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Hologic Inc. (NASDAQ: HOLX) stock is falling in premarket, Why is this happening?

Hologic, Inc. (HOLX) a company specializing in the commercialization of diagnostics products, medical imaging systems and surgical products with an emphasis on women’s health, announced the financial results for the fiscal second quarter which was completed on March 27, 2021. HOLX stock declined sharply adjacent to the news.


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At last check-in, pre-market trading, shares of Hologic Inc. (HOLX) were down -6.77% at $67.5. The stock of HOLX lost -0.62% to complete the last trading session at $72.40. The price range of the company’s shares was between $72.00 and $73.29. For the last six months, the stock has gained a total of 5.45%, and over the last three months, the stock has decreased by -0.15%.

Financial Data and Acquisitions

On April 8, Hologic confirmed an agreement for the acquisition ofMobidiag, a Finnish company that develops and provides molecular diagnostics for infectious diseases and antibiotic resistance, for an enterprise value of almost $795 million. On March 1, that company also acquiredDiagenode, a leading global provider of complete solutions for epigenetics research, for approximately $153 million.

On February 22, Hologic, Inc. completely acquired Biotheranostics, a commercial-stage company that discovers, develops, and commercializes molecular diagnostic tests for breast and metastatic cancers, for approximately $232 million. Biotheranostics’ Breast Cancer Index test was included in the National Comprehensive Cancer Network’s guidelines for prediction of benefit from extended endocrine therapy. On December 30, the Acquisition of SOMATEX also took place, a company specializing in biopsy site markers and localization technologies, for approximately $63 million.

Operational cash flow generated $552.3 million in the second quarter. The Company used its cash flow for several acquisitions as well as repurchase 1.6 million shares of its common stock worth $120 million in the second quarter. Revenue climbed by 103.4% for the quarter or 98.7% in constant currency. Apart from material acquisitions and divestitures, organic revenue in the second quarter surged 104.7% or 100.0% in constant currency.

At the end of the second quarter, the total principal debt was $2.78 billion, with the company ending the quarter with cash and equivalents of $816.4 million. Worldwide molecular diagnostics revenue of $935.3 million soared by 390.6% or 378.4% in constant currency due to the high demand of Hologic’s SARS-CoV-2 assays.

Conclusion

Savvy business decisions, such as the acquisition of several companies combined with a surge in net revenue has immensely improved the financial report of the company. However, a principal debt outstanding of $2.78B in the second quarter has lowered investor interest with HOLX stock declining at the last check.

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