Form 8-K

 

 

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
No.

  

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
No.

  

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.
EX-99.1

Exhibit 99.1

 

LOGO

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   
  

 

 

   

 

 

   

 

 

   

 

 

 

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   
  

 

 

   

 

 

   

 

 

   

 

 

 

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   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (762     (14,582     (3,239     (33,766

Provision (benefit) for income taxes

     874        (82     (318     546   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (1,636   $ (14,500   $ (2,921   $ (34,312
  

 

 

   

 

 

   

 

 

   

 

 

 


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
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total U.S.

   $ 58,568       $ 52,231         12.1   $ 115,379       $ 106,486         8.4
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

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 )% 
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total International

   $ 17,045       $ 18,370         (7.2 )%    $ 33,570       $ 35,133         (4.4 )% 
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

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
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total Revenues

   $ 75,613       $ 70,601         7.1   $ 148,949       $ 141,619         5.2
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 


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
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     12     (3 )%      (7 )%      8     7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     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
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     8     2     (4 )%      7     5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


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   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net sales, excluding the impact of foreign currency

   $ 17,867       $ 76,435       $ 35,709       $ 151,088   
  

 

 

    

 

 

    

 

 

    

 

 

 


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,
 
     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   
  

 

 

   

 

 

   

 

 

   

 

 

 

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   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 16,317      $ 6,545      $ 32,335      $ 11,295   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA as a percentage of net sales

     21.6     9.3     21.7     8.0
  

 

 

   

 

 

   

 

 

   

 

 

 


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
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ (6,223   $ (17,310   $ (7,720   $ (18,909
  

 

 

   

 

 

   

 

 

   

 

 

 


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   
  

 

 

   

 

 

 

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   
  

 

 

   

 

 

 

Total assets

   $ 251,579      $ 259,385   
  

 

 

   

 

 

 

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   
  

 

 

   

 

 

 

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   
  

 

 

   

 

 

 

Total liabilities

     492,440        496,473   
  

 

 

   

 

 

 

Stockholder’s deficit

     (240,861     (237,088
  

 

 

   

 

 

 

Total liabilities and stockholder’s deficit

   $ 251,579      $ 259,385   
  

 

 

   

 

 

 

###