Nordion Reports Strong Fiscal 2011 Financial Results;; Provides Fiscal 2012 Outlook

^{Published on 2011-12-13 15:51:27 - Market Wire}
 

Nordion Reports Strong Fiscal 2011 Financial Results; Provides Fiscal 2012 Outlook

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• Fourth quarter segment earnings increase 22% to $27.8 million compared with fiscal 2010
• Strong fiscal 2011 annual revenue growth of 23%, with TheraSphere® revenue up 47% year-over-year
• $71.6 million in cash returned to shareholders during fiscal 2011 by way of share buybacks and dividends
• Key strategic achievements in fiscal 2011 include: announcement of TheraSphere® Phase III trials, securing a $75 million revolving credit facility, and the divestiture of Belgian operations

Nordion reports in U.S. dollars unless otherwise specified

OTTAWA, Dec. 13, 2011 /PRNewswire/ - Nordion Inc. (TSX: NDN) (NYSE: [ NDZ ]), a leading provider of products and services to the global health sciences market, today reported fourth quarter revenues of $74.0 million, down $7.6 million compared with $81.6 million in the fourth quarter of fiscal 2010. For fiscal 2011, revenues increased 23% to $274.0 million from revenue of $222.0 million in fiscal 2010.

Net income from continuing operations was $6.5 million ($0.10 earnings per share) down 55% compared with $14.4 million ($0.22 earnings per share) in the fourth quarter of fiscal 2010. Net income from continuing operations of $43.5 million ($0.67 earnings per share) in fiscal 2011, increased significantly from a loss of $83.8 million ($0.94 loss per share) in fiscal 2010.

"Nordion delivered solid results in the fourth quarter, capping off a strong performance in fiscal 2011," said Mr. Steve West, Chief Executive Officer, Nordion Inc. "Our key products, TheraSphere, Cobalt-60, and Molybdenum-99, continued to deliver robust results contributing to our bottom-line performance. We executed on key strategic initiatives strengthening our position to build long-term value."

"We entered fiscal 2012 with a strong balance sheet and continue to focus on growth and performance by building on the success of TheraSphere, maintaining our market leading position in Sterilization Technologies, and optimizing the value of our Medical Isotopes business," continued Mr. West.

Consolidated Financial Results

Key Q4 2011 Events:

• On October 21, 2011, Nordion announced that hearings for the Company's arbitration with Atomic Energy of Canada Limited had been extended to the second quarter of fiscal 2012;
• On October 27, 2011, the Canadian Nuclear Safety Commission announced the renewal of the National Reactor Universal (NRU) reactor license until 2016; and,
• As of October 31, 2011, Nordion had repurchased 4.9 million Common shares at an aggregate cost of $52.4 million under its previously announced Normal Course Issuer Bid.

Subsequent to the quarter:

• On December 6, 2011, Nordion launched the commercial availability of the GammaFIT™ irradiator system.

Segment Financial Results (with reconciliation to Net income (loss))

Targeted Therapies
Targeted Therapies revenue for fourth quarter fiscal 2011 of $16.4 million decreased by $2.4 million or 13% compared with fourth quarter fiscal 2010. TheraSphere revenue of $10.9 million increased by $3.2 million or 42% in fourth quarter fiscal 2011, while Contract Manufacturing revenue of $5.5 million decreased by $5.6 million or 51% compared with the same period in the prior year.

The increase in TheraSphere revenue was due to both an increased adoption of the liver cancer treatment with customers already using the treatment and with customers using it for the first time. Contract Manufacturing revenue was primarily impacted by the interruption of CardioGen-82® manufacturing, which Nordion has not manufactured since second quarter fiscal 2011. Nordion manufactures CardioGen-82 for Bracco Diagnostics Inc., which has implemented a voluntary recall of the product that remains in effect.

Targeted Therapies revenue for fiscal 2011 of $61.8 million increased by $1.0 million or 2% compared with fiscal 2010. TheraSphere revenue of $42.6 million increased by $13.5 million or 47%. This was largely offset by a significant decrease in Contract Manufacturing revenue, which declined by 39% from $31.8 million to $19.3 million over the same time period, primarily due to the interruption of CardioGen-82 manufacturing.

Sterilization Technologies
Sterilization Technologies revenue for fourth quarter fiscal 2011 of $32.5 million decreased by $2.6 million or 8% compared with the fourth quarter fiscal 2010. Revenue from Cobalt of $28.1 million in fourth quarter fiscal 2011 decreased by $1.0 million or 4% while revenue from Sterilization-Other of $4.3 million decreased by $1.6 million or 27%, compared with fourth quarter fiscal 2010.

The decrease in Cobalt revenue was driven by lower Co-60 volumes shipped but was partially offset by a positive impact of foreign exchange. Sterilization-Other revenue was down due to the smaller size of the production irradiator shipped in fourth quarter fiscal 2011.

Sterilization Technologies revenue for fiscal 2011 of $108.7 million, increased by $5.1 million or 5% compared with fiscal 2010. Cobalt revenue of $97.0 million in fiscal 2011 increased by $4.2 million or 5% compared with fiscal 2010. Sterilization-Other revenue of $11.7 million was up $0.9 million or 9% over the same period of the prior year.

Medical Isotopes
Medical Isotopes revenue of $25.2 million in fourth quarter fiscal 2011 decreased by $2.6 million or 9% compared with fourth quarter fiscal 2010. Reactor isotopes revenue of $21.9 million in fourth quarter fiscal 2011, decreased by $1.2 million or 5%, while Cyclotron isotopes revenue of $3.3 million decreased by $1.4 million or 30%, each compared with the same period of the prior year.

The decrease in Reactor isotopes revenue in fourth quarter fiscal 2011 was primarily due to lower pricing of Molybdenum-99, while Cyclotron isotopes revenue declined due to lower sales volumes.

Medical Isotopes revenue for fiscal 2011 of $103.5 million increased by $45.9 million or 80% compared with fiscal 2010. Reactor isotopes revenue of $85.1 million increased significantly in fiscal 2011 primarily due to the return to service of the NRU reactor. Cyclotron isotopes revenue for fiscal 2011 of $18.4 million decreased 26% in fiscal 2011 compared with fiscal 2010 mainly driven by the decrease in demand for Thallium-201.

Corporate and Other
Corporate and Other spending was $0.3 million in fourth quarter fiscal 2011, improving $9.2 million or 97%, compared with the fourth quarter fiscal 2010. Corporate selling, general and administrative (SG&A) expenses of $0.9 million in fourth quarter fiscal 2011 decreased 110% compared with fourth quarter fiscal 2010 primarily due to savings associated with the strategic repositioning that took place in fiscal 2010. Other income, net was $0.6 million, compared with an expense of $0.1 million in fourth quarter fiscal 2010, reflecting tax and insurance credits in fourth quarter fiscal 2011.

Corporate SG&A expenses of $7.8 million in fiscal 2011 decreased by $40.4 million or 84% from $48.2 million of expenses incurred in fiscal 2010. The decrease was primarily due to lower compensation cost from workforce reductions, lower consulting and professional costs subsequent to Nordion's strategic repositioning activities in fiscal 2010, and lower costs associated with transition services which were substantially completed in fiscal 2010. Other expenses of $4.6 million in fiscal 2011 decreased by $13.3 million from $17.9 million in fiscal 2010 primarily due to a revaluation in fiscal 2010 of the $450 million of proceeds from the sale of MDS Analytical Technologies that were held in Canadian dollar functional currency entity in U.S. dollars to fund a previous share buyback program through a substantial issuer bid that was completed on March 29, 2010.

Discontinued Operations
Nordion recorded income from discontinued operations, net of income taxes of $0.4 million in the fourth quarter fiscal 2011, down $0.9 million or 68% compared with the fourth quarter fiscal 2010.

For fiscal 2011, Nordion recorded a loss from discontinued operations, net of income taxes, of $26.7 million.  This included the impact of the sale of the Belgian operations in March 2011, an unfavorable ruling in the arbitration with Life Technologies (Life) requiring payment by Nordion of $9.5 million, and certain tax adjustments and settlements relating to the Company's discontinued operations of MDS Pharma Services and MDS Analytical Technologies.

Subsequent to the arbitrator's ruling, on September 30, 2011, Nordion filed a statement of claim against Life in the Ontario Superior Court of Justice seeking recovery of approximately C$30 million and requesting that the $9.5 million settlement payment be stayed pending the outcome of this new claim.  In December 2011, Life filed its statement of defense, and Nordion expects that Life will vigorously defend this action.

Fiscal 2012 Outlook Summary
The following is a summary of Nordion's outlook for fiscal 2012. Please refer to Nordion's fiscal 2011 Management's Discussion and Analysis for a more comprehensive outlook and discussion.

Targeted Therapies

• TheraSphere revenue is expected to continue to grow at 30% or more in fiscal 2012; and,
• Contract Manufacturing revenue is projected to run at approximately $1.5 million per quarter, which is lower than fiscal 2011 due to Nordion's expectation that the Company will not realize revenue for CardioGen-82 in fiscal 2012.

Sterilization Technologies

• In 2012, Sterilization Technologies revenue is expected to be essentially flat compared to 2011 with a slight increase in Co-60 revenue offset by a decline in Sterilization - Other;
• The quarterly profile of Co-60 revenue is expected to be similar to fiscal 2011, with lower shipments in the first half of fiscal 2012 compared to the second half; and,
• Two to three production irradiators are expected to be shipped during the second half of fiscal 2012.

Medical Isotopes

• For fiscal 2012, Reactor isotopes revenue is expected to decline between 3% and 6% from fiscal 2011. Volumes of Mo-99 are expected to remain approximately the same as in fiscal 2011, but average pricing is expected to decline due to competitive supply availability for certain of the Company's smaller volume customers; and,
• Cyclotron isotopes quarterly revenue throughout 2012 is expected to be approximately $3.5 million per quarter.

Corporate SG&A

• Fiscal 2011 Corporate SG&A was $7.8 million, which included a number of tax and insurance credits.  Spending exclusive of these items was approximately $10 million. Fiscal 2012 Corporate SG&A is expected to run at a similar level.

A full copy of Nordion's fourth quarter and fiscal 2011 Management's Discussion and Analysis and the financial statements and notes can be downloaded at [ www.nordion.com/investors/financial_results.asp ].

Conference Call
Nordion will hold a conference call on Wednesday, December 14, 2011 at 10:00 am ET to discuss its fourth quarter and year-end fiscal 2011 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 ]. To participate, please dial 1-800-952-6845 (toll-free North America) or 1-416-695-6623 (International).

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 medical isotopes, targeted therapies and sterilization technologies 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 more than 500 highly skilled employees in three locations. Find out more at [ www.nordion.com ].

Caution Concerning Forward-Looking Statements

This releasecontains 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, and are in particular contained in this release under the heading "Fiscal 2012 Outlook Summary".  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 2011 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 asthe risk factors which are described in section 5 of our 2011 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.

SOURCE Nordion Inc.