Lantheus Holdings, Inc. Reports Third Quarter 2019 Financial Results

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 third quarter ended September 30, 2019.

NORTH BILLERICA, Mass.--(BUSINESS WIRE)-- 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 third quarter ended September 30, 2019.

The Company’s worldwide revenue for the third quarter of 2019 totaled $85.8 million, compared with $88.9 million for the third quarter of 2018, representing a decrease of 3.5% over the prior year period, which included $7.5 million received from the manufacture and sale of TechneLite® to an international partner on an opportunistic basis. Revenue results reflect nearly 20% year-over-year growth of DEFINITY® and higher than expected TechneLite sales.

The Company’s third quarter 2019 net income was $4.9 million, or $0.12 per fully diluted share, as compared to $9.3 million, or $0.24 per fully diluted share for the third quarter of 2018, representing a decrease of 47.6% from the prior year period. The reduction from prior year, for both net income and fully diluted earnings per share results, is due mainly to the aforementioned opportunistic $7.5 million of sales of TechneLite not repeated this year.

The Company’s third quarter 2019 adjusted fully diluted earnings per share were $0.28, as compared to $0.29 for the third quarter of 2018, representing a decrease of 4.5% from the prior year period.

Lastly, Free Cash Flow was $23.1 million, as compared to $19.3 million for the third quarter of 2018, representing an increase of approximately $3.8 million, or 19.9% from the prior year period.

“Once again, an impressive DEFINITY performance of nearly 20% year-over-year growth drove solid third quarter results. Additionally, TechneLite sales performed ahead of expectations realized by leveraging our expertise in radiopharmaceuticals,” said Mary Anne Heino, President and CEO of Lantheus. “Earlier this month, we announced the signing of an agreement to acquire Progenics Pharmaceuticals. The combination will form a leading precision diagnostics and oncology therapeutics company, bringing a diversified and sustainable revenue model, accretion in year three, and enhanced free cash flows over longer term.”

Outlook

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

Q4 Guidance Issued October 31, 2019

Q4 FY 2019 Revenue Growth

3.2% - 5.5%

Q4 FY 2019 Revenue

$89 million - $91 million

Q4 FY 2019 Adjusted Fully Diluted EPS

$0.27 - $0.30

FY Guidance Updated October 31, 2019

FY 2019 Revenue Growth

1.1% - 1.6%

FY 2019 Revenue

$347 million - $349 million

FY 2019 Adjusted Fully Diluted EPS

$1.10 - $1.13

Previously stated guidance for full year 2019 was revenue growth of 0.8% to 1.9%, revenue of $346 million to $350 million, and adjusted fully diluted earnings per share of $1.09 to $1.12.

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, October 31, 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 1865819. 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
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Revenues

$

85,776

$

88,900

$

257,991

$

257,103

Cost of goods sold

44,187

44,015

127,745

126,063

Gross profit

41,589

44,885

130,246

131,040

Operating expenses

Sales and marketing

10,151

10,478

31,496

33,248

General and administrative

18,061

13,609

43,943

37,727

Research and development

4,860

4,316

15,584

12,520

Total operating expenses

33,072

28,403

91,023

83,495

Operating income

8,517

16,482

39,223

47,545

Interest expense

2,356

4,446

11,491

12,794

Loss on extinguishment of debt

3,196

Other expense (income)

804

(799

)

(1,695

)

(2,055

)

Income before income taxes

5,357

12,835

26,231

36,806

Income tax expense

501

3,566

5,014

9,581

Net income

$

4,856

$

9,269

$

21,217

$

27,225

Net income per common share:

Basic

$

0.12

$

0.24

$

0.55

$

0.71

Diluted

$

0.12

$

0.24

$

0.53

$

0.69

Weighted-average common shares outstanding:

Basic

39,123

38,342

38,901

38,155

Diluted

40,286

39,402

40,123

39,467

Lantheus Holdings, Inc.
Consolidated Segment Revenues Analysis

(in thousands – unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

% Change

2019

2018

% Change

United States

DEFINITY

$

50,917

$

42,472

19.9

%

$

154,099

$

131,081

17.6

%

TechneLite

18,281

19,374

(5.6

)%

55,204

56,780

(2.8

)%

Other nuclear

9,355

11,436

(18.2

)%

28,006

37,284

(24.9

)%

Rebates and allowances

(3,903

)

(3,027

)

28.9

%

(12,035

)

(9,316

)

29.2

%

Total United States

74,650

70,255

6.3

%

225,274

215,829

4.4

%

International

DEFINITY

1,478

1,283

15.2

%

$

4,036

$

3,427

17.8

%

TechneLite

3,466

11,244

(69.2

)%

10,794

18,711

(42.3

)%

Other nuclear

6,186

6,119

1.1

%

17,901

19,138

(6.5

)%

Rebates and allowances

(4

)

(1

)

300.0

%

(14

)

(2

)

600.0

%

Total International

11,126

18,645

(40.3

)%

32,717

41,274

(20.7

)%

Worldwide

DEFINITY

52,395

43,755

19.7

%

158,135

134,508

17.6

%

TechneLite

21,747

30,618

(29.0

)%

65,998

75,491

(12.6

)%

Other nuclear

15,541

17,555

(11.5

)%

45,907

56,422

(18.6

)%

Rebates and allowances

(3,907

)

(3,028

)

29.0

%

(12,049

)

(9,318

)

29.3

%

Total Revenues

$

85,776

$

88,900

(3.5

)%

$

257,991

$

257,103

0.3

%

Lantheus Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except per share data – unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Net income

$

4,856

$

9,269

$

21,217

$

27,225

Stock and incentive plan compensation

3,423

2,639

9,580

7,015

Amortization of acquired intangible assets

451

689

1,353

2,067

Campus consolidation costs

84

1,154

Extinguishment of debt

3,196

Strategic collaboration and license costs

300

Acquisition-related costs

5,176

5,176

Income tax effect of non-GAAP adjustments(a)

(2,653

)

(1,153

)

(7,449

)

(4,003

)

Adjusted net income

$

11,253

$

11,528

$

33,373

$

33,458

Adjusted net income, as a percentage of revenues

13.1

%

13.0

%

12.9

%

13.0

%

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Net income per share - diluted

$

0.12

$

0.24

$

0.53

$

0.69

Stock and incentive plan compensation

0.08

0.06

0.24

0.17

Amortization of acquired intangible assets

0.01

0.02

0.03

0.06

Campus consolidation costs

0.03

Extinguishment of debt

0.08

Strategic collaboration and license costs

0.01

Acquisition-related costs

0.13

0.12

Income tax effect of non-GAAP adjustments(a)

(0.06

)

(0.03

)

(0.18

)

(0.10

)

Adjusted net income per share - diluted

$

0.28

$

0.29

$

0.83

$

0.85

Weighted-average common shares outstanding - diluted

40,286

39,402

40,123

39,467

  1. 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
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Net cash provided by operating activities

$

26,442

$

24,277

$

57,963

$

43,887

Capital expenditures

(3,336

)

(5,005

)

(17,320

)

(12,766

)

Free cash flow

$

23,106

$

19,272

$

40,643

$

31,121

Lantheus Holdings, Inc.
Condensed Consolidated Balance Sheets

(in thousands – unaudited)

September 30,
2019

December 31,
2018

Assets

Current assets

Cash and cash equivalents

$

78,062

$

113,401

Accounts receivable, net

40,632

43,753

Inventory

30,596

33,019

Other current assets

5,096

5,242

Total current assets

154,386

195,415

Property, plant and equipment, net

113,531

107,888

Intangibles, net

7,786

9,133

Goodwill

15,714

15,714

Deferred tax assets, net

77,745

81,449

Other long-term assets

33,247

30,232

Total assets

$

402,409

$

439,831

Liabilities and stockholders’ equity

Current liabilities

Current portion of long-term debt and other borrowings

$

10,166

$

2,750

Accounts payable

16,492

17,955

Accrued expenses and other liabilities

32,928

32,050

Total current liabilities

59,586

52,755

Asset retirement obligations

12,560

11,572

Long-term debt, net and other borrowings

186,373

263,709

Other long-term liabilities

42,724

40,793

Total liabilities

301,243

368,829

Total stockholders’ equity

101,166

71,002

Total liabilities and stockholders’ equity

$

402,409

$

439,831

Contacts

Mark Kinarney
Director, Investor Relations
978-671-8842
ir@lantheus.com

Source: Lantheus Holdings, Inc.

MORE ON THIS TOPIC