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Revenue growth slows at Hologic

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Are the boom days over at bone densitometry vendor Hologic? The Waltham, MA, company last week reported sales growth of only 3% for the third quarter (end-June), a far cry from the double-digit revenue increases the company has enjoyed since Merck's

Are the boom days over at bone densitometry vendor Hologic? The Waltham, MA, company last week reported sales growth of only 3% for the third quarter (end-June), a far cry from the double-digit revenue increases the company has enjoyed since Merck's Fosamax osteoporosis drug was approved in 1995. The news prompted Hologic's stock to fall 11% to $21.50 on July 31, the day the figures were announced.

For the period, Hologic posted sales of $26.9 million, compared with revenues of $26.2 million in the third quarter of 1996. This revenue growth rate pales in comparison with the company's second quarter this year, when Hologic saw sales boom 26% to $28 million.

Hologic presented a more positive picture on the earnings side, however, with third-quarter net profit increasing 16% to $4.7 million, compared with $4.1 million in the same period a year ago.

Hologic does not believe that the company's performance in the quarter is indicative of a long-term slowdown, according to Glenn Muir, vice president of finance. Hologic was pleased with its progress in nearly all its markets, although it did experience a slowdown in Japan, which has been a major market for the firm since 1987.

"Japanese sales were down a bit," Muir said. "That is one market that is approaching close to maturity level."

Muir said Hologic's prospects will probably perk up in the future, due to new sales channels for its products, especially into the primary-care market, which Hologic is entering through an agreement with medical product distributor Physician's Sales and Service. Hologic's Sahara ultrasound-based densitometer, which is awaiting clearance by the Food and Drug Administration, should be a perfect product for that market, where PSS is already experiencing success with other Hologic products.

"They have been selling for two months," Muir said. "They've already exceeded our expectations, and there are better things to come."

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