Lantheus Holdings, Inc. Reports 2018 First Quarter Results
DEFINITY® worldwide revenues increase 18.4% year over year
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.
(a) The income tax effect of the adjustments between GAAP net income and
non-GAAP adjusted net income takes into account the tax treatment and
related tax rate that apply to each adjustment in the applicable tax
jurisdiction.
(a) Represents income tax expense, less tax indemnification income
associated with BMS.
(b) Represents non-cash losses incurred associated with inventory and
other write-offs 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. (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
first quarter ended March 31, 2018.
Management Comments "Our first quarter provided an excellent
start to the year, driven by robust sales for DEFINITY," said Mary Anne
Heino, President and CEO. "The first quarter also was marked by
effective execution across a number of programs as we look to enhance
the growth trajectory and profitability of our core microbubble
franchise, augment our pipeline with focus on emerging technologies, and
pursue complementary, external opportunities across the broader Life
Sciences sector that fit with our objective to deliver long-term
sustainable growth and profitability."
"The application of microbubbles is emerging as a valuable platform for
increased uses, including drug delivery and therapy. With the expertise
we have built in microbubble technology, our goal is to lead in these
growing markets. At the same time, clinical work regarding flurpiridaz F
18, a novel PET cardiac imaging agent for the evaluation of coronary
artery disease, and LMI 1195, our fluorine-18-based PET agent which is
expected to aid the diagnosis of heart failure patients at risk for
sudden cardiac death, is proceeding on schedule. Internationally, our
DEFINITY China program continues to move forward, with patient
enrollment completed for the cardiac and pharmacokinetic studies, while
enrollment in the kidney and liver studies is ongoing. We look to
continue to execute successfully on our strategy and will report on our
progress as we proceed through 2018," continued Ms. Heino.
Financial Highlights The Company's worldwide revenues for
the first quarter of 2018 totaled $82.6 million, representing an
increase of 1.6% compared with $81.4 million for the first quarter of
2017. DEFINITY, the Company's flagship product and the world's leading
echo contrast agent, had worldwide revenues of $44.7 million for the
first quarter, an increase of 18.4% from the year-ago period.
Net income for the first quarter of 2018 totaled $8.2 million, or $0.21
per diluted share, compared with $4.1 million, or $0.11 per diluted
share, for the first quarter of 2017. The Company's first quarter 2018
Adjusted EBITDA (as outlined in the GAAP to non-GAAP reconciliation
provided below) was $23.1 million, or 27.9% of revenues, compared with
$22.7 million, or 27.8% of revenues, for the first quarter of 2017.
Outlook For the second quarter of 2018, the Company expects
worldwide revenues in the range of $85 million to $90 million. The
Company expects Adjusted EBITDA, as described in the GAAP to non-GAAP
reconciliation provided later in this release, of $20 million to $23
million, representing 22.2% to 27.1% of anticipated worldwide revenues.
The Company maintains its guidance for full year 2018 worldwide revenues
of approximately $337 million to $342 million, compared with $326.4
million in 2017 (which excludes a $5 million up-front payment received
from GE Healthcare). The Company also maintains its guidance for full
year 2018 Adjusted EBITDA of $85 million to $90 million, representing
24.9% to 26.7% of anticipated worldwide revenues.
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 http://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 8487086. 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.
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 and its line
components; 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 2018
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 2018 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 and the fact that some of the excluded information is not
readily 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.
Lantheus Holdings, Inc. Consolidated Statements of
Operations (in thousands, except per share data –
unaudited)
Three Months Ended March 31,
2018
2017
Revenues
$
82,630
$
81,359
Cost of goods sold
40,321
41,597
Gross profit
42,309
39,762
Operating expenses
Sales and marketing
10,640
10,214
General and administrative
12,543
12,270
Research and development
3,989
5,351
Total operating expenses
27,172
27,835
Operating income
15,137
11,927
Interest expense
4,050
5,420
Loss on extinguishment of debt
—
2,161
Other income
(920
)
(577
)
Income before income taxes
12,007
4,923
Income tax expense
3,796
785
Net income
$
8,211
$
4,138
Net income per common share:
Basic
$
0.22
$
0.11
Diluted
$
0.21
$
0.11
Weighted-average common shares outstanding:
Basic
37,886
36,889
Diluted
39,493
38,601
Lantheus Holdings, Inc. Consolidated Segment
Revenues Analysis (in thousands – unaudited)
Three Months Ended March 31,
2018
2017
Change %
United States
DEFINITY
$
43,506
$
36,923
17.8
%
TechneLite
18,063
23,308
(22.5
)%
Xenon
7,927
8,058
(1.6
)%
Other
1,992
2,738
(27.2
)%
Total United States
71,488
71,027
0.6
%
International
DEFINITY
1,149
789
45.6
%
TechneLite
3,332
3,517
(5.3
)%
Xenon
—
2
(100.0
)%
Other
6,661
6,024
10.6
%
Total International
11,142
10,332
7.8
%
Worldwide
DEFINITY
44,655
37,712
18.4
%
TechneLite
21,395
26,825
(20.2
)%
Xenon
7,927
8,060
(1.7
)%
Other
8,653
8,762
(1.2
)%
Total Revenues
$
82,630
$
81,359
1.6
%
Lantheus Holdings, Inc. Reconciliation of GAAP to
Non-GAAP Financial Measures (in thousands – unaudited)
Three Months Ended March 31,
2018
2017
Operating income
$
15,137
$
11,927
Campus consolidation costs including depreciation
483
2,541
Offering and other costs
—
178
Non-recurring refinancing related fees
—
1,695
Adjusted operating income
$
15,620
$
16,341
Adjusted operating income, as a percentage of revenues
18.9
%
20.1
%
Lantheus Holdings, Inc. Reconciliation of GAAP to
Non-GAAP Financial Measures (in thousands, except per
share data – unaudited)
Three Months Ended March 31,
2018
2017
Net income
$
8,211
$
4,138
Reconciling items impacting operating income:
Campus consolidation costs including depreciation
483
2,541
Offering and other costs
—
178
Non-recurring refinancing related fees
—
1,695
Reconciling items impacting non-operating expenses and income
taxes:
Loss on debt extinguishment and retirement costs
—
2,161
Income tax effect of non-GAAP adjustments(a) (b)
(122
)
(1,660
)
Adjusted net income
$
8,572
$
9,053
Adjusted net income, as a percentage of revenues
10.4
%
11.1
%
Three Months Ended March 31,
2018
2017
Net income per share - diluted
$
0.21
$
0.11
Reconciling items impacting operating income:
Campus consolidation costs including depreciation
0.01
0.07
Offering and other costs
—
—
Non-recurring refinancing related fees
—
0.04
Reconciling items impacting non-operating expenses and income
taxes:
Loss on debt extinguishment and retirement costs
—
0.06
Tax effect of non-GAAP adjustments(a) (b)
—
(0.05
)
Adjusted net income per share - diluted
$
0.22
$
0.23
Weighted-average common shares outstanding - diluted
39,493
38,601
(b) During the fourth quarter of 2017, we released the valuation
allowance previously recorded against our domestic net deferred tax
assets. As a result, we included the tax effect of non-GAAP adjustments
starting in the fourth quarter of 2017. Presentation of 2017 Adjusted
Net Income has been modified to allow better go-forward comparability by
including the tax effect of non-GAAP reconciling items.
Lantheus Holdings, Inc. Reconciliation of GAAP to
Non-GAAP Financial Measures (in thousands – unaudited)
Three Months Ended March 31,
2018
2017
Net income
$
8,211
$
4,138
Interest expense, net
4,043
5,417
Income tax expense(a)
2,955
296
Depreciation
1,874
4,514
Amortization of intangible assets
1,722
1,646
EBITDA
18,805
16,011
Stock and incentive plan compensation
1,977
1,292
Asset write-off (b)
1,245
312
Severance and recruiting costs (c)
209
139
Offering and other costs (d)
—
178
Campus consolidation costs
483
27
Debt refinancing costs
—
1,695
Extinguishment of debt and debt retirement costs
—
2,161
New manufacturer costs (e)
368
836
Adjusted EBITDA
$
23,087
$
22,651
Adjusted EBITDA, as a percentage of revenues
27.9
%
27.8
%
Lantheus Holdings, Inc. Reconciliation of Free Cash
Flow (in thousands – unaudited)
Three Months Ended March 31,
2018
2017
Net cash (used in) provided by operating activities
$
(666
)
$
5,524
Capital expenditures
(2,135
)
(4,899
)
Free cash flow
$
(2,801
)
$
625
Lantheus Holdings, Inc. Condensed Consolidated
Balance Sheets (in thousands – unaudited)
