Exhibit 99.1
Theragenics(R) Reports Revenue and Earnings for Third Quarter 2007
Company Reports Record Quarterly Revenue
BUFORD, Ga.--(BUSINESS WIRE)--Nov. 1, 2007--Theragenics
Corporation(R) (NYSE: TGX), a medical device company serving the
prostate cancer treatment and surgical products markets, today
announced consolidated financial results for the third quarter and
nine months ended September 30, 2007. Consolidated revenue for the
quarter was $16.0 million compared to $14.3 million in the third
quarter of 2006, an increase of 12%. For the nine-month period,
consolidated revenue was $47.0 million, compared to $39.3 million in
the 2006 period, an increase of 20%. Net income for the quarter was
$1.8 million, or $0.05 per share on a diluted basis, compared to net
income of $1.7 million, or $0.05 per share on a diluted basis in the
third quarter of 2006. For the nine-month period, net income was $4.5
million, or $0.13 per share on a diluted basis, compared to net income
of $2.9 million, or $0.09 per share on a diluted basis in 2006.
Results for the 2006 periods include the results of Galt Medical from
August 2, 2006, the date Galt was acquired by Theragenics.
In the 2006 periods, an income tax benefit that resulted from the
release of a portion of the allowance for deferred income tax assets
was recognized. This benefit was $1.0 million in the third quarter of
2006 and $1.4 million in the nine-month period of 2006. This benefit
significantly reduced the effective income tax rates for those periods
and increased earnings per share by $0.03 in the third quarter of 2006
and $0.04 in the nine-month period of 2006. The 2007 periods are
reported as being fully taxed at normal rates. Other items affecting
comparability between the periods include a one-time license fee of
$400,000 recognized and included in revenue and net income in the 2006
periods related to the Company's licensed TheraSphere(R) technology,
and $170,000 of net restructuring related expenses included in the
2006 year to date period. The 2007 year to date period includes
$309,000 of one-time interest income received in connection with a
federal income tax refund.
"Our diversification strategy continues to deliver strong results
as we posted another quarter of record revenue," stated M. Christine
Jacobs, Chairman & CEO. "Nearly half of third quarter revenue was
generated by our surgical products business, and both our
brachytherapy and surgical products businesses contributed to
profitability."
Ms. Jacobs continued, "Our surgical products business has
demonstrated its ability to grow. Going forward we want to continue to
invest in opportunities for organic growth in this business. We also
plan to maintain our leadership position within the brachytherapy
industry, and take advantage of longer term opportunities in what is a
difficult industry environment. Finally, we expect to continue our
diversification and growth via acquisition."
In conclusion, Ms. Jacobs stated, "Our current strategy has
delivered impressive results in a relatively short period of time.
Given the performance of our two business segments and our newly
diversified portfolio of products, our choices and future prospects
are numerous."
Tables I and II to this press release contain condensed
consolidated statements of earnings and balance sheets. Revenue and
operating income by segment excluding special items is summarized in
Tables III and IV, respectively. Table V includes a reconciliation of
GAAP reported revenue to pro forma revenue excluding special items by
segment. Table VI includes a reconciliation of GAAP reported net
earnings to earnings before interest, taxes, depreciation and
amortization (EBITDA) excluding special items.
Theragenics will host a conference call today at 11:00 a.m.
Eastern Time. To access the call, dial 800-538-9844 or 706-634-7274
and provide the conference ID code 20958009. This call is also being
broadcast live over the Internet, and a recording will be available
for one month on the Company's website. To access the webcast, log on
to www.theragenics.com and select Investor Relations followed by
selecting "Company Presentations". You also can access a phone replay
of the call until Midnight, November 8, 2007, by dialing 800-642-1687
or 706-645-9291 and providing the conference ID code: 20958009.
Theragenics Corporation (NYSE: TGX) operates two business
segments: its brachytherapy seed business and its surgical products
business. The brachytherapy business manufactures and markets its
premier product, the palladium-103 TheraSeed(R) device
(www.theraseed.com) and I-Seed, an iodine-125 based device, which are
used primarily in the minimally invasive treatment of localized
prostate cancer. Its surgical products business (www.cpmedical.com and
www.galtmedical.com) manufactures and distributes wound closure and
vascular access products. Wound closure products include sutures,
needles and other surgical products with applications in, among other
areas, urology, veterinary, cardiology, orthopedics, plastic surgery
and dental. Vascular access includes introducers and guidewires used
in the interventional radiology, interventional cardiology and
vascular surgery markets. For additional information, call
Theragenics' Investor Relations Department at (800) 998-8479 or visit
www.theragenics.com.
This press release contains non-GAAP financial measures used by
Management in its analysis of the Company's operating performance. The
Company reports its financial results in accordance with U.S.
generally accepted accounting principles (GAAP). However, management
believes that certain non-GAAP financial measures used in managing the
business may provide users of this financial information additional
meaningful comparisons between current results and results in prior
operating periods. Management believes that these non-GAAP financial
measures can provide additional meaningful reflection of underlying
trends of the business because they provide a comparison of historical
information that excludes certain items that impact the overall
comparability. Management also uses these non-GAAP financial measures
in making financial, operating and planning decisions and in
evaluating the Company's performance. Non-GAAP financial measures
should be considered in addition to, but not as a substitute for, the
Company's reported GAAP results.
This press release contains forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, the
accuracy of which is necessarily subject to risks and uncertainties,
including, without limitation, statements regarding future growth,
opportunities and investments, and anticipated positive results in
general. Actual results may differ materially due to a variety of
factors, including, among other things, uncertainties related to the
integration of acquired companies into the Theragenics organization,
capitalization on opportunities for growth within the Surgical
Products business, ability to recognize value from areas of shared
expertise, risks and uncertainties related to competition within the
medical device industry, development and growth of new applications
within the markets for brachytherapy, wound closure, and vascular
access and, more broadly, medical devices, competition from other
companies within the brachytherapy, wound closure, vascular access and
medical device markets, competition from other methods of treatment,
new product development cycles, effectiveness and execution of
marketing and sales programs, changes in product pricing, changes in
costs of materials used in production processes, continued acceptance
and demand of the Company's products by the markets in which it
operates, introduction and/or availability of competitive products by
others, potential changes in third-party (including CMS)
reimbursement, physician training, third-party distribution
agreements, ability to execute on acquisition opportunities on
favorable terms and successfully integrate any acquisitions, and other
factors set forth from time to time in the Company's Securities and
Exchange Commission filings.
All forward looking statements and cautionary statements included
in this document are made as of the date hereby based on information
available to the Company as of the date hereof, and the Company
assumes no obligation to update any forward looking statement or
cautionary statement.
TABLE I
THERAGENICS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
(Unaudited)
(In thousands except per share data)
Three Months Ended Nine Months Ended
Sept. 30, 2007 Oct. 1, 2006 Sept. 30, 2007 Oct. 1, 2006
-------------- ------------ -------------- ------------
Product sales $ 15,757 $ 13,766 $ 46,348 $ 38,446
License fees 244 554 679 858
-------------- ------------ -------------- ------------
Total revenue 16,001 14,320 47,027 39,304
Cost of sales 8,207 7,263 24,180 19,798
-------------- ------------ -------------- ------------
Gross
profit 7,794 7,057 22,847 19,506
Operating
expenses:
Selling,
general &
administrative 4,498 4,552 14,252 15,277
Amortization
of
purchased
intangibles 469 471 1,406 846
Research &
development 430 206 1,100 624
Restructuring
expenses - - - 369
Gain on sale
of assets - - - (201)
-------------- ------------ -------------- ------------
5,397 5,229 16,758 16,915
-------------- ------------ -------------- ------------
Operating
income 2,397 1,828 6,089 2,591
Non-operating
items
Interest
income 530 362 1,653 1,231
Interest
expense (177) (114) (528) (249)
Other (1) (39) 1 (58)
-------------- ------------ -------------- ------------
352 209 1,126 924
-------------- ------------ -------------- ------------
Earnings
before
income
taxes 2,749 2,037 7,215 3,515
Income tax
expense 986 380 2,740 650
-------------- ------------ -------------- ------------
Net earnings $ 1,763 $ 1,657 $ 4,475 $ 2,865
============== ============ ============== ============
Earnings per
share:
Basic $ 0.05 $ 0.05 $ 0.14 $ 0.09
Diluted $ 0.05 $ 0.05 $ 0.13 $ 0.09
============== ============ ============== ============
Weighted
average
shares:
Basic 33,118 32,752 33,101 32,293
Diluted 33,237 32,822 33,262 32,368
TABLE II
THERAGENICS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
BALANCE SHEETS
(Unaudited)
(In thousands)
Assets Sept. 30, 2007 Dec. 31, 2006
-------------- -------------
Cash, short-term investments &
marketable securities
$ 45,087 $ 32,980
Trade accounts receivable 8,703 7,556
Inventories 7,632 7,433
Deferred income tax asset 5,434 7,798
Asset held for sale 3,400 3,400
Prepaid expenses & other current assets 1,208 3,478
-------------- -------------
Total current assets 71,464 62,645
Property, plant & equipment, net 28,821 30,901
Goodwill 38,658 38,824
Other intangible assets 12,350 13,762
Other long-term assets 93 112
-------------- -------------
Total assets $151,386 $146,244
============== =============
Liabilities & Shareholders' Equity
Current liabilities - accounts payable
& accrued expenses $ 4,829 $ 4,381
-------------- -------------
Contract termination liability 1,494 1,513
Long-term debt 7,500 7,500
Deferred income tax liability, long-
term 5,366 6,148
Other long-term liabilities 894 561
-------------- -------------
Total long-term liabilities 15,254 15,722
Shareholders' equity 131,303 126,141
-------------- -------------
Total liabilities & shareholders'
equity $151,386 $146,244
============== =============
TABLE III
THERAGENICS CORPORATION AND SUBSIDIARIES
REVENUE BY SEGMENT EXCLUDING SPECIAL ITEMS
(Unaudited)
(In thousands)
Three Months Ended Sept. 30, 2007
---------------------------------------
Brachy- Surgical Interseg.
therapy products elim. Consolidated
------- -------- --------- ------------
Revenue, U.S. GAAP $8,477 $7,587 $(63) $16,001
Less: One-time
license fee (1) - - - -
------- -------- --------- ------------
Revenue excluding
special item (a) $8,477 $7,587 $(63) $16,001
======= ======== ========= ============
Three Months Ended Oct. 1, 2006
---------------------------------------
Brachy- Surgical Interseg.
therapy products elim. Consolidated
------- -------- --------- ------------
Revenue, U.S. GAAP $9,248 $5,112 $(40) $14,320
Less: One-time
license fee (1) (400) - - (400)
------- -------- --------- ------------
Revenue excluding
special item (a) $8,848 $5,112 $(40) $13,920
======= ======== ========= ============
Nine Months Ended Sept. 30, 2007
---------------------------------------
Brachy- Surgical Interseg.
therapy products elim. Consolidated
------- -------- --------- ------------
Revenue, U.S. GAAP $25,676 $21,498 $(147) $47,027
Less: One-time
license fee (1) - - - -
------- -------- --------- ------------
Revenue excluding
special item (a) $25,676 $21,498 $(147) $47,027
======= ======== ========= ============
Nine Months Ended Oct. 1, 2006
----------------------------------------
Brachy- Surgical Interseg.
therapy products elim. Consolidated
-------- -------- --------- ------------
Revenue, U.S. GAAP $26,866 $12,573 $(135) $39,304
Less: One-time
license fee (1) (400) - - (400)
-------- -------- --------- ------------
Revenue excluding
special item (a) $26,466 $12,573 $(135) $38,904
======== ======== ========= ============
(1) One-time license fee due upon licensee receiving the CE mark and
European registration for TheraSphere(R). This registration was
received in the third quarter of 2006 and is not expected to recur in
future periods. The Company has adjusted the total revenue as
determined under U.S. GAAP by this amount in order to provide a more
meaningful comparison between the periods presented.
(a) Represents a non GAAP financial measure. See page 2 of this press
release for information on non-GAAP financial measures.
TABLE IV
THERAGENICS CORPORATION AND SUBSIDIARIES
OPERATING INCOME BY SEGMENT EXCLUDING SPECIAL ITEMS
(Unaudited)
(In thousands)
Three Months Ended Sept. 30, 2007
---------------------------------------
Brachy- Surgical Interseg.
therapy products elim. Consolidated
------- -------- --------- ------------
Operating income, U.S.
GAAP $1,244 $1,160 $(7) $2,397
One-time license
Fee (1) - - - -
------- -------- --------- ------------
Operating income
excluding special item(a) $1,244 $1,160 $(7) $2,397
======= ======== ========= ============
Three Months Ended Oct. 1, 2006
---------------------------------------
Brachy- Surgical Interseg.
therapy products elim. Consolidated
------- -------- --------- ------------
Operating income, U.S.
GAAP $1,708 $140 $(20) $1,828
One-time license
Fee (1) (400) - - (400)
------- -------- --------- ------------
Operating income
excluding special item(a) $1,308 $140 $(20) $1,428
======= ======== ========= ============
Nine Months Ended Sept. 30, 2007
---------------------------------------
Brachy- Surgical Interseg.
therapy products elim. Consolidated
------- -------- --------- ------------
Operating income, U.S.
GAAP $3,335 $2,766 $(12) $6,089
One-time license
fee (1) - - - -
Restructuring related
items, net (2) - - - -
------- -------- --------- ------------
Operating income
excluding special
items(a) $3,335 $2,766 $(12) $6,089
======= ======== ========= ============
Nine Months Ended Oct. 1, 2006
---------------------------------------
Brachy- Surgical Interseg.
therapy products elim. Consolidated
------- -------- --------- ------------
Operating income, U.S.
GAAP $1,647 $977 $(33) $2,591
One-time license
fee (1) (400) - - (400)
Restructuring related
items, net (2) 170 - - 170
------- -------- --------- ------------
Operating income
excluding special
items(a) $1,417 $977 $(33) $2,361
======= ======== ========= ============
(1) One-time license fee due upon licensee receiving the CE mark and
European registration for TheraSphere(R). This registration was
received in the third quarter of 2006 and is not expected to recur in
future periods.
(2) Net expenses in the period resulting from 2005 restructuring
activities. The restructuring was completed in the second quarter of
2006.
(a) Represents a non GAAP financial measure. See page 2 of this press
release for information on non-GAAP financial measures.
TABLE V
THERAGENICS CORPORATION AND SUBSIDIARIES
PRO FORMA REVENUE BY SEGMENT
(Unaudited)
(In thousands)
The following unaudited pro forma summary combines the Company's
revenue with that of Galt as if the August 2006 acquisition had
occurred at the beginning of the calendar year of the period
presented. An adjustment has also been made for certain non recurring
revenue in 2006 in order to provide a more meaningful comparison of
revenue between the periods presented. This unaudited pro forma
information is not intended to represent or be indicative of the
Company's consolidated results of operations or financial condition
that would have been reported had the acquisition been completed as
of the beginning of the calendar year presented, and should not be
taken as indicative of the Company's future consolidated results of
operations or financial condition.
Three Months Ended Sept. 30, 2007
---------------------------------------
Brachy- Surgical Interseg.
Therapy products elim. Consolidated
------- -------- --------- ------------
Revenue, U.S. GAAP $8,477 $7,587 $(63) $16,001
One-time license
Fee (1) - - - -
Revenue in pre acquisition
period (2) - - - -
------- -------- --------- ------------
Pro forma revenue excluding
special item(a) $8,477 $7,587 $(63) $16,001
======= ======== ========= ============
Three Months Ended Oct. 1, 2006
---------------------------------------
Brachy- Surgical Interseg.
therapy products elim. Consolidated
------- -------- --------- ------------
Revenue, U.S. GAAP $9,248 $5,112 $(40) $14,320
One-time license
Fee (1) (400) - - (400)
Revenue in pre acquisition
period (2) - 738 - 738
------- -------- --------- ------------
Pro forma revenue excluding
special item(a) $8,848 $5,850 $(40) $14,658
======= ======== ========= ============
Nine Months Ended Sept. 30, 2007
---------------------------------------
Brachy- Surgical Interseg.
Therapy products elim. Consolidated
------- -------- --------- ------------
Revenue, U.S. GAAP $25,676 $21,498 $(147) $47,027
One-time license
fee (1) - - - -
Revenue in pre acquisition
period (3) - - - -
------- -------- --------- ------------
Pro forma revenue excluding
special item(a) $25,676 $21,498 $(147) $47,027
======= ======== ========= ============
Nine Months Ended Oct. 1, 2006
---------------------------------------
Brachy- Surgical Interseg.
therapy products elim. Consolidated
------- -------- --------- ------------
Revenue, U.S. GAAP $26,866 $12,573 $(135) $39,304
One-time license
fee (1) (400) - - (400)
Revenue in pre acquisition
period (3) - 5,990 - 5,990
------- -------- --------- ------------
Pro forma revenue excluding
special item(a) $26,466 $18,563 $(135) $44,894
======= ======== ========= ============
(1) One-time license fee due upon licensee receiving the CE mark and
European registration for TheraSphere(R). This registration was
received in the third quarter of 2006 and is not expected to recur in
future periods.
(2) Revenue of Galt Medical Corp. for the period July 3, 2006 to
August 1, 2006 (period prior to acquisition by Theragenics).
(3) Revenue of Galt Medical Corp. for the period January 1, 2006 to
August 1, 2006 (period prior to acquisition by Theragenics).
(a) Represents a non GAAP financial measure. See page 2 of this press
release for information on non-GAAP financial measures.
TABLE VI
THERAGENICS CORPORATION AND SUBSIDIARIES
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
(EBITDA), EXCLUDING SPECIAL ITEMS
(In thousands)
Three Months Ended Nine Months Ended
------------------ -----------------
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
2007 2006 2007 2006
---------- ------- --------- -------
Net earnings, U.S. GAAP $1,763 $1,657 $4,475 $2,865
Income tax expense 986 380 2,740 650
Interest income (530) (362) (1,653) (1,231)
Interest expense 177 114 528 249
Other non-operating income/expense 1 39 (1) 58
---------- ------- --------- -------
Operating income 2,397 1,828 6,089 2,591
Depreciation and amortization 1,572 1,563 4,711 3,995
Stock-based compensation
amortization 210 79 575 302
---------- ------- --------- -------
EBITDA(a) 4,179 $3,470 11,375 $6,888
One-time license fee (1) - (400) - (400)
Restructuring related items, net
(2) - - 170
---------- ------- --------- -------
EBITDA excluding special items(a) $4,179 $3,070 $11,375 $6,658
========== ======= ========= =======
(1) One-time license fee due upon licensee receiving the CE mark and
European registration for TheraSphere(R). This registration was
received in the third quarter of 2006 and is not expected to recur.
(2) Net expenses in the period resulting from 2005 restructuring
activities. The restructuring was completed in the second quarter of
2006.
(a) Represents a non GAAP financial measure. See page 2 of this press
release for information on non- GAAP financial measures.
CONTACT: Theragenics Corporation
Frank Tarallo, 800-998-8479 OR 770-271-0233
CFO & Treasurer
or
Lisa Rassel, 800-998-8479 OR 770-271-0233
Manager of Investor Relations
WWW.THERAGENICS.COM