75%.


• 3D tomo rollout• Panther placements,

menu expansion• International growth• Pipeline products

• Operational improvements

• G&A leverage• Debt reduction• Tax strategy

Long-Term Opportunities

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Revenue Growth Margin Expansion


For more information:Michael WattsVP, Investor Relations and Corporate Communications858-410-8588

Documents

Building a Sustainable Growth Company · Hologic believes the use of nonGAAP revenues is useful to investors as it eliminates certain effects of purchase accounting on - its recognition