Lantheus Holdings, Inc. Reports Second Quarter 2019 Financial Results

  • Worldwide revenue of $85.7 million for the second quarter 2019, representing an increase of 0.2% over the prior year period; mix of strong DEFINITY® performance and TechneLite® supply challenges
  • Net income of $6.4 million for the second quarter 2019, representing a decrease of 34.2% from the prior year period
  • GAAP diluted EPS of $0.16 for the second quarter 2019, representing a decrease of 35.6% from the prior year period; adjusted diluted EPS of $0.27 for the second quarter 2019, representing a decrease of 8.3% from the prior year period
  • Free Cash Flow was $17.6 million, as compared to $14.7 million for the second quarter of 2018, representing an increase of approximately $3.0 million, or 20.3%
  • The Company provides third quarter 2019 revenue and adjusted diluted earnings per share guidance; updates full year guidance

NORTH BILLERICA, Mass.--()--Lantheus Holdings, Inc. (the “Company”) (NASDAQ: LNTH), parent company of Lantheus Medical Imaging, Inc. (“LMI”), a global leader in the development, manufacture and commercialization of innovative diagnostic imaging agents and products, today reported financial results for its second quarter ended June 30, 2019.

The Company’s worldwide revenue for the second quarter of 2019 totaled $85.7 million, compared with $85.6 million for the second quarter of 2018, representing an increase of 0.2% over the prior year period. Revenue results reflect a mix of strong DEFINITY® performance offset by lower TechneLite® revenue. Foreign exchange reduced worldwide revenues by $0.2 million or 0.2%.

The Company’s second quarter 2019 net income was $6.4 million, or $0.16 per fully diluted share, as compared to $9.7 million, or $0.25 per fully diluted share for the second quarter of 2018, representing a decrease of 35.6% from the prior year period. During the quarter, and contributing to this result, the Company completed an accretive refinancing of its credit facility and expensed $3.2 million, pre-tax, of debt extinguishment costs.

The Company’s second quarter 2019 adjusted fully diluted earnings per share were $0.27, as compared to $0.30 for the second quarter of 2018, representing a decrease of 8.3% from the prior year period.

Lastly, Free Cash Flow was $17.6 million, as compared to $14.7 million for the second quarter of 2018, representing an increase of approximately $3.0 million, or 20.3%.

“Our second quarter revenue performance was supported by strong DEFINITY growth in the high teens, offset by multiple molybdenum-99 supplier challenges that impacted our ability to meet total TechneLite demand,” said Mary Anne Heino, President and CEO of Lantheus. “Despite these challenges, we delivered both solid earnings per share and Free Cash Flow while continuing to make targeted strategic investments in our business to drive long-term, sustainable growth. While we anticipate additional molybdenum-99 supply challenges in the third quarter, based on the progress our suppliers have made, we now project supply will be stable beginning in the fourth quarter.”

Outlook

The Company offers the following guidance for the third quarter as well as updating its guidance for full year 2019.

 

 

Q3 Guidance Issued July 25, 2019

Q3 FY 2019 Revenue Growth

 

(4.4)% - (6.6)%

Q3 FY 2019 Revenue

 

$83 million - $85 million

Q3 FY 2019 Adjusted Fully Diluted EPS

 

$0.18 - $0.20

 

 

FY Guidance Updated July 25, 2019

FY 2019 Revenue Growth

 

0.8% - 1.9%

FY 2019 Revenue

 

$346 million - $350 million

FY 2019 Adjusted Fully Diluted EPS

 

$1.09 - $1.12

Previously stated guidance for full year 2019 was revenue growth of 4.25% to 5.75%, revenue of $358 million to $363 million, and adjusted fully diluted earnings per share of $1.14 to $1.17. Our guidance for Q3 and full year now incorporate the dampening effects of our temporary Moly supply issues that occurred in Q2, continuing into Q3.

On a forward-looking basis, the Company does not provide GAAP income per common share or a reconciliation of adjusted diluted EPS to GAAP income per common share because the Company is unable to predict with reasonable certainty business development and acquisition-related expenses, purchase accounting fair value adjustments, and any one-time, non-recurring charges. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP. As a result, it is the Company’s view that a quantitative reconciliation of adjusted diluted EPS on a forward-looking basis is not available without unreasonable effort.

Internet Posting of Information
The Company routinely posts information that may be important to investors in the “Investors” section of its website at www.lantheus.com. The Company encourages investors and potential investors to consult its website regularly for important information about the Company.

Conference Call and Webcast
As previously announced, the Company will host a conference call on Thursday, July 25, 2019 at 8:00 a.m. ET. 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 7155758. A live audio webcast of the call also will be available in the Investors section of the Company’s website at www.lantheus.com.

A replay of the audio webcast will be available in the Investors section of our website at www.lantheus.com approximately two hours after completion of the call and will be archived for 30 days.

The conference call will 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.

The conference call may include forward-looking statements. See the cautionary information about forward-looking statements in the safe-harbor section of this press release.

About Lantheus Holdings, Inc. and Lantheus Medical Imaging, Inc.
Lantheus Holdings, Inc. is the parent company of LMI, a global leader in the development, manufacture and commercialization of innovative diagnostic imaging agents and products. LMI provides a broad portfolio of products, including the echocardiography contrast agent DEFINITY® Vial for (Perflutren Lipid Microsphere) Injectable Suspension and TechneLite® (Technetium Tc99m Generator), a technetium-based generator that provides the essential medical isotope used in nuclear medicine procedures. The Company is headquartered in North Billerica, Massachusetts with offices in Puerto Rico and Canada. For more information, visit www.lantheus.com.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, such adjusted net income and its line components; adjusted net income per share - diluted; and free cash flow. 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.

This press release includes forward-looking non-GAAP guidance for 2019 adjusted diluted EPS. No reconciliation of this forward-looking non-GAAP guidance was included in this press release because, due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information and the fact that some of the excluded information is not readily ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.

Safe Harbor for Forward-Looking and Cautionary Statements

This press release contains “forward-looking statements” as defined under U.S. federal securities laws, including statements about our 2019 outlook. Forward-looking statements may be identified by their use of terms such as anticipate, believe, confident, could, estimate, expect, intend, may, plan, predict, project, target, will and other similar terms. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to materially differ from those described in the forward-looking statements. 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. Risks and uncertainties that could cause our actual results to materially differ from those described in the forward-looking statements are discussed in our filings with the Securities and Exchange Commission (including those described in the Risk Factors section in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q).

- Tables Follow -

Lantheus Holdings, Inc.
Consolidated Statements of Operations
(in thousands, except per share data – unaudited)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2019

 

2018

 

2019

 

2018

Revenues

 

$

85,705

 

 

$

85,573

 

 

$

172,215

 

 

$

168,203

 

Cost of goods sold

 

41,132

 

 

41,727

 

 

83,558

 

 

82,048

 

Gross profit

 

44,573

 

 

43,846

 

 

88,657

 

 

86,155

 

Operating expenses

 

 

 

 

 

 

 

 

Sales and marketing

 

10,948

 

 

12,130

 

 

21,345

 

 

22,770

 

General and administrative

 

13,293

 

 

11,575

 

 

25,882

 

 

24,118

 

Research and development

 

5,795

 

 

4,215

 

 

10,724

 

 

8,204

 

Total operating expenses

 

30,036

 

 

27,920

 

 

57,951

 

 

55,092

 

Operating income

 

14,537

 

 

15,926

 

 

30,706

 

 

31,063

 

Interest expense

 

4,543

 

 

4,298

 

 

9,135

 

 

8,348

 

Loss on extinguishment of debt

 

3,196

 

 

 

 

3,196

 

 

 

Other income

 

(1,312

)

 

(336

)

 

(2,499

)

 

(1,256

)

Income before income taxes

 

8,110

 

 

11,964

 

 

20,874

 

 

23,971

 

Income tax expense

 

1,698

 

 

2,219

 

 

4,513

 

 

6,015

 

Net income

 

$

6,412

 

 

$

9,745

 

 

$

16,361

 

 

$

17,956

 

Net income per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.16

 

 

$

0.25

 

 

$

0.42

 

 

$

0.47

 

Diluted

 

$

0.16

 

 

$

0.25

 

 

$

0.41

 

 

$

0.45

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

38,972

 

 

38,233

 

 

38,789

 

 

38,060

 

Diluted

 

40,239

 

 

39,398

 

 

40,064

 

 

39,468

 

Lantheus Holdings, Inc.
Consolidated Segment Revenues Analysis
(in thousands – unaudited)

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2019

2018

% Change

 

2019

2018

% Change

United States

 

 

 

 

 

 

 

 

 

 

 

DEFINITY

$

53,466

 

 

$

45,103

 

 

18.5

%

 

$

103,182

 

 

$

88,609

 

 

16.4

%

TechneLite

16,865

 

 

19,343

 

 

(12.8

)%

 

36,923

 

 

37,406

 

 

(1.3

)%

Other nuclear

9,127

 

 

13,031

 

 

(30.0

)%

 

18,651

 

 

25,848

 

 

(27.8

)%

Rebates and allowances

(4,268

)

 

(3,391

)

 

25.9

%

 

(8,132

)

 

(6,289

)

 

29.3

%

Total United States

75,190

 

 

74,086

 

 

1.5

%

 

150,624

 

 

145,574

 

 

3.5

%

International

 

 

 

 

 

 

 

 

 

 

 

DEFINITY

1,163

 

 

995

 

 

16.9

%

 

$

2,558

 

 

$

2,144

 

 

19.3

%

TechneLite

3,241

 

 

4,135

 

 

(21.6

)%

 

7,328

 

 

7,467

 

 

(1.9

)%

Other nuclear

6,119

 

 

6,350

 

 

(3.6

)%

 

11,715

 

 

13,019

 

 

(10.0

)%

Rebates and allowances

(8

)

 

7

 

 

(214.3

)%

 

(10

)

 

(1

)

 

900.0

%

Total International

10,515

 

 

11,487

 

 

(8.5

)%

 

21,591

 

 

22,629

 

 

(4.6

)%

Worldwide

 

 

 

 

 

 

 

 

 

 

 

DEFINITY

54,629

 

 

46,098

 

 

18.5

%

 

105,740

 

 

90,753

 

 

16.5

%

TechneLite

20,106

 

 

23,478

 

 

(14.4

)%

 

44,251

 

 

44,873

 

 

(1.4

)%

Other nuclear

15,246

 

 

19,381

 

 

(21.3

)%

 

30,366

 

 

38,867

 

 

(21.9

)%

Rebates and allowances

(4,276

)

 

(3,384

)

 

26.4

%

 

(8,142

)

 

(6,290

)

 

29.4

%

Total Revenues

$

85,705

 

 

$

85,573

 

 

0.2

%

 

$

172,215

 

 

$

168,203

 

 

2.4

%

Lantheus Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data – unaudited)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

6,412

 

 

$

9,745

 

 

$

16,361

 

 

$

17,956

 

Stock and incentive plan compensation

 

3,376

 

 

2,399

 

 

6,157

 

 

4,376

 

Amortization of acquired intangible assets

 

451

 

 

689

 

 

902

 

 

1,378

 

Campus consolidation costs

 

 

 

587

 

 

 

 

1,070

 

Extinguishment of debt

 

3,196

 

 

 

 

3,196

 

 

 

Strategic collaboration and license costs

 

300

 

 

 

 

300

 

 

 

Income tax effect of non-GAAP adjustments(a)

 

(2,852

)

 

(1,795

)

 

(4,795

)

 

(2,850

)

Adjusted net income

 

$

10,883

 

 

$

11,625

 

 

$

22,121

 

 

$

21,930

 

Adjusted net income, as a percentage of revenues

 

12.7

%

 

13.6

%

 

12.8

%

 

13.0

%

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2019

 

2018

 

2019

 

2018

Net income per share - diluted

 

$

0.16

 

 

$

0.25

 

 

$

0.41

 

 

$

0.45

 

Stock and incentive plan compensation

 

0.08

 

 

0.06

 

 

0.15

 

 

0.11

 

Amortization of acquired intangible assets

 

0.01

 

 

0.02

 

 

0.02

 

 

0.04

 

Campus consolidation costs

 

 

 

0.02

 

 

 

 

0.03

 

Extinguishment of debt

 

0.08

 

 

 

 

0.08

 

 

 

Strategic collaboration and license costs

 

0.01

 

 

 

 

0.01

 

 

 

Income tax effect of non-GAAP adjustments(a)

 

(0.07

)

 

(0.05

)

 

(0.12

)

 

(0.07

)

Adjusted net income per share - diluted

 

$

0.27

 

 

$

0.30

 

 

$

0.55

 

 

$

0.56

 

Weighted-average common shares outstanding - diluted

 

40,239

 

 

39,398

 

 

40,064

 

 

39,468

 

(a) The income tax effect of the adjustments between GAAP net income and non-GAAP adjusted net income takes into account the tax treatment and related tax rate that apply to each adjustment in the applicable tax jurisdiction.

Lantheus Holdings, Inc.
Reconciliation of Free Cash Flow
(in thousands – unaudited)

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2019

 

2018

 

2019

 

2018

Net cash provided by operating activities

$

21,053

 

 

$

20,276

 

 

$

31,521

 

 

$

19,610

 

Capital expenditures

(3,434

)

 

(5,626

)

 

(13,984

)

 

(7,761

)

Free cash flow

$

17,619

 

 

$

14,650

 

 

$

17,537

 

 

$

11,849

 

Lantheus Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands – unaudited)

 

June 30,
2019

 

December 31,
2018

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

56,885

 

 

$

113,401

 

Accounts receivable, net

45,527

 

 

43,753

 

Inventory

32,414

 

 

33,019

 

Other current assets

5,035

 

 

5,242

 

Total current assets

139,861

 

 

195,415

 

Property, plant and equipment, net

113,117

 

 

107,888

 

Intangibles, net

8,239

 

 

9,133

 

Goodwill

15,714

 

 

15,714

 

Deferred tax assets, net

79,170

 

 

81,449

 

Other long-term assets

34,149

 

 

30,232

 

Total assets

$

390,250

 

 

$

439,831

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities

 

 

 

Current portion of long-term debt and other borrowings

$

10,136

 

 

$

2,750

 

Accounts payable

17,149

 

 

17,955

 

Accrued expenses and other liabilities

26,072

 

 

32,050

 

Total current liabilities

53,357

 

 

52,755

 

Asset retirement obligations

12,237

 

 

11,572

 

Long-term debt, net and other borrowings

188,706

 

 

263,709

 

Other long-term liabilities

43,703

 

 

40,793

 

Total liabilities

298,003

 

 

368,829

 

Total stockholders’ equity

92,247

 

 

71,002

 

Total liabilities and stockholders’ equity

$

390,250

 

 

$

439,831

 

 

Contacts

Investors:
Mark Kinarney
Director, Investor Relations
978-671-8842

Media:
Meara Murphy
Director, Corporate Communications
978-671-8508

Release Summary

Lantheus Holdings, Inc. Reports Second Quarter 2019 Financial Results

Contacts

Investors:
Mark Kinarney
Director, Investor Relations
978-671-8842

Media:
Meara Murphy
Director, Corporate Communications
978-671-8508