Nordion Earnings Call Insights: Strategic Review and the Cobalt-60 Supply Chain

Nordion, Inc. (NYSE:NDZ) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Strategic Review

Stephanie Price – CIBC: On the strategic review, can you give us a bit more of an understanding of where you are in the process and if you have any indications of interest from any parties?

Steve M. West – Chief Executive Officer: No, unfortunately as we said in our press release and as I reiterated in my comments this morning, we are in the early stages and I think it will be inappropriate for us to make any further comments, and we frankly don’t intend to be providing any updates until we’ll be making any kind of material disclosure.

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Stephanie Price – CIBC: Maybe just a quick follow-up do you have any sort of timeline for the process?

Steve M. West – Chief Executive Officer: It’s in its early stages and that’s where it sits right now.

The Cobalt-60 Supply Chain

Lennox Gibbs – TD Newcrest: Just with respect to the Cobalt-60 supply chain, where (indiscernible) recently shut down permanently and there seemed to be plans for extensive shutdowns Bruce and Pickering, what risk do these disruptions create with respect to your ability to sustain historic output in over the short medium, long-term?

Steve M. West – Chief Executive Officer: I guess the first way I think about that is, you kind of alluded to planned shutdowns and they are not really disruptions. I think we have always very good line of sight to our supplier providers in their plans, which is very helpful because it enables us to plan in the long-term as well. So, it’s always a measured planning process for us. We’re also looking balancing supply and demand, and as you know this business has very long time lines attached to either bringing on new supply or even in terms of the customer demand. So, we are always in discussion we always continue to evaluate the inherent risk to the supply and I would say at this moment in time we are continuing to evaluate that. There is nothing that we see that I would impacting certainly in the short term and this is something we’ve been managing for 40 odd years and we continue to evaluate CANDU supply both in Canada, supply in Russia and other opportunities.

Lennox Gibbs – TD Newcrest: What about the medium term Steve, let’s say you were talking three, four years out would you still say that you don’t see much risk to being able to sustain historic output?

Steve M. West – Chief Executive Officer: I think, if I were to look at that time frame Lennox I think we are little more focused on demand as being more of managing business than we would be in a specific supplier situation. That’s where I would kind of look at in terms of any variants, we just need to make sure that there is good strong global demand and as far as we know the current capacity globally ourselves and others in this business isn’t likely to change materially. And I think that’s how the market perceives the situation as well.