Lantheus Holdings, Inc. Reports Fourth Quarter and Full Year 2018 Financial Results
- Worldwide revenues of
$86.3 million and$343.4 million for fourth quarter and full year 2018, respectively; representing an increase of 6.2% and 3.6% over the prior year period, respectively - Net income of
$13.3 million and$40.5 million for the fourth quarter and full year 2018, representing a decrease of$83.8 million and$82.9 million over the prior period, respectively, driven by adjustments in tax reporting resulting in a net tax benefit of$85.9 million that was realized in 2017 - EBITDA of
$20.0 million and$77.9 million for fourth quarter and full year 2018, representing an increase of 55.6% and 13.0% over the prior year period, respectively; adjusted EBITDA of$25.2 million and$98.1 million for fourth quarter and full year, representing an increase of 21.0% and 4.3% over the prior year period, respectively - The Company provides first quarter and full year 2019 revenue and adjusted fully diluted earnings per share guidance
The Company’s worldwide revenues for the fourth quarter of 2018 totaled
The Company’s fourth quarter 2018 net income was
The Company’s fourth quarter 2018 EBITDA was
“The fourth quarter marked a great finish to a strong year for
Lantheus,” said
Outlook
The Company guidance for the first quarter and full year 2019 is as follows:
Guidance Issued |
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Q1 FY 2019 Revenue Growth | 3.0% - 6.0% | ||
Q1 FY 2019 Revenue | $85 million - $87.5 million | ||
Q1 FY 2019 Adjusted Diluted EPS | $0.23 - $0.25 | ||
FY 2019 Revenue Growth | 4.25% - 5.75% | ||
FY 2019 Revenue | $358 million - $363 million | ||
FY 2019 Adjusted Diluted EPS | $1.14 - $1.17 | ||
In the future, the Company will not separately report or forecast EBITDA or adjusted EBITDA. The Company believes that because it has matured as a public company and de-levered, adjusted fully diluted earnings per share is now a more appropriate metric to evaluate its financial performance. The Company does not provide GAAP income per common share or a reconciliation of adjusted diluted EPS to GAAP income per common share on a forward-looking basis 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 without unreasonable effort. 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 such quantitative reconciliation of adjusted diluted EPS on a forward-looking basis is not available.
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 on
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
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
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; EBITDA, adjusted EBITDA; 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.
We changed our definition of adjusted net income during the fourth quarter of 2018 to exclude share-based compensation expense, amortization of acquired intangible assets, asset impairment charges, restructuring charges, other charges associated with permitted acquisitions, charges and gains associated with product or business line discontinuance, changes in contingent purchase price, legal settlements and other one-time, non-recurring charges which do not represent ongoing costs to the business. We believe this change provides a more transparent and comparable view of our financial performance as well as reflects the maturity of the Company as a public entity and its anticipated trajectory of growth and profitability. Accordingly, all prior periods reflected in this press release have been recast to reflect the current definition.
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
Lantheus Holdings, Inc. |
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Consolidated Statements of Operations |
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(in thousands, except per share data – unaudited) |
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Three Months Ended December 31, |
Year Ended December 31, |
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2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues | $ | 86,271 | $ | 81,241 | $ | 343,374 | $ | 331,378 | ||||||||
Cost of goods sold | 42,426 | 43,342 | 168,489 | 169,243 | ||||||||||||
Gross profit | 43,845 | 37,899 | 174,885 | 162,135 | ||||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing | 9,911 | 10,423 | 43,159 | 42,315 | ||||||||||||
General and administrative | 12,440 | 14,293 | 50,167 | 49,842 | ||||||||||||
Research and development | 4,551 | 3,976 | 17,071 | 18,125 | ||||||||||||
Total operating expenses | 26,902 | 28,692 | 110,397 | 110,282 | ||||||||||||
Operating income | 16,943 | 9,207 | 64,488 | 51,853 | ||||||||||||
Interest expense | 4,611 | 4,263 | 17,405 | 18,410 | ||||||||||||
Loss on extinguishment of debt | — | 281 | — | 2,442 | ||||||||||||
Other income | (410 | ) | (6,601 | ) | (2,465 | ) | (8,638 | ) | ||||||||
Income before income taxes | 12,742 | 11,264 | 49,548 | 39,639 | ||||||||||||
Income tax (benefit) expense | (551 | ) | (85,862 | ) | 9,030 | (83,746 | ) | |||||||||
Net income | $ | 13,293 | $ | 97,126 | $ | 40,518 | $ | 123,385 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.35 | $ | 2.58 | $ | 1.06 | $ | 3.31 | ||||||||
Diluted | $ | 0.34 | $ | 2.47 | $ | 1.03 | $ | 3.17 | ||||||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic | 38,465 | 37,580 | 38,233 | 37,276 | ||||||||||||
Diluted | 39,492 | 39,294 | 39,501 | 38,892 | ||||||||||||
Lantheus Holdings, Inc. |
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Consolidated Segment Revenues Analysis |
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(in thousands – unaudited) |
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Three Months Ended |
Year Ended |
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2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||||||
United States |
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DEFINITY | $ | 47,359 | $ | 40,546 | 16.8 | % | $ | 178,440 | $ | 153,581 | 16.2 | % | ||||||||||
TechneLite | 17,262 | 21,339 |
(19.1 |
)% |
74,042 | 90,489 | (18.2 | )% | ||||||||||||||
Other | 8,130 | 9,411 | (13.6 | )% | 36,098 | 45,932 | (21.4 | )% | ||||||||||||||
Total United States | 72,751 | 71,296 | 2.0 | % | 288,580 | 290,002 | (0.5 | )% | ||||||||||||||
International |
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DEFINITY | 1,206 | 1,153 | 4.6 | % | 4,633 | 3,687 | 25.7 | % | ||||||||||||||
TechneLite | 6,105 | 3,405 | 79.3 | % | 24,816 | 14,155 | 75.3 | % | ||||||||||||||
Other | 6,209 | 5,387 | 15.3 | % | 25,345 | 23,534 | 7.7 | % | ||||||||||||||
Total International | 13,520 | 9,945 | 35.9 | % | 54,794 | 41,376 | 32.4 | % | ||||||||||||||
Worldwide |
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DEFINITY | 48,565 | 41,699 | 16.5 | % | 183,073 | 157,268 | 16.4 | % | ||||||||||||||
TechneLite | 23,367 | 24,744 | (5.6 | )% | 98,858 | 104,644 | (5.5 | )% | ||||||||||||||
Other | 14,339 | 14,798 | (3.1 | )% | 61,443 | 69,466 | (11.5 | )% | ||||||||||||||
Total Revenues | $ | 86,271 | $ | 81,241 | 6.2 | % | $ | 343,374 | $ | 331,378 | 3.6 | % | ||||||||||
Lantheus Holdings, Inc. |
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Reconciliation of GAAP to Non-GAAP Financial Measures |
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(in thousands, except per share data – unaudited) |
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Three Months Ended |
Year Ended |
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2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 13,293 | $ | 97,126 | $ | 40,518 | $ | 123,385 | ||||||||
Stock and incentive plan compensation | 2,481 | 2,034 | 9,496 | 6,769 | ||||||||||||
Amortization of acquired intangible assets | 581 | 836 | 2,648 | 3,342 | ||||||||||||
Campus consolidation costs | 3 | 51 | 1,157 | 1,152 | ||||||||||||
Asset impairment charges | — | 912 | — | 912 | ||||||||||||
One-time contract and termination costs | — | 2,210 | — | 2,210 | ||||||||||||
Debt financing costs | — | 836 | — | 2,557 | ||||||||||||
Extinguishment of debt and termination costs | — | 281 | — | 2,442 | ||||||||||||
Offering and other costs(a) | — | (26 | ) | — | 576 | |||||||||||
Income tax benefit for release of valuation allowances | (3,969 | ) | (141,094 | ) | (3,969 | ) | (141,094 | ) | ||||||||
Impact of tax charge on deferred taxes | — | 45,129 | — | 45,129 | ||||||||||||
Income tax effect of non-GAAP adjustments(b) | (1,123 | ) | (3,426 | ) | (5,126 | ) | (10,404 | ) | ||||||||
Adjusted net income | $ | 11,266 | $ | 4,869 | $ | 44,724 | $ | 36,976 | ||||||||
Adjusted net income, as a percentage of revenues | 13.1 | % | 6.0 | % | 13.0 | % | 11.2 | % | ||||||||
Three Months Ended |
Year Ended |
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2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income per share - diluted | $ | 0.34 | $ | 2.47 | $ | 1.03 | $ | 3.17 | ||||||||
Stock and incentive plan compensation | 0.06 | 0.05 | 0.24 | 0.18 | ||||||||||||
Amortization of acquired intangible assets | 0.02 | 0.02 | 0.06 | 0.09 | ||||||||||||
Campus consolidation costs | — | — | 0.03 | 0.03 | ||||||||||||
Asset impairment charges | — | 0.02 | — | 0.02 | ||||||||||||
One-time contract and termination costs | — | 0.06 | — | 0.06 | ||||||||||||
Debt financing costs | — | 0.02 | — | 0.07 | ||||||||||||
Extinguishment of debt and termination costs | — | 0.01 | — | 0.06 | ||||||||||||
Offering and other costs(a) | — | — | — | 0.01 | ||||||||||||
Income tax benefit for release of valuation allowances | (0.10 | ) | (3.59 | ) | (0.10 | ) | (3.63 | ) | ||||||||
Impact of tax charge on deferred taxes | — | 1.15 | — | 1.16 | ||||||||||||
Income tax effect of non-GAAP adjustments(b) | (0.03 | ) | (0.09 | ) | (0.13 | ) | (0.27 | ) | ||||||||
Adjusted net income per share - diluted | $ | 0.29 | $ | 0.12 | $ | 1.13 | $ | 0.95 | ||||||||
Weighted-average common shares outstanding - diluted | 39,492 | 39,294 | 39,501 | 38,892 | ||||||||||||
(a) Represents offering costs incurred on behalf of certain shareholders pursuant to a registration rights agreement and other non-recurring costs.
(b) 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. |
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Reconciliation of GAAP to Non-GAAP Financial Measures |
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(in thousands – unaudited) |
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Three Months Ended |
Year Ended |
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2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 13,293 | $ | 97,126 | $ | 40,518 | $ | 123,385 | ||||||||
Interest expense, net | 4,476 | 4,257 | 17,237 | 18,391 | ||||||||||||
Income tax (benefit) expense (a) | (1,186 | ) | (92,759 | ) | 6,175 | (92,113 | ) | |||||||||
Depreciation | 1,844 | 2,419 | 7,377 | 12,485 | ||||||||||||
Amortization of intangible assets | 1,541 | 1,794 | 6,552 | 6,747 | ||||||||||||
EBITDA | 19,968 | 12,837 | 77,859 | 68,895 | ||||||||||||
Stock and incentive plan compensation | 2,481 | 2,034 | 9,496 | 6,769 | ||||||||||||
Asset write-off (b) | 443 | 1,246 | 3,716 | 3,430 | ||||||||||||
Severance and recruiting costs (c) | 342 | 682 | 2,569 | 1,715 | ||||||||||||
Offering and other costs (d) | — | (26 | ) | — | 576 | |||||||||||
Campus consolidation costs | 3 | 51 | 1,157 | 1,152 | ||||||||||||
Debt refinancing costs | — | 836 | — | 2,557 | ||||||||||||
Extinguishment of debt and debt retirement costs | — | 281 | — | 2,442 | ||||||||||||
New manufacturer costs (e) | 1,972 | 688 | 3,273 | 4,304 | ||||||||||||
One-time contract and termination costs | — | 2,210 | — | 2,210 | ||||||||||||
Adjusted EBITDA | $ | 25,209 | $ | 20,839 | $ | 98,070 | $ | 94,050 | ||||||||
Adjusted EBITDA, as a percentage of revenues | 29.2 | % | 25.7 | % | 28.6 | % | 28.4 | % | ||||||||
(a) Represents income tax (benefit) expense, less tax indemnification
income associated with BMS. During the three and twelve months ended
(b) Represents non-cash losses incurred associated with the write-down
of land, inventory and other write-offs of long-lived assets. During the
three and twelve months ended
(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. |
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Reconciliation of Free Cash Flow |
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(in thousands – unaudited) |
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Three Months Ended |
Year Ended |
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2018 | 2017 | 2018 | 2017 | |||||||||||||
Net cash provided by operating activities | $ | 17,306 | $ | 13,086 | $ | 61,193 | $ | 54,777 | ||||||||
Capital expenditures | (7,366 | ) | (5,954 | ) | (20,132 | ) | (17,543 | ) | ||||||||
Free cash flow | $ | 9,940 | $ | 7,132 | $ | 41,061 | $ | 37,234 | ||||||||
Lantheus Holdings, Inc. |
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Condensed Consolidated Balance Sheets |
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(in thousands – unaudited) |
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December 31, 2018 |
December 31, 2017 |
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Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 113,401 | $ | 76,290 | |||
Accounts receivable, net | 43,753 | 40,259 | |||||
Inventory | 33,019 | 26,080 | |||||
Other current assets | 5,242 | 5,221 | |||||
Total current assets | 195,415 | 147,850 | |||||
Property, plant and equipment, net | 107,888 | 92,999 | |||||
Intangibles, net | 9,133 | 11,798 | |||||
Goodwill | 15,714 | 15,714 | |||||
Deferred tax assets, net | 81,449 | 87,010 | |||||
Other long-term assets | 30,232 | 28,487 | |||||
Total assets | $ | 439,831 | $ | 383,858 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities | |||||||
Current portion of long-term debt | $ | 2,750 | $ | 2,750 | |||
Revolving line of credit | — | — | |||||
Accounts payable | 17,955 | 17,464 | |||||
Accrued expenses and other liabilities | 32,050 | 26,536 | |||||
Total current liabilities | 52,755 | 46,750 | |||||
Asset retirement obligations | 11,572 | 10,412 | |||||
Long-term debt, net | 263,709 | 265,393 | |||||
Other long-term liabilities | 40,793 | 38,012 | |||||
Total liabilities | 368,829 | 360,567 | |||||
Total stockholders’ equity | 71,002 | 23,291 | |||||
Total liabilities and stockholders’ equity | $ | 439,831 | $ | 383,858 | |||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190219005970/en/
Source:
Investors:
Mark Kinarney
Director, Investor Relations
978-671-8842
Media:
Meara Murphy
Director, Corporate Communications
978-671-8508