Nordion Reports Second Quarter Fiscal 2013 Financial Results

  Nordion Reports Second Quarter Fiscal 2013 Financial Results

Business Wire

OTTAWA, Ontario -- June 5, 2013

Nordion Inc.(TSX: NDN) (NYSE: NDZ):

  *Revenue of $56.1 million in Q2 2013, an increase of 12% over Q2 2012
  *Adjusted loss per share, excluding specified items, of $0.03 in Q2 2013,
    down from adjusted earnings per share of $0.08 in Q2 2012. GAAP EPS of
    $0.01 in Q2 2013 versus $0.05 EPS in Q2 2012
  *Agreement signed on May 23, 2013 to divest the Targeted Therapies business
    to BTG plc (BTG) for a cash purchase price of $200 million

Nordion reports in U.S. dollars unless otherwise specified

Nordion Inc. (TSX: NDN) (NYSE: NDZ), a leading provider of products and
services to the global health science market, today reported results for the
second quarter of fiscal 2013. The Company generated $56.1  million in revenue
for the second quarter fiscal 2013, an increase of $6.1 million, or 12%, over
revenue of $50.0 million for the same period in fiscal 2012.

Excluding the specified items shown on the attached non-GAAP reconciliation
table, adjusted net loss for the second quarter decreased to $1.8 million from
adjusted net income of $4.8 million during the same period in the previous
fiscal year. Nordion had GAAP net income of $0.7  million in second quarter
fiscal 2013, which decreased by $2.5  million from GAAP net income of $3.2 
million in the second quarter fiscal 2012.

Second quarter fiscal 2013 adjusted non-GAAP loss per share decreased to $0.03
compared with $0.08 non-GAAP earnings per share (EPS) in the second quarter of
2012. GAAP EPS was $0.01  in the second quarter of 2013 versus $0.05  EPS in
the same period last year.

“Nordion’s second quarter results were within our expectations across all
three businesses,” said Mr. Steve West, Chief Executive Officer, Nordion Inc.
“We also made progress on our strategic review, reaching an agreement to
divest the Targeted Therapies business to BTG, which we believe unlocks value
for our shareholders and leaves us with a focused specialty isotopes business
going forward.”

Consolidated Financial Results

GAAP

         Three months ended April 30           Six months ended April 30
(thousands of
U.S. dollars,      2013    2012    %         2013     2012     %
except when                            Change                           Change
noted)
Revenues          $ 56,089  50,013  12%      $ 109,753  103,028  7%
                                                                        
Gross margin         53%      51%      2%           53%       51%       2%
                                                                        
Net income         $ 731      3,221    (77%)      $ 462       2,334     (80%)
                                                                        
Diluted earnings   $ 0.01     0.05     (80%)      $ 0.01      0.04      (75%)
per share
                                                                        
Cash and cash      $ 81,534   77,800   5%         $ 81,534    77,800    5%
equivalents
                                                                        
Weighted average
number of
Common shares
outstanding        61,909  61,981  -         61,909   62,114   -
diluted
(thousands of
shares)

Non-GAAP^1

           Three months ended April 30           Six months ended April 30
(thousands of U.S.                        %                             %
dollars,              2013     2012   Change   2013    2012    Change
except when noted)
Adjusted net (loss)  $ (1,755)   4,793  (137%)  $ 2,345    11,918  (80%)
income
                                                                        
Adjusted diluted
(loss) earnings per  $ (0.03)  $ 0.08   (138%)  $ 0.04   $ 0.19    (79%)
share

^1 See Non-GAAP reconciliation table at the end of this release

Agreement to Divest Targeted Therapies Business to BTG plc
In May 2013, subsequent to the company’s second fiscal quarter, Nordion
announced that it had entered into an agreement to divest its Targeted
Therapies business to BTG, an international specialist healthcare company
based in London, United Kingdom, for a cash purchase price of $200 million.
Net of cash taxes and transaction costs, Nordion expects to realize
approximately $185 million in cash on closing. Under the terms of the
transaction agreements, BTG is expected to acquire the Targeted Therapies
business and Nordion has agreed to continue manufacturing TheraSphere® under a
Manufacturing and Support Agreement with a contract term of three years, plus
up to a two-year extension at BTG’s option. Approximately 40 Nordion employees
are expected to join BTG following the completion of this transaction.
Subsequent to second fiscal quarter, the company sought consent from our
credit facility lenders for the divestiture of the Targeted Therapies business
to BTG. The closing of this transaction is subject tocustomary closing
conditions and approval by BTG’s shareholders. The transaction is anticipated
to be completed by the end of June 2013.

The decision to divest Targeted Therapies was made as part of Nordion’s
ongoing strategic review with the assistance of the Company’s financial
advisor, Jefferies LLC, as announced on January 28, 2013.

Second Quarter Fiscal 2013 Segment Results

Targeted Therapies
TheraSphere® revenue for second quarter fiscal 2013 of $13.2 million increased
by $0.8 million or 6%, compared with second quarter fiscal 2012.

TheraSphere segment earnings of $1.1 million in second quarter fiscal 2013
decreased $2.8 million or 72%, compared with second quarter fiscal 2012
primarily as a result of the Company’s increased expenses on TheraSphere ^
sales and marketing, increased clinical trial expenses, and an increase in
general and administrative costs required to support the growth of the
TheraSphere product.

Sterilization Technologies
Sterilization Technologies revenue for second quarter fiscal 2013 of $20.2
million increased by $5.4 million or 36%, compared with second quarter fiscal
2012. Revenue from Cobalt of $20.1 million in second quarter fiscal 2013
increased by $6.2 million or 45% due to quarterly variability of timing of
shipments to our customers and the relative difference in mix of customers in
each respective period.

Sterilization-Other revenue of $0.1 million decreased by $0.9 million or 90%
in second quarter fiscal 2013, compared with second quarter fiscal 2012
primarily due to a decrease in production irradiator refurbishments.

Sterilization Technologies segment earnings of $6.4 million increased $2.9
million or 83% in second quarter fiscal 2013 compared with second quarter
fiscal 2012 mainly due to higher Cobalt revenue, partially offset by higher
selling, general and administrative costs.

Medical Isotopes
Medical Isotopes revenue for second quarter fiscal 2013 of $22.7 million was
unchanged compared with second quarter fiscal 2012. Reactor isotopes revenue
of $17.2 million was relatively flat compared with the same period in fiscal
2012.

The primary reactor in Europe, used to supply certain of the Company’s segment
competitors, has been shut down since November 2012 with a restart planned
during June 2013, as indicated by the reactor’s operator. Based on potential
additional orders resulting from this shutdown, the Company forecasts a
mitigated decline in fiscal 2013 Medical Isotopes revenue of approximately
10%, excluding the potential impact of TheraSphere contract manufacturing,
compared with an original annual forecast decline of 20% from fiscal 2012
revenue.

On May 16, 2013, Nordion’s primary supplier of medical isotopes, AECL,
reported that the NRU reactor at Chalk River, Ontario, returned to service
from its planned maintenance shutdown. Initiated on April 14, 2013, the one
month shutdown resulted in an interruption in Nordion’s supply of medical
isotopes during the second and third quarters in fiscal 2013. Nordion’s
production and sales resumed as expected and planned Molybdenum-99 shipments
began the week of May 19, 2013.

Cyclotron isotopes revenues were higher by 6% for second quarter fiscal 2013
compared to the same period in fiscal 2012 primarily due to Strontium-82
sales, which began in April 2013. Contract manufacturing revenues decreased
11% in second quarter fiscal 2013, compared with the same period in the prior
year.

Medical Isotopes segment earnings of $5.2 million in second quarter fiscal
2013 decreased $0.7 million or 12%, compared with second quarter fiscal 2012
mainly due to an increase in selling, general and administrative costs, which
included an increase in annual incentive costs and pension expense.

Corporate and Other
The Corporate and Other segment incurred a loss of $2.2 million in second
quarter fiscal 2013, representing a decrease of $0.6 million or 21%, compared
with the second quarter fiscal 2012 primarily due to foreign exchange gains.

A full copy of Nordion’s second quarter fiscal 2013 Management’s Discussion
and Analysis and the financial statements and notes can be downloaded at
www.nordion.com/investors.

Conference Call
Nordion will hold a conference call on Thursday, June 6, 2013 at 10:00 am ET
to discuss its second quarter fiscal 2013 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. Interested parties may access the
live webcast of the conference call from the Nordion website at
www.nordion.com. Participants will need to register for this call and provide
their full name, company name, phone number and email address to obtain the
conference call coordinates. Registered participants will join the call using
the coordinates (phone number, passcode, & personal PIN) provided during the
registration process. Please advise your participants to print the coordinates
when registering.The Self Registration URL link is as follows:

http://selfreg6.bellconferia.ca/webportal3/reg.html?Acc=1790302020&Conf=125106

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 targeted therapies,
sterilization technologies, and medical isotopes 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
approximately 500 highly skilled employees worldwide. Find out more at
www.nordion.com and follow us at twitter.com/NordionInc.

Caution Concerning Forward-Looking Statements
This release  contains 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. 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. In addition, this release contains "forward-looking statements"
relating to a proposed transaction. The timing and completion of the proposed
transaction is subject to many conditions, risks and uncertainties, including
without limitation closing conditions, and there can be no assurance that the
proposed transaction will occur, or that it will occur on the terms and
conditions currently contemplated by the Nordion and its management. The
proposed transaction could be modified, restructured or terminated.
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 2012 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 as  the risk factors which are described in section 5
of our 2012 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 forward-looking statements contained in this news release are
made as of the date of this release and, accordingly, are subject to change
after such date. 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. Additionally, we undertake no obligation to comment on
expectations of, or statements made by, third parties in respect of the
proposed transaction.

Non-GAAP Information
To supplement the financial measures prepared in accordance with generally
accepted accounting principles (GAAP), the company uses non-GAAP financial
measures such as adjusted net income and adjusted earnings per share. Non-GAAP
financial measures exclude certain items, such as restructuring charges and
recovery, change in fair value of embedded derivatives, AECL arbitration and
legal fees, loss and gains on sales of investments, loss or gains on
discontinued operations, and tax effects on adjusted items. Management uses
non-GAAP financial measures internally for strategic decision making,
forecasting future results and evaluating current performance. By disclosing
non-GAAP financial measures, management intends to provide investors with a
meaningful, consistent comparison of the company's core operating results and
trends for the periods presented. Non-GAAP financial measures are not prepared
in accordance with GAAP. Therefore, the information is not necessarily
comparable to other companies and should be considered as a supplement to, not
a substitute for, or superior to, the corresponding measures calculated in
accordance with GAAP.

Segment Financial Results (with reconciliation to net income)

             Three months ended April 30         Six month ended April 30
(thousands of
U.S. dollars,                             %                                    %
except per      2013       2012     Change    2013       2012     Change
share
amounts)
Revenues                                                     
Targeted      $  13,150   $  12,392   6%      $  25,188   $  23,404   8%
Therapies
Sterilization     20,194        14,842    36%          36,624        30,978    18%
Technologies
Medical         22,745     22,779   -         47,941     48,646   (1%)
Isotopes
Consolidated
segment
revenues from $  56,089   $  50,013   12%     $  109,753  $  103,028  7%
continuing
operations
                                                                               
Segment
earnings
(loss)
Targeted      $   1,062     $   3,820     (72%)    $   2,492     $   6,933     (64%)
Therapies
Sterilization     6,415         3,504     83%          9,931         7,958     25%
Technologies
Medical           5,174         5,905     (12%)        12,113        13,616    (11%)
Isotopes
Corporate and   (2,210)    (2,815)  (21%)     (5,027)    (4,730)  6%
Other
Total segment $  10,441   $  10,414   -       $  19,509   $  23,777   (18%)
earnings
                                                                               
Depreciation
and               3,054         5,158     (41%)        6,334         10,338    (39%)
amortization
Restructuring     41            (5)       920%         52            (653)     108%
charges, net
AECL
arbitration
and legal         131           1,941     (93%)        633           3,819     (83%)

costs
Litigation
settlement        1,300         -         100%         1,300         -         100%
loss
Pension
settlement        -             -         -            7,003         -         100%
loss
Loss on
Celerion note     -             -         -            218           2,411     (91%)

receivable
Recovery from
previously
                  (814)         -         (100%)       (814)         -         (100%)
written off
investments
Internal
investigation     4,510         -         100%         8,634         -         100%
costs
Strategic         616           -         100%         616           -         100%
review costs
Change in
fair value of
                493        171      188%      206        6,425    (97%)
embedded
derivatives
Operating     $  1,110    $  3,149    (65%)   $  (4,673)  $  1,437    (425%)
income (loss)
                                                                               
Net interest      110           376       (71%)        638           983       (35%)
income
Income tax
(expense)       (489)      (304)    61%       4,497      (86)     5329%
recovery
Net income    $  731      $  3,221    (77%)   $  462      $  2,334    (80%)

Non-GAAP Reconciliation

       Three months ended April 30                Six months ended April 30
(thousands of
U.S. dollars,                              %                                     %
except per       2013       2012    Change    2013        2012     Change
share
amounts)
Net income     $  731      $  3,221   (77%)   $  462       $  2,334    (80%)
Adjusted for
specified
items:
Restructuring       41            (5)      920%         52             (653)     108%
charges, net
Change in
fair value of
embedded            493           171      188%         206            6,425     (96%)

derivatives
AECL
arbitration         131           1,941    (93%)        633            3,819     (83%)
and legal
fees
Internal
investigation       4,510         -        100%         8,634          -         100%
costs
Loss on
Celerion note       -             -        -            218            2,411     (91%)
receivable
Pension
settlement          -             -        -            7,003          -         100%
loss
Litigation
settlement          1,300         -        100%         1,300          -         100%
loss
Strategic           616           -        100%         616            -         100%
review costs
Recovery from
previously
written off         (814)         -        (100%)       (814)          -         (100%)

investments
Tax effect on
specified           (1,690)       (535)    (216%)       (4,597)        (2,418)   (90%)
items listed
above
Change in
reserve for         (4,805)       -        (100%)       (12,906)       -         (100%)
uncertain tax
positions
Valuation
allowance on     (2,268)    -       (100%)    1,538       -        100%
deferred tax
assets
Adjusted net   $  (1,755)  $  4,793   (137%)  $  2,345     $  11,918   (80%)
(loss) income
                                                                                        
Diluted
earnings per        0.01          0.05     (80%)        0.01           0.04      (75%)
share
Adjusted
diluted
(loss)              (0.03)        0.08     (138%)       0.04           0.19      (79%)
earnings per
share
Weighted
average
number of
Common

shares           61,909     61,981  -         61,909      62,114   -
outstanding –
diluted
(thousands

of shares)

CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION                                        April 30   October 31

[UNAUDITED]
(thousands of U.S. dollars, except share        2013       2012
amounts)
ASSETS                                                        
Current assets
Cash and cash equivalents                      $   81,534      $   109,360
Accounts receivable                                29,237          46,488
Notes receivable                                   3,970           4,004
Inventories                                        47,329          33,977
Income taxes recoverable                           17,168          23,951
Current portion of deferred tax assets             4,057           4,141
Other current assets                            3,584        2,042
Total current assets                               186,879         223,963
                                                                             
Restricted cash                                    39,422          3,906
Property, plant and equipment, net                 82,013          88,217
Deferred tax assets                                47,629          52,855
Long-term investments                              1,450           1,450
Other long-term assets                          50,928       58,190
Total assets                                  $  408,321    $  428,581
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable                               $   22,695      $   18,783
Accrued liabilities                                62,796          80,322
Income taxes payable                               2,408           9,494
Current portion of long-term debt                  4,108           4,190
Current portion of deferred revenue             617          1,500
Total current liabilities                          92,624          114,289
                                                                             
Long-term debt                                     38,252          39,141
Deferred revenue                                   1,396           1,958
Long-term income taxes payable                     3,941           3,960
Other long-term liabilities                     71,654       74,468
Total liabilities                               207,867      233,816
                                                                             
Shareholders’ equity
Common shares at par – Authorized shares:
unlimited; Issued and outstanding shares:          252,168         252,168
61,909,101
Additional paid-in capital                         85,558          84,726
Accumulated deficit                                (265,012)       (265,474)
Accumulated other comprehensive income          127,740      123,345
Total shareholders’ equity                      200,454      194,765
Total liabilities and shareholders’ equity    $  408,321    $  428,581

Please refer to the complete set of Consolidated Financial Statements for Q2
2013

CONSOLIDATED
STATEMENTS OF          Three months ended        Six months ended
OPERATIONS
[UNAUDITED]            April 30                  April 30
(thousands of U.S.
dollars, except per      2013      2012       2013     2012
share amounts)
Revenues               $  56,089  $  50,013   $  109,753  $  103,028
Costs and expenses                                            
Direct cost of              26,157       24,586        52,016        50,044
revenues
Selling, general and        23,091       14,581        44,324        30,626
administration
Depreciation and            3,054        5,158         6,334         10,338
amortization
Restructuring               41           (5)           52            (653)
(recovery) charges
Change in fair value
of embedded                 493          171           206           6,425
derivatives
Other expenses, net      2,143     2,373      11,494     4,811
Total costs and          54,979    46,864     114,426    101,591
expenses
Operating income            1,110        3,149         (4,673)       1,437
(loss)
Interest expense            (893)        (1,119)       (2,216)       (2,292)
Interest income          1,003     1,495      2,854      3,275
Income (loss) before        1,220        3,525         (4,035)       2,420
income taxes
Income tax expense       489       304        (4,497)    86
(recovery)
Net income             $  731     $  3,221    $  462      $  2,334
                                                                             
Basic and diluted      $  0.01    $  0.05     $  0.01     $  0.04
earnings per share

Please refer to the complete set of Consolidated Financial Statements for Q2
2013

CONSOLIDATED
STATEMENTS OF CASH   Three months ended           Six months ended
FLOWS                                          
                     April 30                     April 30
[UNAUDITED]
(thousands of U.S.    2013      2012           2013      2012
dollars)
Operating                                                   
activities
Net income           $   731        $   3,221     $   462        $   2,334
Adjustments to
reconcile net
income to cash
(used in) provided
by operating
activities:
Items not
affecting current        4,336          5,928         17,145         13,932
cash flows
Changes in
operating assets      (10,164)    4,695      (8,592)     6,963
and liabilities
Cash (used in)
provided by           (5,097)     13,844     9,015       23,229
operating
activities
Investing
activities
Purchase of
property, plant          (855)          (2,345)       (953)          (4,656)
and equipment
Decrease
(increase) in         832         166        (35,327)    466
restricted cash
Cash used in
investing             (23)        (2,179)    (36,280)    (4,190)
activities
Financing
activities
Payment of cash          -              (6,198)       -              (12,436)
dividends
Repurchase and
cancellation of       -           -          -           (3,521)
Common shares
Cash used in
financing             -           (6,198)    -           (15,957)
activities
Effect of foreign
exchange rate
changes on cash       (860)       1,167      (561)       651
and cash
equivalents
Net (decrease)
increase in cash
and cash                 (5,980)        6,634         (27,826)       3,733
equivalents during
the period
Cash and cash
equivalents,          87,514      71,166     109,360     74,067
beginning of
period
Cash and cash
equivalents, end    $  81,534    $  77,800   $  81,534    $  77,800
of period

Please refer to the complete set of Consolidated Financial Statements for Q2
2013

Contact:

Nordion Inc.
INVESTORS:
Ana Raman, 613-595-4580
investor.relations@nordion.com
or
MEDIA:
Tamra Benjamin 613-592-3400 x 1022
tamra.benjamin@nordion.com