Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $1,005 million, a decrease of 0.5% in constant currency, but at the upper end of guidance [5][6] - Non-GAAP earnings per share were $1.30, flat compared to the previous year, reflecting solid gross margin expansion and benefits from share buybacks [6][30] - Operating cash flow generated in Q2 was $169.5 million, with cash and equivalents at $1,430 million at quarter end [10][34] Business Line Data and Key Metrics Changes - Diagnostics revenue was $453.6 million, growing 1.5% or 5.2% excluding COVID-related sales, driven by molecular diagnostics [14][17] - Breast Health revenue declined 6.9% to $356.2 million, with a 9.2% organic decline, attributed to lower gantry placements [18][39] - Surgical revenue increased 5.1% to $162.5 million, with international surgical business growing 16.2% [21][22] - Skeletal revenue grew 22.9% to $33 million, benefiting from improved production ramp of the DEXA system [23] Market Data and Key Metrics Changes - The company lowered sales expectations for China due to geopolitical turbulence, now forecasting only about $50 million in revenue from China for fiscal 2025 [12][36] - The diagnostics business in Africa faced declines due to funding cuts, impacting overall growth [17][55] Company Strategy and Development Direction - The company aims to accelerate growth in Breast Health and has reorganized its sales team to improve performance [19][20] - Hologic is actively seeking acquisitions and investments, with a focus on tuck-in M&A and returning value to shareholders through stock repurchases [11][33] - The company is confident in its strong market positions in core US and European markets, despite challenges in other regions [12][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver solid financial results despite macroeconomic challenges [5][6] - The company anticipates faster growth beginning in Q4 2025, driven by better commercial execution and new product introductions [12][36] - Management highlighted the importance of employee engagement and its role in navigating dynamic environments [10] Other Important Information - The company expects a gross impact of $20 to $25 million per quarter from recently announced tariffs, primarily affecting manufacturing in Costa Rica and China [26][27] - Non-GAAP gross margin improved to 61.1%, driven by strong diagnostics sales and the addition of EndoMag and Gynasonics [30] Q&A Session Summary Question: Impact of tariffs and supplier pricing - Management indicated that while there are potential higher costs from suppliers, they believe offsets will balance the impact [45][46] Question: Breast Health sales force reorganization - The reorganization aims to improve focus on capital and disposable product sales, with expectations of a more stable business moving forward [47][49] Question: Revenue guidance and Africa diagnostics weakness - The decline in revenue guidance is primarily due to reduced expectations from China and the impact of funding cuts in Africa [54][55] Question: Gantry replacement cycle - The average life of gantries has extended, and the company is in a replacement cycle, expecting steady placements moving forward [75][76] Question: Supply chain management - Management feels confident in their supply chain, with most manufacturing done in the US, and is evaluating options but not planning significant changes [69][71] Question: Molecular diagnostics contracting cycles - The molecular diagnostics business is expected to grow, despite headwinds from HIV testing declines in Africa [81][83]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $1,005 million, a decrease of 0.5% in constant currency, but at the upper end of guidance [7][8] - Non-GAAP earnings per share were $1.30, flat compared to the previous year, reflecting solid gross margin expansion and benefits from share buybacks [8][30] - Non-GAAP gross margin improved to 61.1%, up 40 basis points year-over-year [31][34] Business Line Data and Key Metrics Changes - Diagnostics revenue was $453.6 million, growing 1.5% or 5.2% excluding COVID-related sales, driven by molecular diagnostics [16][18] - Breast Health revenue declined 6.9% to $356.2 million, with a 9.2% decline organically, attributed to lower gantry placements [19][40] - Surgical revenue increased 5.1% to $162.5 million, with international surgical business growing 16.2% [23][24] - Skeletal revenue grew 22.9% to $33 million, exceeding internal expectations due to improved production [25] Market Data and Key Metrics Changes - The diagnostics division's growth was impacted by reduced HIV testing in Africa due to funding cuts, affecting overall performance [18] - Sales expectations for China were lowered due to geopolitical challenges, with anticipated revenue now at approximately $50 million for the fiscal year [14][66] Company Strategy and Development Direction - The company aims to accelerate growth in Breast Health and has reorganized its sales team to improve focus on capital and disposable product sales [20][21] - Strategic acquisitions, such as Endomagnetics and Gynasonics, are expected to enhance market position and drive future growth [13][35] - The company is exploring various mitigation strategies for tariff impacts, primarily from Costa Rica and China [27][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the challenging macroeconomic environment and anticipates improved growth rates in the fourth quarter [14][43] - The company expects to return to healthy growth in Breast Health by Q4 2025, driven by better commercial execution and new product introductions [40][43] Other Important Information - The company generated $169.5 million in operating cash flow in Q2 and ended the quarter with over $1.6 billion in cash and investments [12][35] - The effective tax rate for Q2 was 19%, reflecting adjustments to align with the expected full-year rate [34] Q&A Session Summary Question: Can you discuss the potential higher costs from suppliers and mitigation efforts? - Management indicated that while there are discussions about potential price increases, they believe they can offset these costs through their existing operations in Costa Rica [46][47] Question: What is the current appetite for capital from hospitals? - Management noted that the breast health business has stabilized, and they expect hospitals to allocate budgets for meaningful product improvements [48][75] Question: How is the company addressing the decline in Africa and China? - The company is de-risking its revenue expectations from China and addressing funding cuts affecting testing in Africa [14][66] Question: What is the outlook for the Breast Health business? - Management is optimistic about returning to steady growth in Breast Health, with improvements expected in the fourth quarter [40][54] Question: Can you provide insights on the gantry replacement cycle? - The average life of gantries has extended to 10-12 years, and the company is actively managing an end-of-life strategy for older units [78] Question: How is the company managing supply chain challenges? - Management expressed confidence in their supply chain, particularly for US-manufactured products, while evaluating potential adjustments as needed [73][74]

Financial Data and Key Metrics Changes - Consolidated net sales declined 2.9% to $458 million in the fiscal third quarter [5][9] - Gross profit reached a record $106 million, with a gross profit margin improvement of 90 basis points to 23.1% [8][11] - Operating income increased by 41.9% to $50 million, driven by lower SG&A costs and gross margin improvement [11][13] - Diluted earnings per share increased by 44.7% to $1.49 [12] Business Line Data and Key Metrics Changes - Retail segment net sales decreased by 2.6%, with a 0.7% decline when excluding exited bakery lines [5][6] - Foodservice segment net sales declined by 3.2%, impacted by weather and industry-wide declines in restaurant traffic [7][8] - Licensing program in the retail segment showed growth, particularly with Chick-fil-A sauce and Texas Roadhouse dinner rolls [6][16] Market Data and Key Metrics Changes - In the frozen dinner roll category, the combined growth of Sister Schubert's and Texas Roadhouse brands was 11.6%, increasing market share to 60.9% [6] - Frozen garlic bread sales grew by 6.8%, with a market share increase to 43.9% [6] - Chick-fil-A dressings grew by 4%, contributing to a category-leading share of 27.2% [7] Company Strategy and Development Direction - The company aims to accelerate core business growth, simplify the supply chain, and expand through focused M&A and strategic licensing [15][16] - Planned closure of the sauce and dressing facility in Milpitas, California, to optimize the manufacturing network [17] - Acquisition of the Atlanta-based facility is expected to enhance the manufacturing network and support growth [18][19] Management's Comments on Operating Environment and Future Outlook - Management anticipates ongoing challenges in the consumer environment but is positioned to respond effectively [16] - Input costs are not expected to significantly impact the upcoming quarter [17] - The company is focused on innovation and distribution expansion in the retail segment [16] Other Important Information - The company reported a cash dividend of $0.95 per share, marking a 6% increase from the previous year [13] - The financial position remains strong with a debt-free balance sheet and $124.6 million in cash [13] Q&A Session Summary Question: Impact of consumer slowdown on foodservice collaboration - Management noted that weather significantly impacted traffic and sales, with expectations of low single-digit declines in foodservice volume [25][28] Question: Balancing distribution gains against consumer softness in retail - Management believes distribution gains from new items will offset consumer softness, projecting low single-digit growth in retail volume [30][32] Question: Weakness in refrigerated dressings and dips - The decline was attributed to the timing of Easter, which shifted sales to the next quarter, impacting consumption data [40][42] Question: Promotional environment at retail - Management indicated a careful approach to trade spending, focusing on effective promotional strategies rather than broad price reductions [46][48] Question: Competitive dynamics and promotional stance - Management emphasized the importance of strategic placements over discounts, noting that private label competition remains manageable [52][54] Question: Quantifying the impact of Easter shift - Management estimated the Easter shift impacted the quarter by at least one percentage point [59][60]

Financial Data and Key Metrics Changes - Consolidated net sales decreased by 2.9% to $458 million for the third quarter [5] - Gross profit reached a record $106 million, with a gross profit margin improvement of 90 basis points to 23.1% [8][9] - Operating income increased by 41.9% to $50 million, driven by lower selling, general and administrative expenses and gross margin improvement [11][12] - Diluted earnings per share increased by 44.7% to $1.49 [12][15] Business Line Data and Key Metrics Changes - Retail segment net sales decreased by 2.6%, with a 0.7% decline when excluding exited bakery lines [5][6] - Foodservice segment net sales declined by 3.2%, impacted by weather and industry-wide declines in restaurant traffic [7][8] - Licensing program in the retail segment showed growth, with Chick-fil-A sauce and Texas Roadhouse dinner rolls performing well [6][18] Market Data and Key Metrics Changes - In the frozen dinner roll category, the combined market share of Sister Schubert's and Texas Roadhouse brands increased by 520 basis points to 60.9% [6] - Frozen garlic bread category saw New York Bakery brand sales grow by 6.8%, increasing market share by 180 basis points to 43.9% [6] - Chick-fil-A dressings grew by 4%, contributing to a category-leading share of 27.2% when combined with Marzetti brand dressings [7] Company Strategy and Development Direction - The company aims to accelerate core business growth, simplify the supply chain, and expand through focused M&A and strategic licensing [17][20] - Planned closure of the sauce and dressing facility in Milpitas, California, to optimize the manufacturing network [19] - Acquisition of the Atlanta-based sauce and dressing facility is expected to enhance the manufacturing network and support growth [20][21] Management's Comments on Operating Environment and Future Outlook - Management anticipates ongoing challenges in the consumer environment but is positioned to respond effectively [18] - Input costs are not expected to significantly impact the upcoming quarter [19] - The company is focused on innovation and distribution expansion for new items in the retail segment [18] Other Important Information - The company reported a cash dividend of $0.95 per share, representing a 6% increase from the prior year [15] - The company maintains a debt-free balance sheet with $124.6 million in cash [15] Q&A Session Summary Question: Impact of consumer slowdown on foodservice collaboration - Management noted that weather significantly impacted Q3 volumes, with some customers closing stores for up to ten days [28][30] Question: Balancing distribution gains against consumer softness in retail - Management believes distribution gains from new items will offset consumer softness, projecting low single-digit volumetric growth [32][34] Question: Weakness in refrigerated dressings and dips - The weakness was attributed to the timing of Easter, which shifted to April, impacting consumption data [44][46] Question: Promotional environment at retail - Management indicated a careful approach to trade spending, focusing on effective promotional strategies rather than broad price reductions [48][50] Question: Competitive dynamics and promotional stance - Management emphasized the importance of relevant new items and effective execution over heavy promotional spending [56][60] Question: Quantifying the impact of Easter shift - Management estimated the Easter shift impacted the quarter by at least one percentage point [62] Question: Impact of weather on foodservice volumes - Management noted that traffic was significantly affected by weather, particularly in January and February [68] Question: Potential of new Chick-fil-A sauce in club channels - Management expressed optimism about the Chick-fil-A sauce's performance in club channels, viewing it as a significant opportunity for growth [70][72]

Financial Data and Key Metrics Changes - Revenues before reimbursable expenses (RBR) grew 11% year-over-year to $395.7 million in Q1 2025 from $356 million in Q1 2024 [18] - Net income increased 36.3% to $24.5 million, or $1.33 per diluted share, compared to $18 million, or $0.95 per diluted share in the prior year [18] - Adjusted EBITDA was $41.5 million, representing 10.5% of RBR, compared to $33.8 million, or 9.5% of RBR in Q1 2024 [19] Business Line Data and Key Metrics Changes - Healthcare segment RBR grew 10% year-over-year to $198.5 million, driven by strong demand for performance improvement financial advisory offerings [5][20] - Education segment RBR increased 10% to $122.7 million, supported by demand for strategy and operations advancement offerings [21] - Commercial segment RBR surged 17% to $74.5 million, primarily due to the acquisition of Axia and strong demand for digital offerings [12][23] Market Data and Key Metrics Changes - The healthcare segment accounted for 50% of total company RBR in Q1 2025, while the education segment contributed 31% and the commercial segment 19% [20][21][24] - Days Sales Outstanding (DSO) improved to 79 days in Q1 2025 from 91 days in Q1 2024, reflecting better collections on larger projects [26] Company Strategy and Development Direction - The company reaffirmed its annual guidance, indicating confidence in its growth strategy and ability to navigate a complex regulatory landscape [5][14] - The focus remains on expanding digital capabilities and enhancing advisory services through both organic growth and acquisitions [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance despite a dynamic external environment, highlighting strong client relationships and industry expertise [4][5] - The healthcare sector is expected to face ongoing financial pressures, prompting clients to seek performance improvement solutions [6][7] Other Important Information - The company divested its student education business at the end of 2024, which is reflected in the current financial results [16] - Cash flow used in operations was $106.8 million in Q1 2025, down from $130.7 million in Q1 2024, primarily due to annual incentive payments [26] Q&A Session Summary Question: Outlook for the commercial segment and any changes in growth expectations - Management noted no changes to segment-level guidance, with record sales conversion driven by the digital business [30][34] Question: Headcount growth and its alignment with revenue - Management expects headcount growth to align with revenue, particularly in the healthcare business, where demand remains strong [36][37] Question: New business and billings trends in education and healthcare - Management reported no notable changes in new business or billings, with strong sales conversion in Q1 [40][42] Question: Impact of policy changes on private universities - Management confirmed ongoing relationships with private universities, with no dramatic effects from recent policy changes [44] Question: Trends in performance improvement project assessments - Assessment activity remains robust, driven by clients facing financial strain and escalating costs [46][48]

Financial Data and Key Metrics Changes - Revenue declined by 1% in 2024 compared to 2023, with solid growth in bag coffee, pods, RTD coffee, and energy [32] - Adjusted EBITDA tripled in 2024, with adjusted EBITDA margin improving from 3.2% in 2023 to 10% in 2024 [38] - Gross margin improved by 950 basis points to 41.2% in 2024, driven by supply chain productivity [36] - Free cash flow generation improved by over $55 million compared to 2023, with positive cash flow from operations [39] Business Line Data and Key Metrics Changes - Wholesale revenue increased from 57% of total sales in 2023 to 63% in 2024, growing 9% or 13% excluding barter transactions [34] - Direct-to-consumer (DTC) segment revenue declined by 14% in 2024, driven by increased retail availability and shifting consumer preferences [35] - Packaged coffee saw outstanding distribution growth, with ACV increasing by 28 points to 45% in grocery [8] Market Data and Key Metrics Changes - Black Rifle sales grew by 22% in 2024, while the overall coffee category declined by 0.5% [11] - In the Ready to Drink (RTD) coffee category, Black Rifle maintained a market share of 4.6%, making it the 3 brand behind Starbucks and Monster [19] - The energy drink category generated over $20 billion in sales in 2024, significantly larger than the packaged coffee category at $12 billion [24] Company Strategy and Development Direction - The company is focused on strengthening its core business and expanding distribution while driving brand awareness and product innovation [7][9] - Plans to revitalize the DTC segment in 2025 while prioritizing growth in the wholesale channel [15] - The launch of Black Rifle Energy is expected to be a significant contributor to growth in 2025, with a focus on 12 key launch markets [22][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 3-year financial targets, including expectations for 10% to 15% revenue CAGR and adjusted EBITDA growth at 15% to 25% CAGR [46] - The company anticipates revenue in 2025 to range between $395 million and $425 million, with gross margin expected to be in the 37% to 39% range [47][49] - Management noted that the first quarter of 2025 is expected to be the lowest for revenue generation, followed by sequential increases throughout the year [48] Other Important Information - The company is committed to supporting active-duty service members, veterans, and first responders, emphasizing community outreach efforts [27][30] - The CFO announced plans to transition to a role on the Board of Directors, with a search for a new CFO underway [59] Q&A Session Summary Question: What is the expected distribution for Energy drinks by the end of the year? - Management indicated that distribution is growing rapidly, with a goal of reaching between 20% and 30% ACV by year-end [65] Question: When will marketing spend for Energy products ramp up? - Marketing spend is expected to start in March, with a significant increase as the summer selling season approaches [70] Question: What are the plans to stabilize the DTC business? - The focus will be on subscription-based programs and stabilizing subscriber counts, with limited spending on acquiring new one-time buyers [76][78] Question: What is the trend with the largest customer? - The largest customer remains a significant source of revenue, with an 8% year-over-year growth in 2024, despite some flattening expected [87][93] Question: How will barter transactions impact the P&L in 2025? - Media credits from barter transactions will be used efficiently in marketing expenses, providing a cost-effective way to support growth [90][91]