Cytyc Reports Record Revenue of $188.8 Million for Second Quarter 2007.26 Percent Revenue Growth MARLBOROUGH, Mass. -- Cytyc Corporation (Nasdaq: CYTC) today announced results for the second quarter ended June 30, 2007. Revenue for the quarter ended June 30, 2007, rose 26 percent to $188.8 million compared to revenue of $150.4 million for the same period of 2006. Reported net income for the quarter was $33.5 million, or $0.27 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, which includes a net of tax charge of $4.4 million related to costs associated with the Company's proposed merger with Hologic, Inc. Excluding this charge, adjusted net income was $37.9 million, or $0.31 per diluted share. This compares with reported net income for the same period in 2006 of $31.7 million, or $0.27 per diluted share, a 20 percent increase in adjusted net income. Second Quarter 2007 Highlights: -- Domestic surgical products revenue increased 32 percent over second quarter of 2006 to $65.9 million, representing 35 percent of total Company revenue. -- International revenue increased 39 percent over second quarter of 2006 to $22.6 million. -- Driven by a 33 percent increase in ThinPrep([R])Imaging System revenue over the second quarter of 2006 and the first full quarter of FullTerm([R]) product revenue, domestic diagnostic products revenue increased 19 percent to $100.3 million, and included the shipment of 9 million ThinPrep([R]) Pap Tests Pap test, Pap smear, or Papanicolaou test (păp'ənē`kəlou), medical procedure used to detect cancer of the uterine cervix. and 37 ThinPrep Imaging Systems. -- As of June 30, the Company had repaid $145.3 million of the $200.5 million borrowed under its line of credit, reducing the outstanding balance to $55.2 million. -- In May, the five-year follow-up results for the initial clinical trial of the MammoSite([R]) Radiation Therapy System were presented at the Annual Meeting of the American Society of Breast Surgeons breast surgeon A general surgeon specialized in breast surgery . The results showed no local recurrences local recurrence Oncology The reappearance of the signs and Sx of CA at a site that was previously treated and responded to therapy. See Relapse. of breast cancer five years after treatment. Patrick J. Sullivan, Cytyc's chairman, president, and chief executive officer, stated, "Once again, Cytyc delivered impressive financial and operating results for the quarter, fueled by a 32 percent growth in our surgical products division and 39 percent growth in our international division. Domestically, our surgical products division continued its robust growth driven by market adoption of our NovaSure([R]) Endometrial Ablation Endometrial ablation is a medical procedure that is used to remove (ablate) or destroy the endometrial lining of a woman's uterus. This technique is most often employed for women who suffer from excessive or prolonged bleeding during their menstrual cycle but can not or do not wish and MammoSiteRadiation Therapy products. Our domestic diagnostic products division benefited from the first full quarter of FullTerm product sales, as well as continued market conversion to the ThinPrep Imaging System and the consistent strength of our ThinPrep Pap Test. At the end of the second quarter, nearly half of all ThinPrep slides were imaged, and Laboratory Corporation of America's imaged conversion reached more than two-thirds." Mr. Sullivan added, "During the second quarter, we announced a definitive agreement to combine Cytyc Corporation and Hologic, Inc., forming one of the largest companies in the world focused exclusively on advanced technology in women's health Women's Health Definition Women's health is the effect of gender on disease and health that encompasses a broad range of biological and psychosocial issues. . Once the transaction is closed, the combined company will offer a comprehensive line of best-in-class products providing healthcare solutions for women throughout their lifetime. We believe our shareholders will also benefit from the operational synergies of the merger, which should drive significant revenue upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside and expanded profitability. Overall, we are extremely excited about this opportunity and believe it will enhance our combined ability to improve women's health through earlier and better detection, improved diagnosis, less invasive treatment, and improved outcomes." The following table sets forth the Company's revenue by division: [TABLE OMITTED] Cytyc management will discuss second quarter 2007 results, business highlights, and future expectations during a conference call on July 31 at 8:30 a.m. (Eastern). The call will be hosted by Patrick J. Sullivan, Cytyc Corporation's chairman, president, and chief executive officer, and Timothy M. Adams, chief financial officer. A live webcast of the call may be accessed at Cytyc's website, http://ir.cytyc.com, and the event will be available for replay at this site approximately two hours following the call until August 14, 2007. Those without web access may access the call by dialing 877-407-0784 or 201-689-8560. A telephonic replay of the call will be available through August 14, 2007, by dialing 877-660-6853 or 201-612-7415; enter account # 3055 and conference ID # 247340. About Cytyc Cytyc Corporation is a diversified diagnostic and medical device company that designs, develops, manufactures, and markets innovative and clinically effective diagnostic and surgical products. Cytyc's products cover a range of cancer and women's health applications, including cervical cancer Cervical Cancer Definition Cervical cancer is a disease in which the cells of the cervix become abnormal and start to grow uncontrollably, forming tumors. screening, preterm preterm /pre·term/ (-term´) before completion of the full term; said of pregnancy or of an infant. pre·term adj. birth screening, treatment of excessive menstrual menstrual /men·stru·al/ (men´stroo-al) pertaining to the menses or to menstruation. men·stru·al or men·stru·ous adj. Of or relating to menstruation. bleeding, radiation treatment of early-stage breast cancer, and radiation treatment of patients with malignant brain tumors Brain Tumor Definition A brain tumor is an abnormal growth of tissue in the brain. Unlike other tumors, brain tumors spread by local extension and rarely metastasize (spread) outside the brain. . Cytyc is traded on The NASDAQ Global Select Market under the symbol CYTC. Cytyc, ThinPrep, NovaSure, MammoSite, and FullTerm are registered trademarks of Cytyc Corporation. Non-GAAP Information In addition to disclosing results determined in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , or GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , Cytyc also discloses adjusted, or non-GAAP, results of operations that exclude certain items. By disclosing this non-GAAP information, management intends to provide investors with additional information to further analyze Cytyc's performance and underlying trends. In order to better assess operating trends, management utilizes a measure of adjusted net income and adjusted diluted net income per common share on a non-GAAP basis that excludes charges in the second quarter of 2007 for the merger with Hologic, and charges in the first quarter of 2007 for in-process research and development related to the acquisitions of Adeza and Adiana. Management believes adjusted net income provides useful supplemental information to management and investors regarding the performance and underlying trends of Cytyc's business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets and facilitates comparisons to its historical operating results. Management uses this information internally for forecasting, budgeting, evaluating the effectiveness of Cytyc's operational strategies, and performance measurement for compensation of management and employees. Management believes it is important to provide investors with the same metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. used by management to measure operating performance, which assists investors in analyzing the underlying trends in Cytyc's business over time. Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as measures of Cytyc's profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made. See the tables in this press release for a reconciliation of non-GAAP amounts to amounts reported under GAAP. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this press release are made pursuant to the provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that statements in this press release which are not strictly historical statements constitute forward-looking statements. These statements include, without limitation: (1) Cytyc's future financial condition, operating results and economic performance, and management's expectations regarding key customer relationships, future growth opportunities, product acceptance and business strategy; and (2) the anticipated benefits of the business combination transaction with Hologic, Inc., including future financial and operating results, the expected permanent financing Permanent financing Long-term financing using either debt or equity. permanent financing The long-term financing that supports a long-term asset. for the transaction, the combined company's plans, objectives, expectations and intentions and other statements that are not historical facts, and the timing of the completion of the transaction. These statements are based on current expectations, forecasts and assumptions of Cytyc and Hologic that are subject to risks and uncertainties, which could cause actual outcomes and results to differ materially from those statements. Risks and uncertainties include, among others: the successful completion of the business combination transaction with Hologic; the successful integration of Adeza and Adiana into Cytyc's business; dependence on key personnel and customers as well as reliance on proprietary technology; uncertainty of product development efforts and timelines, management of growth, product diversification, and organizational change; entry into new market segments domestically, such as pharmaceuticals, and new markets internationally; risks associated with litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; competition and competitive pricing pressures; risks associated with the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. regulatory approval processes and healthcare reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. policies in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and abroad; introduction of technologies that are disruptive to Cytyc's business and operations; the impact of new accounting requirements and governmental rules and regulations; as well as other risks detailed in Cytyc's filings with the SEC, including those under the heading "Risk Factors" in Cytyc's 2006 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , and in Hologic's Registration Statement on Form S-4 (File No. 333-144238) filed with the SEC, as it may be amended from time to time, including those under the heading "Risk Factors" and "Appendix B--Risks Factors." Cytyc cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they were made. Cytyc disclaims any obligation to publicly update or revise any such statements to reflect any change in its expectations or events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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