Correct Success: Hologic Inc (HOLX) Q1 2021 Earnings Call Transcript

Picture supply: The Motley Idiot.

Hologic Inc (NASDAQ:HOLX)
Q1 2021 Earnings Name
Jan 27, 2021, 4:30 p.m. ET

Ready Remarks:

Operator

Good afternoon, and welcome to Hologic’s First Quarter Fiscal 2021 Earnings Convention Name. My title is Eduardo, and I’m your operator for at present’s name. [Operator Instructions]

I might now prefer to introduce Mike Watts, Vice President of Investor Relations and Company Communications, to start the decision.

Michael Watts — Vice President, Investor Relations and Company Communications

Thanks, Eduardo. Good afternoon, and thanks for becoming a member of us for Hologic’s first quarter of fiscal 2021 earnings name. With me at present are Steve MacMillan the Firm’s Chairman, President and CEO and Karleen Oberton, our Chief Monetary Officer.

Steve and Karleen each have some ready remarks, then we’ll have a question-and-answer session at present. Our first quarter press launch is out there now on the Traders part of our web site, we additionally will publish our ready remarks to our web site shortly after we ship them. Lastly, a replay of this name might be archived by means of February 26th.

Earlier than we start, I might like to tell you that sure statements we make throughout this name might be forward-looking. These statements contain identified and unknown dangers and uncertainties which will trigger precise outcomes to vary materially from these expressed or implied. Such elements embrace these referenced within the protected harbor assertion that is included in our earnings launch and in our filings with the SEC.

Additionally throughout this name, we might be discussing sure non-GAAP monetary measures. A reconciliation to GAAP might be present in our earnings launch. One in all these non-GAAP measures is natural income and we outline natural income, as fixed forex income excluding the divested Blood Screening and Cynosure companies, in addition to the acquired Acessa enterprise.

Lastly, any share adjustments we focus on might be on a year-over-year foundation and income development charges might be expressed in fixed forex, until in any other case famous. Now I might like to show the decision over to Steve MacMillan, Hologic’s CEO.

Steve MacMillan — Chairman, President and Chief Govt Officer

Thanks, Mike, and good afternoon everybody. We’re happy to debate our monetary outcomes for the primary quarter of fiscal 2021. We’re off to a really robust begin to the yr throughout all our companies and main geographies. As soon as once more, our Diagnostics division delivered unimaginable efficiency by making an enormous influence towards COVID-19, and our Breast Well being and Surgical enterprise — companies proceed to strengthen with every returning to development in america, Europe and Asia Pacific.

So our efficiency was robust and broad-based throughout each divisions and geographies. In consequence, our monetary outcomes have been distinctive within the first quarter. Let’s present a fast overview. Whole income was $1.61 billion with non-GAAP earnings per share of $2.86. Natural income greater than doubled, up a 104% whereas EPS elevated greater than fourfold, as larger manufacturing volumes in Diagnostics enabled us to leverage our mounted price base. Each income and EPS got here in properly forward of our expectations originally of the quarter.

With that introduction, I might prefer to cowl three principal matters in my remarks at present, which can echo a number of the themes from our presentation on the J.P. Morgan convention earlier this month. First, how our purpose-driven tradition is contributing to and we imagine driving our wonderful monetary outcomes. Second, how we’re making an enormous distinction within the combat towards COVID-19, and third, why we’ll be a stronger firm on the opposite facet of the pandemic.

To start, lots of you’ll recall that Larry Fink the CEO of BlackRock wrote in early 2018, that firms each private and non-private, ought to serve a social objective. Three years later, we’d argue that Hologic is the epitome of such an organization, we’re an extremely purpose-driven extremely engaged group that’s waking up day by day desirous to make a optimistic distinction on this planet and we imagine this tradition is contributing to differentiated monetary efficiency each by way of our COVID response and the sooner than anticipated return to development in our Breast Well being and Surgical divisions.

Our staff perceive that the larger our collective influence on the world, the extra they and our shareholders profit. What makes us tick is our robust objective of enabling more healthy lives all over the place day by day. Inside this, now we have a particular ardour to champion ladies’s well being, however we do not simply assist ladies. If for instance, you are one of many tens of tens of millions of people that have had a Hologic COVID take a look at within the final yr, you’ll be able to relaxation assured that you just’re getting a top quality, extremely correct end result. That is the promise we make to our prospects, which we name The Science of Positive.

Our objective, ardour and promise have proven up in numerous methods because the pandemic started. Some are seen externally like terribly fast EUAs or large will increase in manufacturing capability. However many are behind the scenes from how we rewarded our front-line staff for his or her heroic efforts in the course of the pandemic to how our Board and administration group discovered protected methods to satisfy in particular person, to how we at all times tried to under-promise and over ship on the COVID take a look at commitments we made to prospects and governments all over the world.

We speak about many of those matters in our second annual sustainability report, titled The Energy of Goal, which we simply printed on our web site final week. I might encourage all our buyers, however particularly these enthusiastic about ESG points to have a look.

Now allow us to, provide you with an replace on our COVID testing efforts. As you’ll be able to most likely inform from our monetary outcomes, we proceed to make good progress on our plans to broaden manufacturing capability for our two COVID assays out of our vegetation in San Diego and Manchester U.Ok. Whole output elevated sequentially in comparison with the September quarter, which enabled us to offer about 30 million COVID assays to prospects producing income of about $745 million. As now we have stated, we are actually promoting extra COVID assessments every quarter than we had ever produced of all of our molecular assessments earlier than the pandemic, and we’re on observe to satisfy our aim to supply a minimum of 75 million complete molecular diagnostic assessments 1 / 4 globally by January of 2022.

This may symbolize greater than 3.5 occasions our complete capability pre-COVID, an amazing accomplishment, due to our staff, our suppliers and the U.S. authorities, which is offering monetary assist. Within the first quarter, about one-third of our COVID take a look at income got here exterior america, primarily from Europe. COVID testing continues to strengthen our worldwide enterprise, {our relationships} with prospects, our future prospects in diagnostics and even market entry for our different franchises.

These COVID gross sales contributed to complete worldwide income of $472 million within the quarter, which represented great development of 145% on an natural foundation. On the identical time, we’re additionally inspired the demand for brand new Panther devices stays very robust. You would possibly recall that final fiscal yr, we positioned greater than 500 new Panther methods worldwide, greater than double our typical run price. And we’re off to a wonderful begin in fiscal ’21 with one other 150 shipments within the first quarter alone.

We nonetheless have an extended ready listing for devices, which we imagine displays the longevity of COVID testing that our prospects anticipate. Total, our international put in base now stands at roughly 2,400 devices, giving us a strong platform for future development, as extra prospects come to understand our methods best-in-class capabilities.

Now allow us to shift gears to our third main subject, why we imagine our enterprise might be a lot stronger on the opposite facet of the pandemic. First, it is by no means been extra clear to us that demand for extremely correct molecular COVID testing will stay strong for some time. Whereas we might have turn into a little bit numb to an infection charges that stay staggeringly excessive in america and globally. However as a reminder, the virtually 2 million molecular assessments, which can be being carried out day by day in america at present, would annualize to a market that is about 17 occasions larger than the only largest molecular market earlier than COVID.

So whereas demand will inevitably decline as vaccines rollout. Nucleic acid testing is prone to have an extended significant tail that extends into fiscal ’22 and past. With COVID possible remaining our largest molecular product for years to come back. As now we have seen, it is going to take time to fabricate and administer vaccines broadly and many individuals will select to not be vaccinated. The societal want for and concentrate on COVID testing far exceeds something now we have ever seen earlier than, and the pandemics emotional toll will final for much longer driving future demand.

As public concern round COVID persist, the mixture of our large Panther put in base at services near the affected person and our gold normal assay efficiency, have us uniquely positioned to pursue many use circumstances, that might be round for the long-term. These embrace testing earlier than hospital admissions, asymptomatic screening for numerous functions and even confirmatory testing of different much less correct modalities.

Research have proven that these different assessments can miss two-thirds of asymptomatic circumstances and these false unfavourable outcomes can contribute to tremendous spreader occasions, even because the market matures and our manufacturing capability will increase. We imagine our mixture of sturdy chemistry, revolutionary engineering on Panther and differentiated labeling from FDA will assist us acquire market share.

Transferring on, the second motive Hologic might be stronger sooner or later is the numerous non-COVID enterprise we’re gaining on our quickly rising put in base of Panther devices. I do not suppose it is an exaggeration to say that in america, Europe and Asia, each single Panther that our industrial groups have positioned has been with a watch towards the long run. They’re doing a incredible job of extending and broadening industrial contract, profitable key strategic accounts and fueling our razor razor-blade enterprise mannequin.

As an indicator of this, final quarter we mentioned assessments of file or TORs which symbolize contracted yr one income from new assay prospects. We stated that we had achieved a brand new file in TORs in fiscal 2020 with non-COVID enterprise totaling $35 million in america, about 50% greater than we had ever achieved earlier than. This optimistic development is definitely accelerated in early 2021 with greater than $20 million of extra TORs within the first quarter alone.

That is one motive, the momentum in our molecular enterprise which was already good earlier than COVID is enhancing additional at present, particularly in Europe. For instance, after we take away COVID assay gross sales from our molecular quantity in addition to devices and ancillaries, core assay gross sales grew roughly 10% globally within the first quarter, greater than double the speed 1 / 4 in the past.

The third motive we imagine we might be stronger publish COVID is that, due to the great success of our diagnostics enterprise. We’ve got been in a position to make use of the final a number of quarters to additional bolster our breast and surgical franchises for the long run.

In breast, now we have continued to broaden on our technique to diversify the enterprise throughout the affected person continuum of care moderately than simply inserting capital gear. We are actually promoting a full portfolio of {hardware} and software program upgrades, interventional instruments and repair. Whereas the world has been understandably targeted on COVID, now we have elevated our direct presence with Breast Well being prospects and developed and launched merchandise resembling Provera, which is off to an excellent begin in its relaunch and most not too long ago we acquired for $64 million the German firm SOMATEX, a very long time associate of ours to strengthen our portfolio of breast most cancers markers, improve our industrial presence in Europe, and enhance our profitability.

In Surgical, each our R&D and enterprise growth pipelines have been productive broadening the portfolio of merchandise that we promote by means of a excessive performing extremely engaged gross sales drive. New merchandise resembling our Fluent fluid administration system and new hysteroscopes are complementing our market main MyoSure and NovaSure units and assist that division return to development within the first quarter, properly forward of schedule.

On the enterprise growth entrance, in August we spent roughly $80 million plus future contingent earn-out to purchase Acessa Well being. Acessa’s professional view is a laparoscopic RF product that’s used to deal with fibroids that MyoSure cannot attain, so, it’s extremely complementary to our surgical enterprise and a pleasant match for our gross sales drive. And up to now, early suggestions from our prospects has been good.

The acquisitions of Acessa and SOMATEX show the ultimate motive we might be stronger after the pandemic. The power to make use of the wholesome money move that COVID assessments are producing to step up our enterprise growth actions.

The pending $230 million acquisition of Biotheranostics, which we introduced earlier this month is one other good instance of this technique. Biotheranostics, a frontrunner in molecular take a look at for breast and metastatic cancers permits us to broaden into the adjoining development market of oncology, extra particularly Biotheranostics has achieved a terrific job of creating a powerful medical and reimbursement basis for his or her flagship Breast Most cancers index take a look at, which performs an vital position in a big, however under-penetrated breast most cancers market that we all know quite a bit about.

As well as, Biotheranostics supplies us medical lab capabilities that we are able to use to develop markets for novel content material down the street. From a monetary perspective Biotheranostics brings greater than $30 million of annual income, development charges in extra of 20% and robust gross margins.

We’re excited that since we introduced the deal Biotheranostics has obtained some superb information that can profit ladies with early stage hormone receptor optimistic breast most cancers. The Nationwide Complete Most cancers Community or NCCN included the Breast Most cancers index take a look at and in its tips to foretell the good thing about prolonged remedy with numerous endocrine therapies. This could assist set up the take a look at as the usual of take care of this vital medical query and contribute to elevated affected person entry.

Earlier than turning the decision over to Karleen, let me conclude by saying that we’re off to a wonderful begin in fiscal 2021. Our objective pushed tradition is driving wonderful execution and efficiency each by way of our COVID take a look at and the restoration of our different companies. And we’re working laborious to make sure that the monetary success we’re experiencing now, will translate right into a stronger firm down the street. We’re assured it is going to.

Now I’ll flip the decision over to Karleen.

Karleen Oberton — Chief Monetary Officer

Thanks, Steve and good afternoon everybody. In my remarks at present, I’ll present an outline of our divisional gross sales outcomes, stroll by means of our earnings assertion, briefly contact on just a few different key monetary metrics, and end with our steering for the second quarter fiscal ’21.

As Steve stated, we’re more than happy with our first quarter outcomes, as income and EPS considerably exceeded our steering. Reported income of $1.61 billion elevated 87%, organically income grew 104% pushed by robust COVID gross sales and the continued enchancment of our base enterprise throughout all main geographies. Given the unimaginable demand for our COVID assessments and the robust leads to our base enterprise, we have been capable of considerably enhance revenue margins and money move. In consequence, EPS of $2.86 within the first quarter elevated 369%, properly forward of our expectations. Additional, working money move has continued to be extraordinarily robust, which I will focus on in a minute.

Earlier than I do this, let me present some element on our divisional income outcomes. In Diagnostics, our largest division international income of $1.128 billion grew 256% within the first quarter pushed by molecular, the place gross sales elevated 449%. In response to the unprecedented demand for COVID testing, we shipped about 30 million assessments to prospects, producing income of $745 million, globally, and excluding COVID, our base molecular enterprise accelerated sequentially. As prospects proceed to see the good thing about our assay menu and the energy of Panther’s excessive throughput automation.

Rounding out Diagnostics, the cytology and perinatal companies grew by 1% within the quarter, pushed partially by a catch-up in cytology procedures at calendar year-end. In Breast Well being, international income of $332.7 million was down barely total. Nonetheless, efficiency improved in comparison with the fourth quarter and the enterprise returned to slight development in all geographies apart from Latin America. The division’s efficiency was pushed by the interventional companies, which grew 15% within the quarter and was held by the relaunch of our Brevera biopsy system.

Though, we’re inspired by sequential enchancment within the capital setting and by wholesome gear gross sales at calendar year-end, total spending stays a problem due to COVID. Nonetheless, our intentional diversification to service and consumables, in addition to a number of current acquisitions have helped mitigate stress on capital. For instance, Breast Well being service income, which is bigger than capital gross sales grew by mid-single digits within the quarter.

In Surgical, gross sales of $124 million grew 3.3%, a terrific end result given headwinds on elective procedures from not too long ago rising COVID circumstances in some elements of the nation. This end result exhibits the energy and dedication of our surgical gross sales drive, in addition to the good thing about a number of new merchandise. Total, by way of geography, home gross sales of $1.14 billion elevated 80% on a reported foundation. On an natural foundation, U.S. income was up 91%. Outdoors of america gross sales of $472 million elevated 106% in fixed forex. Organically, gross sales exterior the U.S. grew 145%, a stellar end result that displays our rising worldwide energy.

Now let’s transfer on to the remainder of the P&L for the primary quarter. Gross margins of 77.2% elevated 1,560 foundation factors, pushed by gross sales of excessive margin COVID assessments and the divestiture of the low margin Cynosure enterprise, complete working bills of $274.5 million decreased 5.1% within the first quarter. Nonetheless, bills really elevated when normalized for the Cynosure sale and about $6.5 million of credit from BARDA related to the event of our COVID assays.

These will increase have been pushed by investments in R&D and advertising for future development. As well as, bills related to our deferred compensation plan elevated, because of fairness market positive factors. As a reminder, whereas this legal responsibility is mark-to-market a lot of the expense is offset by a profit we realized in different earnings within the quarter. As well as, our non-GAAP tax price within the quarter was 21.75%, barely decrease than beforehand forecasted pushed by favorable geographic mixture of earnings, primarily from gross sales of COVID-19 assays exterior america.

Placing all this collectively working margins elevated 3,270 foundation factors to 60.2%, and web margins elevated 2,730 foundation factors to 46.6%. In consequence non-GAAP web earnings completed at $749.6 million and non-GAAP earnings per share have been $2.86 properly forward of expectations. Earlier than we cowl our 2021 second quarter steering I will rapidly contact on just a few different monetary metrics. Pushed by demand for our COVID assessments money move from operations was $650 million within the first quarter, a really robust end result.

The truth is, this was about the identical, as our complete money move from operations for all of the fiscal 2019. Checked out one other manner in simply the final two quarters now we have generated about $1.1 billion in working money move, which supplies us great monetary and strategic flexibility. For instance, we repurchased almost 1.5 million shares of inventory for $101 million within the first quarter, and our board not too long ago permitted a brand new $1 billion authorization, highlighting our dedication to capital deployment. And we have been additionally capable of strengthen our steadiness sheet by repaying our excellent revolver steadiness of $250 million.

As a reminder, we had borrowed towards the revolver, as a precautionary measure very early within the pandemic. Total, we had $869 million of money on the finish of the primary quarter, and with greater than $1 billion of EBITDA for the quarter our leverage ratio fell to 0.eight occasions. Whereas we stay comfy with leverage ratio between 2 and three over the longer-term we additionally don’t have any downside with a decrease ratio within the brief time period.

As you already know, we’re actively pursuing a lot of division-led tuck-in acquisitions and hope to make use of our money to finish extra offers this yr, along with shopping for again our inventory. Lastly, ROIC was 26.7% on a trailing 12-month foundation, a major improve of 1,440 foundation factors.

Earlier than we open the decision for questions, let me focus on our expectations for the second quarter of fiscal ’21. We anticipate that fiscal ’21 might be a wonderful yr for Hologic total, however our enterprise setting stays fluid as a result of ongoing results of the pandemic. Subsequently, we’re solely offering a single quarter of steering at present.

Let me additionally level out that our steering doesn’t embrace the influence of the pending Biotheranostics acquisition, which has not but closed. Within the second quarter of fiscal ’21, we anticipate wonderful monetary outcomes once more, with complete income within the vary of $1.5 billion to $1.56 billion, this represents an approximate doubling of natural income development to roughly 96% to 104%.

Underlying this, we anticipate comparable gross sales of our COVID take a look at to drive distinctive Diagnostics’ development. As a reminder, most of our new molecular manufacturing capability is anticipated to come back on-line within the second half of our fiscal yr. Blood Screening income, which we backed out of our natural calculations anticipated to be about $10 million within the quarter.

In our different companies, let me remind you that our March quarter gross sales are sometimes down sequentially in comparison with the December interval for our breast, surgical and base diagnostics companies. As capital gross sales and semi-elective procedures are usually seasonally stronger on the finish of the calendar yr. As well as, our steering incorporates headwinds associated to buyer spending constraints and restrictions on process volumes given rising COVID circumstances.

Whereas our prospects are a lot better ready than they have been final spring to handle by means of native will increase in COVID prevalence, now we have seen a current slowdown in some elective surgical procedures. On the underside line, we anticipate EPS of $2.56 to $2.68 within the second quarter with extraordinary development charges that considerably outpace income, whilst we improve investments for future development. To place this in perspective, we anticipate to earn extra within the second quarter alone, than we did within the full yr of 2019.

The second quarter steering relies on tax price of 21.75% and diluted shares excellent of 262 million to 263 million for the quarter. I might additionally prefer to level out that we anticipate different bills web to extend to shut to $25 million within the second quarter, as we do not forecast positive factors or losses associated to sure hedging actions like we noticed within the first quarter. As you replace your forecast, let me remind you that macro uncertainty has elevated in current weeks, as a result of pandemic. Whereas our visibility has improved in comparison with a number of months in the past, we’d nonetheless encourage you to mannequin on the center of our ranges which includes each potential upsides and disadvantages.

Earlier than we open the decision for questions, let me wrap up by saying that Hologics monetary efficiency within the first quarter was terrific. We proceed to make a huge effect preventing the COVID-19 pandemic and on ladies’s well being globally. Additional, I am assured that now we have positioned ourselves to ship distinctive long-term efficiency.

With that, I’ll ask the operator to open the decision for questions. Please restrict your questions to at least one plus a associated follow-up after which return to the queue.

Operator, we’re prepared for the primary query.

Questions and Solutions:

Operator

Thanks. [Operator Instructions] We’ll take our first query from Dan Leonard at Wells Fargo. Please go forward.

Dan Leonard — Wells Fargo Securities — Analyst

Thanks. So first query, you made a remark that your success for COVID testing exterior of the U.S. has really assist strengthen your different franchises. May you elaborate a bit on that.

Steve MacMillan — Chairman, President and Chief Govt Officer

Yeah, Dan, thanks. First of, it is humorous how issues go in full circle. As you already know over the previous few years, we have acquired a lot of our sellers in Europe on the Breast Well being facet and that gave us far more of a direct presence in a whole lot of the important thing international locations, the UK, Germany, Spain, Portugal, simply to call few and it actually helped us strengthen our complete group in Europe.

So we have been constructing relationships at a better stage as COVID is hit, it is given us unimaginable entry to a whole lot of the main governments. We have contracts with nearly each main authorities in Europe and in so doing, we’re now on their radar display that they actually — a whole lot of them did not know concerning the diagnostics enterprise and the way a lot of a frontrunner we’re within the sexually transmitted infections and different stuff.

So we have been in a position, as we have been promoting in COVID and giving them Panthers to essentially be reserving new enterprise that can come on-line because the Panthers go down and actually simply with the ability to speak extra about our cytology enterprise our HPV enterprise and actually only a totally different stage of relationship that we predict goes to strengthen us considerably down the street.

Dan Leonard — Wells Fargo Securities — Analyst

Okay, that is useful and there is little bit of an unrelated follow-up, how would you characterize the M&A setting proper now, in the course of the pandemic in diagnostics particularly, do you suppose will probably be — is it possible to do one thing in your core infectious illness testing part or do you suppose that is an setting the place you actually acquired to attend for the pandemic to subside earlier than these kind of property turn into accessible? Thanks.

Steve MacMillan — Chairman, President and Chief Govt Officer

Nice query, Dan. I feel, it will most likely put it in a few totally different views. At first, I might say is as — whereas we’re clearly producing a ton of money proper now. We even have the luxurious of being in a massive place of energy. In that our base companies are performing and I feel the easiest way which you can be very disciplined on offers is when it is simpler to stroll away from something since you do not want something. And also you be ok with your underlying enterprise.

So then if we take a look at the market, particularly, it has been fascinating to look at over the past eight months, proper, first everyone hunkered down again March, April, Might, together with ourselves, we had pushed issues just like the Acessa deal, we even pushed out just a few months and we would had a relationship with Biotheranostics and sort of simply wished to see the place our personal money move was at that cut-off date, so now clearly there may be a whole lot of firms which can be pretty flushed with money.

There’s additionally a reasonably wholesome IPO market proper now. So there’s a little bit of froth on the market I feel. And we need to be disciplined. So I might let you know as excited because the offers we have achieved. I am most likely extra happy with some offers we have fairly deep on over the past three, 4 months that we walked away from, actually over valuation or different points in diligence and that is I feel the maturing of our group right here and that the elemental energy.

So I feel we’re ready the place if we are able to get the suitable property on the proper value with good ROICs, hey, that is nice and if we have to wait some issues out and even missed some issues, we’re not going to get caught into bidding wars and overpay. So I do suppose it is a fairly vibrant market proper now. We have had each banker beating us — beating our door down making an attempt to promote us issues as you’ll be able to think about however staying very disciplined.

Dan Leonard — Wells Fargo Securities — Analyst

I respect that coloration. Thanks.

Operator

All proper. We’ll now take our subsequent query from Patrick Donnelly at Citi. Please go forward.

Patrick Donnelly — Citi — Analyst

All proper, thanks guys. Steve possibly one for you, simply on the COVID testing facet, positive you get this quite a bit, clearly, however simply on the sturdiness facet, as we predict out to the again half clearly vaccines rolling out a little bit uneven right here, nevertheless it’s going out as you concentrate on the again half and within the pie probably starting to naturally shrink their, all take a look at aren’t created equal. So I suppose the place you see Hologics sort of touchdown by way of when that pie begin shrinking? Do you get an even bigger piece? How does that play out? And once more actually your capability is increasing. What is the view of that break up between COVID and non-COVID as we get by means of this yr?

Steve MacMillan — Chairman, President and Chief Govt Officer

Positive, Patrick you are hitting on clearly need to be the largest questions. I imagine very strongly that we’ll proceed to enhance our market share. Proper to start with, this was sort of the wild, wild west to the FDA granted a gazillion EUAs, everyone raised out to the market. On the finish of the day, now we have some very highly effective and enduring property that we imagine will put us in a very good place over the long term. It begins frankly with Panther and the put in base.

We all know there’s a ton of hospitals that in a naked minimal are going to need to proceed to check everyone that is available in their doorways for procedures. They’ve them on website they will be doing that as we search to get extra folks again to work and back-to-school. There’s going to be a necessity for top stage testing that is asymptomatic and I feel, once more what’s been occurring within the brief time period, as a result of there wasn’t sufficient molecular assessments to start with, within the lengthy turnaround occasions, there’s a huge emphasis on a whole lot of the fast assessments, significantly a number of the antigen stuff and they will have a spot, however on the finish of the day they are not indicated, most of them for asymptomatic screening and we continue learning an increasing number of by the day. How a lot of that is asymptomatically being handed alongside? And if you take a look at a whole lot of these tremendous spreader occasions, they’re fairly frankly being triggered through the use of the mistaken take a look at off label to attempt to decide whether or not folks have one thing and I feel over time what we at all times stated, our group is the cream rises to the highest. So you’ve got Panther and it is the place it is situated, you’ve got an assay that is acquired unimaginable sensitivity specificity and top-of-the-line labels.

We even have the pooling indication and when you get again into screening, name it subsequent fall. Proper. take into consideration easy issues we need to get everyone again to highschool within the fall. The vaccine, nonetheless aren’t indicated for folks underneath 16. In order we maintain speaking about vaccinating the nation, youngsters are going to be excluded from that, we’ll need to be doing asymptomatic screening and a whole lot of the antigen assessments that folks might say are nice proper now, they are not going to be as efficient at choosing up significantly asymptomatic indications.

So now we have that and then you definitely simply have the pure workflow benefit that ought to by no means be forgotten. And that’s the workflow of Panther the random entry automation potential to simply make that is simple. The lab techs all over the world have been operating a marathon at dash pace, they’re exhausted you’ll be able to’t stroll in any lab and never hear from the lab director that their tax are simply drained and they’d a lot moderately be capable to be utilizing Panther and one of many elementary realities is we have been transport a lot however not all of it has been with our full penn caps and that is a part of the capability, we have been increase.

And as we’re capable of present an increasing number of of our penn caps, it creates the complete automation profit that not everyone is even been absolutely getting but. So we do not know, really precisely how that is going to play out, however all of the discussions we have been having with the Biden transition group has been continued about, hey, are you continue to increase extra capability and we actually are. We’ll see the way it all performs out, however I feel like each market we compete in, we predict we’ll be there standing.

Patrick Donnelly — Citi — Analyst

No. That is actually useful perspective. Admire that. After which possibly only one I feel, Karleen talked about it there on the finish, you’ve got seen a little bit little bit of a current slowdown in some elective surgical procedures, elective procedures prospects in rising COVID circumstances being a little bit of a headwind. Are you able to simply broaden a little bit bit on sort of what you are seeing this quarter sequentially versus final quarter by way of that slowdown, and sort of the place it is taking you guys and what the influence could possibly be? Simply need to make certain, now we have a great deal with on that.

Steve MacMillan — Chairman, President and Chief Govt Officer

Yeah. Total, I might say, it is actually on the margin. We frankly, I feel we completed final quarter higher than most. The truth that Surgical and Breast Well being each ended up rising, which we would not have anticipated. Whether or not they develop or keep flattish, we’re most likely speaking little items right here. We’re seeing little pockets proper in sure geographies, immediately, now we have a few slower days within the surgical enterprise or within the Breast Well being consumable enterprise. So it is I might name it, it is a little bit momentary outages, however essentially, it may be tiny for us, given that we have the COVID offset. And I feel we simply proceed to concentrate on sharing it is going to, maintain itself right here over time, however possibly barely extra muted this quarter on a few these companies, however nonetheless total good.

Patrick Donnelly — Citi — Analyst

Nice that is good to listen to. Thanks, Steve.

Steve MacMillan — Chairman, President and Chief Govt Officer

All proper.

Operator

We’ll now take our subsequent query from Chris Lin, Cowen. Please go forward.

Chris Lin — Cowen — Analyst

Hey, good afternoon and thanks for taking my query. Additionally, welcome again to the earnings name, Karleen.

Karleen Oberton — Chief Monetary Officer

Thanks.

Chris Lin — Cowen — Analyst

Steve,

Steve MacMillan — Chairman, President and Chief Govt Officer

Good job. Chris bear in mind. All proper.

Chris Lin — Cowen — Analyst

ISteve, in previous quarters, you supplied an estimate on what share of Panther placements are anticipated to exchange Tigris and in addition what share of Panther placements displaces a competitor or enabled a brand new buyer to start testing? Do you’ve got an replace on these figures for us? Additionally, I do know you take a look at of file, the take a look at of data metric to trace assay adoption, however do you’ve got an estimate on what share of Panthers positioned over the previous yr are actually additionally operating non-COVID-19 assessments?

Michael Watts — Vice President, Investor Relations and Company Communications

Hey, Chris, it is Mike. Let me take a crack at that. I feel in your first level, we, what we stated just a few quarters in the past is within the early days we positioned a good portion of our Panthers into a few of our largest prospects the place they have been going to exchange Tigris over time and supply entry to a broader menu, there’s 4 take a look at permitted on Tigris I feel, now 18 on Panther, in case you embrace the 2 COVID take a look at.

We have not given an replace on that since then, so I haven’t got an replace for a particular quantity for you at present. I might let you know that by and huge, we’re specializing in our present prospects, clearly, and broadening {our relationships} with these prospects. If you concentrate on the place our Panthers sit total, most of them nonetheless in hospital labs. And I feel this will get again to one of many feedback as Steve was making earlier about how getting testing nearer to the affected person goes to assist us from a share perspective going ahead for pre-op procedures, issues like that. After which the second a part of your query, Chris, on TOR was…

Chris Lin — Cowen — Analyst

What share of recent Panthers?

Michael Watts — Vice President, Investor Relations and Company Communications

Yeah, I do not know that quantity both, however I feel as Steve stated in his ready remarks that is what the gross sales drive is concentrated on, proper. And we have talked a bit previously about how we’re additional incentivizing our gross sales drive to usher in new non-COVID enterprise and so they’ve achieved a terrific job of that. So I feel, as Steve stated within the ready remarks, I imply mainly each Panther that we place is being positioned with a watch towards the long run in that run price of TORs.

I imply, we did $35 million final yr, we talked about this, that was 50% greater than we had ever achieved earlier than, fairly enthusiastic about that, and now within the first quarter we do one other $20 million. So I do not know if that that can proceed with that tempo, however actually at a great run price right here out of the chute.

Steve MacMillan — Chairman, President and Chief Govt Officer

Okay, nice. Then for my follow-up, I simply need to return to the subject of decentralization. One in all your largest friends and better throughput COVID-19 Diagnostics not too long ago introduced the acquisition of a molecular point-of-care platform and past that acquisition, I feel this pandemic has additionally simply highlighted the necessity for fast however correct diagnostic instruments.

Now provided that Panther is in a singular place, as a number one mid-to-high throughputs molecular diagnostics platform. Do you need to lengthen that management to a decrease quantity setting. Actually, do you’ve got any up to date ideas on that market alternative? Yeah. We proceed to have a look at totally different areas and totally different applied sciences, Chris. I imply I might let you know, we have been inundated we most likely get 5 or 10 per day, little firms, totally different applied sciences coming our manner. We’re actually some. We’re most likely, usually a little bit extra targeted within the labs that have been in our present prospects. We’re at all times trying on the perimeter are there methods to increase out from there. So we’ll proceed to have a look at every part and keep disciplined on the place we are able to get a great return and the place we are able to convey worth to the market.

Chris Lin — Cowen — Analyst

Okay, nice. Thanks for taking my questions.

Operator

Proper. We’ll take our subsequent query from Tycho Peterson at J.P. Morgan. Please go forward.

Tycho Peterson — J.P. Morgan Chase — Analyst

Hey, thanks, Steve. I’ll follow the sturdiness seen. I am simply curious over the previous few weeks, clearly, new strengths have emerged and then you definitely’ve acquired the brand new administration making an enormous push right here, so a few fast hits, if you’ll. The place are you on the take a look at for the brand new variants? After which as we take into consideration combine, I feel up until now you mainly been doing a number of stand-alone for COVID. How do you concentrate on the all combo assays, combine shifting over the course of the yr? After which how do you concentrate on the sustainability of the present pricing tendencies and reimbursement because it stands at present?

Steve MacMillan — Chairman, President and Chief Govt Officer

Yeah, Tycho, thanks. I feel by way of the brand new variance proper now we really feel superb that the way in which we have designed our take a look at. With they’ve — we mainly design ours with two targets to make sure there is a backup goal in case the virus mutates. So we proceed to look at that however really feel superb. And that is a part of many benefits of getting an extremely delicate and particular take a look at to start with, it targets the genomic areas which can be much less prone to mutate. So I feel we really feel superb about our potential to proceed to catch these very properly. And the second a part of that was what once more the multiplex.

Chris Lin — Cowen — Analyst

Standalong actions alongside.

Steve MacMillan — Chairman, President and Chief Govt Officer

I am sorry. Yeah, the multiplex. We determine come the autumn, for this winter, as everyone knows there’s mainly been no flu season, demand for our product is nearly been fully our single COVID take a look at. I feel come subsequent fall, having a syndromic multi — a number of choice might be going to make extra sense and you’d anticipate that we’ll sometimes be there.

Chris Lin — Cowen — Analyst

And pricing and reimbursement?

Steve MacMillan — Chairman, President and Chief Govt Officer

I feel a minimum of within the brief time period, we’re most likely nonetheless affordable. I feel over the long term, we have to imagine each of these will ultimately come down. However I feel at this level, significantly with the Biden administration extending the general public well being emergency by means of the top of 2021, we do not see any actual near-term stress on reimbursement. I am positive once more, that can most likely begin to evolve as we go ahead and it could contain at totally different paces with totally different governments all over the world as properly, however in order that in the end might be some downward stress actually most likely on pricing, however really feel fairly good about the place we’re proper now.

Chris Lin — Cowen — Analyst

After which one on capital deployment for the way about — You are placing up nice numbers, your inventory nonetheless buying and selling round 10 occasions EBITDA, so how are you enthusiastic about buybacks would you take into account an ASR?

Steve MacMillan — Chairman, President and Chief Govt Officer

Yeah. We actually did an ASR along with the Cynosure divestiture. Basically not an enormous fan of these wanting an occasion. I feel we have been fairly good patrons of our inventory. Once you look again over the past, actually 5 fiscal years I feel we have purchased again over 30 million shares and been pretty constant final yr much more. So I feel it continues to be an vital a part of our technique, however most likely extra executed alongside the way in which each offsetting dilution, in addition to frankly we have been lowering our share depend actually now for a lot of years.

Chris Lin — Cowen — Analyst

Okay, thanks.

Operator

All proper. We’ll now take our subsequent query from Raj Denhoy at Jefferies. Please go forward.

Zachary Weiner — Jefferies — Analyst

Hey, that is Zach on for Raj. Only a few from us. You begin the yr by saying two acquisitions and $1 billion buyback. Are you able to give any extra element on the potential timing of that share repurchase program? Ought to we anticipate it to begin to are available, publish COVID? After which additionally, are you able to give any extra coloration on potential offers facet and or timing of future offers?

Karleen Oberton — Chief Monetary Officer

Hello, that is Karleen, so let me simply make a few feedback and in return — with regard to capital allocation, actually we’re targeted on deploying our free money move, which has grown tremendously over the past a number of quarters. Our precedence goes to be that tuck-in M&A development accretive property and I feel to construct on the feedback that Steve made, capital share repurchase goes to be a part of that technique. However I might say the $1 billion authorization is over a 5-year interval. So we’d anticipate to make the most of that on some common cadence over that time period.

Steve MacMillan — Chairman, President and Chief Govt Officer

Nice subsequent.

Operator

We’ll take our subsequent query from Jack Meehan, Nephron Analysis. Please go forward.

Jack Meehan — Nephron Analysis — Analyst

Thanks. Good afternoon, guys.

Steve MacMillan — Chairman, President and Chief Govt Officer

Hey, Jack.

Jack Meehan — Nephron Analysis — Analyst

Wanting to speak concerning the core enterprise. In order you mirrored on the quarter, how a lot do you suppose pent-up demand contributed throughout the three segments. I do know you talked about some catch-up in cytology. However do you suppose there may need been some flush from hospitals in Breast Well being and timed surgical procedures going again?

We predict there may be most likely some catch-up once more — is it just a few share factors, is it saying — it is laborious to fully quantify Jack by way of each cytology in addition to surgical and plus you’ve got the year-end. Folks making an attempt to get them in who’ve exceeded their Caps for the yr, so that you are inclined to have a fairly good time at year-end. By way of capital a little bit laborious to know, we noticed a little bit little bit of energy in pockets, actually, once more I feel the way in which we’re enthusiastic about it, total is, there may be nonetheless going to be some little places and takes right here because the markets settle again down within the coming quarters. Or we persevering with to take market share? Or we persevering with to get stronger and none of it frankly goes to make an enormous distinction. May we develop — can we develop a 100% subsequent quarter or 95%, it is — we’re speaking on the bottom enterprise, what can be minor percentages by way of the entire.

Karleen Oberton — Chief Monetary Officer

Yeah, the one factor I might add is that on the Brevera relaunch there was positively some pent-up demand for capital for that relaunch and I feel that basically bodes properly for that product. Transferring ahead, we predict that might be a pleasant contributor to the Breast Well being division.

Zachary Weiner — Jefferies — Analyst

Nice. After which hoped possibly give a little bit little bit of coloration round expectations for brand new product launches all through 2021. What do you’ve got within the pipeline? Ought to we predict sort of extra incremental launches and the way does the setting make you concentrate on possibly doing bigger strikes in another companies for popping out of the R&D portfolio?

Steve MacMillan — Chairman, President and Chief Govt Officer

Yeah, I feel by way of your — the primary query, I feel we have persistently, a whole lot of singles coming in new product growth, frankly we have hit a Grand Slam in Diagnostics and put all of our power and it is laborious for folks to completely perceive how a lot R&D and manufacturing and high quality assurance assets went into getting all of each the assays out for COVID in addition to the extra label indications, issues like pulling and so they contain a whole lot of software program. So we’re persevering with even simply on pathways to proceed to strengthen there. In Breast Well being, we have a lot of issues popping out utilizing AI, we have observe ups from the SSI acquisition on ultrasound Brevera is admittedly within the technique of rolling out. So we have a whole lot of extra software program and smaller issues there, then we have clearly Acessa the Professional-View product rolling in inside the surgical enterprise. So I feel we really feel superb concerning the cadence of these issues rolling out.

After which on the M&A entrance, I will most likely return to our — the remark I made in most likely answering the primary query or so, which is the — to me the easiest way to be disciplined in M&A is to have a terrific core enterprise and all of our enterprise’s proper now are good. We have additionally acquired simply actually good group is ready to do some nice due diligence. We have actually walked away from a lot of issues really even over the previous few months and we proceed to work others.

So I feel we’re capable of look a little bit bit larger, actually given the money, however we do not essentially have huge eyes or huge wants and I feel if something, we’re most likely prone to be constructing a little bit bit extra of a money place right here within the close to time period as Karleen talked about, we have generated a $1 Billion of money, simply within the final 2 quarters, we actually aren’t spending at that price and that is OK for proper now, we’ll might be affected person and disciplined.

Michael Watts — Vice President, Investor Relations and Company Communications

Hey Eduardo, I feel now we have —

Zachary Weiner — Jefferies — Analyst

Thanks guys.

Michael Watts — Vice President, Investor Relations and Company Communications

Eduardo I feel now we have time for could also be another query.

Operator

All proper. We’ll now take our final query from Vijay Kumar at Evercore ISI. Please go forward.

Daniel Markowitz — Evercore ISI — Analyst

Hello, that is Daniel on for Vijay. Thanks for taking the query. Your touch upon the 150 Panther placements within the quarter with a powerful order ebook. I am simply questioning on capability ready to manufacturing or in different phrases, how I ought to take into consideration the unwind on that order ebook?

Steve MacMillan — Chairman, President and Chief Govt Officer

Positive, we’re persevering with to supply Panthers at the same price proper now to what we simply positioned provided that we nonetheless have very robust demand. I feel most likely later into calendar yr ’21, does that begin to again down a little bit bit, most likely given the intense ramp-up, however we’re persevering with to supply at the same price proper now.

Daniel Markowitz — Evercore ISI — Analyst

Thanks.

Operator

[Operator Closing Remarks]

Length: 56 minutes