Nordion third quarter revenue increases 0.5% to $67.1 million

Sep 6 2012

Nordion Inc. (TSX: NDN) (NYSE: NDZ), a leading provider of products and services to the global health science market, today reported results for the fiscal third quarter ended July 31, 2012. The Company generated $67.1 million in revenue for the third quarter, an increase of $0.3 million, or 0.5%, over revenue of $66.8 million for the same period in 2011.

Excluding the specified items shown on the attached quarterly non-GAAP reconciliation table, adjusted net income for the third quarter increased to $15.5 million from $9.8 million during the same period in the previous fiscal year. Nordion generated GAAP net income of $12.3 million in its third quarter, compared with a net loss of $4.1 million in the third quarter of fiscal 2011 when Nordion recorded a loss from discontinued operations, net of income taxes, of $8.8 million.

Third-quarter adjusted earnings per share, excluding specified items, increased to $0.25 compared with $0.15 in the third quarter of 2011. GAAP earnings per share were $0.20 in the third quarter of 2012, versus a $0.06 loss per share in the same period last year.

"Nordion delivered improved and solid performance across our businesses," said Mr. Steve West, Chief Executive Officer, Nordion Inc. "We increased our margins and generated double-digit TheraSphere growth. Management continues to focus on building the business and improving alignment within each of our portfolios."    

Targeted Therapies

The Company's Targeted Therapies business generated revenue of $15.3 million in the third quarter of 2012, an increase of $2.0 million or 15%, from the third quarter of 2011. TheraSphere generated revenue of $13.0 million, an increase of $1.5 million or 13%, in the third quarter from the same time period in 2011. Contract Manufacturing generated revenue of $2.3 million, an increase of $0.5 million or 28%, compared with the same period in the prior year due to an increase in Bexxar revenue.

Increased revenue of TheraSphere in the third quarter of fiscal 2012 was primarily due to adoption by new clinics.

Management continues to expect 2012 TheraSphere revenue growth to be approximately 15% higher than revenue generated in 2011. Sustained growth in TheraSphere supports management's belief that Nordion can create significant value by building a leadership position in the emerging Interventional Oncology market.

Sterilization Technologies

Sterilization Technologies delivered third quarter revenue of $32.1 million, which was relatively flat from the same period in 2011. Cobalt generated third quarter revenue of $31.8 million, an increase of $1.0 million or 3%. The increase in Cobalt revenue was primarily due to increased cobalt-60 shipments to customers.

Sterilization-Other reported revenue of $0.3 million, a decline of $0.9 million or 76%, compared with the same period in 2011. This decline was due to no production irradiators being shipped during the quarter, as compared to one production irradiator shipment in the third quarter of 2011.

Management continues to expect a similar level of Cobalt revenue in fiscal 2012 compared with fiscal 2011, and Sterilization Technologies overall segment revenue to be approximately 10% lower in fiscal 2012 compared with fiscal 2011.

Medical Isotopes

Medical Isotopes generated revenue of $19.7 million, in the third quarter of 2012, a decrease of $1.7 million or 8% compared with the same period in 2011. Reactor isotopes generated revenue of $14.5 million in third quarter 2012, a decrease of $1.2 million or 8%. Revenue for Cyclotron isotopes was $5.2 million, a decrease of $0.5 million or 9%, compared with the same period of the prior year. Cyclotron isotopes were lower mainly due to lower shipments of Strontium-82 and lower customer demand for Thallium-201, Gallium-67 and Iodine-123.

On May 16, 2012, Nordion's primary supplier of medical isotopes, AECL, reported that the National Research Universal (NRU) reactor at Chalk River, Ontario, returned to service from its planned maintenance shutdown, which lasted 31 days. The one-month shutdown resulted in an interruption in the supply of medical isotopes during Q2 and Q3 2012. The Company's production and sales have resumed as expected, and planned Mo-99 shipments began during the week of May 21, 2012. Nordion experienced lower demand from customers during the period in the third quarter that the NRU reactor was operational. This was due to a number of factors, including customers' requirement to diversify supply, a slower ramp of demand after the NRU reactor resumed production and lower levels of demand from Nordion's largest customer..

Management continues to forecast Reactor isotopes revenue to decline 10% to 12% in fiscal 2012 compared with 2011.

Corporate and Other

Corporate and Other reported a segment loss of $2.7 million in the third quarter, a decrease of $0.3 million from the third quarter 2011. Corporate selling, general and administrative (SG&A) expenses were $3.5 million in the third quarter an increase of $0.9 million compared with third quarter fiscal 2011, primarily due to higher stock based compensation costs.