LNTH Lantheus Holdings Inc

• Posts Q3 revenue of $79.9 million, up 9.4% from prior year; net income of $8.5 million and Adjusted EBITDA of $22.6 million
• DEFINITY® worldwide revenues increase 15.7% over prior year period

Lantheus Holdings, Inc. (the “Company”) (NASDAQ: LNTH), parent company of Lantheus Medical Imaging, Inc. (“LMI”), a global leader in the development, manufacture and commercialization of innovative diagnostic imaging agents and products, today reported financial results for its third quarter ended September 30, 2017.

The Company’s worldwide revenues for the third quarter of 2017 totaled $79.9 million. This represents an increase of 9.4% compared to $73.1 million for the prior year period, and exceeds third quarter guidance of $75 million to $78 million. Revenue results were driven by 15.7% growth in worldwide sales of DEFINITY®, 7.4% growth in worldwide sales of TechneLite® and 15.7% growth in worldwide sales of Xenon compared to the third quarter of 2016.

Net income for the third quarter of 2017 totaled $8.5 million, or $0.22 per diluted share, compared to $4.2 million, or $0.13 per diluted share, for the third quarter of 2016. The increase is primarily attributable to DEFINITY and Xenon revenue growth and lower interest expense related to the refinancing of debt in March 2017 and voluntary prepayments made during September and November 2016. This was partially offset by increased operating expenses for sales and marketing as well as costs related to strategic initiatives.

The Company’s third quarter 2017 Adjusted EBITDA (as outlined in the GAAP to non-GAAP reconciliation provided below) was $22.6 million, or 28.3% of revenues. This compares to $18.7 million, or 25.6% of revenues, for the prior year period, and exceeded the previously provided third quarter guidance of $17 million to $19 million. Third quarter results were driven by DEFINITY and Xenon revenue growth, partially offset by sales and marketing expenses attributable to sales growth in DEFINITY as well as costs related to strategic initiatives.

“With revenue up $6.8 million and Adjusted EBITDA up $3.9 million year-over-year, we delivered solid results, again exceeding our quarterly guidance,” commented Mary Anne Heino, President and CEO. “Continued double-digit growth of our echocardiography imaging agent, DEFINITY, complemented by higher contracted volumes of TechneLite and Xenon, drove our results this quarter. As a result of our strong performance, we are raising our full-year guidance. Our priority for the final quarter of the year is to continue to build on our operational success while advancing strategic initiatives to drive long-term growth.”

Outlook

The Company has increased its full-year 2017 worldwide revenue guidance range to $323 million to $325 million from previous guidance of $318 million to $322 million. The Company has also increased its full-year 2017 guidance range for Adjusted EBITDA, as described in the GAAP to non-GAAP reconciliation provided later in this release, to $86 million to $88 million from previous guidance of $82 million to $85 million, a margin of 26.5% to 27.2% of worldwide revenues.

The full-year guidance for both revenue and Adjusted EBITDA excludes the impact of a $5.0 million up-front payment received in the second quarter of 2017 from GE Healthcare under the flurpiridaz F 18 collaboration and license agreement.

The Company’s guidance for worldwide revenues and Adjusted EBITDA are forward-looking statements. They are subject to various risks and uncertainties that could cause the Company’s actual results to differ materially from guidance. Forward-looking statements are not predictions of the Company’s actual performance. See the cautionary information about forward-looking statements in the “Safe-Harbor Statement” section of this press release.

Internet Posting of Information

The Company routinely posts information that may be important to investors in the “Investors” section of its website at www.lantheus.com. The Company encourages investors and potential investors to consult its website regularly for important information about the Company.

Conference Call and Webcast

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 1-866-498-8390 (U.S. callers) or 1-678-509-7599 (international callers) and provide passcode 8783209. A live audio webcast of the call also will be available in the Investors section of the Company’s website at www.lantheus.com.

A replay of the audio webcast will be available in the Investors section of our website at www.lantheus.com approximately two hours after completion of the call and will be archived for 30 days.

The conference call will 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.

The conference call may include forward-looking statements. See the cautionary information about forward-looking statements in the safe-harbor section of this press release.

About Lantheus Holdings, Inc. and Lantheus Medical Imaging, Inc.

Lantheus Holdings, Inc. is the parent company of LMI, a global leader in the development, manufacture and commercialization of innovative diagnostic imaging agents and products. LMI provides a broad portfolio of products, including 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. The Company is headquartered in North Billerica, Massachusetts with offices in Puerto Rico and Canada. For more information, visit www.lantheus.com.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, such as revenues excluding the impact of foreign currency; adjusted operating income; adjusted net income; Adjusted EBITDA; adjusted net income per share - diluted; and free cash flow. 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” as defined under U.S. federal securities laws, including statements about our 2017 outlook. Forward-looking statements may be identified by their use of terms such as anticipate, believe, confident, could, estimate, expect, intend, may, plan, predict, project, target, will and other similar terms. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to materially differ from those described in the forward- looking statements. 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. Risks and uncertainties that could cause our actual results to materially differ from those described in the forward-looking statements are discussed in our filings with the Securities and Exchange Commission (including those described in the Risk Factors section in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q). This press release includes forward-looking non-GAAP guidance for 2017 Adjusted EBITDA. No reconciliation of this forward-looking non-GAAP guidance was included in this press release because, due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.

– Tables Follow –

 

Lantheus Holdings, Inc.Consolidated Statements of Operations(in thousands, except per share data – unaudited)

      Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2017   2016 2017   2016 Revenues $ 79,941 $ 73,063 $ 250,137 $ 227,503 Cost of goods sold 41,414   39,382   125,901   124,370   Gross profit 38,527   33,681   124,236   103,133   Operating expenses Sales and marketing 10,075 8,706 31,892 27,856 General and administrative 12,076 10,091 35,549 28,842 Research and development 3,554   2,849   14,149   8,493   Total operating expenses 25,705 21,646 81,590 65,191 Gain on sales of assets —   (560 ) —   (6,505 ) Operating income 12,822 12,595 42,646 44,447 Interest expense 4,442 6,792 14,147 20,799 Debt retirement costs

 

— 1,415 — 1,415 Loss on extinguishment of debt — — 2,161 — Other (income) expense (908 ) 148   (2,037 ) (317 ) Income before income taxes 9,288 4,240 28,375 22,550 Provision for income taxes 762   20   2,116   657   Net income $ 8,526   $ 4,220   $ 26,259   $ 21,893   Net income per common share outstanding: Basic $ 0.23   $ 0.14   $ 0.71   $ 0.71   Diluted $ 0.22   $ 0.13   $ 0.67   $ 0.71   Weighted-average common shares outstanding: Basic 37,393   31,221   37,174   30,658   Diluted 39,121   32,402   38,971   31,049      

Lantheus Holdings, Inc.Consolidated Segment Revenues Analysis(in thousands – unaudited)

      Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2017   2016   % Change 2017   2016   % Change

United States

DEFINITY $ 36,901 $ 32,007 15.3 % $ 113,035 $ 95,497 18.4 % TechneLite 22,621 20,906 8.2 % 69,150 64,282 7.6 % Xenon 7,726 6,675 15.7 % 23,709 21,620 9.7 % Other 2,331 3,033 (23.1 )% 12,812 11,288 13.5 % Total United States 69,579 62,621 11.1 % 218,706 192,687 13.5 %

International

DEFINITY 828 597 38.7 % 2,534 2,002 26.6 % TechneLite 3,735 3,627 3.0 % 10,750 10,339 4.0 % Xenon — 2 (100.0 )% 4 5 (20.0 )% Other 5,799 6,216 (6.7 )% 18,143 22,470 (19.3 )% Total International 10,362 10,442 (0.8 )% 31,431 34,816 (9.7 )%

Worldwide

DEFINITY 37,729 32,604 15.7 % 115,569 97,499 18.5 % TechneLite 26,356 24,533 7.4 % 79,900 74,621 7.1 % Xenon 7,726 6,677 15.7 % 23,713 21,625 9.7 % Other 8,130 9,249 (12.1 )% 30,955 33,758 (8.3 )% Total Revenues $ 79,941 $ 73,063 9.4 % $ 250,137 $ 227,503 9.9 %    

Lantheus Holdings, Inc.Supplemental Revenue Information(unaudited)

    September 30, 2017Quarter to Date Sales Growth/(Decline) Domestic

As

Reported

  Int'l

Constant

Currency

  Int'l As

Reported

  Total

Constant

Currency

  Total As

Reported

Products DEFINITY 15.3 % 34.3 % 38.7 % 15.6 % 15.7 % TechneLite 8.2 % (0.1 )% 3.0 % 7.0 % 7.4 % Xenon 15.7 % (100.0 )% (100.0 )% 15.7 % 15.7 % Other (23.1 )% (6.0 )% (6.7 )% (11.7 )% (12.1 )% Total Revenues 11.1 % (1.7 )% (0.8 )% 9.3 % 9.4 %   September 30, 2017 Year to Date Sales Growth/(Decline) DomesticAs Reported Int'lConstant Currency Int'l AsReported TotalConstant Currency Total AsReported Products DEFINITY 18.4 % 25.5 % 26.6 % 18.5 % 18.5 % TechneLite 7.6 % 3.1 % 4.0 % 7.0 % 7.1 % Xenon 9.7 % (20.0 )% (20.0 )% 9.7 % 9.7 % Other 13.5 % (19.1 )% (19.3 )% (8.2 )% (8.3 )% Total Revenues 13.5 % (9.9 )% (9.7 )% 9.9 % 9.9 %    

Lantheus Holdings, Inc.Reconciliation of Revenues to Revenues Excluding the Impact of Foreign Currency(in thousands – unaudited)

      Three Months EndedSeptember 30, 2017 Nine Months EndedSeptember 30, 2017

InternationalRevenues

 

TotalRevenues

InternationalRevenues

 

TotalRevenues

Revenues $ 10,362 $ 79,941 $ 31,431 $ 250,137 Currency impact as compared to prior period (96 ) (96 ) (73 ) (73 ) Revenues, excluding the impact of foreign currency $ 10,266   $ 79,845   $ 31,358   $ 250,064      

Lantheus Holdings, Inc.Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands – unaudited)

     

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2017   2016 2017   2016 Operating income $ 12,822 $ 12,595 $ 42,646 $ 44,447 Reconciling items impacting operating income: Campus consolidation costs including depreciation 797 — 5,779 — Offering and other costs 73 — 602 — Non-recurring refinancing related fees — — 1,721 — Gain on sale of assets —   (560 ) —   (6,505 ) Adjusted operating income $ 13,692   $ 12,035   $ 50,748   $ 37,942  

Adjusted operating income, as a percentage of revenues

17.1 % 16.5 % 20.3 % 16.7 %         Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2017   2016 2017   2016 Net income $ 8,526   $ 4,220   $ 26,259   $ 21,893   Reconciling items impacting operating expenses: Campus consolidation costs including depreciation 797 — 5,779 — Offering and other costs 73 — 602 — Non-recurring refinancing related fees — — 1,721 — Gain on sale of assets — (560 ) — (6,505 ) Reconciling items impacting non-operating expenses: Loss on debt extinguishment and retirement costs —   1,415   2,161   1,415   Adjusted net income $ 9,396   $ 5,075   $ 36,522   $ 16,803   Adjusted net income, as a percentage of revenues 11.8 % 6.9 % 14.6 % 7.4 %    

Lantheus Holdings, Inc.Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands, except per share data – unaudited)

      Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2017   2016 2017   2016 Net income per share - diluted $ 0.22   $ 0.13   $ 0.67   $ 0.71   Reconciling items impacting operating expenses: Campus consolidation costs including depreciation $ 0.02 $ — $ 0.15 $ — Offering and other costs $ — $ — $ 0.02 $ — Non-recurring refinancing related fees $ — $ — $ 0.04 $ — Gain on sale of assets $ — $ (0.02 ) $ — $ (0.21 ) Reconciling items impacting non-operating expenses: Loss on debt extinguishment and retirement costs $ —   $ 0.04   $ 0.06   $ 0.05   Adjusted net income per share - diluted $ 0.24   $ 0.15   $ 0.94   $ 0.55   Weighted-average common shares outstanding - diluted 39,121   32,402   38,971   31,049      

Lantheus Holdings, Inc.Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands – unaudited)

      Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2017   2016 2017   2016 Net income $ 8,526 $ 4,220 $ 26,259 $ 21,893 Interest expense, net 4,437 6,786 14,134 20,782 Provision for income taxes (a) 272 (176 ) 646 25 Depreciation 2,102 2,157 10,066 6,386 Amortization of intangible assets 1,646   2,083   4,953   6,278   EBITDA 16,983 15,070 56,058 55,364 Stock and incentive plan compensation 1,933 1,248 4,735 2,736 Asset write-off (b) 911 242 2,184 1,088 Severance and recruiting costs (c) 666 455 1,033 1,886 Offering and other costs(d) 73 — 602 9 Campus consolidation costs 408 — 1,101 — Debt refinancing costs — — 1,721 — Extinguishment of debt and debt retirement costs — 1,415 2,161 1,415 Gain on sales of assets — (560 ) — (6,505 ) New manufacturer costs (e) 1,639   805   3,616   2,451   Adjusted EBITDA $ 22,613   $ 18,675   $ 73,211   $ 58,444   Adjusted EBITDA, as a percentage of revenues 28.3 % 25.6 % 29.3 % 25.7 %  

(a) Represents provision for income taxes, less tax indemnification associated with BMS.

(b) Represents non-cash losses incurred associated with the write-down of inventory and write-off of long-lived assets.

(c) The amounts consist of severance and recruitment costs related to employees, executives and directors.

(d) Represents offering costs incurred on behalf of certain shareholders pursuant to a registration rights agreement and other non-recurring costs.

(e) Represents internal and external costs associated with establishing new manufacturing sources for our commercial and clinical candidate products.

 

Lantheus Holdings, Inc.Reconciliation of Free Cash Flow(in thousands – unaudited)

      Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2017   2016 2017   2016 Net cash provided by operating activities $ 15,600 $ 15,446 $ 41,691 $ 36,861 Capital expenditures (3,288 ) (2,588 ) (11,589 ) (4,976 ) Free cash flow $ 12,312   $ 12,858   $ 30,102   $ 31,885      

Lantheus Holdings, Inc.Condensed Consolidated Balance Sheets(in thousands – unaudited)

      September 30, 2017 December 31, 2016 Assets Current assets Cash and cash equivalents $ 68,077 $ 51,178 Accounts receivable, net 41,713 36,818 Inventory 23,032 17,640 Other current assets 3,789   5,183  

Total current assets

136,611 110,819 Property, plant & equipment, net 94,516 94,187 Intangibles, net 12,645 15,118 Goodwill 15,714 15,714 Other long-term assets 21,535   20,060   Total assets $ 281,021   $ 255,898   Liabilities and Stockholders’ Deficit Current liabilities Current portion of long-term debt $ 2,750 $ 3,650 Revolving line of credit — — Accounts payable 18,756 18,940 Accrued expenses and other liabilities 24,581   21,249   Total current liabilities 46,087 43,839 Asset retirement obligations 10,151 9,370 Long-term debt, net 265,523 274,460 Other long-term liabilities 37,176   34,745   Total liabilities 358,937   362,414   Stockholders’ deficit (77,916 ) (106,516 ) Total liabilities and stockholders’ deficit $ 281,021   $ 255,898    

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Lantheus Holdings, Inc.InvestorsGary Santo, 978-671-8960Head of Capital Markets and Investor RelationsorMediaMeara Murphy, 978-671-8508Director, Investor Relations and Corporate Communications