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):  March 28, 2013
 
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):
 
o           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o           Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o           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 March 28, 2013, Lantheus Medical Imaging, Inc. (the “Company”) issued its financial results for the year ended December 31, 2012 in its Annual Report on Form 10-K. The Company is furnishing certain supplemental non-GAAP and other financial information relating to the three and twelve months ended December 31, 2012 and 2011 in the Current Report on Form 8-K.
 
The information in this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
 
SUMMARY CONSOLIDATED FINANCIAL DATA
 
The following table sets forth summary consolidated financial data for Lantheus MI Intermediate, Inc. and subsidiaries for the three and twelve months ended December 31, 2012 and 2011. The summary consolidated financial data set forth below is not necessarily indicative of future performance. You should read this information together with the Company’s consolidated financial statements included in the Company’s filings with the Securities and Exchange Commission (“SEC”) on Form 10-K for the three and twelve months ended December 31, 2012 and 2011 (the Company’s “Periodic Reports”).
 
(unaudited)	 	Three Months Ended
December 31,	 	Years Ended
December 31,	 	
(In thousands)	 	2012	 	2011	 	2012	 	2011	 	
 	 	 	 	 	 	 	 	 	 	
Statement of Comprehensive Loss Data:	 	 	 	 	 	 	 	 	 	
Total revenues	 	$	72,248	 	$	81,522	 	$	288,105	 	$	356,292	 	
Cost of goods sold	 	44,774	 	67,027	 	211,049	 	255,466	 	
Loss on firm purchase commitment	 	—	 	3,731	 	1,859	 	5,610	 	
General and administrative expenses	 	7,760	 	8,122	 	32,520	 	32,057	 	
Sales and marketing expenses	 	9,272	 	8,942	 	37,437	 	38,689	 	
Research and development expenses	 	9,322	 	9,760	 	40,604	 	40,945	 	
Proceeds from manufacturer	 	—	 	—	 	(34,614	)	—	 	
Operating (loss) income	 	1,120	 	(16,060	)	(750	)	(16,475	)	
Interest expense	 	(10,538	)	(9,541	)	(42,014	)	(37,658	)	
Interest income	 	53	 	103	 	252	 	333	 	
Other (expense) income, net	 	204	 	131	 	(44	)	1,429	 	
Loss before income taxes	 	(9,161	)	(25,367	)	(42,556	)	(52,371	)	
Provision (benefit) for income taxes	 	389	 	93,142	 	(555	)	84,098	 	
Net loss	 	$	(9,550	)	$	(118,509	)	$	(42,001	)	$	(136,469	)	
Statement of Cash Flows Data:	 	 	 	 	 	 	 	 	 	
Net cash flows provided by (used in):	 	 	 	 	 	 	 	 	 	
Operating activities	 	$	(21,688	)	$	(2,637	)	$	523	 	$	22,420	 	
Investing activities	 	(3,020	)	(1,335	)	(8,145	)	(7,694	)	
Financing activities	 	(510	)	(38	)	(2,039	)	(6,991	)	
Other Financial Data:	 	 	 	 	 	 	 	 	 	
EBITDA(1)	 	$	7,958	 	$	(7,489	)	$	26,815	 	$	16,832	 	
Adjusted EBITDA(1)	 	15,126	 	12,738	 	59,070	 	80,084	 	
Capital expenditures	 	3,020	 	1,335	 	7,920	 	7,694	 	
 
2

 

(1)        EBITDA is defined as net income plus interest, income taxes, depreciation and amortization. EBITDA is a measure used by management to measure operating performance. Adjusted EBITDA is defined as EBITDA, further adjusted to exclude unusual items and other adjustments required or permitted in calculating Adjusted EBITDA under the indenture governing the Company’s notes and the credit agreement for the Company’s revolving credit facility. Adjusted EBITDA is also used by management to measure operating performance and by investors to measure a company’s ability to service its debt and meet its other cash needs. Management believes that the inclusion of the adjustments to EBITDA applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about the Company’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance.
 
EBITDA and Adjusted EBITDA, as presented herein, are supplemental measures of the Company’s performance that are not required by, or presented in accordance with generally accepted accounting principles (“GAAP”). They are not measurements of the Company’s financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP or as alternatives to cash flow from operating activities as measures of the Company’s liquidity.
 
The Company’s measurement of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies and are not measures of performance calculated in accordance with GAAP. The Company has included information concerning EBITDA and Adjusted EBITDA in this report because it believes that such information is used by certain investors as one measure of a company’s historical performance.
 
EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of the Company’s operating results or cash flows as reported under GAAP. Some of these limitations are:
 
·                 they do not reflect the Company’s cash expenditures, or future requirements, for capital expenditures or contractual commitments;
·                 they do not reflect changes in, or cash requirements for, the Company’s working capital needs;
·                 they do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments, on the Company’s debt;
·                 although depreciation is a non-cash charge, the assets being depreciated will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
·                 they are not adjusted for all non-cash income or expense items that are reflected in the Company’s statements of cash flows; and
·                 other companies in the Company’s industry may calculate these measures differently than the Company does, limiting their usefulness as comparative measures.
 
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to the Company’s to invest in the growth of its business. The Company compensates for these limitations by relying primarily on its GAAP results and using EBITDA and Adjusted EBITDA only for supplemental purposes.
 
For the Company’s GAAP results, please see the condensed consolidated financial statements and consolidated financial statements included in the Company’s Periodic Reports filed with the SEC.
 
The following table provides a reconciliation of our net income to EBITDA and Adjusted EBITDA for the periods presented:
 
3

 
(Unaudited)	 	Three Months Ended
December 31,	 	Years Ended
December 31,	 	
(In thousands)	 	2012	 	2011	 	2012	 	2011	 	
 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(9,550	)	$	(118,509	)	$	(42,001	)	$	(136,469	)	
Interest expense, net	 	10,485	 	9,438	 	41,762	 	37,325	 	
Provision (benefit) for income taxes(a)	 	(9	)	92,922	 	(901	)	82,718	 	
Depreciation and amortization	 	7,032	 	8,660	 	27,955	 	33,258	 	
EBITDA	 	7,958	 	(7,489	)	26,815	 	16,832	 	
Non-cash stock-based compensation	 	174	 	160	 	1,240	 	(969	)	
Legal fees(b)	 	269	 	2,017	 	1,455	 	2,017	 	
Loss on firm purchase commitment(c)	 	—	 	3,731	 	1,859	 	5,610	 	
Asset write-off(d)	 	642	 	13,703	 	13,095	 	52,973	 	
Severance and recruiting costs(e)	 	465	 	66	 	1,761	 	1,995	 	
Sponsor fee and other(f)	 	261	 	270	 	1,042	 	1,020	 	
New manufacturer costs(g)	 	2,499	 	280	 	8,945	 	606	 	
Run-rate savings(h)	 	2,858	 	—	 	2,858	 	—	 	
Adjusted EBITDA	 	$	15,126	 	$	12,738	 	$	59,070	 	$	80,084	 	

(a)                                Represents provision for income taxes less tax indemnification associated with an agreement with Bristol-Myers Squibb, and in 2011 includes the establishment of a full valuation allowance against the U.S. deferred tax assets.
 
(b)                                Represents legal services incurred in connection with our business interruption claim associated with the NRU reactor shutdown in 2009 to 2010.
 
(c)                                 Represents a loss associated with a portion of the committed purchases of Ablavar that the Company does not believe it will be able to sell prior to expiration.
 
(d)                                Represents non-cash losses incurred associated with the write-down of inventory and write-off of long-lived assets. The 2012 amount consists primarily of a $10.6 million inventory write-down related to Ablavar. The 2011 amount consists primarily of a $25.8 million inventory write-down related to Ablavar and a $23.5 million impairment charge to adjust the carrying value of the Ablavar patent portfolio asset to its fair value of zero.
 
(e)                                 Represents primarily severance and recruitment costs related to employees, executives and directors.
 
(f)                                  Represents annual sponsor monitoring fee and related expenses.
 
(g)                                 Represents internal and external costs associated with establishing new manufacturing sources for our commercial and clinical candidate products.
 
(h)                                Represents run-rate cost savings, operating expense reductions and other expense and cost-saving synergies realized or expected to be taken (calculated on a pro forma basis).
 
4

 
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: March 28, 2013
 
5