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. |
Exhibit 99.1
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 | ) | |||
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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 | )% | ||||||||
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|
|
|||||||
| Total U.S. |
$ | 60,667 | $ | 56,811 | 6.8 | % | ||||||
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| 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 | )% | ||||||||
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| Total International |
$ | 14,156 | $ | 16,525 | (14.3 | )% | ||||||
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| 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 | )% | ||||||||
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|
|||||||
| Total Revenues |
$ | 74,823 | $ | 73,336 | 2.0 | % | ||||||
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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 | )% | ||||||||||
|
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|
|||||||||||
| Total Revenues |
7 | % | (6 | )% | (14 | )% | 4 | % | 2 | % | ||||||||||
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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 | ||||||
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| Revenues, excluding the impact of foreign currency |
$ | 15,463 | $ | 76,130 | ||||
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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 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 | — | ||||||
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|
|
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| Net income (loss), as adjusted |
$ | 4,287 | $ | (1,285 | ) | |||
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|
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| Net income (loss), as adjusted, as a percentage of revenues |
5.7 | % | (1.8 | )% | ||||
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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 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 | ||||||
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|
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| 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 | ||||||
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| Adjusted EBITDA |
$ | 20,587 | $ | 16,018 | ||||
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| Adjusted EBITDA as a percentage of revenues |
27.5 | % | 21.8 | % | ||||
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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 | ) | ||||
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| Free cash flow |
$ | 11,659 | $ | (1,497 | ) | |||
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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 | ||||||
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| 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 | ||||||
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| Total assets |
$ | 248,736 | $ | 247,516 | ||||
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| 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 | ||||||
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| 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 | ||||||
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| Total liabilities |
489,279 | 488,485 | ||||||
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| Stockholder’s deficit |
(240,543 | ) | (240,969 | ) | ||||
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| Total liabilities and stockholder’s deficit |
$ | 248,736 | $ | 247,516 | ||||
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###