Business Wire | Jul 30, 2020 07:00AM EDT

Lantheus Holdings, Inc. Reports Second Quarter 2020 Financial Results

Jul. 30, 2020

NORTH BILLERICA, Mass.--(BUSINESS WIRE)--Jul. 30, 2020--Lantheus Holdings, Inc. (the "Company") (NASDAQ: LNTH), the parent company of Lantheus Medical Imaging, Inc. and Progenics Pharmaceuticals, Inc., and a global leader in the development, manufacture and commercialization of innovative diagnostic and therapeutic agents and products, today reported financial results for its second quarter ended June 30, 2020.

On June 19, 2020, the Company completed the acquisition of Progenics Pharmaceuticals, adding three leading FDA approved products and an emerging clinical-stage pipeline of radiopharmaceutical therapeutics and diagnostics for the treatment of cancer.

The Company's worldwide revenue for the second quarter of 2020 totaled $66.0 million, compared with $85.7 million for the second quarter of 2019, representing a decrease of 23.0% from the prior year period.

The Company's second quarter 2020 net loss was $7.0 million, or $(0.16) per fully diluted share, as compared to net income of $6.4 million, or $0.16 per fully diluted share for the second quarter of 2019.

The Company's second quarter 2020 adjusted fully diluted earnings per share were $0.10, as compared to $0.27 for the second quarter of 2019, representing a decrease of 63.0% from the prior year period.

Lastly, net cash used in operating activities was $2.2 million for the second quarter 2020. Free Cash Flow was a use of $4.4 million in the second quarter of 2020, representing a decrease of approximately $22.0 million from the prior year period.

"As we continue to navigate through the COVID-19 global pandemic, the health and safety of our employees, patients, and other partners in the healthcare community remain our top priority. We closed our acquisition of Progenics in June and are now integrating our portfolio of innovative products and product candidates to enhance our diagnostic and therapeutic footprint," said Mary Anne Heino, President and CEO. "Procedures utilizing our products for the second quarter were impacted by COVID-related hospital and customer restrictions. However, we demonstrated an impressive month-to-month recovery in our business as healthcare markets across the U.S. began to re-open. As we look to the future, our focus will be on unlocking value across our newly combined company including our exciting portfolio of opportunities."

Outlook

On April 9, 2020, the Company withdrew full year 2020 revenue, revenue growth, and adjusted fully diluted earnings per share guidance as a result of the continued uncertainties surrounding the scope, duration and impacts of the COVID-19 pandemic. Due to these uncertainties, and uncertain timing of global recovery and economic normalization, Lantheus continues to be unable to provide guidance as to the overall impacts on its operations and financial results during the ongoing pandemic.

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 30, 2020 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 5565687. 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.

Lantheus Holdings, Inc. is the parent company of Lantheus Medical Imaging, Inc. and Progenics Pharmaceuticals, Inc., and a global leader in the development, manufacture and commercialization of innovative diagnostic and therapeutic agents and products. Lantheus provides a broad portfolio of products, including the echocardiography agent DEFINITY(r) Vial for (Perflutren Lipid Microsphere) Injectable Suspension; TechneLite(r) (Technetium Tc99m Generator), a technetium-based generator that provides the essential medical isotope used in nuclear medicine procedures; AZEDRA(r) for the treatment of certain rare neuroendocrine tumors; and RELISTOR(r) for the treatment of opioid-induced constipation, which is partnered with Bausch Health Companies, Inc. The Company is headquartered in North Billerica, Massachusetts with offices in New York, New Jersey, Puerto Rico, Canada and Sweden. For more information, visit www.lantheus.com.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, such as adjusted net income and its line components; adjusted net income per share - fully 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. However, these measures may exclude items that may be highly variable, difficult to predict and of a size that could have a substantial impact on the Company's reported results of operations for a particular 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 2020 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 include (i) our future operating results; (ii) the impact of the COVID-19 pandemic on our business, financial condition and prospects; (iii) risks that the anticipated benefits of the acquisition of Progenics Pharmaceuticals, Inc. or other commercial opportunities may otherwise not be fully realized or may take longer to realize than expected; (iv) expectations for future clinical trials, the timing and potential outcomes of clinical studies and filings and other interactions with regulatory authorities; and (v) the risk and uncertainties 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 Six Months Ended June 30, June 30,

2020 2019 2020 2019

Revenues $ 66,010 $ 85,705 $ 156,714 $ 172,215

Cost of goods sold 40,162 41,132 92,864 83,558

Gross profit 25,848 44,573 63,850 88,657

Operating expenses

Sales and marketing 6,305 10,948 16,435 21,345

General and 20,670 13,293 37,369 25,882 administrative

Research and development 4,418 5,795 8,466 10,724

Total operating expenses 31,393 30,036 62,270 57,951

Operating (loss) income (5,545) 14,537 1,580 30,706

Interest expense 1,914 4,543 3,860 9,135

Loss on extinguishment - 3,196 - 3,196 of debt

Other income (756) (1,312) (1,106) (2,499)

(Loss) income before (6,703) 8,110 (1,174) 20,874 income taxes

Income tax expense 309 1,698 2,501 4,513

Net (loss) income $ (7,012) $ 6,412 $ (3,675) $ 16,361

Net (loss) income per common share:

Basic $ (0.16) $ 0.16 $ (0.09) $ 0.42

Diluted $ (0.16) $ 0.16 $ (0.09) $ 0.41

Weighted-average common shares outstanding:

Basic 43,135 38,972 41,284 38,789

Diluted 43,135 40,239 41,284 40,064

Lantheus Holdings, Inc.

Consolidated Segment Revenues Analysis

(in thousands - unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 % Change 2020 2019 % Change

United States

DEFINITY $ 39,544 $ 53,466 (26.0) % $ 94,554 $ 103,182 (8.4) %

TechneLite 15,591 16,865 (7.6) % 34,947 36,923 (5.4) %

Other nuclear 5,804 9,127 (36.4) % 14,866 18,651 (20.3) %

Rebates and (3,540) (4,268) (17.1) % (8,223) (8,132) 1.1 %allowances

Total United 57,399 75,190 (23.7) % 136,144 150,624 (9.6) %States

International

DEFINITY 821 1,163 (29.4) % 2,602 2,558 1.7 %

TechneLite 3,318 3,241 2.4 % 7,060 7,328 (3.7) %

Other nuclear 4,473 6,119 (26.9) % 10,911 11,715 (6.9) %

Rebates and (1) (8) (87.5) % (3) (10) (70.0) %allowances

Total 8,611 10,515 (18.1) % 20,570 21,591 (4.7) %International

Worldwide

DEFINITY 40,365 54,629 (26.1) % 97,156 105,740 (8.1) %

TechneLite 18,909 20,106 (6.0) % 42,007 44,251 (5.1) %

Other nuclear 10,277 15,246 (32.6) % 25,777 30,366 (15.1) %

Rebates and (3,541) (4,276) (17.2) % (8,226) (8,142) 1.0 %allowances

Total Revenues $ 66,010 $ 85,705 (23.0) % $ 156,714 $ 172,215 (9.0) %

Lantheus Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except per share data - unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net (loss) income $ (7,012) $ 6,412 $ (3,675) $ 16,361

Stock and incentive plan 3,385 3,376 6,460 6,157 compensation

Amortization of acquired 927 451 1,319 902 intangible assets

Non-recurring refinancing 460 - 460 - related fees

Extinguishment of debt - 3,196 - 3,196

Strategic collaboration and - 300 - 300 license costs

Integration costs 1,201 - 3,573 -

Acquisition-related costs 7,517 - 8,929 -

Impairment of long-lived - - 7,275 - assets

Other - - (75) -

Income tax effect of (1,940) (2,852) (5,446) (4,795) non-GAAP adjustments^(a)

Adjusted net income $ 4,538 $ 10,883 $ 18,820 $ 22,121

Adjusted net income, as a 6.9 % 12.7 % 12.0 % 12.8 % percentage of revenues

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net (loss) income per share $ (0.16) $ 0.16 $ (0.09) $ 0.41 - diluted

Stock and incentive plan 0.08 0.08 0.14 0.15 compensation

Amortization of acquired 0.02 0.01 0.03 0.02 intangible assets

Non-recurring refinancing 0.01 - 0.01 - related fees

Extinguishment of debt - 0.08 - 0.08

Strategic collaboration and - 0.01 - 0.01 license costs

Integration costs 0.03 - 0.09 -

Acquisition-related costs 0.18 - 0.22 -

Impairment of long-lived - - 0.18 - assets

Income tax effect of (0.06) (0.07) (0.13) (0.12) non-GAAP adjustments^(a)

Adjusted net income per $ 0.10 $ 0.27 $ 0.45 $ 0.55 share - diluted

Weighted-average commonshares outstanding - 43,303 40,239 41,702 40,064 diluted^(b)



* The income tax effect of the adjustments between GAAP net income (loss) 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. * Diluted shares may differ for non-GAAP measures as compared to GAAP due to a GAAP net loss position.

Lantheus Holdings, Inc.

Reconciliation of Free Cash Flow

(in thousands - unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net cash (used in) provided $ (2,156) $ 21,053 $ 7,252 $ 31,521 by operating activities

Capital expenditures (2,255) (3,434) (4,953) (13,984)

Free cash flow $ (4,411) $ 17,619 $ 2,299 $ 17,537

Lantheus Holdings, Inc.

Condensed Consolidated Balance Sheets

(in thousands - unaudited)

June 30, December 31, 2020 2019

Assets

Current assets

Cash and cash equivalents $ 90,309 $ 92,919

Accounts receivable, net 46,883 43,529

Inventory 35,334 29,180

Other current assets 8,630 7,283

Total current assets 181,156 172,911

Property, plant and equipment, net 122,903 116,497

Intangibles, net 389,512 7,336

Goodwill 57,765 15,714

Deferred tax assets, net 67,441 71,834

Other long-term assets 60,918 21,627

Total assets $ 879,695 $ 405,919

Liabilities and stockholders' equity

Current liabilities

Current portion of long-term debt and other $ 17,143 $ 10,143 borrowings

Accounts payable 16,301 18,608

Accrued expenses and other liabilities 42,892 37,360

Total current liabilities 76,336 66,111

Asset retirement obligations 13,602 12,883

Long-term debt, net and other borrowings 210,010 183,927

Other long-term liabilities 64,164 28,397

Total liabilities 364,112 291,318

Total stockholders' equity 515,583 114,601

Total liabilities and stockholders' equity $ 879,695 $ 405,919

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