SOURCE: Lantheus Medical Imaging, Inc.

Lantheus Medical Imaging, Inc.

November 12, 2014 16:00 ET

Lantheus Medical Imaging Reports Third Quarter 2014 Financial Results

Worldwide Revenue Grows 8% Led by Continued Strong Performance of DEFINITY®; Adjusted EBITDA Increases by 60%; Company Posts Positive Quarterly Net Income on Continued Gross Margin Expansion and Operating Expense Leverage

BILLERICA, MA--(Marketwired - November 12, 2014) - Lantheus Medical Imaging, Inc. ("Lantheus" or "the Company"), a wholly-owned operating subsidiary of parent company Lantheus MI Intermediate, Inc. and a global leader in developing, manufacturing, selling and distributing innovative diagnostic imaging agents, today reported its financial results for the third quarter ended September 30, 2014.

Worldwide revenue for the third quarter of 2014 totaled $75.7 million, representing an 8% increase on both an as-reported and constant-currency basis over $70.4 million reported for the third quarter of 2013. 

The Company achieved quarterly GAAP-earnings profitability during the third quarter of 2014 with net income totaling $1.5 million, an improvement of $16.6 million over the net loss of $15.1 million reported for the third quarter of 2013. Net loss for the year-ago quarter included a $6.8 million charge for the write-down of land that was subsequently sold. Excluding the impact of that special charge, adjusted third quarter net results improved by $9.7 million over the year-ago period. The attached financial tables include a reconciliation of U.S. GAAP to non-GAAP results.

The Company's third quarter 2014 Adjusted EBITDA, as defined in the GAAP to non-GAAP reconciliation provided later in this release, totaled $19.1 million, or 25.2% of reported revenue, compared to $11.9 million, or 16.9% of revenue, in the third quarter of 2013. 

Jeff Bailey, President and CEO commented, "We are very pleased with our third quarter performance and the Company's continued demonstration of solid sales growth and strong margin expansion. As has been the case for several quarters, our results for the third quarter benefited from the strong sales performance of DEFINITY, reflecting continued growth of the U.S. ultrasound contrast market and our own product leadership position. DEFINITY achieved growth of 20% over the year-ago quarter and once again grew sequentially, while the rest of our product portfolio delivered a solid quarterly performance, as well." 

Mr. Bailey continued, "Overall, our third quarter revenue growth combined with continued gross margin improvement and the leveraging of our operating expenses has significantly expanded our operating and Adjusted EBITDA margins since last year, driving those margins to 15% and 25%, respectively, of reported revenue for the third quarter. The success of our ongoing financial and operational transformation that began seven quarters ago continues to grow increasingly apparent as we progress through 2014. We look forward to completing this seminal year for our business and the opportunities that await us in 2015 and beyond."

Conference Call
As previously announced, the Company will host a conference call starting at 4:30 p.m. (Eastern Time) today. To access the live conference call via telephone, please dial 1-877-299-4454 (U.S. callers) or 1-617-597-5447 (international callers) and provide passcode 59235085. A live audio webcast of the call also will be available on the homepage of the Company's website at www.lantheus.com. A replay of the telephone conference call and audio webcast will be available from approximately 8:30 p.m. ET on November 12, 2014 through midnight on November 26, 2014. To access a replay of the conference call, dial 1-888-286-8010 (U.S. callers) or 1-617-801-6888 (international callers), and provide passcode 99456277. A replay of this conference call will also be available in the Investor Relations section of our website located at www.lantheus.com.

The conference call may include a discussion of non-GAAP financial measures. Reference is made to the most directly comparable GAAP financial measures, the reconciliation of the differences between the two financial measures, and the other information included in this press release, our Form 8-K filed with the SEC today, or otherwise available in the Investor Relations section of our website located at www.lantheus.com.

Non-GAAP Financial Measures
The Company uses non-GAAP financial measures, such as net sales excluding the impact of foreign currency, net income, as adjusted, EBITDA and Adjusted EBITDA. The Company's management believes that the presentation of these measures provides useful information to investors. These measures may assist investors in evaluating the Company's operations, period over period. The measures may exclude such items which may be highly variable, difficult to predict and of a size that could have substantial impact on the Company's reported results of operations for a period. Management uses these and other non-GAAP measures internally for evaluation of the performance of the business, including the allocation of resources and the evaluation of results relative to employee performance compensation targets. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP.

Safe Harbor for Forward-Looking and Cautionary Statements
This press release contains forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that may be described from time to time in the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

About Lantheus Medical Imaging, Inc. and Lantheus MI Intermediate, Inc.
Lantheus Medical Imaging, Inc., a wholly-owned operating subsidiary of parent company, Lantheus MI Intermediate, Inc., is a global leader in developing, manufacturing, selling and distributing innovative diagnostic imaging agents. Lantheus provides a broad portfolio of products, which are primarily used for the diagnosis of cardiovascular diseases. Key products include the echocardiography contrast agent DEFINITY® Vial for (Perflutren Lipid Microsphere) Injectable Suspension; TechneLite® (Technetium Tc99m Generator), a technetium-based generator that provides the essential medical isotope used in nuclear medicine procedures; and Xenon (Xenon Xe 133 Gas), an inhaled radiopharmaceutical imaging agent used to evaluate pulmonary function and for imaging the lungs.

Lantheus has more than 500 employees worldwide with headquarters in North Billerica, Massachusetts, and offices in Puerto Rico, Canada and Australia. 

Lantheus MI Intermediate, Inc. and subsidiaries
Condensed Consolidated Statements of Operations
(dollars in thousands -- unaudited)
 
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2014  2013  2014  2013
            
Revenues $ 75,682  $ 70,385  $ 224,631  $ 212,004
Cost of goods sold  44,044   46,664   131,873   144,524
  Gross profit  31,638   23,721   92,758   67,480
Operating expenses:               
 Sales and marketing expenses  8,327   8,476   27,227   27,266
 General and administrative expenses  8,722   7,132   26,564   25,678
 Research and development expenses  3,049   5,893   8,958   25,428
 Impairment of land  -   6,788   -   6,788
  Total operating expenses  20,098   28,289   62,749   85,160
  Operating income (loss)  11,540   (4,568)   30,009   (17,680)
Interest expense, net  (10,585)   (11,035)   (31,704)   (32,323)
Other income (expense), net  441   260   (148)   894
 Income (loss) before income taxes  1,396   (15,343)   (1,843)   (49,109)
Provision (benefit) for income taxes  (56)   (279)   (374)   267
Net income (loss) $ 1,452  $ (15,064)  $ (1,469)  $ (49,376)
                    
Lantheus MI Intermediate, Inc. and subsidiaries
Consolidated Sales Analysis
(dollars in thousands -- unaudited)
 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
    2014   2013  
% change
  2014  
2013
  % change  
U.S.                          
DEFINITY    23,764    19,758   20.3%    68,768    54,796   25.5%  
TechneLite    20,879    19,351   7.9%    61,602    61,064   0.9%  
Xenon    8,914    8,173   9.1%    27,519    24,117   14.1%  
Cardiolite    888    462   92.2%    1,915    7,324   (73.9)%  
Other    4,984    4,260   17.0%    15,004    11,189   34.1%  
Total U.S.   $ 59,429   $ 52,004   14.3%   $ 174,808   $ 158,490   10.3%  
                               
International                              
DEFINITY    497    403   23.3%    1,368    1,136   20.4%  
TechneLite    2,733    3,071   (11.0)%    8,576    9,039   (5.1)%  
Xenon    2    9   (77.8)%    6    34   (82.4)%  
Cardiolite    3,785    4,178   (9.4)%    12,250    13,415   (8.7)%  
Other    9,236    10,720   (13.8)%    27,623    29,890   (7.6)%  
Total International   $ 16,253   $ 18,381   (11.6)%   $ 49,823   $ 53,514   (6.9)%  
                               
Worldwide                              
DEFINITY    24,261    20,161   20.3%    70,136    55,932   25.4%  
TechneLite    23,612    22,422   5.3%    70,178    70,103   0.1%  
Xenon    8,916    8,182   9.0%    27,525    24,151   14.0%  
Cardiolite    4,673    4,640   0.7%    14,165    20,739   (31.7)%  
Other    14,220    14,980   (5.1)%    42,627    41,079   3.8%  
Total Revenues   $ 75,682   $ 70,385   7.5%   $ 224,631   $ 212,004   6.0%  
                               
Lantheus MI Intermediate, Inc. and subsidiaries
Supplemental Sales Information
(unaudited)
 
    September 30, 2014 Quarter-to-Date Sales Growth/(Decline)  
    Domestic As Reported   Int'l Constant Currency   Int'l As Reported   Total Constant Currency   Total As Reported  
Products                      
DEFINITY   20%   26%   23%   20%   20%  
TechneLite   8%   (8)%   (11)%   6%   5%  
Xenon   9%   (78)%   (78)%   9%   9%  
Cardiolite   92%   (7)%   (9)%   3%   1%  
Other   17%   (12)%   (14)%   (4)%   (5)%  
Total Revenues   14%   (10)%   (12)%   8%   8%  
                       
    September 30, 2014 Year-to-Date Sales Growth/(Decline)  
    Domestic As Reported   Int'l Constant Currency   Int'l As Reported   Total Constant Currency   Total As Reported  
Products                      
DEFINITY   25%   29%   20%   26%   25%  
TechneLite   1%   0%   (5)%   1%   0%  
Xenon   14%   (85)%   (82)%   14%   14%  
Cardiolite   (74)%   (4)%   (9)%   (29)%   (32)%  
Other   34%   (3)%   (8)%   7%   4%  
Total Revenues   10%   (2)%   (7)%   7%   6%  
                       
Lantheus MI Intermediate, Inc. and subsidiaries
Reconciliation of Net Sales to Net Sales Excluding the Impact of Foreign Currency
(dollars in thousands -- unaudited)
 
    Three Months Ended
September 30, 2014
  Nine Months Ended
September 30, 2014
 
    International Net Sales   Total Net Sales   International Net Sales   Total Net Sales  
                   
Net sales, as reported   $ 16,253   $ 75,682   $ 49,823   $ 224,631  
Currency impact as compared to prior period    348    348    2,491    2,491  
Net sales, excluding the impact of foreign currency   $ 16,601   $ 76,030   $ 52,314   $ 227,122  
                       
Lantheus MI Intermediate, Inc. and subsidiaries
Reconciliation of As Reported Results to Non-GAAP Financial Measures
(dollars in thousands -- unaudited)
 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
    2014   2013   2014   2013  
Net Income (loss)                      
 Net income (loss), as reported   $ 1,452   $ (15,064)   $ (1,469)   $ (49,376)  
  Reconciling items impacting Operating Expenses:                      
  Impairment of land    -    6,788    -    6,788  
 Net income (loss), as adjusted   $ 1,452   $ (8,276)   $ (1,469)   $ (42,588)  
                        
 Net income (loss), as adjusted, as a percentage of net sales    1.9%    (11.8)%    (0.7)%    (20.1)%  
               
Lantheus MI Intermediate, Inc. and subsidiaries
Reconciliation of As Reported Results to Non-GAAP Financial Measures
(dollars in thousands -- unaudited)
 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
    2014   2013   2014   2013  
EBITDA                      
 Net income (loss), as reported   $ 1,452   $ (15,064)   $ (1,469)   $ (49,376)  
  Interest expense, net    10,585    11,035    31,704    32,323  
  Provision (benefit) for income taxes    (415)    (713)    (536)    (439)  
  Depreciation    2,163    2,343    6,514    7,115  
  Amortization of intangible assets    2,275    4,130    6,848    12,456  
 EBITDA    16,060    1,731    43,061    2,079  
 Reconciling items impacting EBITDA:                      
  Non-cash stock-based compensation    247    172    782    735  
  Legal fees relating to business interruption claim    462    165    927    552  
  Asset write-off    639    8,200    1,150    10,258  
  Severance and recruiting costs    211    478    512    4,969  
  Sponsor fee and other    263    259    772    1,197  
  New manufacturer costs    1,175    903    4,188    3,413  
Adjusted EBITDA   $ 19,057   $ 11,908   $ 51,392   $ 23,203  
                       
Adjusted EBITDA as a percentage of net sales    25.2%    16.9%    22.9%    10.9%  
              
Lantheus MI Intermediate, Inc. and subsidiaries
Reconciliation of Free Cash Flow
(dollars in thousands -- unaudited)
 
    Three Months Ended   Nine Months Ended  
    September 30, 2014   September 30, 2013   September 30, 2014   September 30, 2013  
                   
Net cash used in operating activities   $ 19,688   $ 4,291   $ 15,448   $ (11,822)  
Capital expenditures    (1,823)    (915)    (5,303)    (3,711)  
Free cash flow   $ 17,865   $ 3,376   $ 10,145   $ (15,533)  
                       
Lantheus MI Intermediate, Inc. and subsidiaries
Condensed Consolidated Balance Sheets
(dollars in thousands -- unaudited)
 
    September 30,
 2014
  December 31, 2013  
Assets          
Current assets:            
 Cash and cash equivalents   $ 25,205   $ 16,669  
 Accounts receivable, net    41,160    38,910  
 Inventory    16,425    18,310  
 Income tax receivable    448    325  
 Deferred tax assets    12    18  
 Other current assets    4,181    3,087  
  Total current assets    87,431    77,319  
             
Property, plant and equipment, net    96,072    97,653  
Capitalized software development costs, net    1,829    1,470  
Intangibles, net    29,203    34,998  
Goodwill    15,714    15,714  
Deferred financing costs    7,969    9,639  
Deferred tax assets    45    15  
Other long-term assets    19,791    22,577  
 Total assets   $ 258,054   $ 259,385  
             
Liabilities and stockholder's deficit            
Current liabilities:            
 Line of credit   $ 8,000   $ 8,000  
 Accounts payable    15,383    18,103  
 Accrued expenses and other liabilities    35,088    25,492  
 Deferred tax liability    57    57  
 Deferred revenue    1,063    3,979  
  Total current liabilities    59,591    55,631  
Asset retirement obligation    7,244    6,385  
Long-term debt, net    399,220    399,037  
Deferred tax liability    8    12  
Other long-term liabilities    32,407    35,408  
 Total liabilities    498,470    496,473  
             
Stockholder's deficit    (240,416)    (237,088)  
 Total liabilities and stockholder's deficit   $ 258,054   $ 259,385  
         

Contact Information

  • CONTACTS:
    Linda Lennox 
    Office: 978-671-8854 
    Cell: 908-627-3424 

    Meara Murphy
    Office: 978-671-8508
    Cell: 617-794-1045