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Lantheus Holdings, Inc. Reports 2016 Fourth Quarter and Full Year Financial Results; Provides 2017 Guidance

Company exceeds full year 2016 guidance, posts revenue of $301.9 million, net income of $26.8 million and Adjusted EBITDA of $78.3 million

NORTH BILLERICA, Mass.--(BUSINESS WIRE)--Feb. 21, 2017-- 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 fourth quarter and full year ended December 31, 2016.

The Company’s worldwide revenues for the fourth quarter of 2016 totaled $74.4 million, compared to $71.2 million for the fourth quarter of 2015. For the full year 2016, worldwide revenues totaled $301.9 million, compared to $293.5 in 2015, exceeding 2016 guidance of $296 million to $299 million. Revenue results were driven by growth in sales of DEFINITY® and TechneLite®, partially offset by price concessions for Xenon as part of the Company’s nuclear products contracting strategy as well as the divestiture of the Company’s Canadian and Australian radiopharmacy businesses.

Net income for the fourth quarter of 2016 totaled $4.9 million or $0.13 per diluted share, compared to $3.9 million or $0.13 per diluted share for the fourth quarter of 2015. Full year 2016 net income totaled $26.8 million, compared to a net loss of $14.7 million in 2015. The full year $41.5 million improvement is primarily attributable to operational improvements, decreased interest expense and one-time activities in 2015 associated with the Company’s initial public offering and debt refinancing.

The Company’s fourth quarter 2016 Adjusted EBITDA (as defined below in the GAAP to non-GAAP reconciliation) was $19.8 million, or 26.7% of revenues, compared to $18.3 million, or 25.7% of revenues, in the fourth quarter of 2015. Full year 2016 Adjusted EBITDA was $78.3 million, or 25.9% of revenues, compared to $76.3 million, or 26.0% of revenues, for 2015, exceeding 2016 guidance of $73 million to $75 million. Higher Adjusted EBITDA was attributable to the strong performance of higher margin products in the U.S. and the Company’s shift to a distribution model in Canada and Australia, partially offset by the margin impact of price concessions attributed to the Company’s nuclear products contracting strategy and incremental sales and marketing expenses attributable to the growth of DEFINITY sales.

Mary Anne Heino, President and CEO, commented, “2016 was a successful year for the Company on a number of levels as we exceeded both revenue and Adjusted EBITDA guidance, delivering significant value to shareholders. Our strong results reflect 18.1% revenue growth of DEFINITY worldwide, execution of our nuclear products contracting strategy, and a consistent focus on optimizing our capital structure, including $75 million of reduction in our outstanding debt. We enter 2017 poised to drive continued growth while remaining focused on building our portfolio and strengthening the long-term financial results of the Company.”

Outlook

The Company anticipates worldwide revenues for full year 2017 of approximately $312 million to $317 million, compared to $301.9 million in 2016. For the first quarter of 2017, the Company expects worldwide revenues in the range of $77 million to $80 million.

The Company anticipates full year 2017 Adjusted EBITDA, as described in the GAAP to non-GAAP reconciliation provided later in this release, of $79 million to $82 million, representing 24.9% to 26.3% of anticipated worldwide revenues. For the first quarter of 2017, the Company expects Adjusted EBITDA in the range of $18 million to $20 million.

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 65019185. 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, which are primarily used for the diagnosis of cardiovascular diseases. LMI’s 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. 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 share and per share data – unaudited)

     

Three Months Ended
December 31,

 

Year Ended
December 31,

 
2016   2015 2016   2015
Revenues $ 74,350 $ 71,201 $ 301,853 $ 293,461
Cost of goods sold   39,703     37,820     164,073     157,939  
Gross profit   34,647     33,381     137,780     135,522  
Operating expenses
Sales and marketing 8,686 7,806 36,542 34,740
General and administrative 9,990 10,121 38,832 43,894
Research and development   3,710     3,066     12,203     14,358  
Total operating expenses 22,386 20,993 87,577 92,992
Gain (loss) on sales of assets   (120 )       6,385      
Operating income 12,141 12,388 56,588 42,530
Interest expense (5,819 ) (7,098 ) (26,618 ) (38,715 )
Debt retirement costs (481 ) (1,896 )
Loss on extinguishment of debt (15,528 )
Other (expense) income, net   (97 )   (317 )   220     (65 )
Income (loss) before income taxes 5,744 4,973 28,294 (11,778 )
Provision for income taxes   875     1,057     1,532     2,968  
Net income (loss) $ 4,869   $ 3,916   $ 26,762   $ (14,746 )
Net income (loss) per common share:
Basic $ 0.13   $ 0.13   $ 0.84   $ (0.60 )
Diluted $ 0.13   $ 0.13   $ 0.82   $ (0.60 )
Weighted-average common shares:
Basic   36,172,609     30,364,501     32,043,904     24,439,845  
Diluted   37,853,125     30,364,914     32,655,958     24,439,845  
 
 

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

     

Three Months Ended
December 31,

Year Ended
December 31,

2016   2015   % Change 2016   2015   % Change
United States    
DEFINITY $ 33,180 $ 28,324 17.1 % $ 128,677 $ 109,656 17.3 %
TechneLite 21,130 14,667 44.1 % 85,412 62,034 37.7 %
Xenon 7,458 10,931 (31.8 )% 29,078 48,868 (40.5 )%
Other   2,965   3,645   (18.7 )%   14,253   15,266   (6.6 )%
Total United States   64,733   57,567   12.4 %   257,420   235,824   9.2 %
International
DEFINITY 932 558 67.0 % 2,935 2,203 33.2 %
TechneLite 3,466 2,450 41.5 % 13,805 10,528 31.1 %
Xenon 2 2 8 30 (73.3 )%
Other   5,217   10,624   (50.9 )%   27,685   44,876   (38.3 )%
Total International   9,617   13,634   (29.5 )%   44,433   57,637   (22.9 )%
Worldwide
DEFINITY 34,112 28,882 18.1 % 131,612 111,859 17.7 %
TechneLite 24,596 17,117 43.7 % 99,217 72,562 36.7 %
Xenon 7,460 10,933 (31.8 )% 29,086 48,898 (40.5 )%
Other   8,182   14,269   (42.7 )%   41,938   60,142   (30.3 )%
Total Revenues $ 74,350 $ 71,201   4.4 % $ 301,853 $ 293,461   2.9 %
 
 

Lantheus Holdings, Inc.
Supplemental Revenue Information
(unaudited)

   

December 31, 2016
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 17.1 % 67.2 % 67.0 % 18.1 % 18.1 %
TechneLite 44.1 % 41.7 % 41.5 % 43.7 % 43.7 %
Xenon (31.8 )% (31.8 )% (31.8 )%
Other (18.7 )% (51.5 )% (50.9 )% (43.1 )% (42.7 )%
Total Revenues 12.4 % (29.9 )% (29.5 )% 4.3 % 4.4 %
 

December 31, 2016
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 17.3 % 37.7 % 33.2 % 17.7 % 17.7 %
TechneLite 37.7 % 35.6 % 31.1 % 37.4 % 36.7 %
Xenon (40.5 )% (73.3 )% (73.3 )% (40.5 )% (40.5 )%
Other (6.6 )% (37.7 )% (38.3 )% (29.8 )% (30.3 )%
Total Revenues 9.2 % (21.4 )% (22.9 )% 3.2 % 2.9 %
 
 

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

     

Three Months Ended
December 31, 2016

Year Ended
December 31, 2016

International
Revenues

 

Total
Revenues

International
Revenues

 

Total
Revenues

Revenues $ 9,617 $ 74,350 $ 44,433 $ 301,853
Currency impact as compared to prior period   (53 )   (53 )   860   860
Revenues, excluding the impact of foreign currency $ 9,564   $ 74,297   $ 45,293 $ 302,713
 
 

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

     

Three Months Ended
December 31,

Year Ended
December 31,

2016   2015 2016   2015
Operating income $ 12,141 $ 12,388 $ 56,588 $ 42,530
Reconciling items impacting Operating Income:
Campus consolidation costs 1,181 1,181 3,630
Sponsor and other costs 117 117 6,527
Gain (loss) on sales of assets   120     (6,385 )  
Adjusted operating income $ 13,559 $ 12,388 $ 51,501 $ 52,687
Adjusted operating income, as a percentage revenues   18.2 %   17.4 %   17.1 %   18.0 %
 
   

Three Months Ended
December 31,

 

Year Ended
December 31,

2016   2015 2016   2015
Net income (loss) $ 4,869 $ 3,916 $ 26,762 $ (14,746 )
Reconciling items impacting Gross Profit:
Campus consolidation costs 77
Reconciling items impacting Operating Expenses:
Campus consolidation costs 1,181 1,181 3,553
Sponsor and other costs 117 117 6,527
Gain (loss) on sales of assets 120 (6,385 )
Reconciling items impacting Non-operating Expenses:
Debt retirement costs 481 1,896
Loss on debt extinguishment 15,528
Interest upon redemption of senior notes         3,250
Adjusted net income $ 6,768 $ 3,916 $ 23,571 $ 14,189
Adjusted net income, as a percentage of revenues   9.1 %   5.5 %   7.8 %   4.8 %
 
 

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

     

Three Months Ended
December 31,

Year Ended
December 31,

2016   2015 2016   2015
Net income (loss) per common share - Diluted $ 0.13 $ 0.13 $ 0.82 $ (0.60 )
Reconciling items impacting Gross Profit:

Campus consolidation costs

$ $ $ $
Reconciling items impacting Operating Expenses:
Campus consolidation costs $ 0.04 $ $ 0.04 $ 0.15
Sponsor and other costs $ $ $ $ 0.27
Gain (loss) on sales of assets $ $ $ (0.20 ) $
Reconciling items impacting Non-operating Expenses:
Debt retirement costs $ 0.01 $ $ 0.06 $
Loss on debt extinguishment $ $ $ $ 0.64
Interest upon redemption of senior notes $ $ $ $ 0.13
Adjusted net income per common share - Diluted $ 0.18 $ 0.13 $ 0.72 $ 0.59
Weighted-average common shares outstanding – Diluted   37,853,125   30,364,914   32,655,958   24,439,845
 
 

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

     
Three Months Ended
December 31,
Year Ended
December 31,
2016   2015 2016   2015
Net income (loss) $ 4,869 $ 3,916 $ 26,762 $ (14,746 )
Interest expense, net 5,816 7,092 26,598 38,691
Provision for income taxes(a) 452 619 477 1,314
Depreciation 3,529 2,164 9,915 11,813
Amortization of intangible assets   2,070   2,160   8,348   7,838
EBITDA 16,736 15,951 72,100 44,910
Reconciling items impacting EBITDA:
Stock and incentive plan compensation 791 478 3,527 2,002
Legal fees relating to business interruption claim(b) 5 9 72
Asset write-off(c) 818 286 1,906 1,468
Severance and recruiting costs(d) 204 507 2,090 1,360
Sponsor fee and other(e) 117 117 7,340
Debt retirement costs 481 1,896
Extinguishment of debt 15,528
Gain (loss) on sales of assets 120 (6,385 )
New manufacturer costs(f)   578   1,081   3,029   3,649
Adjusted EBITDA $ 19,845 $ 18,308 $ 78,289 $ 76,329
Adjusted EBITDA, as a percentage of revenues   26.7 %   25.7 %   25.9 %   26.0 %
 

(a) Represents provision for income taxes, less tax indemnification associated with BMS.
(b) Represents legal fees and disbursements incurred in connection with our business interruption claim associated with the NRU reactor shutdown in 2009 to 2010.
(c) Represents non-cash losses incurred associated with the write-down of inventory and write-off of long-lived assets.
(d) The amounts consist of severance and recruitment costs related to employees, executives and directors.
(e) Represents expenses paid on behalf of our former sponsor’s secondary offering in 2016, annual sponsor monitoring fee and related expenses and a $6.5 million payment for the termination of our advisory services and monitoring agreement with our sponsor in 2015.
(f) 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 Ended
December 31,

Year Ended
December 31,

2016   2015 2016   2015
Cash provided by operating activities $ 12,781 $ 12,626 $ 49,642 $ 21,762
Capital expenditures   (2,422 )   (4,732 )   (7,398 )   (13,151 )
Free cash flow $ 10,359 $ 7,894 $ 42,244 $ 8,611
 
 

Lantheus Holdings, Inc.
Condensed Consolidated Balance Sheets

(in thousands – unaudited)

     

December 31,
2016

December 31,
2015

Assets
Current assets:
Cash and cash equivalents $ 51,178 $ 28,596
Accounts receivable, net 36,818 37,293
Inventory 17,640 15,622
Other current assets 5,183 3,851
Assets held for sale     4,644
Total current assets 110,819 90,006
Property, plant & equipment, net 94,187 95,654
Intangibles, net 15,118 20,496
Goodwill 15,714 15,714
Other long-term assets   20,060   20,509
Total assets $ 255,898 $ 242,379

 

Liabilities and Stockholders’ Deficit
Current liabilities:
Current portion of long-term debt $ 3,650 $ 3,650
Accounts payable 18,940 11,657
Accrued expenses and other current liabilities 21,249 18,502
Liabilities held for sale     1,715
Total current liabilities 43,839 35,524
Asset retirement obligation 9,370 8,145
Long-term debt, net 274,460 349,858
Other long-term liabilities   34,745   34,141
Total liabilities   362,414   427,668
Stockholders’ deficit   (106,516 )   (185,289 )
Total liabilities and stockholders’ deficit $ 255,898 $ 242,379
 

Source: Lantheus Holdings, Inc.

Lantheus Holdings, Inc.
Investors
Gary Santo, 978-671-8960
Head of Capital Markets and Investor Relations
or
Media
Meara Murphy, 978-671-8508
Director, Investor Relations and Corporate Communications