UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 12, 2014
LANTHEUS MEDICAL IMAGING, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 333-169785 | 51-0396366 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
331 Treble Cove Road, North Billerica, MA 01862
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: (978) 671-8001
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition. |
On August 12, 2014, Lantheus Medical Imaging, Inc. (the “Company”) announced via press release its financial results as of and for the three and six months ended June 30, 2014. A copy of that press release is being furnished as Exhibit 99.1 and is hereby incorporated by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit |
Description | |
| 99.1 | Press release of Lantheus Medical Imaging, Inc. dated August 12, 2014, announcing its financial results as of and for the three and six months ended June 30, 2014. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LANTHEUS MEDICAL IMAGING, INC. | ||||||
| By: | /s/ Michael P. Duffy | |||||
| Name: | Michael P. Duffy | |||||
| Title: | Vice President and General Counsel | |||||
| Date: August 12, 2014 | ||||||
EXHIBIT INDEX
| Exhibit |
Description |
Location | ||
| 99.1 | Press release of Lantheus Medical Imaging, Inc. dated August 12, 2014, announcing its financial results as of and for the three and six months ended June 30, 2014. | Furnished herewith * | ||
| * | Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. |
Exhibit 99.1
TUESDAY, AUGUST 12, 2014
CONTACTS:
| Linda Lennox | Meara Murphy | |
| Office: 978-671-8854 | Office: 978-671-8508 | |
| Cell: 908-627-3424 | Cell: 617-794-1045 |
Lantheus Medical Imaging Reports Results for Second Quarter
Ended June 30, 2104
Worldwide revenues increase 7% as-reported and 8% constant currency
Adjusted EBITDA increases to $16.3 million on continued gross margin expansion
and operating expense leverage
No. BILLERICA, Mass. (August 12, 2014) – Lantheus Medical Imaging, Inc. (“LMI”), a wholly-owned operating subsidiary of parent company Lantheus MI Intermediate, Inc. and a global leader in developing, manufacturing, selling and distributing innovative diagnostic imaging agents, today reported financial results for its second quarter ended June 30, 2014.
Worldwide revenue totaled $75.6 million during the second quarter ended June 30, 2014, representing a 7% increase over $70.6 million reported during the second quarter of 2013. Excluding the impact of foreign currency, revenue increased 8% during the second quarter.
The Company’s second quarter 2014 GAAP net loss totaled $1.6 million, narrowed by $12.9 million from a net loss of $14.5 million in second quarter of 2013, while the Company’s Adjusted EBITDA increased by $9.8 million, to $16.3 million for the second quarter of 2014 from $6.5 million in the second quarter of 2013. The attached financial tables include a reconciliation of U.S. GAAP to non-GAAP results.
Jeffrey Bailey, President and CEO said, “We have been undertaking a financial and operational transformation of our business over the past six quarters, and our success to date is quite evident with the financial results of our second quarter. Our 8% constant currency revenue growth, accompanied by significant gross margin expansion and operating expense reduction, combined to expand our Adjusted EBITDA by 149% from year-ago levels, and has elevated our business to a meaningfully greater level of financial performance in a relatively short period of time.”
Mr. Bailey continued, “We continue to be pleased by the momentum of our business. Sequentially, our second quarter 2014 revenue and Adjusted EBITDA results exceeded those of our first quarter, the result of accelerated revenue growth in combination with continued operating leverage. During the second quarter, DEFINITY revenues once again grew sequentially, the result of continued growth of the U.S. ultrasound contrast market and the execution of our dedicated sales force. Looking ahead, the dynamics of our markets, the initiatives that we are targeting and the capabilities of our team combine to create exciting opportunities for our business during the remainder of 2014 and beyond.”
Conference Call
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 1-866-510-0712 (U.S. callers) or 1-617-597-5380 (international callers) and provide passcode 37835042. A live audio webcast of the call also will be available on the homepage of the Company’s website at www.lantheus.com. A replay of the telephone conference call and audio webcast will be available from approximately 6:30 p.m. ET on August 12, 2014 through midnight on August 25, 2014. To access a replay of the conference call, dial 1-888-286-8010 (U.S. callers) or 1-617-801-6888 (international callers), and provide passcode 62046667. A replay of this conference call will also be available via for at least 90 days in the Investor Relations section of our website located at www.lantheus.com.
The conference call may 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.
Non-GAAP Financial Measures
The Company uses non-GAAP financial measures, such as net sales excluding the impact of foreign currency, EBITDA and Adjusted EBITDA. 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. Such forward-looking statements are subject to risks and uncertainties that may be described from time to time in the Company’s filings with the Securities and Exchange Commission. 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.
About Lantheus Medical Imaging, Inc. and Lantheus MI Intermediate, Inc.
Lantheus Medical Imaging, Inc. (“LMI”), a wholly-owned operating subsidiary of parent company, Lantheus MI Intermediate, Inc., is a global leader in developing, manufacturing, selling and distributing innovative diagnostic imaging agents. 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.
Lantheus has more than 500 employees worldwide with headquarters in North Billerica, Massachusetts, and offices in Puerto Rico, Canada and Australia.
– Tables Follow –
Lantheus MI Intermediate, Inc. and subsidiaries
Condensed Consolidated Statements of Operations
(dollars in thousands – unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Revenues |
$ | 75,613 | $ | 70,601 | $ | 148,949 | $ | 141,619 | ||||||||
| Cost of goods sold |
44,554 | 49,654 | 87,829 | 97,860 | ||||||||||||
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| Gross profit |
31,059 | 20,947 | 61,120 | 43,759 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Sales and marketing expenses |
9,402 | 8,993 | 18,900 | 18,790 | ||||||||||||
| General and administrative expenses |
8,990 | 8,293 | 17,842 | 18,546 | ||||||||||||
| Research and development expenses |
2,687 | 7,537 | 5,909 | 19,535 | ||||||||||||
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| Total operating expenses |
21,079 | 24,823 | 42,651 | 56,871 | ||||||||||||
| Operating income (loss) |
9,980 | (3,876 | ) | 18,469 | (13,112 | ) | ||||||||||
| Interest expense, net |
(10,567 | ) | (10,619 | ) | (21,119 | ) | (21,288 | ) | ||||||||
| Other (expense) income, net |
(175 | ) | (87 | ) | (589 | ) | 634 | |||||||||
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| Loss before income taxes |
(762 | ) | (14,582 | ) | (3,239 | ) | (33,766 | ) | ||||||||
| Provision (benefit) for income taxes |
874 | (82 | ) | (318 | ) | 546 | ||||||||||
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| Net loss |
$ | (1,636 | ) | $ | (14,500 | ) | $ | (2,921 | ) | $ | (34,312 | ) | ||||
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Lantheus MI Intermediate, Inc. and subsidiaries
Consolidated Sales Analysis
(dollars in thousands – unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||||||
| 2014 | 2013 | % change | 2014 | 2013 | % change | |||||||||||||||||||
| U.S. |
||||||||||||||||||||||||
| DEFINITY |
23,019 | 18,291 | 25.8 | % | 45,003 | 35,037 | 28.4 | % | ||||||||||||||||
| TechneLite |
20,624 | 22,140 | (6.8 | )% | 40,723 | 41,712 | (2.4 | )% | ||||||||||||||||
| Xenon |
8,899 | 7,638 | 16.5 | % | 18,605 | 15,945 | 16.7 | % | ||||||||||||||||
| Cardiolite |
506 | 432 | 17.1 | % | 1,027 | 6,862 | (85.0 | )% | ||||||||||||||||
| Other |
5,520 | 3,730 | 48.0 | % | 10,021 | 6,930 | 44.6 | % | ||||||||||||||||
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| Total U.S. |
$ | 58,568 | $ | 52,231 | 12.1 | % | $ | 115,379 | $ | 106,486 | 8.4 | % | ||||||||||||
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| International |
||||||||||||||||||||||||
| DEFINITY |
497 | 451 | 10.2 | % | 871 | 734 | 18.7 | % | ||||||||||||||||
| TechneLite |
2,901 | 3,114 | (6.8 | )% | 5,843 | 5,968 | (2.1 | )% | ||||||||||||||||
| Xenon |
— | 9 | (100 | )% | 4 | 25 | (84.0 | )% | ||||||||||||||||
| Cardiolite |
4,306 | 4,756 | (9.5 | )% | 8,465 | 9,236 | (8.3 | )% | ||||||||||||||||
| Other |
9,341 | 10,040 | (7.0 | )% | 18,387 | 19,170 | (4.1 | )% | ||||||||||||||||
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| Total International |
$ | 17,045 | $ | 18,370 | (7.2 | )% | $ | 33,570 | $ | 35,133 | (4.4 | )% | ||||||||||||
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| Worldwide |
||||||||||||||||||||||||
| DEFINITY |
23,516 | 18,742 | 25.5 | % | 45,874 | 35,771 | 28.2 | % | ||||||||||||||||
| TechneLite |
23,525 | 25,254 | (6.8 | )% | 46,566 | 47,680 | (2.3 | )% | ||||||||||||||||
| Xenon |
8,899 | 7,647 | 16.4 | % | 18,609 | 15,970 | 16.5 | % | ||||||||||||||||
| Cardiolite |
4,812 | 5,188 | (7.2 | )% | 9,492 | 16,098 | (41.0 | )% | ||||||||||||||||
| Other |
14,861 | 13,770 | 7.9 | % | 28,408 | 26,100 | 8.8 | % | ||||||||||||||||
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|||||||||||||
| Total Revenues |
$ | 75,613 | $ | 70,601 | 7.1 | % | $ | 148,949 | $ | 141,619 | 5.2 | % | ||||||||||||
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Lantheus MI Intermediate, Inc. and subsidiaries
Supplemental Sales Information
(unaudited)
| June 30, 2014 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 |
26 | % | 18 | % | 10 | % | 26 | % | 25 | % | ||||||||||
| TechneLite |
(7 | )% | (1 | )% | (7 | )% | (6 | )% | (7 | )% | ||||||||||
| Xenon |
17 | % | (100 | )% | (100 | )% | 16 | % | 16 | % | ||||||||||
| Cardiolite |
17 | % | (5 | )% | (9 | )% | (3 | )% | (7 | )% | ||||||||||
| Other |
48 | % | (3 | )% | (7 | )% | 11 | % | 8 | % | ||||||||||
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| Total Revenues |
12 | % | (3 | )% | (7 | )% | 8 | % | 7 | % | ||||||||||
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| June 30, 2014 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 |
28 | % | 29 | % | 19 | % | 28 | % | 28 | % | ||||||||||
| TechneLite |
(2 | )% | 5 | % | (2 | )% | (1 | )% | (2 | )% | ||||||||||
| Xenon |
17 | % | (84 | )% | (84 | )% | 17 | % | 17 | % | ||||||||||
| Cardiolite |
(85 | )% | (3 | )% | (8 | )% | (38 | )% | (41 | )% | ||||||||||
| Other |
45 | % | 2 | % | (4 | )% | 13 | % | 9 | % | ||||||||||
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| Total Revenues |
8 | % | 2 | % | (4 | )% | 7 | % | 5 | % | ||||||||||
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Lantheus MI Intermediate, Inc. and subsidiaries
Reconciliation of Net Sales to Net Sales Excluding the Impact of Foreign Currency
(dollars in thousands – unaudited)
| Three Months Ended June 30, 2014 |
Six Months Ended June 30, 2014 |
|||||||||||||||
| International Net Sales |
Total Net Sales |
International Net Sales |
Total Net Sales |
|||||||||||||
| Net sales, as reported |
$ | 17,045 | $ | 75,613 | $ | 33,570 | $ | 148,949 | ||||||||
| Currency impact as compared to prior period |
822 | 822 | 2,139 | 2,139 | ||||||||||||
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| Net sales, excluding the impact of foreign currency |
$ | 17,867 | $ | 76,435 | $ | 35,709 | $ | 151,088 | ||||||||
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Lantheus MI Intermediate, Inc. and subsidiaries
Reconciliation of As Reported Results to Non-GAAP Financial Measures
(dollars in thousands – unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| EBITDA |
||||||||||||||||
| Net loss, as reported |
$ | (1,636 | ) | $ | (14,500 | ) | $ | (2,921 | ) | $ | (34,312 | ) | ||||
| Interest expense, net |
10,567 | 10,619 | 21,119 | 21,288 | ||||||||||||
| Provision (benefit) for income taxes |
896 | 85 | (121 | ) | 274 | |||||||||||
| Depreciation |
2,137 | 2,370 | 4,351 | 4,772 | ||||||||||||
| Amortization of intangible assets |
2,271 | 4,160 | 4,573 | 8,326 | ||||||||||||
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| EBITDA |
14,235 | 2,734 | 27,001 | 348 | ||||||||||||
| Reconciling items impacting EBITDA: |
||||||||||||||||
| Non-cash stock-based compensation |
251 | 306 | 535 | 563 | ||||||||||||
| Legal fees relating to business interruption claim |
231 | 119 | 465 | 387 | ||||||||||||
| Asset write-off |
91 | 958 | 511 | 2,058 | ||||||||||||
| Severance and recruiting costs |
216 | 400 | 301 | 4,491 | ||||||||||||
| Sponsor fee and other |
258 | 681 | 509 | 938 | ||||||||||||
| New manufacturer costs |
1,035 | 1,347 | 3,013 | 2,510 | ||||||||||||
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| Adjusted EBITDA |
$ | 16,317 | $ | 6,545 | $ | 32,335 | $ | 11,295 | ||||||||
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| Adjusted EBITDA as a percentage of net sales |
21.6 | % | 9.3 | % | 21.7 | % | 8.0 | % | ||||||||
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Lantheus MI Intermediate, Inc. and subsidiaries
Reconciliation of Free Cash Flow
(dollars in thousands – unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2014 |
June 30, 2013 |
June 30, 2014 |
June 30, 2013 |
|||||||||||||
| Net cash used in operating activities |
$ | (4,225 | ) | $ | (15,963 | ) | $ | (4,240 | ) | $ | (16,113 | ) | ||||
| Capital expenditures |
(1,998 | ) | (1,347 | ) | (3,480 | ) | (2,796 | ) | ||||||||
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| Free cash flow |
$ | (6,223 | ) | $ | (17,310 | ) | $ | (7,720 | ) | $ | (18,909 | ) | ||||
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Lantheus MI Intermediate, Inc. and subsidiaries
Condensed Consolidated Balance Sheets
(dollars in thousands – unaudited)
| June 30, 2014 |
December 31, 2013 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 14,100 | $ | 16,669 | ||||
| Accounts receivable, net |
42,536 | 38,910 | ||||||
| Inventory |
16,301 | 18,310 | ||||||
| Income tax receivable |
596 | 325 | ||||||
| Deferred tax assets |
13 | 18 | ||||||
| Other current assets |
4,525 | 3,087 | ||||||
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| Total current assets |
78,071 | 77,319 | ||||||
| Property, plant and equipment, net |
96,381 | 97,653 | ||||||
| Capitalized software development costs, net |
1,866 | 1,470 | ||||||
| Intangibles, net |
31,192 | 34,998 | ||||||
| Goodwill |
15,714 | 15,714 | ||||||
| Deferred financing costs |
8,549 | 9,639 | ||||||
| Deferred tax assets |
37 | 15 | ||||||
| Other long-term assets |
19,769 | 22,577 | ||||||
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| Total assets |
$ | 251,579 | $ | 259,385 | ||||
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| Liabilities and stockholder’s deficit |
||||||||
| Current liabilities: |
||||||||
| Line of credit |
$ | 13,500 | $ | 8,000 | ||||
| Accounts payable |
13,987 | 18,103 | ||||||
| Accrued expenses and other liabilities |
23,891 | 25,492 | ||||||
| Deferred tax liability |
61 | 57 | ||||||
| Deferred revenue |
2,175 | 3,979 | ||||||
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| Total current liabilities |
53,614 | 55,631 | ||||||
| Asset retirement obligation |
7,052 | 6,385 | ||||||
| Long-term debt, net |
399,159 | 399,037 | ||||||
| Deferred tax liability |
8 | 12 | ||||||
| Other long-term liabilities |
32,607 | 35,408 | ||||||
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| Total liabilities |
492,440 | 496,473 | ||||||
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| Stockholder’s deficit |
(240,861 | ) | (237,088 | ) | ||||
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| Total liabilities and stockholder’s deficit |
$ | 251,579 | $ | 259,385 | ||||
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###