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Lantheus Holdings, Inc. Reports Third Quarter 2019 Financial Results

  • Worldwide revenue of $85.8 million for the third quarter 2019, representing a decrease of 3.5% from the prior year period ($88.9 million, which includes $7.5 million of opportunistic TechneLite® sales to ANSTO)
  • Net income of $4.9 million for the third quarter 2019, representing a decrease of 47.6% from the prior year period
  • GAAP diluted EPS of $0.12 for the third quarter 2019, representing a decrease of 48.8% from the prior year period; adjusted diluted EPS of $0.28 for the third quarter 2019, representing a decrease of 4.5% from the prior year period
  • The Company updates 2019 full year revenue and adjusted diluted earnings per share guidance

NORTH BILLERICA, Mass.--(BUSINESS WIRE)--Oct. 31, 2019-- 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, 2019.

The Company’s worldwide revenue for the third quarter of 2019 totaled $85.8 million, compared with $88.9 million for the third quarter of 2018, representing a decrease of 3.5% over the prior year period, which included $7.5 million received from the manufacture and sale of TechneLite® to an international partner on an opportunistic basis. Revenue results reflect nearly 20% year-over-year growth of DEFINITY® and higher than expected TechneLite sales.

The Company’s third quarter 2019 net income was $4.9 million, or $0.12 per fully diluted share, as compared to $9.3 million, or $0.24 per fully diluted share for the third quarter of 2018, representing a decrease of 47.6% from the prior year period. The reduction from prior year, for both net income and fully diluted earnings per share results, is due mainly to the aforementioned opportunistic $7.5 million of sales of TechneLite not repeated this year.

The Company’s third quarter 2019 adjusted fully diluted earnings per share were $0.28, as compared to $0.29 for the third quarter of 2018, representing a decrease of 4.5% from the prior year period.

Lastly, Free Cash Flow was $23.1 million, as compared to $19.3 million for the third quarter of 2018, representing an increase of approximately $3.8 million, or 19.9% from the prior year period.

“Once again, an impressive DEFINITY performance of nearly 20% year-over-year growth drove solid third quarter results. Additionally, TechneLite sales performed ahead of expectations realized by leveraging our expertise in radiopharmaceuticals,” said Mary Anne Heino, President and CEO of Lantheus. “Earlier this month, we announced the signing of an agreement to acquire Progenics Pharmaceuticals. The combination will form a leading precision diagnostics and oncology therapeutics company, bringing a diversified and sustainable revenue model, accretion in year three, and enhanced free cash flows over longer term.”

Outlook

The Company offers the following guidance for the fourth quarter as well as updating its guidance for full year 2019.

 

 

Q4 Guidance Issued October 31, 2019

Q4 FY 2019 Revenue Growth

 

3.2% - 5.5%

Q4 FY 2019 Revenue

 

$89 million - $91 million

Q4 FY 2019 Adjusted Fully Diluted EPS

 

$0.27 - $0.30

 

 

FY Guidance Updated October 31, 2019

FY 2019 Revenue Growth

 

1.1% - 1.6%

FY 2019 Revenue

 

$347 million - $349 million

FY 2019 Adjusted Fully Diluted EPS

 

$1.10 - $1.13

Previously stated guidance for full year 2019 was revenue growth of 0.8% to 1.9%, revenue of $346 million to $350 million, and adjusted fully diluted earnings per share of $1.09 to $1.12.

On a forward-looking basis, the Company does not provide GAAP income per common share or a reconciliation of adjusted diluted EPS to GAAP income per common share because the Company is unable to predict with reasonable certainty business development and acquisition-related expenses, purchase accounting fair value adjustments, and any one-time, non-recurring charges. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP. As a result, it is the Company’s view that a quantitative reconciliation of adjusted diluted EPS on a forward-looking basis is not available without unreasonable effort.

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 on Thursday, October 31, 2019 at 8:00 a.m. ET. 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 1865819. 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 and TechneLite® (Technetium Tc99m Generator), a technetium-based generator that provides the essential medical isotope used in nuclear medicine procedures. 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 adjusted net income and its line components; 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.

This press release includes forward-looking non-GAAP guidance for 2019 adjusted diluted EPS. 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.

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 2019 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).

- Tables Follow -

 

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

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2019

 

2018

 

2019

 

2018

Revenues

 

$

85,776

 

 

$

88,900

 

 

$

257,991

 

 

$

257,103

 

Cost of goods sold

 

44,187

 

 

44,015

 

 

127,745

 

 

126,063

 

Gross profit

 

41,589

 

 

44,885

 

 

130,246

 

 

131,040

 

Operating expenses

 

 

 

 

 

 

 

 

Sales and marketing

 

10,151

 

 

10,478

 

 

31,496

 

 

33,248

 

General and administrative

 

18,061

 

 

13,609

 

 

43,943

 

 

37,727

 

Research and development

 

4,860

 

 

4,316

 

 

15,584

 

 

12,520

 

Total operating expenses

 

33,072

 

 

28,403

 

 

91,023

 

 

83,495

 

Operating income

 

8,517

 

 

16,482

 

 

39,223

 

 

47,545

 

Interest expense

 

2,356

 

 

4,446

 

 

11,491

 

 

12,794

 

Loss on extinguishment of debt

 

 

 

 

 

3,196

 

 

 

Other expense (income)

 

804

 

 

(799

)

 

(1,695

)

 

(2,055

)

Income before income taxes

 

5,357

 

 

12,835

 

 

26,231

 

 

36,806

 

Income tax expense

 

501

 

 

3,566

 

 

5,014

 

 

9,581

 

Net income

 

$

4,856

 

 

$

9,269

 

 

$

21,217

 

 

$

27,225

 

Net income per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.12

 

 

$

0.24

 

 

$

0.55

 

 

$

0.71

 

Diluted

 

$

0.12

 

 

$

0.24

 

 

$

0.53

 

 

$

0.69

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

39,123

 

 

38,342

 

 

38,901

 

 

38,155

 

Diluted

40,286

39,402

40,123

39,467

 

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

 

 

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2019

2018

% Change

 

2019

2018

% Change

United States

 

 

 

 

 

 

 

 

 

 

 

 

DEFINITY

 

$

50,917

 

 

$

42,472

 

 

19.9

%

 

$

154,099

 

 

$

131,081

 

 

17.6

%

TechneLite

 

18,281

 

 

19,374

 

 

(5.6

)%

 

55,204

 

 

56,780

 

 

(2.8

)%

Other nuclear

 

9,355

 

 

11,436

 

 

(18.2

)%

 

28,006

 

 

37,284

 

 

(24.9

)%

Rebates and allowances

 

(3,903

)

 

(3,027

)

 

28.9

%

 

(12,035

)

 

(9,316

)

 

29.2

%

Total United States

 

74,650

 

 

70,255

 

 

6.3

%

 

225,274

 

 

215,829

 

 

4.4

%

International

 

 

 

 

 

 

 

 

 

 

 

 

DEFINITY

 

1,478

 

 

1,283

 

 

15.2

%

 

$

4,036

 

 

$

3,427

 

 

17.8

%

TechneLite

 

3,466

 

 

11,244

 

 

(69.2

)%

 

10,794

 

 

18,711

 

 

(42.3

)%

Other nuclear

 

6,186

 

 

6,119

 

 

1.1

%

 

17,901

 

 

19,138

 

 

(6.5

)%

Rebates and allowances

 

(4

)

 

(1

)

 

300.0

%

 

(14

)

 

(2

)

 

600.0

%

Total International

 

11,126

 

 

18,645

 

 

(40.3

)%

 

32,717

 

 

41,274

 

 

(20.7

)%

Worldwide

 

 

 

 

 

 

 

 

 

 

 

 

DEFINITY

 

52,395

 

 

43,755

 

 

19.7

%

 

158,135

 

 

134,508

 

 

17.6

%

TechneLite

 

21,747

 

 

30,618

 

 

(29.0

)%

 

65,998

 

 

75,491

 

 

(12.6

)%

Other nuclear

 

15,541

 

 

17,555

 

 

(11.5

)%

 

45,907

 

 

56,422

 

 

(18.6

)%

Rebates and allowances

 

(3,907

)

 

(3,028

)

 

29.0

%

 

(12,049

)

 

(9,318

)

 

29.3

%

Total Revenues

 

$

85,776

 

 

$

88,900

 

 

(3.5

)%

 

$

257,991

 

 

$

257,103

 

 

0.3

%

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

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

4,856

 

 

$

9,269

 

 

$

21,217

 

 

$

27,225

 

Stock and incentive plan compensation

 

3,423

 

 

2,639

 

 

9,580

 

 

7,015

 

Amortization of acquired intangible assets

 

451

 

 

689

 

 

1,353

 

 

2,067

 

Campus consolidation costs

 

 

 

84

 

 

 

 

1,154

 

Extinguishment of debt

 

 

 

 

 

3,196

 

 

 

Strategic collaboration and license costs

 

 

 

 

 

300

 

 

 

Acquisition-related costs

 

5,176

 

 

 

 

5,176

 

 

 

Income tax effect of non-GAAP adjustments(a)

 

(2,653

)

 

(1,153

)

 

(7,449

)

 

(4,003

)

Adjusted net income

 

$

11,253

 

 

$

11,528

 

 

$

33,373

 

 

$

33,458

 

Adjusted net income, as a percentage of revenues

 

13.1

%

 

13.0

%

 

12.9

%

 

13.0

%

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income per share - diluted

 

$

0.12

 

 

$

0.24

 

 

$

0.53

 

 

$

0.69

 

Stock and incentive plan compensation

 

0.08

 

 

0.06

 

 

0.24

 

 

0.17

 

Amortization of acquired intangible assets

 

0.01

 

 

0.02

 

 

0.03

 

 

0.06

 

Campus consolidation costs

 

 

 

 

 

 

 

0.03

 

Extinguishment of debt

 

 

 

 

 

0.08

 

 

 

Strategic collaboration and license costs

 

 

 

 

 

0.01

 

 

 

Acquisition-related costs

 

0.13

 

 

 

 

0.12

 

 

 

Income tax effect of non-GAAP adjustments(a)

 

(0.06

)

 

(0.03

)

 

(0.18

)

 

(0.10

)

Adjusted net income per share - diluted

 

$

0.28

 

 

$

0.29

 

 

$

0.83

 

 

$

0.85

 

Weighted-average common shares outstanding - diluted

 

40,286

 

 

39,402

 

 

40,123

 

 

39,467

 

  1. 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.

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

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2019

 

2018

 

2019

 

2018

Net cash provided by operating activities

 

$

26,442

 

 

$

24,277

 

 

$

57,963

 

 

$

43,887

 

Capital expenditures

 

(3,336

)

 

(5,005

)

 

(17,320

)

 

(12,766

)

Free cash flow

 

$

23,106

 

 

$

19,272

 

 

$

40,643

 

 

$

31,121

 

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

 

 

 

September 30,
2019

 

December 31,
2018

Assets

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

78,062

 

 

$

113,401

 

Accounts receivable, net

 

40,632

 

 

43,753

 

Inventory

 

30,596

 

 

33,019

 

Other current assets

 

5,096

 

 

5,242

 

Total current assets

 

154,386

 

 

195,415

 

Property, plant and equipment, net

 

113,531

 

 

107,888

 

Intangibles, net

 

7,786

 

 

9,133

 

Goodwill

 

15,714

 

 

15,714

 

Deferred tax assets, net

 

77,745

 

 

81,449

 

Other long-term assets

 

33,247

 

 

30,232

 

Total assets

 

$

402,409

 

 

$

439,831

 

Liabilities and stockholders’ equity

 

 

 

 

Current liabilities

 

 

 

 

Current portion of long-term debt and other borrowings

 

$

10,166

 

 

$

2,750

 

Accounts payable

 

16,492

 

 

17,955

 

Accrued expenses and other liabilities

 

32,928

 

 

32,050

 

Total current liabilities

 

59,586

 

 

52,755

 

Asset retirement obligations

 

12,560

 

 

11,572

 

Long-term debt, net and other borrowings

 

186,373

 

 

263,709

 

Other long-term liabilities

 

42,724

 

 

40,793

 

Total liabilities

 

301,243

 

 

368,829

 

Total stockholders’ equity

 

101,166

 

 

71,002

 

Total liabilities and stockholders’ equity

 

$

402,409

 

 

$

439,831

 

 

Source: Lantheus Holdings, Inc.

Mark Kinarney
Director, Investor Relations
978-671-8842
ir@lantheus.com