ordion earns $237.15-million (U.S.) in fiscal 2013 2014-01-09 07:35 ET - News Release Mr. Steve West reports NORDION REPORTS FOURTH QUARTER AND FISCAL 2013 FINANCIAL RESULTS; PROVIDES FISCAL 2014 OUTLOOK Nordion Inc. has released results for the fiscal fourth quarter and year ended Oct. 31, 2013. The Company generated $51.3 million in revenue for the fourth quarter fiscal 2013, a decrease of $23.4 million, or 31%, from revenue of $74.7 million for the same period in fiscal 2012. Revenue for full year fiscal 2013 was $232.8 million, down 5% from revenue of $244.8 million in fiscal 2012. Nordion had GAAP net income of $56.3 million in fourth quarter fiscal 2013, compared with a GAAP net loss of $43.5 million in fourth quarter fiscal 2012. Excluding the specified items shown on the attached non-GAAP reconciliation table, adjusted net income for the fourth quarter decreased to $9.4million from adjusted net income of $16.8 million during the same period in the previous fiscal year. GAAP EPS of $0.91were recorded in fourth quarter fiscal 2013 versus a $0.70 LPS in the same period last year. Fourth-quarter adjusted non-GAAP EPS decreased to $0.15 compared with $0.27 non-GAAP EPS in fourth quarter fiscal 2012. Fiscal 2013 GAAP net income was $237.2 million, compared with a net loss of $28.9 million in fiscal 2012. Adjusted net income for fiscal 2013 decreased to $29.6 million from $44.2 million in fiscal 2012. GAAP EPS of $3.83 in fiscal 2013 increased from $0.47 LPS last year. Fiscal 2013 adjusted non-GAAP EPS was $0.48, compared with $0.71for fiscal 2012. "Nordion continued to deliver results in line with our plan in the fourth quarter, ending the fiscal year in a strong financial position," said Mr. Steve West, Chief Executive Officer, Nordion Inc. "We executed on our business strategy, reduced uncertainty, and focused on our operations and meeting customer needs. We also continue to make progress on our strategic review, and are working diligently to achieve a successful outcome for our stakeholders." Consolidated Financial Results (thousands of U.S. dollars, except when noted) Three months ended October 31 Year ended October 31 2013 2012 2013 2012 Revenues $ 51,328 $ 74,671 $232,790 $ 244,840 Gross margin 49% 59% 53% 55% Net income (loss) $ 56,264 $(43,505) $237,150 $(28,869) Diluted earnings (loss) per share $ 0.91 $ (0.70) $ 3.83 $ (0.47) Cash and cash equivalents $323,099 $ 109,360 $323,099 $ 109,360 Strategic Review Update During Q1 2013, Nordion initiated a review of strategic alternatives with a view to enhancing shareholder value. In Q3 2013, Nordion announced and completed the sale of the Targeted Therapies business to BTG, reaching the conclusion of the first phase of the strategic review. In Q4 2013 and to date in 2014, Nordion advanced the second phase of the review, and evaluated other strategic alternatives for the Company. Ongoing activity in this phase continues to move the review forward. Completing the strategic review continues to be a priority for Nordion in fiscal 2014. Certain decisions, including the use of the Company's current cash, are expected to be made as part of or once the outcome of the strategic review has been finalized. The Board of Directors and management team are fully engaged in the review, and are making progress on the second phase. While Nordion cannot provide the current status of, or address the timeline and potential results of the strategic review, the Company is working diligently with the objective of reaching a successful outcome. Fourth Quarter and Fiscal 2013 Segment Results Sterilization Technologies Sterilization Technologies revenue for fourth quarter fiscal 2013 of $23.0 million decreased by $9.4 million or 29% compared with fourth quarter fiscal 2012. Revenue from Cobalt of $22.3 million in fourth quarter fiscal 2013 decreased by $8.8 million or 28% from the same period last year due to lower Cobalt-60 (Co-60) volumes and a negative impact on average pricing due to mix of customers. Sterilization-Other revenue of $0.7 million decreased by $0.6 million or 46% in fourth quarter fiscal 2013, compared with fourth quarter fiscal 2012. Fiscal 2013 Sterilization Technologies revenue of $96.1 million increased by $0.7 million or 1% compared with fiscal 2012. Cobalt revenue of $93.1 million in fiscal 2013 increased by $0.7 million or 1%, compared with fiscal 2012. Sterilization-Other revenue of $3.0 million was relatively flat compared with the prior year. Medical Isotopes Medical Isotopes revenue in fourth quarter fiscal 2013 of $28.4 million decreased by $2.0 million or 6%, compared with fourth quarter fiscal 2012. Reactor isotopes revenue of $17.3 million in fourth quarter fiscal 2013 decreased by $7.5 million or 30% from the same period last year primarily due to a decline in Molybdenum-99 (Mo-99) sales volumes and pricing during the quarter, as well as a one-time $4.0 million payment recorded as revenue in fourth quarter fiscal 2012 due to customer shortfalls in Mo-99 volume below contract commitments. Cyclotron isotopes revenue of $6.2 million increased by $2.6 million, or 73% in fourth quarter fiscal 2013, compared with the same period of the prior year primarily due to the resumption of Strontium-82 (Sr-82) sales in April 2013. Contract Manufacturing revenue of $4.9 million increased by $3.0 million, or 150%, in fourth quarter fiscal 2013, compared with the same period of the prior year mainly due to the contract manufacturing of TheraSphereAtrademark for BTG plc (BTG) subsequent to the sale of the Targeted Therapies business in July 2013. Medical Isotopes revenue for fiscal 2013 of $100.3 million remained relatively flat compared with fiscal 2012. Reactor isotopes revenue of $70.9 million decreased by $6.5 million or 8% in fiscal 2013 from the previous year due to a decline in Mo-99 sales volume and pricing with regular customers. The decline was partially offset by approximately $15 million in additional orders received as a result of supply interruptions from the primary reactor in Europe that supplies certain of our customers. Cyclotron isotopes revenue for fiscal 2013 of $18.3 million increased by $2.8 million or 18%, compared with fiscal 2012 mainly due to the resumption of Sr-82 sales during fiscal 2013. Contract Manufacturing revenue for fiscal 2013 of $11.2 million increased by $3.1 million or 38% year-over-year primarily due to the contract manufacturing of TheraSphere. Corporate and Other Corporate and Other segment loss was $2.3 million in fourth quarter fiscal 2013, up $1.0 million or 78%, compared with fourth quarter fiscal 2012. The main drivers of this increase were costs previously allocated to Targeted Therapies, and increases in stock-based compensation, which was partially offset by foreign exchange gains. Corporate and Other segment loss of $12.0 million in fiscal 2013 increased by $3.3 million or 38% from $8.7 million of segment loss incurred in fiscal 2012. Corporate selling, general and administrative (SG&A) expense for fiscal 2013 increased by $6.0 million or 61% from fiscal 2012 due to higher stock based compensation and an increase in SG&A costs associated with central functions previously allocated to Targeted Therapies. Other (income) expenses, net improved $2.8 million, compared to fiscal 2012 primarily related to foreign exchange gains and revenue relating to the transition services agreement associated with the sale of Targeted Therapies. Income Tax Recovery Tax recovery for fiscal 2013 was $15.6 million on pre-tax income from continuing operations of $221.6 million. With an estimated tax rate of 25%, Nordion expected a tax expense of $55.9 million for fiscal 2013. The net difference of $71.5 million from the expected tax expense was due to a $40.4 million release of the Company's valuation allowance in fourth quarter fiscal 2013, with $24.2 million due to the tax treatment on the Targeted Therapies sale gain and non-deductible portion of capital losses, along with other discrete adjustments for the fiscal year. Fiscal 2014 Outlook Summary The following is a summary of Nordion's outlook for fiscal 2014. Please refer to Nordion's fiscal 2013 Management's Discussion and Analysis for a more comprehensive outlook and discussion. Nordion expects total fiscal 2014 revenue and segment earnings to increase compared with fiscal 2013. Sterilization Technologies In fiscal 2014, Sterilization Technologies revenue is expected to increase between 10% to 15% compared with fiscal 2013; and, Cobalt revenue in the first half of fiscal 2014 is expected to be significantly higher than the first half of fiscal 2013. Medical Isotopes Fiscal 2014 Medical Isotope revenue is expected to increase by 30% to 40%, compared with fiscal 2013; Reactor isotopes revenue is expected to increase by 30% to 40% in fiscal 2014, compared with fiscal 2013; Cyclotron isotopes revenue is expected to increase by 20% to 25% in fiscal 2014, compared with fiscal 2013, primarily due to an increase in Sr-82 revenue; and, Nordion expects revenue contribution from the contract manufacture of TheraSphere to be approximately $14 million in fiscal 2014. Corporate SG&A During fiscal 2014, Corporate SG&A is expected to decrease as the Company rationalizes its G&A costs reflecting the divestiture of the Targeted Therapies business. Other Spending on the internal investigation is currently expected to be approximately $3 million in fiscal 2014; Fiscal 2014 pension expense is expected to decrease from $6.7 million in fiscal 2013 to approximately $3 million. The decrease in pension expense is expected to impact SG&A in both the Sterilization Technologies and Medical Isotopes business segments; As a result of the divestiture, management does not expect any further financial revenue or costs in the Targeted Therapies reporting segment; and, Depreciation expense is expected to decline by approximately $2 million in fiscal 2014 compared with fiscal 2013. A full copy of Nordion's fourth quarter and fiscal 2013 Management's Discussion and Analysis and the financial statements and notes can be downloaded at www.nordion.com/investors. Nordion has filed its 2013 Annual Report on Form 40-F with the Securities and Exchange Commission, including its audited consolidated financial statements and notes for the year ended October 31, 2013, and related management's discussion and analysis. To view the Company's annual disclosure documents, visit Nordion's website at www.nordion.com/investors. Print copies can be ordered on the Company's website free of charge upon request at www.nordion.com/investors/report_request_form.asp. Conference Call Nordion will hold a conference call on Thursday, January 9, 2014 at 10:00 am ET to discuss its fourth quarter and year-end fiscal 2013 results. This call will be webcast live at www.nordion.com, and will be available after the call in archived format at https://www.nordion.com/webcasts. To participate, please dial 1-866-223-7781 (toll-free North America) or 1-416-340-2216 (International). We seek Safe Harbor. © 2014 Canjex Publishing Ltd. All rights reserved. |