As filed with the Securities and Exchange Commission on November 29, 2001
Registration No. 333-73596
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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HOLOGIC, INC.
(Exact Name Of Registrant As Specified In Its Charter)
Delaware 04-2902449
(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Or Organization) Identification Number)
35 Crosby Drive, Bedford, Massachusetts 01730-1401 (781) 999-7300
(Address, Including Zip Code, And Telephone Number, Including Area Code, Of
Registrant's Principal Executive Offices)
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John W. Cumming
President and Chief Executive Officer
Hologic, Inc.
35 Crosby Drive,
Bedford, Massachusetts 01730-1401
(781) 999-7300
(Name, Address, Including Zip Code, And Telephone Number, Including Area Code,
Of Agent For Service)
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Copies to:
Philip J. Flink, Esquire Stanton D. Wong, Esquire
Brown, Rudnick, Freed & Gesmer Pillsbury Winthrop LLP
One Financial Center 50 Fremont Street
Boston, Massachusetts 02111 San Francisco, CA 94105
(415) 983-1000
(617) 856-8200
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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EXPLANATORY NOTE
This is a Form S-3 Registration Statement for the shelf registration of
3,000,000 shares of common stock. We have also included in this Registration
Statement a Prospectus Supplement relating to an initial offering of
approximately 2,500,000 shares of our common stock plus an additional 375,000
shares to cover over-allotments, if any, which we expect will be underwritten
by Needham & Company, Inc. and Stephens Inc. We anticipate that this initial
offering will be effected promptly following the effective date of this
Registration Statement.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+The information in this preliminary prospectus supplement is not complete and +
+may be changed. These securities may not be sold until the registration +
+statement filed with the Securities and Exchange Commission is effective. +
+This preliminary prospectus supplement is not an offer to sell nor does it +
+seek an offer to buy these securities in any state or jurisdiction where the +
+offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED NOVEMBER 29, 2001
PROSPECTUS SUPPLEMENT
(to Prospectus dated December , 2001)
2,500,000 Shares
[HOLOGIC LOGO]
Common Stock
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We are offering 2,000,000 shares of our common stock. Our common stock is
traded on the Nasdaq National Market under the symbol "HOLX." On November 28,
2001, the last reported sale price for our common stock on the Nasdaq National
Market was $10.67 per share.
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Investing in our common stock involves risks. See "Risk Factors" beginning on
page S-12.
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Per Share Total
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Public Price.................................................. $ $
Underwriting Discount......................................... $ $
Proceeds, before expenses, to Hologic......................... $ $
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We have granted the underwriters the right to purchase up to an additional
375,000 shares of our common stock to cover over-allotments.
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved of these securities or determined if this
prospectus supplement is truthful or complete. It is illegal for any person to
tell you otherwise.
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Needham & Company, Inc.
Stephens Inc.
The date of this prospectus supplement is December , 2001.
Hologic: Women's Health and Imaging Systems
[HOLOGIC LOGO]
Osteoporosis Assessment
Delphi(TM) Bone Densitometer
[PICTURE OF DELPHI BONE DENSITOMETER]
[LORAD LOGO]
Breast Imaging
M-IV Series Mammography Systems
[PICTURE OF M-IV MAMMOGRAPHY SYSTEM]
[DIRECT RADIOGRAPHY LOGO]
Direct-to-Digital X-ray Technology
DirectRay(R) Digital Detector
[PICTURE OF DIRECTRAY DIGITAL DETECTOR]
[HOLOGIC LOGO]
Digital Radiography Systems
EPEX(TM) for General Radiography
[PICTURE OF EPEX GENERAL RADIOGRAPHY SYSTEM]
[FLUOROSCAN]
C-arm Imaging
Premier C-arm System for Orthopedic Procedures
[PICTURE OF PREMIER MINI C-ARM SYSTEM]
[HOLOGIC LOGO]
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Page
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Summary.................................................................... S-1
Risk Factors............................................................... S-12
Price Range of Common Stock................................................ S-22
Use of Proceeds............................................................ S-23
Capitalization............................................................. S-24
Dilution................................................................... S-25
Executive Officers......................................................... S-26
Underwriting............................................................... S-28
Legal Matters.............................................................. S-29
Experts.................................................................... S-29
Where You Can Find More Information........................................ S-29
PROSPECTUS
Prospectus Summary......................................................... 1
Risk Factors............................................................... 2
Prospectus................................................................. 11
Prospectus Supplement...................................................... 11
Dividend Policy............................................................ 11
Use of Proceeds............................................................ 12
Plan of Distribution....................................................... 13
Legal Matters.............................................................. 13
Experts.................................................................... 14
Where You Can Find More Information........................................ 14
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You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may be used only where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.
The Hologic logo is one of our service marks. QDR, ACCLAIM, Sahara, EPEX,
RADEX, StereoLoc and Lorad are our registered trademarks. Affinity, QDR 4000,
QDR 4500, QDR 4500A, QDR 4500SL, QDR 4500W, QDR 4500C, Delphi, FluoroScan,
Premier, OfficeMate, FluoroScan Imaging Systems, DirectRay, DR 1000C, Elite,
MultiCare, HTC, Automatic Internal Reference System, Instant Vertebral
Assessment, and Direct Radiography are other trademarks that we own. This
prospectus supplement may also include the trade names and trademarks of
companies other than us whose mention herein is with due recognition of and
without intent to misappropriate their marks.
i
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus supplement, the
accompanying prospectus and in the documents incorporated by reference, are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
statements involve known and unknown risks, uncertainties and other factors
which may cause our or our industry's actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. Forward-
looking statements include, but are not limited to statements regarding:
. our goal of returning to profitability;
. our goal of expanding our market positions;
. the development of new competitive technologies and products;
. regulatory approval and clearances for our products;
. production schedules for our products;
. market acceptance of new products;
. business strategies;
. dependence on significant suppliers;
. dependence on significant distributors and customers;
. the availability of debt and equity financing;
. general economic conditions;
. the impact of our cost-savings initiatives; and
. our financial condition or results of operations.
In some cases, you can identify forward-looking statements by terms such as
"may," "will," "should," "could," "would," "expects," "plans," "anticipates,"
"believes," "estimates," "projects," "predicts," "potential" and similar
expressions intended to identify forward-looking statements. These statements
are only predictions and involve known and unknown risks, uncertainties, and
other factors that may cause our actual results, levels of activity,
performance, or achievements to be materially different from any future
results, levels of activity, performance, or achievements expressed or implied
by such forward-looking statements. Given these uncertainties, you should not
place undue reliance on these forward-looking statements. We discuss many of
these risks in greater detail under the heading "Risk Factors." Also, these
forward-looking statements represent our estimates and assumptions only as of
the date of this prospectus supplement.
You should read this prospectus supplement, the accompanying prospectus and
the documents that we incorporate by reference completely and with the
understanding that our actual future results may be materially different from
what we expect. We may not update these forward-looking statements, even though
our situation may change in the future. We qualify all of our forward-looking
statements by these cautionary statements.
ii
SUMMARY
This summary provides an overview of selected information and may not
contain all of the information that is important to you. You should read the
entire prospectus supplement and the accompanying prospectus carefully,
including the financial data, related notes and the information we have
incorporated by reference before making an investment decision. Unless
otherwise indicated, all information in this prospectus supplement assumes that
the underwriters do not exercise their over-allotment option.
Unless otherwise indicated or unless the context otherwise requires, all
references in this prospectus supplement to "we," "us," or similar references
mean Hologic, Inc. and its subsidiaries.
Hologic Overview
We are a leading developer, manufacturer and supplier of diagnostic and
medical imaging systems primarily serving the healthcare needs of women. We
focus our resources on developing systems and subsystems offering superior
image quality and diagnostic accuracy, which has enabled us to capture
significant market shares and customer loyalty, despite the presence of large
competitors. Our core women's healthcare business units are focused on bone
densitometry, mammography and breast biopsy and on developing a direct-to-
digital X-ray mammography system. Our bone densitometry product line and our
Lorad line of mammography systems are premier brands in their markets. In
addition, we develop, manufacture and supply other X-ray based imaging systems,
such as general purpose direct-to-digital X-ray equipment and mini c-arm
imaging products. Our customers are hospitals, imaging clinics and private
practices and include many of the leading healthcare organizations in the
world. Our customers are also major pharmaceutical companies who use our
products in conducting clinical trials.
We were founded on and remain committed to the principle of applying
superior technology to medical imaging challenges. We achieved our first market
and technology position shortly after the first commercial shipment of our
initial product targeting bone densitometry in 1987. Our patented technology
remains a leading bone densitometry assessment tool, offering superior, cost-
effective accuracy and reliability. Starting in 1996, we embarked on an
acquisition program intended to expand and diversify our business. In 1996 we
acquired FluoroScan Imaging Systems, a market leader for low intensity, real-
time mini c-arm X-ray imaging devices that address the trend towards minimally
invasive surgery. We have long identified mammography as an attractive growth
opportunity where superior imaging technology could significantly improve
diagnosis. With this goal in mind, in June 1999, we acquired Direct Radiography
Corporation, or DRC, from Sterling Diagnostics and have continued to invest in
the development of their direct-to-digital X-ray technology, DirectRay,
targeting mammography as well as general radiography applications. While we
originally intended to internally develop mammography systems based on
DirectRay, in September 2000 we significantly expedited our entry into the
mammography market by acquiring the U.S. assets of Trex Medical Corporation,
which included the Lorad product line of mammography and minimally invasive
breast biopsy systems used to detect breast cancer. We estimate that we have
sold over 9,500 mammography systems worldwide, and our products are known
within the industry for superior image quality and technological innovation. We
plan on integrating our DirectRay technology into the Lorad mammography product
line, selling both digital upgrades to our existing installed base and new
digital systems to potential customers.
As a result of these acquisitions and our commitment to develop digital
radiography, particularly for mammography systems, we generated losses in
fiscal 1999, 2000 and 2001. Following the death in June 2001 of S. David
Ellenbogen, our co-founder, Chairman and Chief Executive Officer, John W.
Cumming was named our Chief Executive Officer and President. In August 2001, we
implemented an extensive restructuring plan focused on returning to
profitability and strengthening our competitive position in the women's health
and emerging digital imaging markets. This restructuring plan included a
company-wide cost savings initiative, which we estimate will result in annual
cost savings in excess of $10 million. Cost savings initiatives which
S-1
have been effected include a reduction of our workforce, reduction of operating
expenses in each of our four business units and the phase-out of non-core and
unprofitable units. The second element of our restructuring plan focuses on
long-term revenue growth through new marketing programs, expanded distribution
channels, and development of strategic business relationships. Consistent with
the plan, we announced in November 2001 that we have entered into a non-
exclusive distribution agreement with Siemens Medical Solutions, a unit of
Siemens AG, for the sale of our X-ray bone densitometers throughout the United
States. We also announced the closure of our conventional X-ray equipment
manufacturing facility located in Littleton, Massachusetts, acquired through
our acquisition of Trex Medical. This business incurred significant losses
during fiscal 2001. We intend to relocate some of the Littleton product lines
and sales and service support personnel to our corporate headquarters in
Bedford, Massachusetts. Including the reduction in workforce being implemented
in connection with the closure of our Littleton facility, since the beginning
of fiscal 2001, we will have reduced our workforce by approximately 25%.
We are focused on returning to profitability, expanding our market position
in bone densitometry and mammography, and leading the field of digital
mammography. We are evaluating new marketing programs designed to expand market
share in our core markets, assessing new distribution channels for our product
portfolio and pursuing business relationships that would allow us to further
leverage our state-of-the-art technology base.
Our Markets and Products
Our core women's healthcare business units are focused on bone densitometry,
mammography and breast biopsy and developing a direct-to-digital X-ray
mammography system. In addition, we develop, manufacture and supply general
purpose direct-to-digital X-ray equipment, and other X-ray based imaging
systems, such as c-arm imaging products.
Bone Densitometry
Bone densitometry is the precise measurement of bone density to assist in
the diagnosis and monitoring of osteoporosis and other metabolic bone diseases
that can lead to debilitating bone fractures, often of the spine and hip. The
National Osteoporosis Foundation estimates that osteoporosis is a major public
health threat for approximately 28 million Americans and 250 million people
worldwide, the majority of whom are women. Each year osteoporosis contributes
to more than 1.5 million new hip, spine and other fractures. In August 2000,
the National Institutes of Health estimated that the burden of healthcare costs
for osteoporotic and associated fractures were between $10 billion and $15
billion per year. A significant boost for our bone assessment business was the
1995 introduction of drug therapies to treat and prevent osteoporosis. We
believe that the introduction of new drug therapies, the aging of the
population, and an increased focus on women's health issues and preventive
medical practices has created a growing awareness among patients and physicians
that osteoporosis is treatable. As a result, more women than ever are seeking
bone assessment for osteoporosis. We believe that the demand for our bone
densitometry systems will continue to be driven by an increase in the number of
available therapies to treat osteoporosis, the increase in the at-risk
population, and broader reimbursement coverage for bone density testing. In
fiscal 2001, we shipped more than 750 dual X-ray bone densitometry systems
worldwide which we believe represents at least 50% of the worldwide market for
these systems.
We introduced our first product serving the bone densitometry market in
1986, began commercial shipments in 1987, and quickly gained recognition for
our superior technology. Our patented dual-energy X-ray technology remains a
leading bone densitometry assessment tool, offering superior, cost-effective
accuracy and reliability. In 1999, we introduced our next-generation
densitometer, Delphi QDR, which incorporates our patented fan beam imaging
technology and Instant Vertebral Assessment, or IVA, technology. These dual
technologies enable physicians to simultaneously measure bone density and
visually assess vertebral status in a clinical setting. The ability to conduct
these two diagnostic procedures with one system enables doctors to cost-
S-2
effectively improve fracture risk assessment and to capture greater
reimbursement fees. In May 2001, we received the 2001 Frost & Sullivan
Technology Innovation Award in the osteoporosis diagnostics market, given for
technical superiority within the industry.
We began commercial shipments of our base models of the Delphi series in
March 2000 and introduced more advanced systems, which perform lateral, side-
to-side scans of the lower spine without patient repositioning, in November
2000. In our quarter ended September 29, 2001, our high-end Delphi systems
represented approximately 70% of our revenue from shipments of X-ray bone
densitometry systems, and our bone densitometry revenues in the quarter were
the highest for any quarter in the last two fiscal years. Over 500 Delphi
systems have been installed to date. In addition to sales of new Delphi
systems, we also offer upgrade opportunities to purchasers of many of our
earlier generation systems in order to incorporate the technology advantages of
Delphi. Worldwide, approximately 3,900 of our previously installed densitometry
systems can be upgraded with Delphi capabilities. Through September 29, 2001,
over 170 previously installed systems have been upgraded.
In November 2001, we announced a non-exclusive distribution agreement with
Siemens Medical Solutions, a unit of Siemens AG, for the sale of our X-ray bone
densitometers throughout the United States. Siemens is a global leader in
medical imaging technologies and we view this partnership as a first step in
forging a long-term relationship with Siemens. With the Siemens relationship,
we hope to increase sales of our bone densitometry line to the Siemens customer
base and increase our presence in the hospital market.
Mammography and Breast Biopsy
According to the American Cancer Society, breast cancer is the second most
common cancer among women, and an estimated 192,000 new invasive cases of
breast cancer are expected to occur among women in the United States during
2001. Breast cancer ranks as the second leading cause of cancer-related deaths
among women, causing an estimated 40,000 deaths in 2001. A leading industry
analyst estimates that the mammography imaging equipment market was
approximately $293 million in 1999 and expects that it may grow to $567 million
by 2007. When we acquired the U.S. assets of Trex Medical in September 2000, we
immediately gained a significant market share in the mammography and breast
biopsy systems market and a leading market share in the high-end segment of the
mammography systems market in which we primarily compete. In fiscal 2001 we
shipped 585 mammography systems worldwide.
Our Lorad division offers a broad product line of breast imaging products,
including a range of mammography systems and breast biopsy systems. Currently
our highest-end Lorad system, the M-IV, is considered a technology leader in
the mammography marketplace. The M-IV incorporates our High Transmission
Cellular Imaging System, recognized by Frost & Sullivan in connection with
Lorad's receipt of the 2001 Frost & Sullivan Technology Innovation Award, as
one of the most effective contrast improvements in 20 years of breast imaging.
The patented HTC technology reduces X-ray scatter in two dimensions, delivering
superior contrast and resolution without an increase in radiation dose. In
addition, we recently received marketing clearance from the FDA for our Lorad
Affinity mammography system, which is a high-performance screen-film
mammography system specifically developed to fill a market need for a cost-
effective product, with performance characteristics similar to high-end
systems. We expect to begin full commercial production of these systems in the
first quarter of 2002.
Digital Radiography
We have made a strategic commitment to digital radiography. We believe that
the advantages of digital radiography over conventional film technology create
a market with significant growth potential in general and in our core
mammography systems market in particular. Digital image capture offers speed,
eliminates film storage issues and provides for almost instantaneous image
preview, modification and re-take when required. Diagnostic images captured in
an outpatient setting can be delivered electronically for interpretation
throughout
S-3
a provider's computer network and can enable hospitals to share patient data
and allow radiologists to confer more easily regarding diagnoses. In spite of
their high acquisition cost, we believe that digital radiography systems are
cost effective in the long-term when considering increased throughput, savings
in film-related expenses, image storage and transfer costs as well as the
benefits of enhanced diagnostic convenience.
We believe that a significant factor in the market's acceptance of digital
technology is the current transition within the healthcare industry from
conventional X-ray film archiving to Picture, Archive and Communication
Systems, known as PACS, to store X-ray images electronically. We believe that
only a limited number of hospitals have adopted the PACS environment to date.
We expect this adoption rate to accelerate over the next several years as
hospitals realize the value and cost savings of a filmless infrastructure.
Industry analysts estimate that the worldwide replacement market for installed
X-ray units is approximately 11,000 systems per year, and, while not all
facilities in which X-ray units are installed will migrate to digital
technology, we believe many large facilities will, particularly those in the
U.S. where PACS is an important initiative.
According to an industry analyst, in 2000 there were approximately 300,000
general radiographic X-ray units installed worldwide. Although the market for
general radiography products is mature, we expect the market for digital X-ray
systems to grow substantially over the next several years. By 2005, a leading
industry analyst projects that the market for digital radiography products will
reach $1.0 billion annually.
Digital radiography can be implemented with a number of technologies,
involving the direct or indirect conversion of X-ray energy captured by a
detector into electronic signals. The different digital technologies are
principally differentiated by their image resolution, X-ray dosage requirement,
cost and field of view. First-generation digital radiography systems use
indirect-conversion detectors where the X-ray energy is first converted into
light, through the use of a fluorescent screen or other device, and then into
electronic signals. Second-generation systems utilize a direct conversion
method wherein the X-rays are absorbed and the electric signals are created in
one step. We believe that amorphous selenium is currently the only commercially
available direct conversion technology.
Selenium is particularly well-suited for high-quality digital imaging
because it has high X-ray absorption efficiency, very high intrinsic resolution
and low noise. We believe that amorphous selenium technology results in the
highest quality digital image across a wide range of general radiographic
applications and is particularly valuable for mammography which has high
resolution requirements.
We have developed two digital technologies. Our first-generation digital
technology, developed by Lorad, is an indirect conversion technology involving
charged coupled devices, or CCDs, to detect the light emitted by a fluorescent
screen. Our second-generation digital technology is DirectRay, developed by
DRC, which is a selenium-based direct-conversion technology. While we have no
exclusivity on the use of amorphous selenium in detector plates, we hold
31 patents related to our DirectRay technology, and we believe that our
amorphous selenium development efforts are the most advanced in the industry.
As the only commercially available, FDA-cleared, direct-conversion selenium
detector, we believe that our DirectRay technology has the potential to gain
industry acceptance as a standard for direct-to-digital conversion technology.
We currently offer the DirectRay digital technology in several forms for
general radiographic applications, including as fully integrated radiographic
systems, such as our EPEX and RADEX systems and our Digital Chest imaging
systems, as an image capture upgrade to existing X-ray equipment, and as a
digital component for OEMs to incorporate into their own equipment. As of the
close of our fourth quarter of 2001, we had a record backlog of 26 systems, or
greater than $8 million, due to increasing orders for our EPEX, RADEX and
Digital Chest imaging systems. We supply our amorphous selenium flat panels to
Agfa Corporation for non-destructive imaging applications as well as to
Analogic Corporation which incorporates our panels into systems which it
supplies to Eastman Kodak.
S-4
Digital Mammography
We expect digital technology to bring particularly important benefits to
mammography. In addition to speed and convenience, digital technology and high-
resolution detector plates have the potential for greater image accuracy than
conventional films, a critical factor in mammography. While digital mammography
systems are presently several times more expensive than conventional systems,
we believe they can provide long-term savings as they eliminate the recurring
film costs and reduce the cost of image manipulation.
We have pursued digital mammography with both our CCD-based and our
DirectRay technologies. In October 2001, we received an approvable letter from
the FDA for our Lorad Full Field Digital Mammography system. The Lorad Full
Field Digital Mammography system utilizes our first-generation CCD-based
technology. Final marketing clearance for the Lorad Full Field Digital
Mammography System is subject to labeling discussions, the agreement on
criteria on the use of the product and successful completion of a Good
Manufacturing Practices audit by the FDA of our manufacturing facility in
Bedford, Massachusetts. We are also in the advanced stages of development of a
second-generation digital mammography system that incorporates our proprietary
amorphous selenium DirectRay direct-to-digital technology. This system will
require regulatory review by the FDA. We are currently collecting clinical data
for this system as part of a premarket approval application which we expect to
submit to the FDA in the first half of 2002. To our knowledge, no other company
has filed a premarket approval application for a direct-to-digital mammography
system. We believe our DirectRay technology to be superior to currently
available technologies and expect that the experience gained through our CCD
development will enhance our ability to transition to the selenium technology
and to gain FDA approval for use of DirectRay in mammography.
We expect that our DirectRay direct-to-digital mammography product line
under development, if and when approved by the FDA, will position us to expand
our share of the mammography market. With the improved imaging of our direct-
to-digital amorphous selenium technology, we believe our Lorad mammography
systems will offer women one of the most advanced tools available for early
detection of breast cancer.
GE Medical Systems and Fischer Imaging Corporation received FDA approval to
commercialize their own indirect conversion digital mammography systems in
January 2000 and September 2001, respectively. In the short time since these
systems became available, we believe that approximately 250 full field digital
mammography systems have been installed worldwide. We believe that growth of
the digital mammography market will accelerate as product offerings improve
image quality over existing systems. We believe that, when and if approved, our
DirectRay product line could be the first direct-to-digital FDA approved
mammography system. We believe that it will provide excellent image quality,
offering women one of the most advanced tools available for early detection of
breast cancer, and therefore will receive market acceptance. We intend to offer
DirectRay to our existing customer base through upgrades or replacement
systems. We estimate that we have sold over 9,500 mammography systems
worldwide. We will also seek to expand our market beyond our historic customer
base with expansion of our sales force or co-distribution arrangements.
We recently entered into a letter of intent with Siemens AG to enter into a
strategic alliance focused on the development of direct-to-digital mammography
systems. Through this alliance we intend to combine our proprietary amorphous
selenium direct-to-digital technology with Siemens' proprietary software for a
dedicated physician's workstation to bring to market direct-to-digital
mammography systems. The launch of this strategic alliance is subject to
several conditions, including the negotiation and execution of definitive
agreements which we expect will occur over the next several months. We cannot
assure that any definitive agreement with Siemens will be reached.
Mini C-arm Technology
Another of our wholly-owned subsidiaries, FluoroScan Imaging Systems, is a
market leader for low intensity, real time mini c-arm X-ray imaging devices
that address the trend towards minimally invasive
S-5
surgery. These systems provide surgeons with high-resolution images at
radiation levels and at a cost well below those of conventional X-ray and
fluoroscopic equipment.
Our Strategy
We are committed to returning to profitability and creating shareholder
value. Following implementation of our announced restructuring plan, we believe
we have made significant progress in streamlining our operations. We expect
this restructuring to result in annual savings in excess of $10 million. We
believe that the breadth of our product line, recent new product introductions
as well as planned new product introductions position us to once again achieve
sustainable growth and profitability by providing superior diagnostic and
imaging systems.
Key elements of our strategy include:
Maintaining and expanding our technology leadership. Historically, we have
been recognized for our technology leadership in bone densitometry
assessment. We have furthered this leadership with the introduction of our
Delphi product line which enables doctors to improve fracture risk
assessment. In the mammography area, our Lorad M-IV is already recognized
as a technology leader because of its High Transmission Cellular Imaging
System, which reduces X-ray scatter, delivering superior contrast and
resolution without an increase in X-ray dose. We are in the advanced stages
of development of our DirectRay direct-to-digital mammography system. We
expect this system to have superior capabilities when compared to current
generation mammography systems.
Accelerating sales and market acceptance of our DirectRay, direct-to-
digital technology. We have several strategies that address our plan to
leverage our direct-to-digital X-ray technology. In addition to our focus
on developing DirectRay technology for use in our Lorad product line, we
plan to accelerate market acceptance of our direct-to-digital technology by
selling our own general radiography systems, the EPEX, RADEX and chest
imaging systems, as well as offering our selenium plates as upgrades to X-
ray systems developed by other OEMs.
Continuing to seek partnerships, alliances and joint ventures. We intend to
pursue alliances, joint ventures and other business relationships that
would allow us to expand our distribution channels either for our core
products outside of our established distribution network or for our less
established products beyond our core markets. In addition, in connection
with our DirectRay technology we intend to explore alliances, joint
ventures and other business relationships that would enable us to raise
capital or share ongoing research and development costs, thereby leveraging
our technology base.
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We were incorporated in Massachusetts in October 1985 and reincorporated in
Delaware in March 1990. Our principal executive offices are located at 35
Crosby Drive, Bedford, Massachusetts 01730-1401. Our telephone number is (781)
999-7300.
Recent Events
Results for Quarter and Year ended September 29, 2001
For the fourth quarter ended September 29, 2001, we reported a net loss of
$4,928,000, or $0.32 per diluted share, compared with a net loss of
$10,922,000, or $0.71 per diluted share, for the corresponding quarter ended
September 30, 2000. Fourth quarter fiscal 2001 revenues totaled $45,262,000
compared to revenues of $27,117,000 for the corresponding three months in
fiscal 2000. Included in the fourth quarter was revenue of $20,624,000 from the
mammography and general radiography system businesses acquired in September
2000.
Included in the fiscal 2001 three and twelve month operating results were
certain nonrecurring and restructuring items incurred in the fourth quarter.
These items include:
. a restructuring charge of approximately $808,000 for severance related
expenses resulting from a 10% reduction in our work force in August 2001;
and
S-6
. a reassessment of reserves and final purchase accounting charge of
approximately $361,000 relating to the acquisition of the U.S. assets of
Trex Medical in September 2000.
Fourth quarter results included a $4,359,000 net loss in our digital
radiography business. A contributing factor to this loss is our continued
investment in the research and development of direct radiography systems and
plates, including our ongoing efforts to develop a direct radiography full
field mammography plate.
For the year ended September 29, 2001, we recognized a net loss of
$20,851,000, or $1.35 per diluted share, compared with a net loss of
$18,619,000, or $1.22 per diluted share, for fiscal 2000. Revenues totaled
$178,491,000 for the year ended September 29, 2001, compared to revenues of
$93,746,000 for fiscal 2000. Included in fiscal 2001 is revenue of $86,470,000
from our mammography and general radiography system businesses acquired in
September 2000.
Fiscal 2001 operating results included the following nonrecurring and
restructuring items incurred in the third quarter, in addition to those items
incurred in the fourth quarter:
. a $2.9 million reduction in expenses related to the settlement of the
final purchase price and reassessment of reserves from the acquisition of
Trex Medical;
. the recognition of $2.1 million of other revenue, which was previously
deferred, and a $500,000 reduction of cost of product sales due to excess
warranty reserve. These adjustments are the result of our settlement of
the litigation with Fleet Business Credit Corp. concerning rights and
obligations under a Master Product Financing Agreement entered into in
September 1996; and
. charges of approximately $710,000, comprised of a $510,000 nonrecurring
charge related to the relocation of our FluoroScan subsidiary to our
headquarters in April 2001, and a restructuring charge of $200,000
related to a reduction in Lorad's workforce in June 2001.
Closing of Littleton Division
On November 13, 2001 we announced that we are closing our conventional X-ray
equipment manufacturing facility in Littleton, Massachusetts and that we will
relocate some of the Littleton product lines and sales and service support
personnel to our corporate headquarters in Bedford, Massachusetts. This action
completes our previously announced plan to integrate some of our product lines
and phase-out non-core and unprofitable ones, such as the conventional
radiographic systems. As a result of this consolidation, we expect to eliminate
approximately 80 employment positions and take a restructuring charge,
primarily related to severance costs, of approximately $1 million, in the first
quarter of fiscal 2002. Our Littleton operations incurred significant losses
during fiscal 2001.
Foothill Working Capital Line of Credit
In September 2001, we entered into an agreement for a $25 million credit
facility with Foothill Capital Corporation, a wholly-owned subsidiary of Wells
Fargo & Company. We intend to draw upon this facility to fund some of our
research and development projects, particularly relating to our direct-to-
digital technology, as well as general corporate purposes. As of September 29,
2001, we had borrowed approximately $2.5 million under this facility.
Strengthened Sales and Distribution Channels
During or after the fourth quarter of 2001, we entered into a number of
agreements which have strengthened the sales and distribution channels for our
core product lines, as follows:
. We entered into a non-exclusive distribution agreement with Siemens
Medical Solutions, a unit of Siemens AG, for the sale of our X-ray bone
densitometers throughout the United States. Siemens is a
S-7
global leader in medical imaging technologies. With the Siemens
relationship, we hope to increase sales of our bone densitometry line to
the Siemens customer base and increase our presence in the hospital
market.
. We entered into strategic alliances, which include exclusive distribution
rights, with Stephanix, one of the leading French manufacturers of
medical X-ray equipment, and Radiologia, S.A., the oldest X-ray equipment
manufacturer in Spain, for sales of our product lines in France, Spain
and Portugal.
. We entered into an agreement with Ethicon Endo-Surgery for non-exclusive
distribution rights in the United States to Ethicon's minimally invasive
breast biopsy device, the Mammotome ST, for purchase with Lorad's
MultiCare and StereoLoc II stereotactic breast biopsy systems.
. We expanded our relationship with group purchasing organizations. We
entered into an exclusive two-year contract, with options to renew for an
additional two years, with Broadlane, Inc., a leader in providing supply
chain management services to the healthcare industry, for the sale of
Lorad mammography systems. Broadlane customers include leading healthcare
providers such as Kaiser Permanente, Tenet Healthcare Corporation and
Universal Health Services. We have also extended our existing agreement
with HealthTrust Purchasing Group for the sale of Lorad mammography
systems.
Proposed Digital Mammography Alliance
In November 2001, we entered into a letter of intent with Siemens to enter
into a strategic alliance focused on the development of direct-to-digital
mammography systems. Through this alliance we intend to combine our proprietary
amorphous selenium direct-to-digital technology with Siemens' proprietary
software for a dedicated physician's workstation to bring to market direct-to-
digital mammography systems. The launch of this strategic alliance is subject
to several conditions, including the negotiation and execution of definitive
agreements which we expect will occur over the next several months. We cannot
assure that any definitive agreement with Siemens will be reached.
S-8
The Offering
Common stock offered by Hologic..... 2,500,000 shares
Common stock to be outstanding
after the offering.................. 18,327,936 shares
Use of proceeds..................... For continued development of our
DirectRay direct-to-digital mammography
system, to fund research and development
of our other products under development,
and for general corporate purposes and
working capital. See "Use of Proceeds."
Nasdaq National Market symbol....... HOLX
The number of shares of our common stock to be outstanding immediately after
this offering is based on the number of shares outstanding as of November 27,
2001. It does not include:
. 3,375,959 shares of common stock issuable upon exercise of stock options
outstanding, as of September 29, 2001, at a weighted average exercise
price of $7.65 per share;
. 229,124 shares of common stock reserved for issuance pursuant to our
employee stock purchase plan, as of September 29, 2001; and
. 1,388,612 shares of common stock reserved for issuance pursuant to stock
options not yet granted under all of our stock option plans, as of
September 29, 2001.
S-9
Summary Consolidated Financial Data
The following selected financial information should be read together with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our financial statements and the related notes to those
statements incorporated by reference into this prospectus supplement. The
statement of operations data for each of the three years in the period ended
September 30, 2000 are derived from our audited financial statements
incorporated by reference into this prospectus supplement. The statement of
operations data for the years ended September 28, 1996 and September 27, 1997
are derived from our audited financial statements not included in this
prospectus supplement. The statement of operations data for the nine months
ended July 1, 2000 and June 30, 2001 and the balance sheet data as of June 30,
2001 have been derived from our unaudited financial statements, which are
incorporated by reference into this prospectus supplement. In our opinion,
these unaudited financial statements include all adjustments consisting of only
normal recurring adjustments that are necessary for a fair presentation of our
financial position and results of operations for those periods. Operating
results for the nine month period ended June 30, 2001 are not necessarily
indicative of the results to be expected for the fiscal year ending September
29, 2001.
Fiscal Year Ended Nine Months Ended
--------------------------------------------------------------------- ------------------
September 28, September 27, September 26, September 25, September 30, July 1, June 30,
1996 1997 1998 1999 2000 2000 2001
------------- ------------- ------------- ------------- ------------- -------- --------
(in thousands, except per share data)
Consolidated Statement of Operations
Data
Revenues:
Product sales.......... $88,201 $102,781 $111,498 $81,737 $ 90,864 $ 63,903 $130,716
Other revenue.......... 3,390 3,908 4,066 2,403 2,882 2,726 2,514
------- -------- -------- ------- -------- -------- --------
91,591 106,689 115,564 84,140 93,746 66,629 133,230
Costs and expenses:
Cost of product sales.. 41,253 47,492 55,891 50,333 63,604 40,531 86,842
Research and
development........... 7,283 8,527 9,778 12,664 22,178 12,626 17,986
Selling and marketing.. 16,504 19,448 28,589 19,658 23,882 17,232 26,904
General and
administrative........ 9,879 8,827 10,452 10,963 16,441 10,922 15,341
Nonrecurring and
restructuring charges. -- -- -- -- -- -- 710
Acquisition expenses... 1,949 -- -- -- -- -- --
------- -------- -------- ------- -------- -------- --------
(Loss) income from
operations............ 14,723 22,395 10,854 (9,478) (32,359) (14,682) (14,553)
------- -------- -------- ------- -------- -------- --------
Other income (expense):
Interest (expense)
income, net........... 2,583 5,346 5,998 4,204 3,567 2,767 854
Other income (expense),
net................... (249) (172) (664) (548) (227) (82) (2,073)
------- -------- -------- ------- -------- -------- --------
(Loss) income before
provision (benefit)
for income taxes...... 17,057 27,569 16,188 (5,822) (29,019) (11,997) (15,772)
Provision (benefit) for
income taxes........... 5,700 9,840 5,800 (2,075) (10,400) (4,300) 151
------- -------- -------- ------- -------- -------- --------
Net (loss) income...... $11,357 $ 17,729 $ 10,388 $(3,747) $(18,619) $ (7,697) $(15,923)
======= ======== ======== ======= ======== ======== ========
Net (loss) income per
share:
Basic.................. $ 0.97 $ 1.37 $ 0.78 $ (0.27) $ (1.22) $ (0.50) $ (1.03)
======= ======== ======== ======= ======== ======== ========
Diluted................ $ 0.91 $ 1.30 $ 0.75 $ (0.27) $ (1.22) $ (0.50) $ (1.03)
======= ======== ======== ======= ======== ======== ========
Weighted average number
of shares outstanding:
Basic.................. 11,698 12,986 13,259 13,950 15,320 15,302 15,443
======= ======== ======== ======= ======== ======== ========
Diluted................ 12,524 13,672 13,766 13,950 15,320 15,302 15,443
======= ======== ======== ======= ======== ======== ========
S-10
The unaudited consolidated balance sheet data, under the as adjusted column
at June 30, 2001 set forth in the table below, reflects the sale by us of
2,500,000 shares of our common stock in this offering at an assumed offering
price of $10.67 per share, after deducting the estimated underwriters' discount
and estimated offering expenses payable by us, as if it occurred as of June 30,
2001.
As of June 30, 2001
--------------------
Actual As Adjusted
-------- -----------
Consolidated Balance Sheet Data
Cash and cash equivalents.................................. $ 11,908 $ 36,683
Working capital............................................ 48,114 72,889
Total assets............................................... 192,475 217,250
Line of credit............................................. 1,592 1,592
Note payable............................................... 26,550 26,550
Total stockholders' equity................................. 116,026 140,801
S-11
RISK FACTORS
The common stock that is offered with this prospectus supplement involves a
high degree of risk. You should carefully consider the following risk factors
in addition to other information in this prospectus supplement and the
accompanying prospectus before deciding to purchase the common stock. If any of
the following risks actually occurs, our business, financial condition or
results of operations could be materially and adversely affected. In this case,
the trading price of our common stock could decline, and you could lose all or
part of your investment.
This prospectus supplement also contains forward-looking statements that
involve risks and uncertainties. Our actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including the risks faced by us described below and elsewhere
in this prospectus supplement.
Risks Related to Our Business and Markets
We are incurring significant losses and cannot assure that we will become
profitable.
We incurred net losses of $18.6 million in fiscal 2000 and $20.9 million in
fiscal 2001. In fiscal 2000, these losses were primarily attributable to the
operations of Direct Radiography Corp. and charges incurred in connection with
our acquisition of substantially all of the U.S. assets of Trex Medical in
September 2000. Similarly, in fiscal 2001, these losses were primarily
attributable to the operations of Direct Radiography Corp. and general
radiography operations of the acquired Trex Medical businesses. Direct
Radiography Corp. has had only limited sales of its products. We intend to
incur significant expenses in connection with the further development and
commercialization of our direct radiography plates and systems. We cannot
assure that we will become profitable or that we can maintain profitability if
we attain it.
Our failure to reduce our losses or obtain additional funding could result in
the delay or limitation of our research and development activities or otherwise
harm our business and prospects.
We are working on the research and development of several long-term
projects, with an emphasis on direct radiography plates and systems. We believe
that we will require significant additional funds in order to complete the
development, conduct clinical trials and achieve regulatory approvals of our
direct radiography and other products under development over the next several
years. Moreover, we may require additional funds for the working capital to
commence the manufacture and marketing of these new products in commercial
quantities, if and when approved or cleared by the regulatory authorities. If
our capital requirements vary materially from those currently planned, we may
require additional financing sooner than anticipated. As a result, we
anticipate that we will be required to reduce our losses or obtain additional
funding to support these efforts. We may need to raise capital in addition to
what we are seeking in this offering through additional equity or debt
financings, asset sales, collaborative arrangements or from other sources. This
additional financing may not be available to us on a timely basis, if at all,
or, may not be available on terms acceptable to us. If we fail to obtain
acceptable additional financing, we may be required to reduce our planned
expenditures, including our ongoing research and development expenditures. Such
a reduction could result in the delay or limitation of our ongoing research and
development projects and otherwise harm our business and prospects. Moreover,
additional equity financing may cause dilution to existing stockholders.
If we are unable to satisfy our financial covenants under our loan agreement
our loan availability may be limited or we may have to obtain alternative
sources of financing.
Our loan agreement with Foothill Capital contains financial and other
covenants. As a result of recent events, including the restructuring charges we
incurred in the fourth quarter of fiscal 2001, we are not in compliance with
some of these covenants. We are working with our lender to modify our loan
covenants. If we are not able to obtain a modification or waiver of these
covenants or if we otherwise do not comply with our covenants, our availability
under our loan agreement could be reduced or our lender could declare a
default. In the event of a loan default or a substantial reduction of loan
availability, we would be required to obtain alternative financing, which could
be more expensive than our current arrangement, be dilutive to existing
stockholders and divert management's time and attention. Moreover, we cannot
assure that we would be able to
S-12
obtain alternative financing on favorable terms and on a timely basis, if at
all. At September 29, 2001 we had borrowed approximately $2.5 million under our
loan agreement. Our failure to meet any of our covenants under our loan
agreement could significantly harm our liquidity and financial position.
The markets for our direct radiography products are unproven.
In 1998, our subsidiary, Direct Radiography Corp., was the first company to
introduce direct-to-digital X-ray imaging products in the United States. Since
that introduction, Direct Radiography Corp. has had only limited sales of its
products. Moreover, the markets for these products are relatively new and
remain unproven. There is a significant installed base of conventional X-ray
imaging products in hospitals and radiological practices. The use of our
direct-to-digital X-ray imaging products in many cases would require these
potential customers to either modify or replace their existing X-ray imaging
equipment. Moreover, we believe that a major factor in the market's acceptance
of direct-to-digital X-ray technology is the trend toward transition by the
healthcare industry from conventional film archiving systems to hospital
Picture, Archive and Communication Systems, known as PACS, to store X-ray
images electronically. Because the benefits of our direct-to-digital technology
may not be fully realized by customers until they install a PACS platform, a
large potential market for these products may not develop until PACS
environments are more widely used. Because of the early stage of the markets
for these products, it is likely that our evaluation of the potential markets
for these products will materially vary with time. We cannot assure that any
significant market will develop for our direct radiography products.
If we fail to achieve and maintain the high manufacturing standards that our
direct radiography products require, we will not be successful in developing
and marketing those products.
The manufacture of our direct radiography detectors is highly complex and
requires precise high quality manufacturing that is difficult to achieve. We
have experienced difficulties manufacturing these detectors.
We obtain transistor plates for our direct radiography detectors from a sole
contract manufacturer. Following our recent development of an improved design
for our transistor plates, we experienced unacceptably high levels of defects
for the newly designed plates. While the manufacturer has resolved the problem,
and is now producing the plates to our satisfaction, we could again encounter
production problems with future shipments. Moreover, further changes in design
for our direct radiography detectors, including for our mammography detectors
under development, could result in other unanticipated production problems. Our
initial difficulties have led to a delay in our ability to ship our new direct
radiography systems and adversely affected our anticipated revenues and results
of operations from sales of those systems. Our failure, including the failure
of our contract manufacturers, to achieve and maintain the required high
manufacturing standards could result in further delays or failures in product
testing or delivery, cost overruns, product recalls or withdrawals, or other
problems that could harm our business and prospects.
Our success depends on new product development.
We have a continuing research and development program designed to develop
new products and to enhance and improve our products. We are expending
significant resources on the development of digital X-ray imaging products,
including a digital mammography product. The successful development of our
products and product enhancements are subject to numerous risks, both known and
unknown, including:
. unanticipated delays;
. access to capital;
. budget overruns;
. technical problems; and
. other difficulties that could result in the abandonment or substantial
change in the design, development and commercialization of these new
products, including, for example, changes requested by the FDA in
connection with pre-market approval applications for our products or
510(k) notification.
S-13
Given the uncertainties inherent with product development and introduction,
we cannot assure that any of our product development efforts will be successful
on a timely basis or within budget, if at all. Our failure to develop new
products and product enhancements on a timely basis or within budget could harm
our business and prospects.
We are undergoing a management transition, which if not successfully
implemented could harm our business and prospects.
On June 21, 2001, S. David Ellenbogen, our co-founder, Chairman and Chief
Executive Officer, unexpectedly passed away. On July 31, 2001, our Board of
Directors named John W. Cumming, as our Chief Executive Officer, President and
a director. Mr. Cumming joined Hologic in August 2000 as Senior Vice President
and President of Lorad, one of our divisions. Steve L. Nakashige, our former
President, Chief Operating Officer and a director, left the Company in August
2001, and Thomas Umbel, our former Vice President, Business Development, left
the Company in September 2001. In addition, Glenn P. Muir, an Executive Vice
President and our Chief Financial Officer, has also been appointed as a
director. The management transition is occurring at a challenging time, given
our recent acquisitions, ongoing development activities and losses, and
involves numerous other risks and uncertainties, including:
. the diversion of management's attention;
. the ability of continuing and new management to work together
effectively;
. the ability of new management to handle its new responsibilities and to
quickly understand and develop and successfully implement effective
strategies for the business; and
. the potential loss of key employees.
The management transition, if not successful, could harm our business and
prospects.
Our business could be harmed if our products contain undetected errors or
defects or do not meet customer specifications.
We are continuously developing new products and improving our existing
products. Newly introduced products can contain undetected errors or defects.
In addition, these products may not meet their performance specifications under
all conditions or for all applications. If, despite our internal testing and
testing by our customers, any of our products contains errors or defects or any
of our products fails to meet customer specifications, then we may be required
to enhance or improve those products or technologies. We may not be able to do
so on a timely basis, if at all, and may only be able to do so at considerable
expense. In addition, any significant reliability problems could result in
adverse customer reaction, negative publicity or legal claims and could harm
our business and prospects.
The general radiography digital market is a new market which is continuing to
develop and our new products for this market may not meet the needs of this
market as it continues to develop.
The general radiography digital market is a new market which is continuing
to develop and for which customer requirements have not been fully specified.
For example, our initial specification for the first two digital products for
general radiography, the EPEX and RADEX, did not fulfill all the needs of some
potential customers for these systems. We have addressed these additional
customer requirements through the development and release of new software for
these systems. Our introduction of our EPEX and RADEX systems has also resulted
in challenges to our direct sales force, which had only limited experience in
marketing general radiography products. We cannot assure that we will be able
to develop a successful strategy for addressing the general radiography market
as it continues to develop. Our failure to do so could harm our business and
prospects.
Our reliance on one or only a limited number of suppliers for some key
components or subassemblies for our products could harm our business and
prospects.
We rely on one or only a limited number of suppliers for some key components
or subassemblies for our products. In particular we have only one source of
supply for each of the panel and the coating of that panel for
S-14
our direct radiography products. The supplier for the panel coating is Analogic
Corporation, which is also a customer as well as a potential competitor. In
addition we have only limited sources of supply for some key components used in
our mini c-arm systems. Obtaining alternative sources of supply of these
components could involve significant delays and other costs, and may not be
available to us on reasonable terms, if at all. The failure of a component
supplier or contract assembler to provide acceptable quality and timely
components or assembly service at an acceptable price, or an interruption of
supplies from such a supplier could harm our business and prospects. Any
disruption of supplies of key components could have an adverse effect on
shipments which could result in lost or deferred sales.
We may not be able to compete successfully.
A number of companies have developed, or are expected to develop, products
that compete or will compete with our products. Many of these competitors offer
a range of products in areas other than those in which we compete, which may
make such competitors more attractive to hospitals, radiology clients, general
purchasing organizations and other potential customers. In addition, many of
our competitors and potential competitors are larger and have greater financial
resources than we do and offer a range of products broader than our products.
Some of the companies with which we now compete or may compete in the future
have or may have more extensive research, marketing and manufacturing
capabilities and significantly greater technical and personnel resources than
we do, and may be better positioned to continue to improve their technology in
order to compete in an evolving industry. Our failure to compete successfully
could harm our business and prospects.
The primary competitor for our bone densitometry products is General
Electric Medical Systems (GEMS). Our direct-to-digital imaging products compete
with traditional X-ray systems as well as computed radiography systems, which
are less expensive than our products, and other direct-to-digital systems. The
larger competitors in these markets include GEMS, Siemens, Kodak, Canon and
Varian. General Electric has received FDA approval to market a digital general
radiography X-ray system. Another company, Fischer Imaging Corporation,
recently received FDA marketing approval for its general radiography digital X-
ray system. Our mammography systems compete with products offered by GEMS,
Siemens, Instrumentarium and Fischer Imaging Corporation. Our minimally
invasive breast biopsy systems compete with products offered by Fischer Imaging
Corporation and with conventional surgical biopsy procedures. Our mini c-arm
products compete directly with mini c-arms manufactured and sold by a limited
number of companies including GEMS. We also compete indirectly with
manufacturers of conventional c-arm image intensifiers including Siemens and
GEMS.
Our success depends upon our ability to adapt to rapid changes in technology
and customer requirements.
The market for our products has been characterized by rapid technological
change, frequent product introductions and evolving customer requirements. We
believe that these trends will continue into the foreseeable future. Our
success will depend, in part, upon our ability to enhance our existing
products, successfully develop new products that meet increasing customer
requirements and gain market acceptance. If we fail to do so our products may
be rendered obsolete or uncompetitive by new industry standards or changing
technology.
We may be unable to successfully integrate the operations of our acquisitions.
We acquired the United States business of Trex Medical in September 2000 and
Direct Radiography Corp. in June 1999. Both of these acquisitions involve
numerous risks generally associated with acquisitions, including:
. the diversion of management's attention;
. the assimilation of operations, personnel and products of the acquired
businesses;
. the ability to manage geographically remote units; and
. the potential loss of key employees of the acquired businesses.
S-15
We may not be able to successfully integrate the operations of Trex Medical or
Direct Radiography Corp. Failure to do so would harm our business and
prospects.
Our failure to manage current or future alliances or joint ventures effectively
may harm our business and prospects.
We are exploring potential alliances, joint ventures or other business
relationships to expand our distribution channels, raise cash or share ongoing
research and development costs. Potential partners most likely would include
our competitors or potential competitors, and our alliance with any of them
could enhance their business to our detriment. Moreover, we may not be able to:
. identify appropriate candidates for alliances or joint ventures;
. assure that any alliance or joint venture candidate will provide us with
the support anticipated;
. successfully negotiate an alliance or joint venture on terms that are
advantageous to us; or
. successfully manage any alliance or joint venture.
Furthermore, any alliance or joint venture may divert management time and
resources. Our entering into a disadvantageous alliance or joint venture or
failure to manage an alliance or joint venture effectively could harm our
business and prospects.
The uncertainty of healthcare reform could harm our business and prospects.
In recent years, the healthcare industry has undergone significant change
driven by various efforts to reduce costs, including efforts at national
healthcare reform, trends toward managed care, cuts in Medicare, consolidation
of healthcare distribution companies and collective purchasing arrangements by
office-based healthcare practitioners. Healthcare reform proposals and medical
cost containment measures in the United States and in many foreign countries
could:
. limit the use of our products;
. reduce reimbursement available for such use; or
. adversely affect the use of new therapies for which our products may be
targeted.
These reforms or cost containment measures, including the uncertainty in the
medical community regarding their nature and effect, could harm our business
and prospects and make it difficult for us to raise additional capital on
advantageous terms, if at all.
We depend on third party reimbursement to our customers for market acceptance
of our products. Failure of third party payors to provide appropriate levels of
reimbursement for use of our products could harm our business and prospects.
Sales of medical products largely depend on the reimbursement of patients'
medical expenses by government healthcare programs and private health insurers.
The costs of our products are substantial, and market acceptance of our
products depends upon our customers' ability to obtain appropriate levels of
reimbursement from third-party payors for use of our products. In the United
States, the Health Care Finance Administration, known as HCFA, establishes
guidelines for the reimbursement of healthcare providers treating Medicare and
Medicaid patients. Under current HCFA guidelines, varying reimbursement levels
have been established for dual X-ray and ultrasound bone density assessment,
mammography and other imaging and diagnostic procedures performed by our
products. The actual reimbursement amounts are determined by individual state
Medicare carriers and, for non-Medicare and Medicaid patients, private
insurance carriers. There are often delays between the reimbursement approvals
by HCFA and by a state Medicare carrier and private insurance carriers.
Moreover, states as well as private insurance carriers may choose not to follow
the HCFA reimbursement guidelines. The use of our products outside the United
States is similarly affected by reimbursement policies adopted by foreign
regulatory and insurance carriers. A reduction or other adverse change in
reimbursement policies for the use of our products could harm our business and
prospects.
S-16
The future growth of our bone densitometry business depends in large part on
the continued development and more widespread acceptance of complementary
therapies.
Our bone densitometers and related products are used to assist physicians in
diagnosing patients at risk for osteoporosis and other bone disorders, and to
monitor the effectiveness of therapies to treat these disorders. As a result,
the future growth of the market for these products and of this business will in
large part be dependent upon the development and more widespread acceptance of
drug therapies to prevent and to treat osteoporosis. Over the last several
years, the FDA has approved a number of drug therapies to treat osteoporosis.
We also understand that a number of other drug therapies are under development.
While sales of our bone densitometry products have benefited from the increased
availability and use of these therapies, most patients who are at risk for
osteoporosis continue to go untreated. We cannot assure that any therapies
under development or in clinical trials will prove to be effective, obtain
regulatory approval, or that any approved therapy will gain wide acceptance.
Even if these therapies gain widespread acceptance, we cannot assure that this
acceptance will increase the sales of our products.
Reductions in revenues could harm our operating results because a high
percentage of our operating expenses is relatively fixed.
A high percentage of our operating expenses is relatively fixed. We likely
will not be able to reduce spending to compensate for adverse fluctuations in
revenues. As a result, shortfalls in revenues are likely to harm our operating
results.
Our results of operations are subject to significant quarterly variation and
seasonal fluctuation.
Our results of operations have been and may continue to be subject to
significant quarterly variation. The results for a particular quarter may vary
due to a number of factors, including:
. the overall state of healthcare and cost containment efforts;
. the development status and demand for drug therapies to treat
osteoporosis;
. the development status and demand for our direct-to-digital imaging
products;
. economic conditions in our markets;
. foreign exchange rates;
. the timing of orders;
. the timing of expenditures in anticipation of future sales;
. the mix of products sold by us;
. the introduction of new products and product enhancements by us or our
competitors; and
. pricing and other competitive conditions.
We also believe that our sales may be somewhat seasonal, with reduced orders
in the summer months reflecting summer vacation schedules. Customers may also
cancel or reschedule shipments. Production difficulties could also delay
shipments. Any of these factors also could harm our business and prospects.
Our delay or inability to obtain any necessary United States or foreign
regulatory clearances or approvals for our products could harm our business and
prospects.
Our products are medical devices that are the subject of a high level of
regulatory oversight. Our delay or inability to obtain any necessary United
States or foreign regulatory clearances or approvals for our products could
harm our business and prospects. The process of obtaining clearances and
approvals can be costly and time-consuming. There is a risk that any approvals
or clearances, once obtained, may be withdrawn or
S-17
modified. Medical devices cannot be marketed in the United States without
clearance or approval by the FDA. Medical devices sold in the United States
must also be manufactured in compliance with FDA Good Manufacturing Practices,
which regulate the design, manufacture, packing, storage and installation of
medical devices. Moreover, medical devices are required to comply with FDA
regulations relating to investigational research and labeling. States may also
regulate the manufacture, sale and use of medical devices, particularly those
that employ X-ray technology. Our products are also subject to approval and
regulation by foreign regulatory and safety agencies.
Fluctuations in the exchange rates of European currencies and the other foreign
currencies in which we conduct our business, in relation to the U.S. dollar,
have harmed and could continue to harm our business and prospects.
Foreign sales accounted for approximately 33% of our product sales in fiscal
2000 and 28% of our product sales in fiscal 2001. We maintain a sales and
service office in Belgium and a support office in France. The expenses and
sales of these offices are denominated in local currencies. We anticipate that
foreign sales and sales denominated in foreign currencies will continue to
account for a significant portion of our total sales. Fluctuations in the value
of local currencies have caused, and are likely to continue to cause, amounts
translated into U.S. dollars to fluctuate in comparison with previous periods.
In particular, the strength in value of the U.S. dollar to the Euro and other
European currencies has resulted in an increase in price for products
denominated in those currencies. We believe that these price increases have
adversely affected our ability to compete in these markets. Conversely, an
increase in the value of the local currencies in which we have offices would
likely increase our expenses relative to U.S. dollar sales and could also harm
our operating results. We have hedged our foreign currency exposure by
borrowing funds in local European currencies to pay the expenses of our foreign
offices. There is a risk that these hedging activities will not be successful
in mitigating our foreign exchange risk exposure.
We conduct our business worldwide, which exposes us to a number of difficulties
in coordinating our international activities and dealing with multiple
regulatory environments.
We sell our products to customers throughout the world. Our worldwide
business may be harmed by:
. difficulties in staffing and managing operations in multiple locations;
. greater difficulties in trade accounts receivable collection;
. possible adverse tax consequences;
. governmental currency controls;
. changes in various regulatory requirements;
. political and economic changes and disruptions;
. export/import controls; and
. tariff regulations.
We have experienced difficulties in collecting accounts receivable in Latin
America, which as of September 29, 2001 totaled $3.3 million, including
$425,000 of long-term accounts receivable included in other assets.
Our business could be harmed if we are unable to protect our proprietary
technology.
We rely primarily on a combination of trade secrets, patents, copyright and
trademark laws and confidentiality procedures to protect our technology.
Despite these precautions, unauthorized third parties may infringe, copy or
reverse engineer portions of our technology. We do not know if current or
future patent applications will be issued with the scope of the claims sought,
if at all, or whether any patents issued will be challenged or invalidated. In
addition, we have obtained or applied for corresponding patents and patent
applications in several foreign countries for some of our patents and patent
applications. There is a risk that
S-18
these patent applications will not be granted or that the patent or patent
application will not provide significant protection for our products and
technology. Our competitors may independently develop similar technology that
our patents do not cover. In addition, because patent applications in the
United States are not publicly disclosed until the patent is issued,
applications may have been filed which relate to our technology. Moreover,
there is a risk that foreign intellectual property laws will not protect our
intellectual property rights to the same extent as United States intellectual
property laws. In the absence of significant patent protection, we may be
vulnerable to competitors who attempt to copy our products, processes or
technology.
Our business could be harmed if we infringe upon the intellectual property
rights of others.
There has been substantial litigation regarding patent and other
intellectual property rights in the medical device and related industries. We
have been, and may be in the future, notified that we may be infringing
intellectual property rights possessed by third parties. If any such claims are
asserted against our intellectual property rights, we may seek to enter into
royalty or licensing arrangements. There is a risk in these situations that no
license will be available or that a license will not be available on reasonable
terms. Alternatively, we may decide to litigate such claims or to design around
the patented technology. These actions could be costly and would divert the
efforts and attention of our management and technical personnel. As a result,
any infringement claims by third parties or claims for indemnification by
customers resulting from infringement claims, whether or not proven to be true,
may harm our business and prospects.
We may be prohibited from manufacturing and selling the Lorad prone breast
biopsy system and be required to pay significant damages if Fischer Imaging
Corporation succeeds in its lawsuit against Trex Medical that alleges that the
system infringes two Fischer Imaging patents.
In connection with our acquisition of Trex Medical's U.S. assets, we assumed
liability for a lawsuit filed by Fischer Imaging against Trex Medical alleging
that the Lorad prone biopsy system infringes upon two Fischer Imaging patents,
subject to indemnification from Trex Medical and its parent, Thermo Electron
Corporation, for any damages up to our adjusted purchase price for the Trex
Medical assets. In connection with this arrangement, Trex Medical is continuing
to defend this lawsuit. Recently, Fischer Imaging filed a lawsuit against us in
connection with our sales of this product. Trex Medical and Thermo Electron
have agreed to indemnify us in connection with, and to defend, this lawsuit. If
Trex Medical is unsuccessful in defending these lawsuits, we may be prohibited
from manufacturing and selling the prone breast biopsy system without a license
from Fischer Imaging and Fischer Imaging could be awarded significant damages.
If a license were required, we cannot assure that we would be able to obtain
one on commercially reasonable terms, if at all. Moreover, if Fischer Imaging
were awarded damages, we cannot assure that our indemnification from Trex
Medical and Thermo Electron, if any, would be sufficient to cover the amount of
the award. A significant award above the indemnification amount actually
received could harm our business and prospects.
Our future success will depend on the continued services of our key personnel.
The loss of any of our key personnel, particularly our key research and
development personnel, could harm our business and prospects. Our success will
also depend upon our ability to attract and retain other qualified managerial
and technical personnel. Competition for such personnel, particularly software
engineers and other technical personnel, is intense. We may not be able to
attract and retain personnel necessary for the development of our business. We
do not have any key man life insurance for any of our officers or other key
personnel.
There is a risk that our insurance will not be sufficient to protect us from
product liability claims, or that in the future product liability insurance
will not be available to us at a reasonable cost, if at all.
Our business involves the risk of product liability claims inherent to the
medical device business. We maintain product liability insurance subject to
deductibles and exclusions. There is a risk that our insurance will
S-19
not be sufficient to protect us from product liability claims, or that product
liability insurance will not be available to us at a reasonable cost, if at
all. An underinsured or uninsured claim could harm our operating results or
financial condition.
We use hazardous materials and products.
Our research and development involves the controlled use of hazardous
materials, such as toxic and carcinogenic chemicals and various radioactive
compounds. Although we believe that our safety procedures for handling and
disposing of such materials comply with the standards prescribed by federal,
state and local regulations, we cannot completely eliminate the risk of
accidental contamination or injury from these materials. In the event of this
type of accident, we could be held liable for any resulting damages, and any
such liability could be extensive. We are also subject to substantial
regulation relating to occupational health and safety, environmental
protection, hazardous substance control, and waste management and disposal. The
failure to comply with such regulations could subject us to, among other
things, fines and criminal liability.
Provisions in our Certificate of Incorporation and By-laws and our stockholder
rights plan may have the effect of discouraging advantageous offers for our
business or common stock and limit the price that investors might be willing to
pay in the future for shares of our common stock.
Our Certificate of Incorporation, By-laws and the provisions of Delaware
corporate law include provisions that may have the effect of discouraging or
preventing a change in control. In addition, we have a stockholder rights plan
that may have the effect of discouraging or preventing a change in control.
These provisions could limit the price that our stockholders might receive in
the future for shares of our common stock.
Risks Related to this Offering
The volatility of our stock price could adversely affect your investment in our
common stock.
The market price of our common stock has been, and may continue to be,
highly volatile. We believe that a variety of factors could cause the price of
our common stock to fluctuate, perhaps substantially, including:
. announcements and rumors of developments related to our business or the
industry in which we compete;
. quarterly fluctuations in our actual or anticipated operating results
and order levels;
. general conditions in the worldwide economy;
. announcements of technological innovations;
. new products or product enhancements by us or our competitors;
. developments in patents or other intellectual property rights and
litigation; and
. developments in our relationships with our customers and suppliers.
In addition, in recent years the stock market in general and the markets for
shares of small capitalization and "high-tech" companies in particular, have
experienced extreme price fluctuations which have often been unrelated to the
operating performance of affected companies. Any such fluctuations in the
future could adversely affect the market price of our common stock, and the
market price of our common stock may decline.
Future sales of our common stock may cause our stock price to decline.
Substantially all of our outstanding shares of common stock are freely
tradable without restriction or further registration. Affiliates must sell all
shares they own in compliance with the volume and other
S-20
requirements of Rule 144, except for the holding period requirements.
Nevertheless, sales of substantial amounts of common stock by our stockholders,
including purchasers in this offering, or even the potential for such sales,
may cause the market price of our common stock to decline and could impair our
ability to raise capital through the sale of our equity securities.
Management will have broad discretion in how we use the proceeds of this
offering, and we may not use these proceeds effectively.
Our management will have considerable discretion in the application of the
net proceeds of this offering, and you will not have the opportunity, as part
of your investment decision, to assess whether the proceeds are being used
appropriately. The net proceeds may be used for corporate purposes that do not
increase our profitability or our market value.
S-21
PRICE RANGE OF COMMON STOCK
Our common stock is traded on the Nasdaq National Market under the symbol
"HOLX." The following table sets forth, for the periods indicated, the high and
low sales prices per share of common stock, as reported by the Nasdaq National
Market.
High Low
------ -----
Fiscal Year Ended September 30, 2000
First Quarter................................................ $ 6.75 $3.06
Second Quarter............................................... 9.81 5.69
Third Quarter................................................ 7.81 5.56
Fourth Quarter............................................... 8.88 6.88
Fiscal Year Ended September 29, 2001
First Quarter................................................ $ 7.06 $4.66
Second Quarter............................................... 7.19 4.00
Third Quarter................................................ 6.80 4.00
Fourth Quarter............................................... 6.60 4.62
Fiscal Year Ending September 30, 2002
First Quarter (through November 28, 2001).................... $10.94 $5.00
The last reported sale price of our common stock on the Nasdaq National
Market on November 28, 2001 was $10.67 per share. As of November 27, 2001,
there were approximately 1,857 holders of record of our common stock.
S-22
USE OF PROCEEDS
We estimate that the net proceeds to us from the sale of the 2,500,000
shares of common stock we are offering will be approximately $24.8 million. If
the underwriters fully exercise the over-allotment option, the net proceeds to
us will be approximately $28.5 million. "Net proceeds" is what we expect to
receive based on an assumed public offering price of $10.67 per share and after
we pay the underwriting discount and other estimated expenses for this
offering.
We expect to use the net proceeds of this offering to fund the continued
development of our DirectRay direct-to-digital mammography system, including
conducting clinical trials and working toward regulatory approvals, as well as
to fund research and development of other products and for general corporate
purposes and working capital. As of the date of this prospectus supplement, we
cannot specify with certainty all of the particular uses we will have for the
net proceeds upon completion of this offering. Accordingly, our management will
have broad discretion in the application of the net proceeds.
Pending these uses, we intend to invest the net proceeds in interest-
bearing, investment-grade instruments, certificates of deposit or direct or
guaranteed obligations of the United States.
S-23
CAPITALIZATION
The following table sets forth our capitalization as of June 30, 2001, on an
actual basis and as adjusted to give effect to the receipt by us of the
estimated net proceeds from the sale of 2,500,000 shares of common stock at an
assumed offering price of $10.67 and after deducting the estimated underwriting
discount and estimated offering expenses.
As of June 30, 2001
---------------------
Actual As Adjusted
-------- -----------
(in thousands except
share and per share
data)
Cash and cash equivalents................................ $ 11,908 $ 36,683
======== ========
Line of credit........................................... 1,592 1,592
Note payable............................................. 26,550 26,550
Stockholders' equity:
Preferred stock, $0.01 par value--1,623,000 shares
authorized, none issued and outstanding............... -- --
Common stock, $0.01 par value--30,000,000 shares
authorized, 15,524,000 shares issued and outstanding,
actual and 18,024,000 shares as adjusted.............. 155 180
Capital in excess of par value......................... 110,719 135,469
Retained earnings...................................... 7,899 7,899
Accumulated other comprehensive loss................... (2,283) (2,283)
Treasury stock, at cost--45 shares..................... (464) (464)
-------- --------
Total stockholders' equity........................... 116,026 140,801
-------- --------
Total capitalization............................... $144,168 $168,943
======== ========
S-24
DILUTION
At June 30, 2001, we had a net tangible book value of $83.1 million or
approximately $5.36 per share of common stock. Net tangible book value per
share represents the amount of our tangible assets less our total liabilities,
divided by the number of outstanding shares of our common stock. Net tangible
book value dilution per share represents the difference between the amount per
share paid by purchasers of shares of common stock in the offering pursuant to
this prospectus and the pro forma net tangible book value per share of common
stock immediately after completion of the offering. After giving effect to the
sale of 2,500,000 shares of common stock in this offering at an assumed
offering price of $10.67 per share and the application of the estimated net
proceeds therefrom (after deducting the estimated underwriting discount and
estimated offering expenses), but without taking into account any other changes
in our net tangible book value after June 30, 2001, our pro forma net tangible
book value as of June 30, 2001 would have been $107.9 million, or $5.99 per
share. This represents an immediate increase in net tangible book value of
$0.63 per share to existing stockholders and an immediate dilution in net
tangible book value of $4.68 per share to purchasers of common stock in the
offering, as illustrated in the table below.
Assumed public offering price per share......................... $10.67
Net tangible book value per share before the offering......... $5.36
Increase per share attributable to new investors.............. 0.63
-----
Pro forma net tangible book value per share after the offering.. 5.99
------
Dilution per share to new investors............................. $ 4.68
======
S-25
EXECUTIVE OFFICERS
The following is a list of all current executive officers of Hologic, Inc.
Name Age Position
---- --- --------
John W. Cumming......... 55 Chief Executive Officer, President and Director
Jay A. Stein............ 59 Chairman of the Board and Chief Technical Officer
Glenn P. Muir........... 42 Executive Vice President, Finance and Administration,
Treasurer and Director
Mark A. Duerst.......... 45 Senior Vice President and General Manager, Worldwide Sales
and Marketing
Peter C. Kershaw........ 48 Vice President and General Manager, Lorad
Peter Soltani........... 40 Vice President and General Manager, Direct Radiography Corp.
Eric von Stetten........ 39 Vice President and General Manager, Osteoporosis Assessment
John W. Cumming was appointed to the position of Chief Executive Officer,
President and director in July 2001 by our Board of Directors. Prior to that,
Mr. Cumming held the position of Senior Vice President and President, Lorad,
since joining us in August 2000. Prior to joining us, Mr. Cumming served as
President and Managing Director of Health Care Markets Group, a strategic
advisory and investment banking firm he founded in 1984. Prior to forming
Health Care Markets Group, Mr. Cumming was Vice President/Division Manager for
Elscint, Inc., a full line manufacturer of diagnostic imaging equipment. He
became a member of Elscint's management team through the acquisition of Xonics
Medical Systems in 1983, where he served as Director of Sales & Marketing. Mr.
Cumming joined Xonics through the acquisition of Radiographic Development
(medical imaging), where he served as Vice President, Sales & Marketing. Mr.
Cumming currently serves on the Board of Directors of Vascular Genetics, a gene
therapy company focusing on coronary artery disease, MRPnet, Inc., an internet
application provider to the healthcare industry, Century Capital, an investment
banking firm specializing in the biosciences field, and Health Care Markets
Group.
Dr. Jay A. Stein, a co-founder and our Chief Technical Officer, has served
as our Executive or Senior Vice President, Chief Technical Officer and a
director since our organization in October 1985 and as Chairman of our Board of
Directors since June 2001. Prior to co-founding us, Dr. Stein served as Vice
President and Technical Director of Diagnostic Technology, Inc. (DTI), which he
co-founded with S. David Ellenbogen in 1981. DTI, which developed an X-ray
product for digital angiography, was acquired in 1982 by Advanced Technology
Laboratories, Inc. (ATL), a wholly-owned subsidiary of Squibb Corporation. Dr.
Stein served as Technical Director of the digital angiography group of its
successor, ATL, from 1982 to 1985. Dr. Stein received a Ph.D. in Physics from
The Massachusetts Institute of Technology. He is the principal author of
fifteen patents involving X-ray technology. From July 1989 to January 2000, Dr.
Stein was also the Senior Vice President, Technical Director and a director of
Vivid Technologies, Inc. pursuant to a management agreement between us and
Vivid. On January 13, 2000, PerkinElmer completed the purchase of Vivid and Dr.
Stein relinquished all positions and duties with Vivid.
Glenn P. Muir, a Certified Public Accountant, was appointed to our Board of
Directors in July 2001, and has held the position of Executive Vice President,
Finance and Administration and Treasurer since September 2000. Prior to that,
Mr. Muir served as Vice President of Finance and Treasurer since February 1992
and Controller since joining us in October 1988. From 1986 to 1988, Mr. Muir
was Vice President of Finance and Administration and Chief Financial Officer of
Metallon Engineered Materials Corp., a manufacturer of composite materials. Mr.
Muir received an MBA from the Harvard Graduate School of Business
Administration in 1986.
S-26
Mark Duerst was appointed to the position of Senior Vice President and
General Manager, Worldwide Sales in April 2001. Prior to that, Mr. Duerst
served as Senior Vice President and General Manager of International Sales from
September 2000, served as Vice President of Sales from 1994 to 2000 and in
other sales management positions since joining us in 1989. From 1988 to 1989,
Mr. Duerst was an independent marketing and sales consultant and from 1983 to
1987, he was Director of Sales and Marketing of Lunar Corporation.
Peter C. Kershaw was appointed Vice President and General Manager, Lorad in
July 2001. Prior to joining us, Mr. Kershaw was President of Bespak Medical
Device Division from 1998 to 2001, and held the position of Vice President and
General Manager from 1996 to 1998. From 1991 to 1996, Mr. Kershaw was Vice
President of Operations at Bard Cardiology, a division of C.R. Bard and served
as Director of Manufacturing from 1989 to 1991. Prior to joining Bard, Mr.
Kershaw was with Johnson & Johnson Orthopedics serving in a variety of
engineering and manufacturing management roles from 1982 to 1989.
Dr. Peter Soltani joined us in November 2000 as Vice President and General
Manager of Direct Radiography Corp. Prior to joining us, Dr. Soltani served as
General Manager, NDT Business Group, Digital Systems at AGFA Corporation from
1999 to November 2000. From 1994 to 1999, Dr. Soltani served as General
Manager, Imaging Systems Division of Liberty Technologies, a division of Crane
Nuclear, Inc. Prior to joining Liberty Technologies, Dr. Soltani was with
Quantex Corporation, serving as Vice President, Technology from 1992 to 1994,
Director, Product Development, from 1990 to 1992 and as a Senior Staff
Scientist from 1986 to 1990. Dr. Soltani is the principal author or co-author
of a number of patents related to digital imaging technologies and has
published numerous articles on digital imaging. Dr. Soltani received a Ph.D. in
Materials Engineering from the University of Maryland in 1994.
Eric von Stetten has held numerous positions with us since joining us in
1990. Dr. von Stetten was appointed to his current position of Vice President
and General Manager, Osteoporosis Assessment in September 2000 and served as
Scientific Director for our bone densitometry products from 1999 to 2000. Prior
to being Scientific Director, Dr. von Stetten held the position of Director,
Ultrasound Technologies from 1996 to 1999 and Principal Scientist from 1993 to
1996. Dr. von Stetten is the principal author or co-author of several patents
related to osteoporosis testing devices and has published numerous papers on
osteoporosis assessment technologies. Dr. von Stetten received a Ph.D. in
Experimental Solid State Physics from Brandeis University in 1990.
S-27
UNDERWRITING
We have entered into an underwriting agreement with the underwriters named
below. Needham & Company, Inc. and Stephens Inc. are acting as representatives
of the underwriters. Subject to the terms and conditions of the underwriting
agreement, each underwriter has severally agreed to purchase from us the number
of shares of common stock set forth opposite its name below.
Number of
Underwriter Shares
----------- ---------
Needham & Company, Inc..............................................
Stephens Inc........................................................
---------
Total............................................................. 2,500,000
=========
The representatives have advised us that the underwriters propose to offer
the shares of common stock to the public at the public offering price per share
set forth on the cover page of this prospectus supplement. The underwriters may
offer shares to securities dealers, who may include the underwriters, at that
public offering price less a concession of up to $ per share. The
underwriters may allow, and those dealers may reallow, a concession to other
securities dealers of up to $ per share. After the offering to the public,
the offering price and other selling terms may be changed by the
representatives.
We have granted an option to the underwriters to purchase up to 375,000
additional shares of common stock at the public offering price per share, less
the underwriting discount, set forth on the cover page of this prospectus
supplement. This option is exercisable during the 30-day period after the date
of this prospectus supplement. The underwriters may exercise this option only
to cover over-allotments made in connection with this offering. If this option
is exercised, each of the underwriters will purchase approximately the same
percentage of the additional shares as the number of shares of common stock to
be purchased by that underwriter, as shown in the table above, bears to the
total shown.
The following table shows the per share and total underwriting discount to
be paid to the underwriters by us. These amounts are shown assuming both no
exercise and full exercise of the underwriters' option to purchase additional
shares.
Total
-------------------------
Per
Share No Exercise Full Exercise
----- ----------- -------------
Paid by Hologic.............................. $ $ $
We estimate that the total expenses of the offering, excluding the
underwriting discount will be approximately $300,000.
The underwriting agreement provides that we will indemnify the underwriters
against some of the liabilities that may be incurred in connection with this
offering, including liabilities under the Securities Act, or contribute
payments that the underwriters may be required to make in respect thereof.
We have agreed not to offer, sell, contract to sell, grant options to
purchase, or otherwise dispose of any shares of our common stock or securities
exchangeable for or convertible into our common stock for a period of 90 days
after the date of this prospectus without the prior consent of Needham &
Company, Inc. This agreement does not apply to any existing employee benefit
plans. Our directors and executive officers have agreed not to, directly or
indirectly, sell, hedge, or otherwise dispose of any shares of common stock,
options to acquire shares of common stock, or securities exchangeable for or
convertible into shares of common stock, for a period of 90 days after the date
of this prospectus without the prior written consent of Needham & Company, Inc.
Needham & Company, Inc. may, in its sole discretion and at any time without
notice, release all or any portion of the securities subject to these lock-up
agreements.
S-28
In connection with this offering, the underwriters may engage in
transactions that stabilize, maintain, or otherwise affect the price of our
common stock. Specifically, the underwriters may over-allot in connection with
this offering by selling more shares than are set forth on the cover page of
this prospectus supplement. This creates a short position in our common stock
for their own account. The short position may be either a covered short
position or a naked short position. In a covered short position, the number of
shares over-allotted by the underwriters are not greater than the number of
shares that they may purchase in the over-allotment option. In a naked short
position, the number of shares involved is greater than the number of shares in
the over-allotment option. To close out a short position or to stabilize the
price of our common stock, the underwriters may bid for, and purchase, common
stock in the open market. The underwriters may also elect to reduce any short
position by exercising all or part of the over-allotment option. In determining
the source of shares to close out the short position, the underwriters will
consider, among other things, the price of shares available for purchase in the
open market as compared to the price at which they may purchase shares through
the over-allotment option. If the underwriters sell more shares than could be
covered by the over-allotment option, a naked short position, the position can
only be closed out by buying shares in the open market. A naked short position
is more likely to be created if the underwriters are concerned that there could
be downward pressure on the price of the shares in the open market after
pricing that could adversely affect investors who purchase in this offering.
The underwriters may also impose a penalty bid. This occurs when a
particular underwriter or dealer repays selling concessions allowed to it for
distributing our common stock in this offering because the underwriters
repurchase that stock in stabilizing or short covering transactions.
Finally, the underwriters may bid for, and purchase, shares of our common
stock in market making transactions.
These activities may stabilize or maintain the market price of our common
stock at a price that is higher than the price that might otherwise exist in
the absence of these activities. The underwriters are not required to engage in
these activities, and may discontinue any of these activities at any time
without notice. These transactions may be effected on the Nasdaq National
Market, in the over-the-counter market, or otherwise.
LEGAL MATTERS
The validity of the shares of common stock to be sold in this offering will
be passed upon for us by Brown, Rudnick, Freed & Gesmer, Boston, Massachusetts.
Pillsbury Winthrop LLP, San Francisco, California, is acting as counsel for the
underwriters in connection with selected legal matters relating to the shares
of common stock offered by this prospectus supplement.
EXPERTS
The consolidated financial statements of Hologic, Inc., as of September 25,
1999 and September 30, 2000 and for each of the three years in the period ended
September 30, 2000 incorporated by reference in this prospectus supplement and
in the registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference in reliance upon the authority of
such firm as experts in giving such reports.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange
Commission. See "Where You Can Find More Information" in the accompanying
prospectus for information on the documents we incorporate by reference in this
prospectus supplement and the accompanying prospectus.
S-29
You should rely only on the information incorporated by reference or
provided in this prospectus supplement and the accompanying prospectus. We have
authorized no one to provide you with different information. We are not making
an offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus supplement and the
accompanying prospectus is accurate as of any date other than the date on the
front of these documents.
S-30
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+The information in this prospectus is not complete and may be changed. These +
+securities may not be sold until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell nor does it seek an offer to buy these securities in any state +
+or jurisdiction where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED NOVEMBER 29, 2001
PROSPECTUS
HOLOGIC, INC.
Common Stock
3,000,000 Shares
------------
This is a public offering of shares of the common stock of Hologic, Inc. This
means that from time to time:
. we may offer and issue shares of common stock in varying amounts and at
prices and on terms to be determined at the time of sale;
. we will provide a prospectus supplement each time we sell such common
stock; and
. the prospectus supplement will describe the offering and the terms of each
such sale.
We will receive all of the proceeds from such sales.
We may offer the securities directly or through agents or to or through
underwriters or dealers. If any agents or underwriters are involved in the sale
of the securities, their names, and any applicable purchase price, fee,
commission or discount arrangement between or among them, will be set forth, or
will be calculable from the information set forth, in an accompanying
prospectus supplement. We can then sell the securities through agents,
underwriters or dealers only with delivery of a prospectus supplement
describing the method and terms of the offering of such securities. See "Plan
of Distribution."
Our common stock is quoted on the Nasdaq National Market under the symbol
"HOLX". On November 28, 2001, the last reported sale price of our common stock
on the Nasdaq National Market was $10.67 per share.
Investing in our common stock involves risks. See "Risk Factors" beginning on
page 2.
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved of these securities or determined if this
prospectus is truthful or complete. It is illegal for any person to tell you
otherwise.
The date of this prospectus is December , 2001.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus, the accompanying
prospectus supplement and in the documents incorporated by reference, are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements involve known and
unknown risks, uncertainties and other factors which may cause our or our
industry's actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. Forward-looking statements include,
but are not limited to statements regarding:
. our goal of returning to profitability;
. our goal of expanding our market positions;
. the development of new competitive technologies and products;
. regulatory approval and clearances for our products;
. production schedules for our products;
. market acceptance of new products;
. business strategies;
. dependence on significant suppliers;
. dependence on significant distributors and customers;
. the availability of debt and equity financing;
. general economic conditions;
. the impact of our cost-savings initiatives; and
. our financial condition or results of operations.
In some cases, you can identify forward-looking statements by terms such as
"may," "will," "should," "could," "would," "expects," "plans," "anticipates,"
"believes," "estimates," "projects," "predicts," "potential" and similar
expressions intended to identify forward-looking statements. These statements
are only predictions and involve known and unknown risks, uncertainties, and
other factors that may cause our actual results, levels of activity,
performance, or achievements to be materially different from any future
results, levels of activity, performance, or achievements expressed or implied
by such forward-looking statements. Given these uncertainties, you should not
place undue reliance on these forward-looking statements. We discuss many of
these risks in greater detail under the heading "Risk Factors." Also, these
forward-looking statements represent our estimates and assumptions only as of
the date of this prospectus.
You should read this prospectus, the accompanying prospectus supplement and
the documents that we incorporate by reference completely and with the
understanding that our actual future results may be materially different from
what we expect. We may not update these forward-looking statements, even though
our situation may change in the future. We qualify all of our forward-looking
statements by these cautionary statements.
i
PROSPECTUS SUMMARY
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration or continuous
offering process. We may from time to time sell the shares of common stock set
forth in this prospectus in one or more offerings up to an aggregate of
3,000,000 shares of common stock.
This prospectus provides you with a general description of the securities we
may offer. Each time we sell securities, we will provide you with a prospectus
supplement containing specific information about the terms of such sale. The
prospectus supplement also may add, update or change information in this
prospectus. If there is any inconsistency between the information in the
prospectus and the prospectus supplement, you should rely on the information in
the prospectus supplement. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information" beginning on page 14 of this
prospectus.
Unless otherwise indicated or unless the context otherwise requires, all
references in this prospectus to "we," "us," or similar references mean
Hologic, Inc. and its subsidiaries.
You should rely only on the information contained in this prospectus or in
an accompanying prospectus supplement. We have not authorized anyone to provide
you with information different from that contained or incorporated by reference
in this prospectus. We may offer to sell, and seek offers to buy, shares of our
common stock only in jurisdictions where such offers and sales are permitted.
The information contained in this prospectus or an accompanying prospectus
supplement is accurate only as of the date of these documents, regardless of
the time of delivery of this prospectus or of any sale of common stock.
About Hologic
We are a leading developer, manufacturer and supplier of diagnostic and
medical imaging systems primarily serving the healthcare needs of women. We
focus our resources on developing systems and subsystems offering superior
image quality and diagnostic accuracy, which has enabled us to capture
significant market shares and customer loyalty, despite the presence of large
competitors. Our core women's healthcare business units are focused on bone
densitometry, mammography and breast biopsy and on developing a direct-to-
digital X-ray mammography system. Our bone densitometry product line and our
Lorad line of mammography systems are premier brands in their markets. In
addition, we develop, manufacture and supply other X-ray based imaging systems,
such as general purpose direct-to-digital X-ray equipment and mini c-arm
imaging products. Our customers are hospitals, imaging clinics and private
practices and include many of the leading healthcare organizations in the
world. Our customers are also major pharmaceutical companies who use our
products in conducting clinical trials.
----------------
We were incorporated in Massachusetts in October 1985 and reincorporated in
Delaware in March 1990. Our principal executive offices are located at 35
Crosby Drive, Bedford, Massachusetts 01730-1401. Our telephone number is (781)
999-7300.
1
RISK FACTORS
The common stock that is offered with this prospectus involves a high degree
of risk. You should carefully consider the following risk factors in addition
to other information in this prospectus and the accompanying prospectus
supplement before deciding to purchase the common stock. If any of the
following risks actually occurs, our business, financial condition or results
of operations could be materially and adversely affected. In this case, the
trading price of our common stock could decline, and you could lose all or part
of your investment.
This prospectus also contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including the risks faced by us described below and elsewhere in this
prospectus and the accompanying prospectus supplement.
Risks Related to Our Business and Markets
We are incurring significant losses and cannot assure that we will become
profitable.
We incurred net losses of $18.6 million in fiscal 2000 and $20.9 million in
fiscal 2001. In fiscal 2000, these losses were primarily attributable to the
operations of Direct Radiography Corp. and charges incurred in connection with
our acquisition of substantially all of the U.S. assets of Trex Medical in
September 2000. Similarly, in fiscal 2001, these losses were primarily
attributable to the operations of Direct Radiography Corp. and the general
radiography operations of the acquired Trex Medical businesses. Direct
Radiography Corp. has had only limited sales of its products. We intend to
incur significant expenses in connection with the further development and
commercialization of our direct radiography plates and systems. We cannot
assure that we will become profitable or that we can maintain profitability if
we attain it.
Our failure to reduce our losses or obtain additional funding could result in
the delay or limitation of our research and development activities or otherwise
harm our business and prospects.
We are working on the research and development of several long-term
projects, with an emphasis on direct radiography plates and systems. We believe
that we will require significant additional funds in order to complete the
development, conduct clinical trials and achieve regulatory approvals of our
direct radiography and other products under development over the next several
years. Moreover, we may require additional funds for the working capital to
commence the manufacture and marketing of these new products in commercial
quantities, if and when approved or cleared by the regulatory authorities. If
our capital requirements vary materially from those currently planned, we may
require additional financing sooner than anticipated. As a result, we
anticipate that we will be required to reduce our losses or obtain additional
funding to support these efforts. We may need to raise capital in addition to
what we are seeking in this offering through additional equity or debt
financings, asset sales, collaborative arrangements or from other sources. This
additional financing may not be available to us on a timely basis, if at all,
or, may not be available on terms acceptable to us. If we fail to obtain
acceptable additional financing, we may be required to reduce our planned
expenditures, including our ongoing research and development expenditures. Such
a reduction could result in the delay or limitation of our ongoing research and
development projects and otherwise harm our business and prospects. Moreover,
additional equity financing may cause dilution to existing stockholders.
If we are unable to satisfy our financial covenants under our loan agreement
our loan availability may be limited or we may have to obtain alternative
sources of financing.
Our loan agreement with Foothill Capital contains financial and other
covenants. As a result of recent events, including the restructuring charges we
incurred in the fourth quarter of fiscal 2001, we are not in compliance with
some of these covenants. We are working with our lender to modify our loan
covenants. If we are not able to obtain a modification or waiver of these
covenants or if we otherwise do not comply with our
2
covenants, our availability under our loan agreement could be reduced or our
lender could declare a default. In the event of a loan default or a substantial
reduction of loan availability, we would be required to obtain alternative
financing, which could be more expensive than our current arrangement, be
dilutive to existing stockholders and divert management's time and attention.
Moreover, we cannot assure that we would be able to obtain alternative
financing on favorable terms and on a timely basis, if at all. At September 29,
2001 we had borrowed approximately $2.5 million under our loan agreement. Our
failure to meet any of our covenants under our loan agreement could
significantly harm our liquidity and financial position.
The markets for our direct radiography products are unproven.
In 1998, our subsidiary, Direct Radiography Corp., was the first company to
introduce direct-to-digital X-ray imaging products in the United States. Since
that introduction, Direct Radiography Corp. has had only limited sales of its
products. Moreover, the markets for these products are relatively new and
remain unproven. There is a significant installed base of conventional X-ray
imaging products in hospitals and radiological practices. The use of our
direct-to-digital X-ray imaging products in many cases would require these
potential customers to either modify or replace their existing X-ray imaging
equipment. Moreover, we believe that a major factor in the market's acceptance
of direct-to-digital X-ray technology is the trend toward transition by the
healthcare industry from conventional film archiving systems to hospital
Picture, Archive and Communication Systems, known as PACS, to store X-ray
images electronically. Because the benefits of our direct-to-digital technology
may not be fully realized by customers until they install a PACS platform, a
large potential market for these products may not develop until PACS
environments are more widely used. Because of the early stage of the markets
for these products, it is likely that our evaluation of the potential markets
for these products will materially vary with time. We cannot assure that any
significant market will develop for our direct radiography products.
If we fail to achieve and maintain the high manufacturing standards that our
direct radiography products require, we will not be successful in developing
and marketing those products.
The manufacture of our direct radiography detectors is highly complex and
requires precise high quality manufacturing that is difficult to achieve. We
have experienced difficulties manufacturing these detectors.
We obtain transistor plates for our direct radiography detectors from a sole
contract manufacturer. Following our recent development of an improved design
for our transistor plates, we experienced unacceptably high levels of defects
for the newly designed plates. While the manufacturer has resolved the problem,
and is now producing the plates to our satisfaction, we could again encounter
production problems with future shipments. Moreover, further changes in design
for our direct radiography detectors, including for our mammography detectors
under development, could result in other unanticipated production problems. Our
initial difficulties have led to a delay in our ability to ship our new direct
radiography systems and adversely affected our anticipated revenues and results
of operations from sales of those systems. Our failure, including the failure
of our contract manufacturers, to achieve and maintain the required high
manufacturing standards could result in further delays or failures in product
testing or delivery, cost overruns, product recalls or withdrawals, or other
problems that could harm our business and prospects.
Our success depends on new product development.
We have a continuing research and development program designed to develop
new products and to enhance and improve our products. We are expending
significant resources on the development of digital X-ray imaging products,
including a digital mammography product. The successful development of our
products and product enhancements are subject to numerous risks, both known and
unknown, including:
. unanticipated delays;
. access to capital;
. budget overruns;
. technical problems; and
3
. other difficulties that could result in the abandonment or substantial
change in the design, development and commercialization of these new
products, including, for example, changes requested by the FDA in
connection with pre-market approval applications for our products or
510(k) notification.
Given the uncertainties inherent with product development and introduction,
we cannot assure that any of our product development efforts will be successful
on a timely basis or within budget, if at all. Our failure to develop new
products and product enhancements on a timely basis or within budget could harm
our business and prospects.
We are undergoing a management transition, which if not successfully
implemented could harm our business and prospects.
On June 21, 2001, S. David Ellenbogen, our co-founder, Chairman and Chief
Executive Officer, unexpectedly passed away. On July 31, 2001, our Board of
Directors named John W. Cumming, as our Chief Executive Officer, President and
a director. Mr. Cumming joined Hologic in August 2000 as Senior Vice President
and President of Lorad, one of our divisions. Steve L. Nakashige, our former
President, Chief Operating Officer and a director, left the Company in August
2001, and Thomas Umbel, our former Vice President, Business Development, left
the Company in September 2001. In addition, Glenn P. Muir, an Executive Vice
President and our Chief Financial Officer, has also been appointed as a
director. The management transition is occurring at a challenging time, given
our recent acquisitions, ongoing development activities and losses, and
involves numerous other risks and uncertainties, including:
. the diversion of management's attention;
. the ability of continuing and new management to work together
effectively;
. the ability of new management to handle its new responsibilities and to
quickly understand and develop and successfully implement effective
strategies for the business; and
. the potential loss of key employees.
The management transition, if not successful, could harm our business and
prospects.
Our business could be harmed if our products contain undetected errors or
defects or do not meet customer specifications.
We are continuously developing new products and improving our existing
products. Newly introduced products can contain undetected errors or defects.
In addition, these products may not meet their performance specifications under
all conditions or for all applications. If, despite our internal testing and
testing by our customers, any of our products contains errors or defects or any
of our products fails to meet customer specifications, then we may be required
to enhance or improve those products or technologies. We may not be able to do
so on a timely basis, if at all, and may only be able to do so at considerable
expense. In addition, any significant reliability problems could result in
adverse customer reaction, negative publicity or legal claims and could harm
our business and prospects.
The general radiography digital market is a new market which is continuing to
develop and our new products for this market may not meet the needs of this
market as it continues to develop.
The general radiography digital market is a new market which is continuing
to develop and for which customer requirements have not been fully specified.
For example, our initial specification for the first two digital products for
general radiography, the EPEX and RADEX, did not fulfill all the needs of some
potential customers for these systems. We have addressed these additional
customer requirements through the development and release of new software for
these systems. Our introduction of our EPEX and RADEX systems has also resulted
in challenges to our direct sales force, which had only limited experience in
marketing general radiography products. We cannot assure that we will be able
to develop a successful strategy for addressing the general radiography market
as it continues to develop. Our failure to do so could harm our business and
prospects.
4
Our reliance on one or only a limited number of suppliers for some key
components or subassemblies for our products could harm our business and
prospects.
We rely on one or only a limited number of suppliers for some key components
or subassemblies for our products. In particular we have only one source of
supply for each of the panel and the coating of that panel for our direct
radiography products. The supplier for the panel coating is Analogic
Corporation, which is also a customer as well as a potential competitor. In
addition we have only limited sources of supply for some key components used in
our mini c-arm systems. Obtaining alternative sources of supply of these
components could involve significant delays and other costs, and may not be
available to us on reasonable terms, if at all. The failure of a component
supplier or contract assembler to provide acceptable quality and timely
components or assembly service at an acceptable price, or an interruption of
supplies from such a supplier could harm our business and prospects. Any
disruption of supplies of key components could have an adverse effect on
shipments which could result in lost or deferred sales.
We may not be able to compete successfully.
A number of companies have developed, or are expected to develop, products
that compete or will compete with our products. Many of these competitors offer
a range of products in areas other than those in which we compete, which may
make such competitors more attractive to hospitals, radiology clients, general
purchasing organizations and other potential customers. In addition, many of
our competitors and potential competitors are larger and have greater financial
resources than we do and offer a range of products broader than our products.
Some of the companies with which we now compete or may compete in the future
have or may have more extensive research, marketing and manufacturing
capabilities and significantly greater technical and personnel resources than
we do, and may be better positioned to continue to improve their technology in
order to compete in an evolving industry. Our failure to compete successfully
could harm our business and prospects.
The primary competitor for our bone densitometry products is General
Electric Medical Systems (GEMS). Our direct-to-digital imaging products compete
with traditional X-ray systems as well as computed radiography systems, which
are less expensive than our products, and other direct-to-digital systems. The
larger competitors in these markets include GEMS, Siemens, Kodak, Canon and
Varian. General Electric has received FDA approval to market a digital general
radiography X-ray system. Another company, Fischer Imaging Corporation,
recently received FDA marketing approval for its general radiography digital X-
ray system. Our mammography systems compete with products offered by GEMS,
Siemens, Instrumentarium and Fischer Imaging Corporation. Our minimally
invasive breast biopsy systems compete with products offered by Fischer Imaging
Corporation and with conventional surgical biopsy procedures. Our mini c-arm
products compete directly with mini c-arms manufactured and sold by a limited
number of companies including GEMS. We also compete indirectly with
manufacturers of conventional c-arm image intensifiers including Siemens and
GEMS.
Our success depends upon our ability to adapt to rapid changes in technology
and customer requirements.
The market for our products has been characterized by rapid technological
change, frequent product introductions and evolving customer requirements. We
believe that these trends will continue into the foreseeable future. Our
success will depend, in part, upon our ability to enhance our existing
products, successfully develop new products that meet increasing customer
requirements and gain market acceptance. If we fail to do so our products may
be rendered obsolete or uncompetitive by new industry standards or changing
technology.
We may be unable to successfully integrate the operations of our acquisitions.
We acquired the United States business of Trex Medical in September 2000 and
Direct Radiography Corp. in June 1999. Both of these acquisitions involve
numerous risks generally associated with acquisitions, including:
. the diversion of management's attention;
. the assimilation of operations, personnel and products of the acquired
businesses;
5
. the ability to manage geographically remote units; and
. the potential loss of key employees of the acquired businesses.
We may not be able to successfully integrate the operations of Trex Medical or
Direct Radiography Corp. Failure to do so would harm our business and
prospects.
Our failure to manage current or future alliances or joint ventures effectively
may harm our business and prospects.
We are exploring potential alliances, joint ventures or other business
relationships to expand our distribution channels, raise cash or share ongoing
research and development costs. Potential partners most likely would include
our competitors or potential competitors, and our alliance with any of them
could enhance their business to our detriment. Moreover, we may not be able to:
. identify appropriate candidates for alliances or joint ventures;
. assure that any alliance or joint venture candidate will provide us with
the support anticipated;
. successfully negotiate an alliance or joint venture on terms that are
advantageous to us; or
. successfully manage any alliance or joint venture.
Furthermore, any alliance or joint venture may divert management time and
resources. Our entering into a disadvantageous alliance or joint venture or
failure to manage an alliance or joint venture effectively could harm our
business and prospects.
The uncertainty of healthcare reform could harm our business and prospects.
In recent years, the healthcare industry has undergone significant change
driven by various efforts to reduce costs, including efforts at national
healthcare reform, trends toward managed care, cuts in Medicare, consolidation
of healthcare distribution companies and collective purchasing arrangements by
office-based healthcare practitioners. Healthcare reform proposals and medical
cost containment measures in the United States and in many foreign countries
could:
. limit the use of our products;
. reduce reimbursement available for such use; or
. adversely affect the use of new therapies for which our products may be
targeted.
These reforms or cost containment measures, including the uncertainty in the
medical community regarding their nature and effect, could harm our business
and prospects and make it difficult for us to raise additional capital on
advantageous terms, if at all.
We depend on third party reimbursement to our customers for market acceptance
of our products. Failure of third party payors to provide appropriate levels of
reimbursement for use of our products could harm our business and prospects.
Sales of medical products largely depend on the reimbursement of patients'
medical expenses by government healthcare programs and private health insurers.
The costs of our products are substantial, and market acceptance of our
products depends upon our customers' ability to obtain appropriate levels of
reimbursement from third-party payors for use of our products. In the United
States, the Health Care Finance Administration, known as HCFA, establishes
guidelines for the reimbursement of healthcare providers treating Medicare and
Medicaid patients. Under current HCFA guidelines, varying reimbursement levels
have been established for dual X-ray and ultrasound bone density assessment,
mammography and other imaging and diagnostic procedures performed by our
products. The actual reimbursement amounts are determined by individual state
Medicare carriers and, for non-Medicare and Medicaid patients, private
insurance carriers. There are often delays between the reimbursement approvals
by HCFA and by a state Medicare carrier and private insurance carriers.
Moreover, states as well as private insurance carriers may choose not to follow
the HCFA reimbursement guidelines. The use of our products outside the United
States is similarly affected by
6
reimbursement policies adopted by foreign regulatory and insurance carriers. A
reduction or other adverse change in reimbursement policies for the use of our
products could harm our business and prospects.
The future growth of our bone densitometry business depends in large part on
the continued development and more widespread acceptance of complementary
therapies.
Our bone densitometers and related products are used to assist physicians in
diagnosing patients at risk for osteoporosis and other bone disorders, and to
monitor the effectiveness of therapies to treat these disorders. As a result,
the future growth of the market for these products and of this business will in
large part be dependent upon the development and more widespread acceptance of
drug therapies to prevent and to treat osteoporosis. Over the last several
years, the FDA has approved a number of drug therapies to treat osteoporosis.
We also understand that a number of other drug therapies are under development.
While sales of our bone densitometry products have benefited from the increased
availability and use of these therapies, most patients who are at risk for
osteoporosis continue to go untreated. We cannot assure that any therapies
under development or in clinical trials will prove to be effective, obtain
regulatory approval, or that any approved therapy will gain wide acceptance.
Even if these therapies gain widespread acceptance, we cannot assure that this
acceptance will increase the sales of our products.
Reductions in revenues could harm our operating results because a high
percentage of our operating expenses is relatively fixed.
A high percentage of our operating expenses is relatively fixed. We likely
will not be able to reduce spending to compensate for adverse fluctuations in
revenues. As a result, shortfalls in revenues are likely to harm our operating
results.
Our results of operations are subject to significant quarterly variation and
seasonal fluctuation.
Our results of operations have been and may continue to be subject to
significant quarterly variation. The results for a particular quarter may vary
due to a number of factors, including:
. the overall state of healthcare and cost containment efforts;
. the development status and demand for drug therapies to treat
osteoporosis;
. the development status and demand for our direct-to-digital imaging
products;
. economic conditions in our markets;
. foreign exchange rates;
. the timing of orders;
. the timing of expenditures in anticipation of future sales;
. the mix of products sold by us;
. the introduction of new products and product enhancements by us or our
competitors; and
. pricing and other competitive conditions.
We also believe that our sales may be somewhat seasonal, with reduced orders
in the summer months reflecting summer vacation schedules. Customers may also
cancel or reschedule shipments. Production difficulties could also delay
shipments. Any of these factors also could harm our business and prospects.
Our delay or inability to obtain any necessary United States or foreign
regulatory clearances or approvals for our products could harm our business and
prospects.
Our products are medical devices that are the subject of a high level of
regulatory oversight. Our delay or inability to obtain any necessary United
States or foreign regulatory clearances or approvals for our products
7
could harm our business and prospects. The process of obtaining clearances and
approvals can be costly and time-consuming. There is a risk that any approvals
or clearances, once obtained, may be withdrawn or modified. Medical devices
cannot be marketed in the United States without clearance or approval by the
FDA. Medical devices sold in the United States must also be manufactured in
compliance with FDA Good Manufacturing Practices, which regulate the design,
manufacture, packing, storage and installation of medical devices. Moreover,
medical devices are required to comply with FDA regulations relating to
investigational research and labeling. States may also regulate the
manufacture, sale and use of medical devices, particularly those that employ X-
ray technology. Our products are also subject to approval and regulation by
foreign regulatory and safety agencies.
Fluctuations in the exchange rates of European currencies and the other foreign
currencies in which we conduct our business, in relation to the U.S. dollar,
have harmed and could continue to harm our business and prospects.
Foreign sales accounted for approximately 33% of our product sales in fiscal
2000 and 28% of our product sales in fiscal 2001. We maintain a sales and
service office in Belgium and a support office in France. The expenses and
sales of these offices are denominated in local currencies. We anticipate that
foreign sales and sales denominated in foreign currencies will continue to
account for a significant portion of our total sales. Fluctuations in the value
of local currencies have caused, and are likely to continue to cause, amounts
translated into U.S. dollars to fluctuate in comparison with previous periods.
In particular, the strength in value of the U.S. dollar to the Euro and other
European currencies has resulted in an increase in price for products
denominated in those currencies. We believe that these price increases have
adversely affected our ability to compete in these markets. Conversely, an
increase in the value of the local currencies in which we have offices would
likely increase our expenses relative to U.S. dollar sales and could also harm
our operating results. We have hedged our foreign currency exposure by
borrowing funds in local European currencies to pay the expenses of our foreign
offices. There is a risk that these hedging activities will not be successful
in mitigating our foreign exchange risk exposure.
We conduct our business worldwide, which exposes us to a number of difficulties
in coordinating our international activities and dealing with multiple
regulatory environments.
We sell our products to customers throughout the world. Our worldwide
business may be harmed by:
. difficulties in staffing and managing operations in multiple locations;
. greater difficulties in trade accounts receivable collection;
. possible adverse tax consequences;
. governmental currency controls;
. changes in various regulatory requirements;
. political and economic changes and disruptions;
. export/import controls; and
. tariff regulations.
We have experienced difficulties in collecting accounts receivable in Latin
America, which as of September 29, 2001 totaled $3.3 million, including
$425,000 of long-term accounts receivable included in other assets.
Our business could be harmed if we are unable to protect our proprietary
technology.
We rely primarily on a combination of trade secrets, patents, copyright and
trademark laws and confidentiality procedures to protect our technology.
Despite these precautions, unauthorized third parties may
8
infringe, copy or reverse engineer portions of our technology. We do not know
if current or future patent applications will be issued with the scope of the
claims sought, if at all, or whether any patents issued will be challenged or
invalidated. In addition, we have obtained or applied for corresponding patents
and patent applications in several foreign countries for some of our patents
and patent applications. There is a risk that these patent applications will
not be granted or that the patent or patent application will not provide
significant protection for our products and technology. Our competitors may
independently develop similar technology that our patents do not cover. In
addition, because patent applications in the United States are not publicly
disclosed until the patent is issued, applications may have been filed which
relate to our technology. Moreover, there is a risk that foreign intellectual
property laws will not protect our intellectual property rights to the same
extent as United States intellectual property laws. In the absence of
significant patent protection, we may be vulnerable to competitors who attempt
to copy our products, processes or technology.
Our business could be harmed if we infringe upon the intellectual property
rights of others.
There has been substantial litigation regarding patent and other
intellectual property rights in the medical device and related industries. We
have been, and may be in the future, notified that we may be infringing
intellectual property rights possessed by third parties. If any such claims are
asserted against our intellectual property rights, we may seek to enter into
royalty or licensing arrangements. There is a risk in these situations that no
license will be available or that a license will not be available on reasonable
terms. Alternatively, we may decide to litigate such claims or to design around
the patented technology. These actions could be costly and would divert the
efforts and attention of our management and technical personnel. As a result,
any infringement claims by third parties or claims for indemnification by
customers resulting from infringement claims, whether or not proven to be true,
may harm our business and prospects.
We may be prohibited from manufacturing and selling the Lorad prone breast
biopsy system and be required to pay significant damages if Fischer Imaging
Corporation succeeds in its lawsuit against Trex Medical that alleges that the
system infringes two Fischer Imaging patents.
In connection with our acquisition of Trex Medical's U.S. assets, we assumed
liability for a lawsuit filed by Fischer Imaging against Trex Medical alleging
that the Lorad prone biopsy system infringes upon two Fischer Imaging patents,
subject to indemnification from Trex Medical and its parent, Thermo Electron
Corporation, for any damages up to our adjusted purchase price for the Trex
Medical assets. In connection with this arrangement, Trex Medical is continuing
to defend this lawsuit. Recently, Fischer Imaging filed a lawsuit against us in
connection with our sales of this product. Trex Medical and Thermo Electron
have agreed to indemnify us in connection with, and to defend, this lawsuit. If
Trex Medical is unsuccessful in defending these lawsuits, we may be prohibited
from manufacturing and selling the prone breast biopsy system without a license
from Fischer Imaging and Fischer Imaging could be awarded significant damages.
If a license were required, we cannot assure that we would be able to obtain
one on commercially reasonable terms, if at all. Moreover, if Fischer Imaging
were awarded damages, we cannot assure that our indemnification from Trex
Medical and Thermo Electron, if any, would be sufficient to cover the amount of
the award. A significant award above the indemnification amount actually
received could harm our business and prospects.
9
Our future success will depend on the continued services of our key personnel.
The loss of any of our key personnel, particularly our key research and
development personnel, could harm our business and prospects. Our success will
also depend upon our ability to attract and retain other qualified managerial
and technical personnel. Competition for such personnel, particularly software
engineers and other technical personnel, is intense. We may not be able to
attract and retain personnel necessary for the development of our business. We
do not have any key man life insurance for any of our officers or other key
personnel.
There is a risk that our insurance will not be sufficient to protect us from
product liability claims, or that in the future product liability insurance
will not be available to us at a reasonable cost, if at all.
Our business involves the risk of product liability claims inherent to the
medical device business. We maintain product liability insurance subject to
deductibles and exclusions. There is a risk that our insurance will not be
sufficient to protect us from product liability claims, or that product
liability insurance will not be available to us at a reasonable cost, if at
all. An underinsured or uninsured claim could harm our operating results or
financial condition.
We use hazardous materials and products.
Our research and development involves the controlled use of hazardous
materials, such as toxic and carcinogenic chemicals and various radioactive
compounds. Although we believe that our safety procedures for handling and
disposing of such materials comply with the standards prescribed by federal,
state and local regulations, we cannot completely eliminate the risk of
accidental contamination or injury from these materials. In the event of this
type of accident, we could be held liable for any resulting damages, and any
such liability could be extensive. We are also subject to substantial
regulation relating to occupational health and safety, environmental
protection, hazardous substance control, and waste management and disposal. The
failure to comply with such regulations could subject us to, among other
things, fines and criminal liability.
Provisions in our Certificate of Incorporation and By-laws and our stockholder
rights plan may have the effect of discouraging advantageous offers for our
business or common stock and limit the price that investors might be willing to
pay in the future for shares of our common stock.
Our Certificate of Incorporation, By-laws and the provisions of Delaware
corporate law include provisions that may have the effect of discouraging or
preventing a change in control. In addition, we have a stockholder rights plan
that may have the effect of discouraging or preventing a change in control.
These provisions could limit the price that our stockholders might receive in
the future for shares of our common stock.
Risks Related to this Offering
The volatility of our stock price could adversely affect your investment in our
common stock.
The market price of our common stock has been, and may continue to be,
highly volatile. We believe that a variety of factors could cause the price of
our common stock to fluctuate, perhaps substantially, including:
. announcements and rumors of developments related to our business or the
industry in which we compete;
. quarterly fluctuations in our actual or anticipated operating results and
order levels;
. general conditions in the worldwide economy;
. announcements of technological innovations;
. new products or product enhancements by us or our competitors;
. developments in patents or other intellectual property rights and
litigation; and
. developments in our relationships with our customers and suppliers.
10
In addition, in recent years the stock market in general and the markets for
shares of small capitalization and "high-tech" companies in particular, have
experienced extreme price fluctuations which have often been unrelated to the
operating performance of affected companies. Any such fluctuations in the
future could adversely affect the market price of our common stock, and the
market price of our common stock may decline.
Future sales of our common stock may cause our stock price to decline.
Substantially all of our outstanding shares of common stock are freely
tradable without restriction or further registration. Affiliates must sell all
shares they own in compliance with the volume and other requirements of Rule
144, except for the holding period requirements. Nevertheless, sales of
substantial amounts of common stock by our stockholders, including purchasers
in this offering, or even the potential for such sales, may cause the market
price of our common stock to decline and could impair our ability to raise
capital through the sale of our equity securities.
Management will have broad discretion in how we use the proceeds of this
offering, and we may not use these proceeds effectively.
Our management will have considerable discretion in the application of the
net proceeds of this offering, and you will not have the opportunity, as part
of your investment decision, to assess whether the proceeds are being used
appropriately. The net proceeds may be used for corporate purposes that do not
increase our profitability or our market value.
PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may
sell common stock in one or more offerings up to a total of 3,000,000 shares of
common stock.
PROSPECTUS SUPPLEMENT
This prospectus provides you with a general description of the offerings we
may make of our common stock. Each time we sell common stock, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add to or change information
contained in this prospectus. If so, the prospectus supplement should be read
as superseding this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information."
The prospectus supplement to be attached to the front of this prospectus
will describe the terms of the offering of common stock, including the offering
price, the purchase price and net proceeds we will receive in such offering and
the specific terms related to the offering.
DIVIDEND POLICY
We have never declared or paid cash dividends on our capital stock and do
not plan to pay any cash dividends in the foreseeable future. Our current
policy is to retain all of our earnings to finance future growth. In addition,
our existing credit facility with Foothill Capital Corporation prohibits us
from declaring or paying any dividends.
11
USE OF PROCEEDS
We will receive all of the net proceeds from the sale of our common stock
registered under the registration statement of which this prospectus is a part.
We expect to use the net proceeds of this offering and any future issuances
under the registration statement to fund the continued development of our
DirectRay direct-to-digital mammography systems, including conducting clinical
trials and working toward regulatory approvals, as well as to fund research and
development of our other products and for general corporate purposes and
working capital. As of the date of this prospectus, we cannot specify with
certainty all of the particular uses we will have for the net proceeds upon
completion of the offerings made under the registration statement. Accordingly,
unless the applicable prospectus supplement states otherwise, our management
will have broad discretion in the application of the net proceeds.
Pending these uses, we intend to invest the net proceeds in interest-
bearing, investment-grade instruments, certificates of deposit or direct or
guaranteed obligations of the United States.
12
PLAN OF DISTRIBUTION
Needham & Company, Inc. is acting as our financial advisor in connection
with this distribution. We may offer our common stock for sale in one or more
transactions, including block transactions, at a fixed price or prices, which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at prices determined on a
negotiated or competitive bid basis. We may sell common stock directly, through
agents designated from time to time, or by such other means as may be specified
in the applicable prospectus supplement. Participating agents or broker-dealers
in the distribution of any of the common stock may be deemed to be
"underwriters" within the meaning of the Securities Act. Any discount or
commission received by any underwriter and any participating agents or broker-
dealers, and any profit on the resale of shares of the securities purchased by
any of them may be deemed to be underwriting discounts or commissions under the
Securities Act.
We may sell our common stock through a broker-dealer acting as agent or
broker or to a broker-dealer acting as principal. In the latter case, the
broker-dealer may then resell such common stock to the public at varying prices
to be determined by the broker-dealer at the time of resale. The maximum
commission or discount that may be received by any NASD member firm or
independent broker-dealer will not be greater than 8% for the sale of
securities offered under Rule 415 under the Securities Act.
To the extent required, the number and amount of the common stock to be
sold, information relating to the underwriters, the purchase price, the public
offering price, if applicable, the name of any underwriter, agent or broker-
dealer, and any applicable commissions, discounts or other items constituting
compensation to such underwriters, agents or broker-dealers with respect to a
particular offering will be set forth in any accompanying supplement to this
prospectus.
If underwriters are used in a sale, common stock will be acquired by the
underwriters for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The common
stock may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of the common stock will be named in the
prospectus supplement relating to that offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be stated on
the cover of the prospectus supplement. Underwriters, dealers, and agents may
be entitled, under agreements entered into with us, to indemnification against
and contribution toward certain civil liabilities, including under the
Securities Act.
Under the securities laws of some states, the common stock registered by the
registration statement may be sold in those states only through registered or
licensed brokers or dealers.
Any person participating in the distribution of the common stock registered
under the registration statement that includes this prospectus will be subject
to applicable provisions of the Securities Exchange Act of 1934, as amended,
and the applicable Securities and Exchange Commission rules and regulations,
including, among others, Regulation M, which may limit the timing of purchases
and sales of any of our common stock by any such person. Furthermore,
Regulation M may restrict the ability of any person engaged in the distribution
of our common stock to engage in market-making activities with respect to our
securities. These restrictions may affect the marketability of our common stock
and the ability of any person or entity to engage in market-making activities
with respect to our common stock.
Upon sale under the registration statement that includes this prospectus,
the securities registered by the registration statement will be freely tradable
in the hands of persons other than our affiliates.
LEGAL MATTERS
The validity of the shares of common stock to be sold in this offering will
be passed upon for us by Brown, Rudnick, Freed & Gesmer, Boston, Massachusetts.
13
EXPERTS
The consolidated financial statements of Hologic, Inc., as of September 25,
1999 and September 30, 2000 and for each of the three years in the period ended
September 30, 2000 incorporated by reference in this prospectus and in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
incorporated by reference in reliance upon the authority of such firm as
experts in giving such reports.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange
Commission. You may read and copy these reports, proxy statements and other
information at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. You can request copies of these documents by writing to the
SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-
0330 for more information about the operation of the public reference room. Our
SEC filings are also available at the SEC's web site at http://www.sec.gov.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act with respect to common stock offered in connection with this
prospectus. This prospectus does not contain all of the information set forth
in the registration statement. We have omitted certain parts of the
registration statement in accordance with the rules and regulations of the SEC.
For further information with respect to us and our common stock, you should
refer to the registration statement. Statements contained in this prospectus as
to the contents of any contract or other document are not necessarily complete
and, in each instance, you should refer to the copy of such contract or
document filed as an exhibit to or incorporated by reference in the
registration statement. Each statement as to the contents of such contract or
document is qualified in all respects by such reference. You may obtain copies
of the registration statement from the SEC's principal office in Washington,
D.C. upon payment of the fees prescribed by the SEC, or you may examine the
registration statement without charge at the offices of the SEC described
above.
The SEC allows us to "incorporate by reference" information that we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, until all of the common stock
registered hereunder is sold:
. Our Annual Report on Form 10-K for the year ended September 30, 2000;
. Our Quarterly Reports on Form 10-Q for the period ended December 30,
2000; March 31, 2001; June 30, 2001;
. The description of our common stock contained in our Registration
Statement on Form 8-A dated January 31, 1990;
. The description of our common stock purchase rights contained in our
Registration Statement on Form 8-A/A dated June 14, 1999, filed with the
SEC on June 18, 1999; and
. Current Reports on Form 8-K filed with the SEC on June 28, 2001 and
August 2, 2001.
14
You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
Hologic, Inc.
35 Crosby Drive
Bedford, MA 01730-1401
Attention: Investor Relations
Tel: (781) 999-7300
You should rely only on the information or representations provided in this
prospectus and in the accompanying prospectus supplement. We have authorized
no one to provide you with different information. We are not making an offer
of these securities in any state where the offer is not permitted. You should
not assume that the information in this prospectus or in any prospectus
supplement is accurate as of any date other than the date on the front of
these documents.
15
[Hologic Logo appears here]
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
SEC Registration Fee.............................................. $ 7,245
Printing Expenses................................................. $ 30,000
Accounting Fees and Expenses...................................... $ 100,000
Legal Fees and Expenses........................................... $ 150,000
Miscellaneous..................................................... $ 12,755
---------
TOTAL........................................................... $ 300,000
=========
Item 15. Indemnification of Directors and Officers
Article 10 of our Certificate of Incorporation eliminates the personal
liability of directors to us or our stockholders for monetary damages for
breach of fiduciary duty to the extent permitted by DelawareGeneral Corporation
Law. Article VII of our By-Laws provides that we shall indemnify our officers
and directors to the extent permitted by Delaware General Corporation Law.
Section 145 of the Delaware General Corporation Law authorizes a corporation to
indemnify directors, officers, employees or agents of the corporation if such
party acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interest of the corporation and, with respect to any
criminal action or proceeding, hadno reason to believe his conduct was
unlawful, as determined in accordance with the Delaware General Corporation
Law. Section 145 further provides that indemnification shall be provided if the
party in question is successful on the merits otherwise. We have also entered
into indemnification agreements with each of our directors. The indemnification
agreements are intended to provide the maximum protection permitted by Delaware
law with respect to indemnification of directors. We may also enter into
similar agreements with certain of our officers who are not also directors. The
effect of these provisions is to permit indemnification by us for liabilities
arising under the Securities Act of 1933, as amended. We also maintain
directors and officers liability insurance.
Item 16. Exhibits
Exhibit
Number Reference
------- ---------
1.01 Form of Underwriting Agreement A
2.01 Merger Agreement between Hologic and its Massachusetts B
predecessor
2.02 Agreement and Plan of Merger between Hologic, Fenway D-2.01
Acquisition Corp., and FluoroScan Imaging Systems, Inc.
2.03 Securities Purchase Agreement dated April 28, 1999, as G-1
amended on
June 3, 1999 by and among Hologic, Sterling Diagnostic
Imaging, Inc. and SDI Investments, L.L.C.
2.04 Contract of Sale dated April 28, 1999, as amended on June G-2
3, 1999, by and between Glasgow Land Company, L.L.C. and
Hologic
2.05 Asset Purchase and Sale Agreement among Trex Medical H-2
Systems, Corporation, ThermoTrex Corporation and Thermo
Electron Corporation and Hologic dated August 13, 2000
3.01 Certificate of Incorporation of Hologic B
II-1
Exhibit
Number Reference
------- ---------
4.01 Specimen certificate for shares of Hologic's Common Stock B
4.02 Description of capital stock (contained in Hologic's B
Certificate of Incorporation, filed as Exhibit 3.01)
4.03 Rights Agreement dated December 22, 1992 C
4.04 Amendment No. 1 to Rights Agreement dated as of December E-4.01
13, 1995
4.05 Amendment No. 2 to Rights Agreement dated as of December E-4.02
19, 1996
4.06 Amendment No. 3 to Rights Agreement dated as of April 25, F-4.03
1999
5.01 Legal Opinion of Brown, Rudnick, Freed & Gesmer, P.C. I
23.01 Consent of Arthur Andersen LLP I
23.02 Consent of Brown, Rudnick, Freed & Gesmer, P.C. (included I
in Exhibit 5.01)
24.01 Power of Attorney (contained on page II-4 hereof) J
--------
A. To be filed by Amendment or on Form 8-K.
B. The above exhibits were previously filed as an exhibit of the same number to
our Registration Statement on Form S-1 (Registration No. 33-33128) filed on
January 24, 1990 and are incorporated herein by reference.
C. The above exhibit was previously filed as an exhibit of the same number to
our 1992 Annual Report on Form 10-K and are incorporated herein by
reference.
D. The above exhibit was previously filed with the referenced exhibit number as
an exhibit to our Proxy Statement and Prospectus on Form S-4 (Registration
No. 333-08977) filed on August 6, 1996 and is incorporated herein by
reference.
E. The above exhibit was previously filed with the referenced exhibit number as
an exhibit to Amendment No. 1 to Hologic's Registration Statement on Form 8-
A/A (Registration No. 000-18281) filed on January 17, 1997 and is
incorporated herein by reference.
F. The above exhibit was previously filed with the referenced exhibit number as
an exhibit to Amendment No. 2 to Hologic's Registration Statement on Form 8-
A/A (Registration No. 000-18281) filed on May 20, 1999 and is incorporated
herein by reference.
G. The above exhibit was previously filed with the referenced exhibit number as
an exhibit to Hologic's Current Report on Form 8-K (SEC File No. 000-18281)
filed on June 18, 1999 and is incorporated herein by reference.
H. The above exhibit was previously filed on October 2, 2000 with the
referenced exhibit number as an exhibit to our Current Report on Form 8-K
(SEC File No. 000-18281) dated as of September 15, 2000, and is incorporated
herein by reference.
I. Filed herewith.
J. Previously filed.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
II-2
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(5) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnification provisions described herein, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as express in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Bedford, Commonwealth of
Massachusetts, on the 28th day of November, 2001.
Hologic, Inc.
/s/ Glenn P. Muir
By: _________________________________
Glenn P. Muir
Chief Financial Officer and
Executive Vice President Finance
and Administration
Signature Title Date
--------- ----- ----
* Director, Chief Executive November 28, 2001
______________________________________ Officer and President
John W. Cumming (Principal Executive
Officer)
/s/ Glenn P. Muir Executive Vice President November 28, 2001
______________________________________ Finance and
Glenn P. Muir Administration, Treasurer
and Director (Principal
Financial Officer)
* Chairman of the Board and November 28, 2001
______________________________________ Chief Technical Officer
Jay A. Stein
* Principal Accounting November 28, 2001
______________________________________ Officer and Controller
Robert H. Lavallee
* Director November 28, 2001
______________________________________
Irwin Jacobs
* Director November 28, 2001
______________________________________
William A. Peck
* Director November 28, 2001
______________________________________
Elaine Ullian
/s/ Glenn P. Muir
*By: ________________________________
Glenn P. Muir
Attorney-in-Fact
II-4
EXHIBIT INDEX
Exhibit
Number Reference
------- ---------
1.01 Form of Underwriting Agreement A
2.01 Merger Agreement between Hologic and its Massachusetts B
predecessor
2.02 Agreement and Plan of Merger between Hologic, Fenway D-2.01
Acquisition Corp., and FluoroScan Imaging Systems, Inc.
2.03 Securities Purchase Agreement dated April 28, 1999, as G-1
amended on June 3, 1999 by and among Hologic, Sterling
Diagnostic Imaging, Inc. and SDI Investments, L.L.C.
2.04 Contract of Sale dated April 28, 1999, as amended on June G-2
3, 1999, by and between Glasgow Land Company, L.L.C. and
Hologic
2.05 Asset Purchase and Sale Agreement among Trex Medical H-2
Systems, Corporation, ThermoTrex Corporation and Thermo
Electron Corporation and Hologic dated August 13, 2000
3.01 Certificate of Incorporation of Hologic B
4.01 Specimen certificate for shares of Hologic's Common Stock B
4.02 Description of capital stock (contained in Hologic's B
Certificate of Incorporation filed, as Exhibit 3.01)
4.03 Rights Agreement dated December 22, 1992 C
4.04 Amendment No. 1 to Rights Agreement dated as of December E-4.01
13, 1995
4.05 Amendment No. 2 to Rights Agreement dated as of December E-4.02
19, 1996
4.06 Amendment No. 3 to Rights Agreement dated as of April 25, F-4.03
1999
5.01 Legal Opinion of Brown, Rudnick, Freed & Gesmer, P.C. I
23.01 Consent of Arthur Andersen LLP I
23.02 Consent of Brown, Rudnick, Freed & Gesmer, P.C. (included I
in Exhibit 5.01)
24.01 Power of Attorney (contained on page II-4 hereof) J
--------
A. To be filed by amendment or on Form 8-K.
B. The above exhibits were previously filed as an exhibit of the same number to
our Registration Statement on Form S-1 (Registration No. 33-33128) filed on
January 24, 1990 and are incorporated herein by reference.
C. The above exhibit was previously filed as an exhibit of the same number to
our 1992 Annual Report on Form 10-K and is incorporated herein by reference.
D. The above exhibit was previously filed with the referenced exhibit number as
an exhibit to our Proxy Statement and Prospectus on Form S-4 (Registration
No. 333-08977) filed on August 6, 1996 and is incorporated herein by
reference.
E. The above exhibit was previously filed with the referenced exhibit number as
an exhibit to Amendment No. 1 to Hologic's Registration Statement on Form 8-
A/A (Registration No. 000-18281) filed on January 17, 1997 and is
incorporated herein by reference.
F. The above exhibit was previously filed with the referenced exhibit number as
an exhibit to Amendment No. 2 to Hologic's Registration Statement on Form 8-
A/A (Registration No. 000-18281) filed on May 20, 1999 and is incorporated
herein by reference.
II-5
G. The above exhibit was previously filed with the referenced exhibit number as
an exhibit to Hologic's Current Report on Form 8-K (SEC File No. 000-18281)
filed on June 18, 1999 and is incorporated herein by reference.
H. The above exhibit was previously filed on October 2, 2000 with the
referenced exhibit number as an exhibit to our Current Report on Form 8-K
(SEC File No. 000-18281) dated as of September 15, 2000, and is incorporated
herein by reference.
I. Filed herewith.
J. Previously filed.
II-6