“The review is still in its early stages,” CEO Steve West said in a conference call on Wednesday morning. “We believe it’s an important step in evaluating strategic options and creating future opportunities for Nordion.”
The local medical isotope provider reported a net loss of $300,000, an improvement over the $900,000 net loss during the same period last year. Revenues were up one per cent year-over-year, from $53 million up to $53.7 million.
Nordion stated that no decision has been made to enter into any specific strategic transaction and that the company does not plan to disclose or comment on developments in the process “until further disclosure is deemed appropriate.”
Nordion announced in its final quarter of fiscal 2012 that it had hired global investment banking firm Jefferies & Co. to advise and assist in the strategic review.
During the conference call, chief financial officer Peter Dans gave an update on Nordion’s internal investigation announced in August. The investigation, which Mr. Dans said is ongoing, is looking into potential improper payments or other possible violations of anti-corruption laws in the U.S. and Canada.
Nordion recorded $4 million in expenses in its first quarter for the investigation, and expects to spend $10 million total this fiscal year, Mr. Dans said.
The company’s targeted therapies division grew by nine per cent this quarter compared to the same period last year, bringing in revenues of $12 million. The growth came from adoption in new clinics, a trend Nordion said it expects to continue in the second half of fiscal 2013.
The growth came from adoption in new clinics, a trend Nordion said it expects to continue even more strongly in the second half of fiscal 2013. New sites included six in Europe and the Middle East as well as four in the U.S.
Nordion’s sterilization technologies division also saw its revenues increase, by two per cent year-over-year up to $16.4 million.
A decrease in the price of Molybdenum-99 from Nordion’s largest customer led to a three per cent dip in revenues, year-over-year, for the medical isotopes division. That stream accumulated $25.2 million this quarter.
Partially offsetting that decline was the shutdown of the primary reactor in Europe that usually supplies Nordion’s competitors. The company expects a decline in the mid-teen percentage range for the medical isotope division in fiscal 2013 – an improvement from the 20 per cent decline Nordion originally projected.
“I am pleased with our first quarter results,” Mr. West said. “Nordion remains a strong brand in the global healthcare marketplace, but we still have work to do.”
Highlights from the quarter included Nordion entering into an $80 million amended and restated senior secured credit facility agreement with the Toronto-Dominion bank and a group of other financial institutions.The results follow a dismal end to Nordion’s fiscal 2012 year, when the firm racked up a fourth-quarter loss of $28.9 million, a significant portion of which came from its arbitration and litigation fees incurred throughout the year during its legal battle with Atomic Energy of Canada Ltd.
The arbitration decision in September, which ruled against Nordion by a two-to-one margin, ended part of the three-year fight over the MAPLE nuclear reactors that AECL decided to mothball, citing a design flaw that Nordion argued was manageable.
But Nordion is still pursuing damages from the nuclear energy company – albeit 85 per cent less than it was originally seeking, in the amount of $243.5 million.
The local firm may also be on the hook for part of the $46 million in arbitration fees claimed by AECL. A decision on the matter will likely be made in the second quarter of fiscal 2013.
More to come...