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): May 5, 2015

 

 

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 May 5, 2015, Lantheus Medical Imaging, Inc. (the “Company”) announced via press release its financial results as of and for the three months ended March 31, 2015. 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 May 5, 2015, announcing its financial results as of and for the three months ended March 31, 2015.

 

* 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.


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: May 5, 2015


EXHIBIT INDEX

 

Exhibit

No.

  

Description

99.1*    Press release of Lantheus Medical Imaging, Inc. dated May 5, 2015, announcing its financial results as of and for the three and nine months ended March 31, 2015.

 

* 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

FOR RELEASE 4:00 PM EASTERN

TUESDAY, MAY 5, 2015

CONTACTS:

 

Investor Relations Media Relations
John Bakewell Meara Murphy  
978-436-7073 978-671-8508   

Lantheus Medical Imaging Reports 2015 First Quarter

Financial Results

First quarter Adjusted EBITDA increases 29% to $20.6 million

DEFINITY® revenue increases 15%, growing sequentially for the eleventh consecutive quarter

No. BILLERICA, Mass. (May 5, 2015) – Lantheus Medical Imaging, Inc. (“Lantheus” or “the Company”), a wholly-owned operating subsidiary of parent company Lantheus Holdings, Inc. and a global leader in developing, manufacturing, selling and distributing innovative diagnostic imaging agents and products, today reported financial results for its first quarter ended March 31, 2015.

Worldwide revenue for the first quarter of 2015 totaled $74.8 million, representing a 2% increase as-reported and a 4% increase on a constant-currency basis over $73.3 million reported for the first quarter of 2014.

The Company reported quarterly GAAP-earnings profitability during the first quarter of 2015 with net income totaling $700,000, an improvement of nearly $2.0 million over a net loss of $1.3 million reported for the first quarter of 2014.

Net income for the first quarter of 2015 included $3.6 million of non-cash costs associated with the Company’s previously announced campus consolidation initiative. The Company’s first quarter 2015 net income, as adjusted for the above items, totaled $4.3 million, an improvement of $5.6 million, compared to a net loss of $1.3 million for the first quarter of 2014. The attached financial tables include a reconciliation of U.S. GAAP to as-adjusted results.

The Company’s first quarter Adjusted EBITDA, as defined in the GAAP to non-GAAP reconciliation provided later in this release, was $20.6 million, increasing by 29% from $16.0 million in the same quarter of the prior year.


Jeff Bailey, President and CEO commented, “We delivered a strong start to 2015, as reflected in our first quarter results. We are pleased once again with the continued strength of DEFINITY, which now has grown sequentially every quarter since mid-2012, driven by our ongoing efforts to expand the appropriate use of contrast in cardiac echo procedures. Our first quarter performance also reflects lower sales volumes but higher average selling prices and some mix shift in one customer channel, driven by a change in contract status. While we anticipate that the benefit of this change will moderate in future quarters, we are nonetheless pleased with its contribution to our strong start to 2015.”

Mr. Bailey continued, “Further contributing to our strong Q1 performance, our operating expense levels, as adjusted, declined versus the year-ago period, reflecting our continued efforts to improve operating efficiency and resulting in 190 basis points of margin improvement, as adjusted, versus the year-ago quarter. Altogether, we delivered first quarter Adjusted EBITDA of $20.6 million and free cash flow of $11.7 million for an excellent start to 2015. Looking ahead to the rest of the year, our efforts will continue to focus on initiatives that strengthen our business and improve our operating model while meeting the needs of the customers we serve.”

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 1-866-498-8390 (U.S. callers) or 1-678-509-7599 (international callers) and provide passcode 30201918. 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 8:30 p.m. ET on May 5, 2015 through midnight on May 19, 2015. To access a replay of the conference call, dial 1-855-859-2056 (U.S. callers) or 1-404-537-3406 (international callers), and provide passcode 30201918. A replay of this conference call will also be available 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, net income, as adjusted, 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 Holdings, Inc.

Lantheus Medical Imaging, Inc., a wholly-owned operating subsidiary of parent company, Lantheus Holdings, Inc., is a global leader in developing, manufacturing, selling and distributing innovative diagnostic imaging agents and products. Lantheus provides a broad portfolio of products, which are primarily used for the diagnosis of cardiovascular diseases. 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 Xe 133 Gas (Xenon 133), 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

Consolidated Statements of Operations

(dollars in thousands – unaudited)

 

     Three Months Ended March 31,  
     2015     2014  

Revenues

   $ 74,823      $ 73,336   

Cost of goods sold

     39,054        43,275   
  

 

 

   

 

 

 

Gross profit

  35,769      30,061   

Operating expenses:

Sales and marketing expenses

  9,072      9,498   

General and administrative expenses

  8,841      8,852   

Research and development expenses

  6,196      3,222   
  

 

 

   

 

 

 

Total operating expenses

  24,109      21,572   

Operating income

  11,660      8,489   

Interest expense, net

  (10,623   (10,552

Other expense, net

  (383   (414
  

 

 

   

 

 

 

Income (loss) before income taxes

  654      (2,477

Benefit for income taxes

  (3   (1,192
  

 

 

   

 

 

 

Net income (loss)

$ 657    $ (1,285
  

 

 

   

 

 

 


Lantheus MI Intermediate, Inc. and subsidiaries

Consolidated Revenue Analysis

(dollars in thousands – unaudited)

 

     Three Months Ended March 31,  
     2015      2014      % change  

U.S.

        

DEFINITY

     25,182         21,984         14.5

TechneLite

     18,173         20,100         (9.6 )% 

Xenon

     13,186         9,705         35.9

Other

     4,126         5,022         (17.8 )% 
  

 

 

    

 

 

    

 

 

 

Total U.S.

$ 60,667    $ 56,811      6.8
  

 

 

    

 

 

    

 

 

 

International

DEFINITY

  484      375      29.1

TechneLite

  2,687      2,941      (8.6 )% 

Xenon

  8      4      100.0

Other

  10,977      13,205      (16.9 )% 
  

 

 

    

 

 

    

 

 

 

Total International

$ 14,156    $ 16,525      (14.3 )% 
  

 

 

    

 

 

    

 

 

 

Worldwide

DEFINITY

  25,666      22,359      14.8

TechneLite

  20,860      23,041      (9.5 )% 

Xenon

  13,194      9,709      35.9

Other

  15,103      18,227      (17.1 )% 
  

 

 

    

 

 

    

 

 

 

Total Revenues

$ 74,823    $ 73,336      2.0
  

 

 

    

 

 

    

 

 

 


Lantheus MI Intermediate, Inc. and subsidiaries

Supplemental Revenue Information

(unaudited)

 

     March 31, 2015 Quarter to Date Revenue Growth/(Decline)  
     Domestic As
Reported
    Int’l
Constant
Currency
    Int’l As
Reported
    Total
Constant
Currency
    Total As
Reported
 

Products

          

DEFINITY

     15     46     29     15     15

TechneLite

     (10 )%      0     (9 )%      (8 )%      (9 )% 

Xenon

     36     122     100     36     36

Other

     (18 )%      (9 )%      (17 )%      (12 )%      (17 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

  7   (6 )%    (14 )%    4   2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


Lantheus MI Intermediate, Inc. and subsidiaries

Reconciliation of Revenues to Revenues Excluding the Impact of Foreign Currency

(dollars in thousands – unaudited)

 

     Three Months Ended March 31, 2015  
     International Revenues      Total Revenues  

Revenues, as reported

   $ 14,156       $ 74,823   

Currency impact as compared to prior period

     1,307         1,307   
  

 

 

    

 

 

 

Revenues, excluding the impact of foreign currency

$ 15,463    $ 76,130   
  

 

 

    

 

 

 


Lantheus MI Intermediate, Inc. and subsidiaries

Reconciliation of As Reported Results to Non-GAAP Financial Measures

(dollars in thousands – unaudited)

 

     Three Months Ended March 31,  
     2015     2014  

Net Income (loss)

    

Net income (loss), as reported

   $ 657      $ (1,285

Reconciling items impacting

    

Gross Profit:

    

Campus Consolidation Costs

     77        —     

Reconciling items impacting

    

Operating Expenses:

    

Campus Consolidation Costs

     3,553        —     
  

 

 

   

 

 

 

Net income (loss), as adjusted

$ 4,287    $ (1,285
  

 

 

   

 

 

 

Net income (loss), as adjusted, as a percentage of revenues

  5.7   (1.8 )% 
  

 

 

   

 

 

 


Lantheus MI Intermediate, Inc. and subsidiaries

Reconciliation of As Reported Results to Non-GAAP Financial Measures

(dollars in thousands – unaudited)

 

     Three Months Ended March 31,  
     2015     2014  

EBITDA

    

Net income (loss), as reported

   $ 657      $ (1,285

Interest expense, net

     10,623        10,552   

Provision (benefit) for income taxes

     1        (1,017

Depreciation

     5,688        2,214   

Amortization of intangible assets

     1,896        2,302   
  

 

 

   

 

 

 

EBITDA

  18,865      12,766   

Reconciling items impacting

EBITDA:

Non-cash stock-based compensation

  277      284   

Legal fees relating to business interruption claim

  17      234   

Asset write-off

  180      420   

Severance and recruiting costs

  97      85   

Sponsor fee and other

  289      251   

New manufacturer costs

  862      1,978   
  

 

 

   

 

 

 

Adjusted EBITDA

$ 20,587    $ 16,018   
  

 

 

   

 

 

 

Adjusted EBITDA as a percentage of revenues

  27.5   21.8
  

 

 

   

 

 

 


Lantheus MI Intermediate, Inc. and subsidiaries

Reconciliation of Free Cash Flow

(dollars in thousands – unaudited)

 

     Three Months Ended  
     March 31, 2015     March 31, 2014  

Net cash provided by (used in) operating activities

   $ 15,157      $ (15

Capital expenditures

     (3,498     (1,482
  

 

 

   

 

 

 

Free cash flow

$ 11,659    $ (1,497
  

 

 

   

 

 

 


Lantheus MI Intermediate, Inc. and subsidiaries

Condensed Consolidated Balance Sheets

(dollars in thousands – unaudited)

 

     March 31, 2015     December 31, 2014  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 28,821      $ 17,817   

Accounts receivable, net

     38,401        41,540   

Inventory

     16,153        15,582   

Income tax receivable

     157        247   

Deferred tax assets

     255        256   

Other current assets

     4,795        3,739   
  

 

 

   

 

 

 

Total current assets

  88,582      79,181   

Property, plant and equipment, net

  92,102      96,014   

Capitalized software development costs, net

  2,268      2,421   

Intangibles, net

  25,582      27,191   

Goodwill

  15,714      15,714   

Deferred financing costs

  6,668      7,349   

Deferred tax assets

  334      328   

Other long-term assets

  17,486      19,318   
  

 

 

   

 

 

 

Total assets

$ 248,736    $ 247,516   
  

 

 

   

 

 

 

Liabilities and stockholder’s deficit

Current liabilities:

Line of credit

$ 8,000    $ 8,000   

Accounts payable

  13,053      15,665   

Accrued expenses and other liabilities

  29,876      24,579   

Deferred tax liability

  148      152   

Deferred revenue

  129      132   
  

 

 

   

 

 

 

Total current liabilities

  51,206      48,528   

Asset retirement obligation

  7,373      7,435   

Long-term debt, net

  399,348      399,280   

Deferred tax liability

  246      247   

Other long-term liabilities

  31,106      32,995   
  

 

 

   

 

 

 

Total liabilities

  489,279      488,485   
  

 

 

   

 

 

 

Stockholder’s deficit

  (240,543   (240,969
  

 

 

   

 

 

 

Total liabilities and stockholder’s deficit

$ 248,736    $ 247,516   
  

 

 

   

 

 

 

###