Lantheus Holdings, Inc. Reports 2016 Second Quarter Financial Results

NORTH BILLERICA, Mass.-- Lantheus Holdings, Inc. (the “Company”) (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, 2016.

The Company’s worldwide revenue for the second quarter of 2016 totaled $78.0 million, representing an increase of 6% as-reported compared to $73.3 million reported for the second quarter of 2015. Second quarter worldwide revenue results reflect continued strong sales of DEFINITY® and stable revenues from the nuclear products portfolio driven by contracts with key radiopharmacy customers.

Net income for the second quarter of 2016 totaled $7.4 million or $0.24 per diluted share, an improvement of $31.8 million compared to a net loss of $24.4 million or $(1.29) per diluted share in the second quarter of 2015. The second quarter net income results also reflect a decrease in the amount of interest expense due to debt refinancing in June of 2015.

The Company’s second quarter 2016 Adjusted EBITDA, as defined in the GAAP to non-GAAP reconciliation provided later in this release, was $21.4 million, or 27.5% of reported revenue, compared to $18.0 million, or 24.5% of reported revenue, in the second quarter of 2015. The increase in Adjusted EBITDA reflects the impact of DEFINITY revenue growth.

Mary Anne Heino, President and CEO commented, “We are very pleased with our second quarter results, which delivered 6% year over year growth and exceeded both our second quarter revenue and Adjusted EBITDA guidance. During the second quarter, we saw continued strong performance of DEFINITY with 18% year over year growth in a competitive ultrasound contrast market and higher than forecasted sales of our nuclear products, demonstrating that our commercial strategy is working.”

Ms. Heino continued, “We are also very pleased to be raising our annual revenue and Adjusted EBITDA guidance which reflects the overall strength of our product portfolio and the firm contracts we have with key nuclear products customers.”

Outlook

The Company is increasing its outlook for worldwide revenue for full year 2016 to a range of $291 million to $295 million. For the third quarter of 2016, the Company expects worldwide revenue in the range of $68 million to $70 million.

The Company is also increasing its outlook for full year 2016 Adjusted EBITDA, as described in the GAAP to non-GAAP reconciliation provided later in this release, to a range of $70 million to $73 million. For the third quarter of 2016, the Company expects Adjusted EBITDA in the range of $14 million to $16 million.

The Company’s guidance for worldwide revenue and Adjusted EBITDA are forward-looking statements. They are subject to various risks and uncertainties that could cause the Company’s actual results to differ materially from the anticipated targets. The anticipated targets are not predictions of the Company’s actual performance. See the cautionary information about forward-looking statements in the “Safe-Harbor Statement” section of this press release.

Internet Posting of Information

The Company routinely posts information that may be important to investors in the “Investor Relations” 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 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 47799009. 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 August 4, 2016 through midnight on August 18, 2016. 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 47799009. A replay of this conference call will also be available in the Investor Relations section of our website located atwww.lantheus.com.

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 atwww.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, 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. The Company is headquartered in North Billerica, Massachusetts with offices in Puerto Rico, Canada and Australia. For more information, visit www.lantheus.com.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, such as net sales excluding the impact of foreign currency; operating income, as adjusted; net income, as adjusted; Adjusted EBITDA; net income, as adjusted, per diluted share; Adjusted EBITDA per diluted share; 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.

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 2016 outlook. These statements reflect management’s current knowledge, assumptions, beliefs, estimates and expectations and express management’s current view of future performance, results and trends. 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. and subsidiaries
Condensed Consolidated Statements of Operations
(dollars in thousands, except share and per share data—unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015

Revenues	$	77,966	$	73,314	$	154,440	$	148,137
Cost of goods sold		42,215		40,647		84,988		79,701
Gross profit		35,751		32,667		69,452		68,436
Operating expenses
Sales and marketing expenses		9,843		9,229		19,150		18,301
General and administrative expenses		9,238		15,444		18,751		24,567
Research and development expenses		2,608		2,638		5,644		8,834
Total operating expenses		21,689		27,311		43,545		51,702
Gain on sale of assets		117		—		5,945		—
Operating income		14,179		5,356		31,852		16,734
Interest expense, net		(6,978)		(13,876)		(13,996)		(24,499)
Loss on extinguishment of debt		—		(15,528)		—		(15,528)
Other income, net		396		800		454		417
Income (loss) before income taxes		7,597		(23,248)		18,310		(22,876)
Provision for income taxes		247		1,175		637		1,172
Net income (loss)	$	7,350	$	(24,423)	$	17,673	$	(24,048)

Net income (loss) per weighted average common share outstanding
Basic and diluted	$	0.24	$	(1.29)	$	0.58	$	(1.30)

Weighted average common shares outstanding
Basic		30,377,562		18,898,003		30,372,901		18,489,451
Diluted		30,542,728		18,898,003		30,453,776		18,489,451


Lantheus Holdings, Inc. and subsidiaries
Consolidated Revenue Analysis
(dollars in thousands—unaudited)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016		2015		% change	2016		2015		% change
	2016		2015		% change	2016		2015		% change
U.S.
DEFINITY		32,698		27,828	17.5%		63,491		53,010	19.8%
TechneLite		21,643		14,637	47.9%		43,376		32,810	32.2%
Xenon		6,773		12,038	(43.7)%		14,945		25,224	(40.8)%
Other		4,020		3,875	3.7%		8,255		8,001	3.2%
Total U.S.	$	65,134	$	58,378	11.6%	$	130,067	$	119,045	9.3%

International
DEFINITY		776		600	29.3%		1,405		1,084	29.6%
TechneLite		3,609		2,725	32.4%		6,712		5,411	24.0%
Xenon		1		10	(90.0)%		3		19	(84.2)%
Other		8,446		11,601	(27.2)%		16,253		22,578	(28.0)%
Total International	$	12,832	$	14,936	(14.1)%	$	24,373	$	29,092	(16.2)%

Worldwide
DEFINITY		33,474		28,428	17.8%		64,896		54,094	20.0%
TechneLite		25,252		17,362	45.4%		50,088		38,221	31.0%
Xenon		6,774		12,048	(43.8)%		14,948		25,243	(40.8)%
Other		12,466		15,476	(19.4)%		24,508		30,579	(19.9)%
Total Revenues	$	77,966	$	73,314	6.3%	$	154,440	$	148,137	4.3%


Lantheus Holdings, Inc. and subsidiaries
Supplemental Revenue Information
(unaudited)



	June 30, 2016 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	17.5%	35.3%	29.3%	17.9%	17.8%
TechneLite	47.9%	38.1%	32.4%	46.3%	45.4%
Xenon	(43.7)%	(90.0)%	(90.0)%	(43.7)%	(43.8)%
Other	3.7%	(26.6)%	(27.2)%	(19.0)%	(19.4)%
Total Revenues	11.6%	(12.4)%	(14.1)%	6.7%	6.3%



	June 30, 2016 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	19.8%	38.7%	29.6%	20.2%	20.0%
TechneLite	32.2%	32.5%	24.0%	32.2%	31.0%
Xenon	(40.8)%	(84.2)%	(84.2)%	(40.8)%	(40.8)%
Other	3.2%	(26.0)%	(28.0)%	(18.3)%	(19.9)%
Total Revenues	9.3%	(12.7)%	(16.2)%	4.9%	4.3%


Lantheus Holdings, Inc. and subsidiaries
Reconciliation of Revenues to Revenues Excluding the Impact of Foreign Currency
(dollars in thousands—unaudited)



	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	International Net Sales		Total Net Sales		International Net Sales		Total Net Sales

Net sales, as reported	$	12,832	$	77,966	$	24,373	$	154,440
Currency impact as compared to prior period		256		256		1,021		1,021
Net sales, excluding the impact of foreign currency	$	13,088	$	78,222	$	25,394	$	155,461


Lantheus Holdings, Inc. and subsidiaries
Reconciliations of As Reported Results to Non-GAAP Financial Measures
(dollars in thousands, except share and per share data—unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Operating Income
Operating Income, as reported	$	14,179	$	5,356	$	31,852	$	16,734
Reconciling items impacting
Operating Income:
Campus Consolidation Costs		—		—		—		3,630
Sponsor Termination Costs		—		6,527		—		6,527
Gain on Sale of Assets		(117)		—		(5,945)		—
Operating income, as adjusted	$	14,062	$	11,883	$	25,907	$	26,891

Operating Income, as adjusted, as a percentage of net sales		18.0%		16.2%		16.8%		18.2%


Lantheus Holdings, Inc. and subsidiaries
Reconciliation of As Reported Results to Non-GAAP Financial Measures
(dollars in thousands, except share and per share data—unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Net income (loss)
Net income (loss), as reported	$	7,350	$	(24,423)	$	17,673	$	(24,048)
Reconciling items impacting
Gross Profit:
Campus Consolidation Costs		—		—		—		77
Reconciling items impacting
Operating Expenses:
Campus Consolidation Costs		—		—		—		3,553
Sponsor Termination Costs		—		6,527		—		6,527
Gain on Sale of Assets		(117)		—		(5,945)		—
Reconciling items impacting
Non-operating Expenses:
Loss on Debt Extinguishment		—		15,528		—		15,528
Interest Upon Redemption of Senior Notes		—		3,250		—		3,250
Net income, as adjusted	$	7,233	$	882	$	11,728	$	4,887

Net income, as adjusted, as a percentage of net sales		9.3%		1.2%		7.6%		3.3%

Net income, as adjusted, per weighted average common share outstanding
Basic	$	0.24	$	0.05	$	0.39	$	0.26
Diluted	$	0.24	$	0.05	$	0.39	$	0.26

Weighted average common shares outstanding
Basic		30,377,562		18,898,003		30,372,901		18,489,451
Diluted		30,542,728		19,259,161		30,453,776		18,843,088


Lantheus Holdings, Inc. and subsidiaries
Reconciliation of As Reported Results to Non-GAAP Financial Measures
(dollars in thousands—unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
EBITDA
Net income (loss), as reported	$	7,350	$	(24,423)	$	17,673	$	(24,048)
Interest expense, net		6,978		13,876		13,996		24,499
Provision for income taxes		107		394		201		395
Depreciation		2,222		2,021		4,229		7,709
Amortization of intangible assets		2,089		1,894		4,195		3,790
EBITDA		18,746		(6,238)		40,294		12,345
Reconciling items impacting
EBITDA:
Stock and incentive plan compensation		916		656		1,488		933
Legal fees relating to business
interruption claim	5		46			9	63
Asset write-off		349		371		846		551
Severance and recruiting costs		762		122		1,431		219
Sponsor fee and other		—		6,747		—		7,318
Extinguishment of debt		—		15,528		—		15,528
Gain on sale of assets		(117)		—		(5,945)		—
New manufacturer costs		746		753		1,646		1,615
Adjusted EBITDA	$	21,407	$	17,985	$	39,769	$	38,572

Adjusted EBITDA as a percentage of	27.5%		24.5%		25.8%		26.0%
net sales	27.5%		24.5%		25.8%		26.0%


Lantheus Holdings, Inc. and subsidiaries
Reconciliation of Free Cash Flow
(dollars in thousands—unaudited)



	Three Months Ended				Six Months Ended
	June 30, 2016		June 30, 2015		June 30, 2016		June 30, 2015

Net cash provided by (used in) operating activities	$	17,635	$	(11,438)	$	21,415	$	3,719
Capital expenditures		(736)		(2,614)		(2,388)		(6,112)
Free cash flow	$	16,899	$	(14,052)	$	19,027	$	(2,393)


Lantheus Holdings, Inc. and subsidiaries
Condensed Consolidated Balance Sheets
(dollars in thousands—unaudited)


	June 30, 2016		December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	54,851	$	28,596
Accounts receivable, net		39,457		37,293
Inventory		14,433		15,622
Other current assets		4,282		3,851
Assets held for sale		—		4,644
Total current assets		113,023		90,006

Property, plant and equipment, net		84,422		86,517
Capitalized software development costs, net		8,121		9,137
Intangibles, net		17,949		20,496
Goodwill		15,714		15,714
Other long-term assets		20,038		20,509
Total assets	$	259,267	$	242,379

Liabilities and stockholders' deficit
Current liabilities:
Current portion of long-term debt	$	3,650	$	3,650
Line of credit		—		—
Accounts payable		12,778		11,657
Accrued expenses and other liabilities		17,664		18,502
Liabilities held for sale		—		1,715
Total current liabilities		34,092		35,524
Asset retirement obligation		8,650		8,145
Long-term debt, net		348,838		349,858
Other long-term liabilities		34,055		34,141
Total liabilities		425,635		427,668

Stockholders' deficit		(166,368)		(185,289)
Total liabilities and stockholders' deficit	$	259,267	$	242,379

Lantheus Holdings Inc ( LNTH )

Lantheus Holdings, Inc. Reports 2016 Second Quarter Financial Results