The market for big-ticket capital equipment will drag for about another year, Hologic CEO Jack Cumming told the Reuters news service.
“We see it continuing as a very tough climate to be selling capital equipment in, at least for the next year,” Cumming said. “I expect, from an economic standpoint, a very slow recovery.”
The Bedford-based women’s health products maker took a 32 percent hit to its bottom line during its 2009 third quarter, posting $41 million in net income on $403 million in sales during the three months ended June 30.
That’s down 32 percent from $61 million the company reported on $430 million in sales during the same period last year.
Sales for Hologic’s breast health business, including a suite of mammography and imaging capital equipment, were off about 20 percent during the quarter. The division did about $175 million in sales, compared to $220 million during the third quarter of 2008.
Cumming told the news service that hospitals remain tight-fisted when it comes equipment purchases and women are delaying annual medical checkups. That’s pushing more cases to the emergency room and putting further stress on hospitals’ finances.
“The economy is causing people to extend the time between their visits. You just hope that something doesn’t get missed between that period of time,” he said. “It’s scary that people’s personal situations are so tight that they are looking at not spending $50 or $35 for the (insurance) co-payments because it makes a difference to their overall family budgets.”
“It’s hard for me to imagine hospitals are going to ramp up spending in this area, when they are fighting to get their Medicare reimbursement from states that are having budget problems,” Cumming told Reuters.
The company is surely hoping the economy proves Cumming right about the timing of a recovery. Hologic expects to make a series of FDA submissions on its Tomosynthesis system beginning in 2010, just in time for his predicted easing of the capital equipment market. The product has been stuck in regulatory limbo for more than a year, according to filings.
“We know it’s going to get approved. It’s a question of when,” Cumming said. “We continue to have conversations with them. We are trying to format our data with the way they want to review it.”