Nordion Inc. (TSX: NDN) (NYSE: NDZ:
-
Revenue of $53.7 million in Q1 2013, an increase of 1% over Q1 2012
-
Adjusted earnings per share, excluding specified items, decreased
to $0.07 in Q1 2013, down from adjusted earnings per share of $0.11 in
the first quarter fiscal 2012
-
TheraSphere revenue of $12.0 million in Q1 2013, an increase of 9%
over Q1 2012
Nordion reports in U.S. dollars unless otherwise specified
Nordion Inc. (TSX: NDN) (NYSE: NDZ), a leading provider of products and
services to the global health science market, today reported results for
the first quarter of fiscal 2013. The Company generated $53.7 million in
revenue for the first quarter fiscal 2013, an increase of $0.6 million,
or 1%, over revenue of $53.0 million for the same period in fiscal 2012.
Excluding the specified items shown on the attached non-GAAP
reconciliation table, adjusted net income for the first quarter
decreased to $4.1 million from adjusted net income of $7.1 million
during the same period in the previous fiscal year. Nordion had a GAAP
net loss of $0.3 million in first quarter fiscal 2013, which improved by
$0.6 million from a GAAP net loss of $0.9 million in the first quarter
fiscal 2012.
First quarter fiscal 2013 adjusted non-GAAP earnings per share (EPS)
decreased to $0.07 compared with $0.11 non-GAAP EPS in the first quarter
of 2012. GAAP EPS was nil in the first quarter of 2013 versus a $0.01
loss per share in the same period last year.
“Nordion reported solid Q1 results with our Targeted Therapies,
Sterilization Technologies and Medical Isotopes businesses turning in
good performances,” said Mr. Steve West, Chief Executive Officer,
Nordion Inc. “We remain focused on executing our business strategy and
building long-term value for shareholders.”
Consolidated Financial Results
GAAP
|
|
Three months ended January 31
|
(thousands of U.S. dollars, except when noted)
|
|
|
2013
|
|
2012
|
|
% Change
|
Revenues
|
|
$
|
53,664
|
|
53,015
|
|
1%
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
52%
|
|
52%
|
|
-
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(269)
|
|
(887)
|
|
70%
|
|
|
|
|
|
|
|
|
Diluted loss per share
|
|
$
|
-
|
|
(0.01)
|
|
100%
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
87,514
|
|
71,166
|
|
23%
|
|
|
|
|
|
|
|
|
Weighted average number of Common shares outstanding – diluted
(thousands of shares)
|
|
|
61,909
|
|
62,247
|
|
(1%)
|
Non-GAAP1
|
|
Three months ended January 31
|
|
(thousands of U.S. dollars, except when noted)
|
|
|
|
2013
|
|
|
|
2012
|
|
% Change
|
|
Adjusted net income
|
|
$
|
|
4,100
|
|
|
|
7,125
|
|
(42%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share
|
|
$
|
|
0.07
|
|
|
|
0.11
|
|
(36%)
|
|
1 See Non-GAAP reconciliation table at the end of this release
Q1 2013 Key Events
-
On January 28, 2013, Nordion announced it had engaged Jefferies &
Company to advise and assist in a review of strategic alternatives for
the Company to enhance shareholder value and create new opportunities.
-
On January 25, 2013, Nordion entered an $80 million Amended and
Restated senior secured credit facility agreement with the
Toronto-Dominion Bank and a select group of other financial
institutions.
-
On January 21, 2013, Nordion filed an amended statement of claim
against Atomic Energy of Canada Limited (AECL) in the Ontario Superior
Court of Justice with regards to the Isotope Production Facilities
Agreement.
Review of Strategic Alternatives
During its first quarter fiscal 2013, Nordion announced it had initiated
a review of strategic alternatives with a view to enhancing shareholder
value and creating new opportunities for the Company. Jefferies &
Company has been engaged to advise and assist in this review. No
decision has been made to enter into any specific strategic transaction
or any other strategic alternative at this time, and there can be no
assurance that Nordion will enter into a transaction in the future. The
Company does not plan to disclose or comment on developments regarding
the strategic review process until further disclosure is deemed
appropriate. Nordion intends to continue with planned business
activities throughout the strategic alternatives review process.
First Quarter Fiscal 2013 Segment Results
Following the strategic organizational realignment announced on
September 12, 2012, the sole product that is now reported in Targeted
Therapies is Nordion’s innovative liver cancer treatment, TheraSphere®.
Contract Manufacturing is now reported under Medical Isotopes.
Targeted Therapies
TheraSphere® revenue for first quarter fiscal 2013 of $12.0 million
increased by $1.0 million or 9% compared with first quarter fiscal 2012
primarily due to adoption in new clinics. Nordion expects growth in the
second half of fiscal 2013 to be stronger than in the first half of the
year and continues to forecast annual growth in the mid-teen percent
range.
TheraSphere segment earnings of $1.4 million in first quarter fiscal
2013 decreased $1.7 million or 54%, compared with first quarter fiscal
2012 mainly due to higher spend for TheraSpheresales and
marketing activities and supporting functions, as well as increased
research and development spending related to the Company’s Phase III
clinical trials.
Sterilization Technologies
Sterilization Technologies revenue for first quarter fiscal 2013 of
$16.4 million increased by $0.3 million or 2% compared with first
quarter fiscal 2012. Revenue from Cobalt of $15.4 million in first
quarter fiscal 2013 decreased by $0.3 million or 2% due to quarterly
variability of timing of shipments to our customers and the relative
difference in mix of customers in each respective period.
Sterilization-Other revenue of $1.1 million increased by $0.6 million or
133% in first quarter fiscal 2013, compared with first quarter fiscal
2012 due to an increase in refurbishment work performed on existing
production irradiators.
Sterilization Technologies segment earnings of $3.5 million decreased
$0.9 million or 21% in first quarter fiscal 2013 compared with first
quarter fiscal 2012 mainly due to lower Cobalt sales volumes covering
slightly higher production support costs as well as higher pension
related costs.
Medical Isotopes
Medical Isotopes revenue for first quarter fiscal 2013 of $25.2 million
decreased by $0.7 million or 3% compared with first quarter fiscal 2012.
Reactor isotopes revenue of $20.4 million in first quarter fiscal 2013,
decreased by $0.5 million or 3% primarily due to decreases in the price
of Molybdenum-99 (Mo-99) from Nordion’s largest customer, which was
partially offset by additional orders resulting from the shutdown of the
primary reactor in Europe that usually supplies certain of the Company’s
competitors. Based on the additional orders resulting from this
shutdown, Nordion expects its forecasted decline in Medical Isotopes
revenue to be in the mid-teen percentage range compared to the Company’s
original annual forecast of a 20% decline for fiscal 2013.
Cyclotron isotopes revenues were lower by 8% for Q1 2013 compared to the
same period in fiscal 2012 primarily due to lower customer demand for
Iodine-123. Contract manufacturing revenues were higher by 6% for Q1
2013 compared to the same period in fiscal 2012 due to higher sales
price for Bexxar®, a Glaxo Smith Kline product.
Medical Isotopes segment earnings of $6.9 million in first quarter
fiscal 2013 decreased $0.8 million or 10% compared with first quarter
fiscal 2012 mainly due to lower sales volume and price of Mo-99.
Corporate and Other
Corporate and Other segment loss was $2.8 million in first quarter
fiscal 2013, increased by $0.9 million or 47%, compared with the first
quarter fiscal 2012. The quarterly increase in loss reflected a foreign
exchange gain the Company recorded in first quarter fiscal 2012.
A full copy of Nordion’s first quarter fiscal 2013 Management’s
Discussion and Analysis and the financial statements and notes can be
downloaded at www.nordion.com/investors.
Conference Call
Nordion will hold a conference call on Wednesday, March 6, 2013 at 9:30
am ET to discuss its first quarter fiscal 2013 results. This call will
be webcast live at www.nordion.com,
and will be available after the call in archived format at http://www.nordion.com/webcasts.
Interested parties may access the live webcast of the conference call
from the Nordion website at www.nordion.com.
Participants will need to register for this call and provide their full
name, company name, phone number and email address to obtain the
conference call coordinates. Registered participants will join the call
using the coordinates (phone number, passcode, & personal PIN) provided
during the registration process. Please advise your participants to
print the coordinates when registering. The Self Registration URL link
is as follows:
http://selfreg6.bellconferia.ca/webportal3/reg.html?Acc=1790302020&Conf=124979
About Nordion Inc.
Nordion Inc. (TSX: NDN) (NYSE: NDZ) is a global health science company
that provides market-leading products used for the prevention, diagnosis
and treatment of disease. We are a leading provider of targeted
therapies, sterilization technologies, and medical isotopes that benefit
the lives of millions of people in more than 60 countries around the
world. Our products are used daily by pharmaceutical and biotechnology
companies, medical-device manufacturers, hospitals, clinics and research
laboratories. Nordion has approximately 500 highly skilled employees
worldwide. Find out more at www.nordion.com
and follow us at http://twitter.com/NordionInc.
Caution Concerning Forward-Looking Statements
This release contains forward-looking statements, within the
meaning of applicable securities laws, including under applicable
Canadian securities laws and the “safe harbour” provisions of the United
States Private Securities Litigation Reform Act of 1995. These
statements can be identified by expressions of belief, expectation or
intention, as well as those statements that are not historical fact. The
words “may”, “will”, “could”, “should”, “would”, “outlook”, “believe”,
“plan”, “anticipate”, “estimate”, “project”, “expect”, “intend”,
“indicate”, “forecast”, “objective”, “optimistic”, and similar words and
expressions are also intended to identify forward-looking statements.
Forward-looking statements are necessarily based on estimates and
assumptions made by us in light of our experience and our perception of
historical trends, current conditions and expected future developments,
as well as other factors that we believe are appropriate in the
circumstances, but which are inherently subject to significant business,
political, economic and competitive uncertainties and contingencies.
Known and unknown factors could cause actual results to differ
materially from those projected in the forward-looking statements.
Accordingly, this release is subject to the disclaimer and qualified by
the assumptions, qualifications and risk factors referred to in our 2012
Annual Information Form (AIF). Factors that could cause actual results
or events to differ materially from current expectations include, but
are not limited to, fluctuations in supply and demand, pricing pressures
and rising costs, changes in currency and exchange rates and potential
adverse developments in new and pending legal proceedings or regulatory
investigations, as well as the risk factors which are
described in section 5 of our 2012 AIF and in our other filings with the
Canadian provincial securities commissions and the US Securities and
Exchange Commission, and our success in anticipating and managing those
risks. We caution readers not to place undue reliance on the Company’s
forward-looking statements, as a number of factors could cause our
actual results, performance or achievements to differ materially from
the beliefs, plans, objectives, expectations, anticipations, estimates
and intentions expressed in such forward-looking statements. The Company
does not assume any obligation to update or revise any forward-looking
statements, whether written or oral, that may be made from time to time
by us or on our behalf, except as required by applicable law.
Non-GAAP Information
To supplement the financial measures prepared in accordance with
generally accepted accounting principles (GAAP), the company uses
non-GAAP financial measures such as adjusted net income and adjusted
earnings per share. Non-GAAP financial measures exclude certain items,
such as restructuring charges and recovery, change in fair value of
embedded derivatives, AECL arbitration and legal fees, loss and gains on
sales of investments, loss or gains on discontinued operations, and tax
effects on adjusted items. Management uses non-GAAP financial measures
internally for strategic decision making, forecasting future results and
evaluating current performance. By disclosing non-GAAP financial
measures, management intends to provide investors with a meaningful,
consistent comparison of the company's core operating results and trends
for the periods presented. Non-GAAP financial measures are not prepared
in accordance with GAAP. Therefore, the information is not necessarily
comparable to other companies and should be considered as a supplement
to, not a substitute for, or superior to, the corresponding measures
calculated in accordance with GAAP.
Segment Financial Results (with reconciliation to net loss)
|
Three months ended January 31
|
|
(thousands of U.S. dollars, except per share amounts)
|
|
|
|
2013
|
|
|
|
2012
|
|
% Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Targeted Therapies
|
|
$
|
|
12,038
|
|
$
|
|
11,012
|
|
9%
|
|
Sterilization Technologies
|
|
|
|
16,430
|
|
|
|
16,136
|
|
2%
|
|
Medical Isotopes
|
|
|
|
25,196
|
|
|
|
25,867
|
|
(3%)
|
|
Consolidated segment revenues from continuing operations
|
|
$
|
|
53,664
|
|
$
|
|
53,015
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings (loss)
|
|
|
|
|
|
|
|
|
|
|
|
Targeted Therapies
|
|
$
|
|
1,430
|
|
$
|
|
3,113
|
|
(54%)
|
|
Sterilization Technologies
|
|
|
|
3,516
|
|
|
|
4,454
|
|
(21%)
|
|
Medical Isotopes
|
|
|
|
6,939
|
|
|
|
7,711
|
|
(10%)
|
|
Corporate and Other
|
|
|
|
(2,817)
|
|
|
|
(1,915)
|
|
(47%)
|
|
Total segment earnings
|
|
$
|
|
9,068
|
|
$
|
|
13,363
|
|
(32%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
3,280
|
|
|
|
5,180
|
|
(37%)
|
|
Restructuring charges, net
|
|
|
|
11
|
|
|
|
(648)
|
|
102%
|
|
AECL arbitration and legal costs
|
|
|
|
502
|
|
|
|
1,878
|
|
(73%)
|
|
Pension settlement loss
|
|
|
|
7,003
|
|
|
|
-
|
|
100%
|
|
Internal investigation costs
|
|
|
|
4,124
|
|
|
|
-
|
|
100%
|
|
Change in fair value of embedded derivatives
|
|
|
|
(287)
|
|
|
|
6,254
|
|
(105%)
|
|
Loss on Celerion note receivable
|
|
|
|
218
|
|
|
|
2,411
|
|
(91%)
|
|
Consolidated operatingloss
|
|
$
|
|
(5,783)
|
|
$
|
|
(1,712)
|
|
(238%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
|
528
|
|
|
|
607
|
|
(13%)
|
|
Income tax recovery
|
|
|
|
4,986
|
|
|
|
218
|
|
2187%
|
|
Net loss
|
|
$
|
|
(269)
|
|
$
|
|
(887)
|
|
70%
|
|
Non-GAAP Reconciliation
|
Three months ended January 31
|
|
(thousands of U.S. dollars, except per share amounts)
|
|
|
|
2013
|
|
|
|
2012
|
|
% Change
|
|
Net (loss) income
|
|
$
|
|
(269)
|
|
$
|
|
(887)
|
|
70%
|
|
Adjusted for specified items:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges, net
|
|
|
|
11
|
|
|
|
(648)
|
|
102%
|
|
Change in fair value of embedded
derivatives
|
|
|
|
(287)
|
|
|
|
6,254
|
|
(105%)
|
|
AECL arbitration and legal fees
|
|
|
|
502
|
|
|
|
1,878
|
|
(73%)
|
|
Internal investigation costs
|
|
|
|
4,124
|
|
|
|
-
|
|
100%
|
|
Loss on Celerion note receivable
|
|
|
|
218
|
|
|
|
2,411
|
|
(91%)
|
|
Pension settlement loss
|
|
|
|
7,003
|
|
|
|
-
|
|
100%
|
|
Tax effect on specified items listed above
|
|
|
|
(2,907)
|
|
|
|
(1,883)
|
|
(54%)
|
|
Change in reserve for uncertain tax positions
|
|
|
|
(8,101)
|
|
|
|
-
|
|
(100%)
|
|
Valuation allowance on deferred tax assets
|
|
|
|
4,465
|
|
|
|
-
|
|
100%
|
|
Adjusted net income
|
|
$
|
|
4,100
|
|
$
|
|
7,125
|
|
(42%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per share
|
|
|
|
-
|
|
|
|
(0.01)
|
|
100%
|
|
Adjusted diluted earnings per share
|
|
|
|
0.07
|
|
|
|
0.11
|
|
(36%)
|
|
Weighted average number of Common
shares outstanding – diluted (thousands of shares)
|
|
|
|
61,909
|
|
|
|
62,247
|
|
(1%)
|
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
[UNAUDITED]
|
|
|
|
January 31
|
|
October 31
|
|
(thousands of U.S. dollars, except share amounts)
|
|
|
|
2013
|
|
2012
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
|
87,514
|
|
$
|
|
109,360
|
|
Accounts receivable
|
|
|
|
34,759
|
|
|
|
46,488
|
|
Notes receivable
|
|
|
|
4,011
|
|
|
|
4,004
|
|
Inventories
|
|
|
|
39,717
|
|
|
|
33,977
|
|
Income taxes recoverable
|
|
|
|
17,013
|
|
|
|
23,951
|
|
Current portion of deferred tax assets
|
|
|
|
4,150
|
|
|
|
4,141
|
|
Other current assets
|
|
|
|
4,618
|
|
|
|
2,042
|
|
Total current assets
|
|
|
|
191,782
|
|
|
|
223,963
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
|
40,254
|
|
|
|
3,906
|
|
Property, plant and equipment, net
|
|
|
|
84,679
|
|
|
|
88,217
|
|
Deferred tax assets
|
|
|
|
52,383
|
|
|
|
52,855
|
|
Long-term investments
|
|
|
|
1,450
|
|
|
|
1,450
|
|
Other long-term assets
|
|
|
|
51,583
|
|
|
|
58,190
|
|
Total assets
|
|
$
|
|
422,131
|
|
$
|
|
428,581
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
|
13,527
|
|
$
|
|
18,783
|
|
Accrued liabilities
|
|
|
|
78,552
|
|
|
|
80,322
|
|
Income taxes payable
|
|
|
|
7,432
|
|
|
|
9,494
|
|
Current portion of long-term debt
|
|
|
|
4,178
|
|
|
|
4,190
|
|
Current portion of deferred revenue
|
|
|
|
1,256
|
|
|
|
1,500
|
|
Total current liabilities
|
|
|
|
104,945
|
|
|
|
114,289
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
39,937
|
|
|
|
39,141
|
|
Deferred revenue
|
|
|
|
1,686
|
|
|
|
1,958
|
|
Long-term income taxes payable
|
|
|
|
3,960
|
|
|
|
3,960
|
|
Other long-term liabilities
|
|
|
|
70,790
|
|
|
|
74,468
|
|
Total liabilities
|
|
|
|
221,318
|
|
|
|
233,816
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
Common shares at par – Authorized shares: unlimited; Issued and
outstanding shares: 61,909,101
|
|
|
|
252,168
|
|
|
|
252,168
|
|
Additional paid-in capital
|
|
|
|
85,118
|
|
|
|
84,726
|
|
Accumulated deficit
|
|
|
|
(265,741)
|
|
|
|
(265,474)
|
|
Accumulated other comprehensive income
|
|
|
|
129,268
|
|
|
|
123,345
|
|
Total shareholders’ equity
|
|
|
|
200,813
|
|
|
|
194,765
|
|
Total liabilities and shareholders’ equity
|
|
$
|
|
422,131
|
|
$
|
|
428,581
|
|
Please refer to the complete set of Consolidated Financial Statements
for Q1 2013
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
[UNAUDITED]
|
Three months ended January 31
|
|
(thousands of U.S. dollars, except per share amounts)
|
|
|
|
2013
|
|
2012
|
|
Revenues
|
|
$
|
|
53,664
|
|
$
|
|
53,015
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
Direct cost of revenues
|
|
|
|
25,859
|
|
|
|
25,458
|
|
Selling, general and administration
|
|
|
|
21,233
|
|
|
|
16,045
|
|
Depreciation and amortization
|
|
|
|
3,280
|
|
|
|
5,180
|
|
Restructuring charges (recovery), net
|
|
|
|
11
|
|
|
|
(648)
|
|
Change in fair value of embedded derivatives
|
|
|
|
(287)
|
|
|
|
6,254
|
|
Other expenses, net
|
|
|
|
9,351
|
|
|
|
2,438
|
|
Total costs and expenses
|
|
|
|
59,447
|
|
|
|
54,727
|
|
Operating loss
|
|
|
|
(5,783)
|
|
|
|
(1,712)
|
|
Interest expense
|
|
|
|
(1,323)
|
|
|
|
(1,173)
|
|
Interest and dividend income
|
|
|
|
1,851
|
|
|
|
1,780
|
|
Loss before income taxes
|
|
|
|
(5,255)
|
|
|
|
(1,105)
|
|
Income tax recovery
|
|
|
|
(4,986)
|
|
|
|
(218)
|
|
Net loss
|
|
$
|
|
(269)
|
|
$
|
|
(887)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share
|
|
$
|
|
-
|
|
$
|
|
(0.01)
|
|
Please refer to the complete set of Consolidated Financial Statements
for Q1 2013
CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
|
|
Three months ended January 31
|
|
(thousands of U.S. dollars)
|
|
|
|
2013
|
|
|
|
2012
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
|
(269)
|
|
$
|
|
(887)
|
|
Adjustments to reconcile net loss to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Items not affecting current cash flows
|
|
|
|
12,809
|
|
|
|
8,004
|
|
Changes in operating assets and liabilities
|
|
|
|
1,572
|
|
|
|
2,268
|
|
Cash provided by operating activities
|
|
|
|
14,112
|
|
|
|
9,385
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
|
|
(98)
|
|
|
|
(2,311)
|
|
(Increase) decrease in restricted cash
|
|
|
|
(36,159)
|
|
|
|
300
|
|
Cash used in investing activities
|
|
|
|
(36,257)
|
|
|
|
(2,011)
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
Payment of cash dividends
|
|
|
|
-
|
|
|
|
(6,238)
|
|
Repurchase and cancellation of Common shares
|
|
|
|
-
|
|
|
|
(3,521)
|
|
Cash used in financing activities
|
|
|
|
-
|
|
|
|
(9,759)
|
|
Effect of foreign exchange rate changes on cash and cash equivalents
|
|
|
|
299
|
|
|
|
(516)
|
|
Net decrease in cash and cash equivalents during the period
|
|
|
|
(21,846)
|
|
|
|
(2,901)
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
109,360
|
|
|
|
74,067
|
|
Cash and cash equivalents, end of period
|
|
$
|
|
87,514
|
|
$
|
|
71,166
|
|
Please refer to the complete set of Consolidated Financial Statements
for Q1 2013