Meara Murphy - Head, Corporate Communications Jeff Bailey - President and CEO John Bakewell - CFO

Good afternoon, ladies and gentlemen. I would like to welcome everyone to the Lantheus Medical Imaging First Quarter 2015 Earnings Conference Call. Please note that all lines have been placed on mute to prevent any background noise. This call is being recorded for replay purposes. A replay of this call will be available approximately three hours after conclusion of the live call through May 19th. I would now turn the call over to your host for today, Ms. Meara Murphy.

Thank you and good afternoon, everyone. Welcome to Lantheus Medical Imaging’s first quarter 2015 earnings conference call. We appreciate you joining us. I am Meara Murphy, Head of Corporate Communications for Lantheus Medical Imaging. With me on the call today are Jeff Bailey, President and Chief Executive Officer and John Bakewell, Chief Financial Officer. Please note that earlier this afternoon we issued a Press Release reporting first quarter 2015 results. We also filed with the SEC our Form 10-Q for the quarter ended March 31, 2015. You can find both of these documents in the Investor Relations section of Lantheus’ Web site at lantheus.com. Please note that consistent with last quarter's call, we are refraining from our traditional practice of conducting a question-and-answer session due to the fact that our parent company, Lantheus Holdings, Inc. remains in registration for a possible public offering of its equity securities. Today's remarks have been prepared in order to anticipate the topics that may otherwise have been on your list of questions. Before we begin, I would like to remind you that remarks during this call may include some forward-looking statements including statements related to our products and supply arrangements and expectations for future periods. Matters addressed in these statements are subject to risks and uncertainties. Words such as believes, expects, anticipates, hopes, plans, may and similar expressions are intended to identify such statements. Actual results may differ materially from our expectations. Please refer to the cautionary statements and risk factors contained in our SEC filings, including our Annual Report on Form 10-K filed with the SEC today March 04, 2015 and our quarterly report on Form 10-Q filed with the SEC on May 05, 2015. A copy may be obtained at sec.gov and on our Web site at lantheus.com. Except to the extent required by law, we do not undertake any obligation to update any forward-looking statements and we caution you against relying on any forward-looking statements. On today’s call, we will also discuss certain non-GAAP financial measures with respect to our performance. We use these non-GAAP indicators for our financial and operational decision-making and as a means to evaluate our performance. The definitions of EBITDA, adjusted EBITDA and net income as adjusted along with their reconciliations to GAAP net income are set forth in our earnings release, which was filed with the SEC as of May 05, 2015 as a current report on Form 8-K. Copies may be obtained at sec.gov and on the Company's Web site at lantheus.com. Please note that unless indicated otherwise, all of our commentary on today’s call will make reference to as adjusted results. With that introduction, it is now my pleasure to turn the call over to our CEO, Jeff Bailey. Jeff?

Thank you, Meara. And welcome to everyone joining us today on our first quarter 2015 earnings call. I'll begin our discussion today with some opening commentary before handing the call over to John for his review of the first quarter 2015 financial results after which I'll return to provide a business and strategic update before concluding with some additional closing remarks. Yesterday's Press Release indicates we had a very good start to the year. Our first quarter 2015 performance reflects our continued focus on execution and operational excellence. First quarter 2015 revenue totaled $74.8 million increasing year-over-year by 2% as reported and 4% on a constant currency basis. This growth was led by the continued commercial success of DEFINITY posting a 15% year-over-year increase in Q1 growing sequentially for its 11th consecutive quarter. All together we posted positive GAAP net income for the third consecutive quarter totaling $700,000 for the first as compared to a $1.3 million GAAP net loss in the year ago quarter. On an adjusted basis first quarter net income totaled $4.3 million, an improvement of $5.6 million, compared to a net loss as adjusted of $1.3 million for the year ago quarter. Our first quarter adjusted EBITDA totaled $20.6 million, increasing 29% from $16 million in the same quarter of last year, of note, first quarter adjusted EBITDA expanded sequentially by $1.2 million compared to the fourth quarter of 2014, our increasing earnings in Q1 reflects continued growth of our high margin DEFINITY echocardiography contrast agent it also had a favorable net result of a lower sales volumes but increased selling pricing and margins for a number of our nuclear medicine products driven in large part by our previously announced change in contractual status with Cardinal Health that become effective January 1, 2015 all I am going to is change to a little contract status with Cardinal. Our sales volumes again to transition from previous historical levels to new lower levels but providing a revenue and margin benefit in Q1, some of the volume that we previously sold to Cardinal has shifted to sales to other of our radiopharmacy customers, but we fully anticipate the benefit of this change contractual status to moderate the future quarters we're nonetheless pleased with our strong start to 2015. You'll hear more about how all this is affecting our revenue and gross margins later into this call. At this time, I'll hand the call over to John for a detailed review of our first quarter financial results after which I'll be back to take you through the rest of our agenda. So with that, John it's all yours.

Thanks, Jeff, good afternoon everyone. As Jeff, noted we are quite pleased with our start to 2015. I’m happy to be taking you through the details. As we get started let me reiterate that unless otherwise stated all of today's discussions regarding our sales growth rates referred to our constant currency growth rates and our results of operations refer to our as adjusted results as described by our operator during the instruction to our call. Also as was noted during the introduction, today's Press Release provides you with our P&L results in accordance to GAAP requirement and also includes tables which provide reconciliations of certain of our P&L components from an as reported GAAP basis to an as adjusted basis to exclude the impact of certain special charges and credit. We recognize that most of you evaluate our performance on one or more of these bases that exclude certain non-cash expenses as well as other special items and we have provided you with all the information necessary for you to model our results accordingly. As Jeff noted our first quarter revenue growth totaled 4% on a constant currency basis. Looking at those results in detail on a product line basis, DEFINTY continued its strong performance during the first quarter with revenue totaling $25.7 million increasing by $3.3 million or 15% over the first quarter of 2014. Sales growth was once again driven by the continued adoption of contrast in echocardiography procedures evidenced by the U.S. market contrast penetration rate which has been increasing steady since 2010. DEFINITY now represents 34% of our worldwide revenue growing from 30% in the first quarter of 2014. Our TechneLite business posted worldwide revenue of $20.9 million for the first quarter of 2015, decreasing by 8% on a constant currency basis compared to the year…

Thank you, John. I'll start my business update today with a focus on our flagship product DEFINITY, as noted previously DEFINITY continued to perform strongly during the first quarter. All in at third FDA approved echocardiography agent has recently entered the U.S. market. Our strategy remains focused on growing overall appropriate use of contrast imaging in echocardiography and in educating healthcare providers on how the appropriate use of DEFINITY in improved clinical factors. As many of you know we track contrast penetration rate which is the percentage of all U.S. echocardiography studies performed within imaging agent of any kind, we continue to see steady contrast penetration growth as more physicians and sonographers recognize the value the appropriate use of contrast in fact the exited the first quarter for the three month average U.S. contrast penetration rate of 4.4% marking an all time high contrast penetration rate since launch of DEFINITY in 2001. Our next topic is a supply related update. Throughout the past several years Molybdenum-99 or moly supply diversification advanced has been a key priority at Lantheus. This has positioned us to successfully prepare for the annual planned shutdown of NRU reactor for its routine pump on inspection and maintenance as required by Canadian regulators. This year before we shut down period for the NRU reactors started back on April 13th, the reactor is expected to come back on line on May 13th. Therefore extensively NCP South Africa and so in Australia and IRE in Belgium to a range alternative of moly supplies during the NRU outage, now as a result of these efforts, we expect to be believe to source all our standing quarter customer demand for technetium generators during the NRU outage period our global supply chain. Presently we also received Xenon to the pipeline of moly…

Thank you, ladies and gentlemen this concludes today's conference. Thank you for participating. You may now disconnect.