Full Press Release Details
Repligen Reports Fourth Quarter 2017 Financial Results, Provides Guidance for 2018
- Revenue for 2017 increased by 35% to $141.2 million (36% at constant currency) -
- GAAP EPS for 2017 more than doubled to $0.72, including a positive $0.24 impact of U.S. tax reform -
- Spectrum outperforms on revenue guidance for first 5 months of ownership -
WALTHAM, MA February 22, 2018 Repligen Corporation (NASDAQ:RGEN), a life sciences company focused on bioprocessing
technology leadership, today reported financial results for its fourth quarter and year ended December 31, 2017. Provided in this press release are financial highlights for these periods, our financial guidance for the year 2018 and access
information for today s webcast and conference call.
Tony J. Hunt, President and Chief Executive Officer said, Overall, 2017 was another
outstanding year for the company; we delivered above-industry average organic revenue growth of 9%, driven by 19% organic growth for our direct-to-customer products in
filtration and chromatography. Through the year, we invested in our operations, we significantly expanded our filtration product portfolio through the acquisition of Spectrum, and we increased our commercial presence around the globe. Our direct
sales jumped to over 60% of total revenue in 2017 and we expect direct sales to reach over 70% of total revenue in 2018. We finished the year strong, with an outstanding quarter in terms of revenue growth, order demand and margin expansion. Our
bioprocessing diversification and technology leadership strategy has truly taken hold and we are enthusiastic about the opportunities we see to continue building value for our customers and shareholders.
Fourth Quarter 2017 Snapshot
Full Year 2017 Snapshot
Financial Details for the Fourth Quarter and Full Year 2017
GROSS PROFIT and GROSS
and OPERATING MARGIN
All reconciliations of GAAP to adjusted (non-GAAP) figures above, as well as EBITDA to adjusted EBITDA, are detailed
in the reconciliation tables included later in this press release.
In 2017, we modified our non-GAAP reporting to exclude certain expenses
that were not excluded during 2016. Throughout 2017 and including in this release, we are providing updated GAAP to non-GAAP reconciliation tables to exclude the following in both 2017 and 2016: intangible
amortization, the tax effect of intangible amortization and inventory step-up charges.
Financial Guidance for
Based on our current projections, we are providing financial guidance for the year 2018. This guidance is based on expectations for our existing
business and does not include the financial impact of potential new acquisitions or future fluctuations in foreign currency exchange rates.
for 2018 includes the first full year of sales following our acquisition of Spectrum on August 1, 2017.
Our non-GAAP guidance for the year 2018
excludes the following items:
Our non-GAAP guidance for the year 2018 includes:
All reconciliations of GAAP to adjusted (non-GAAP) guidance are detailed in the tables included later in this press
Repligen will host a conference call and webcast today, February 22, 2018, at 8:30 a.m. EST, to discuss fourth quarter and full year 2017 financial
results and corporate developments. The conference call will be accessible by dialing toll-free (866) 777-2509 for domestic callers or (412) 317-5413 for international
callers. No passcode is required for the live call. In addition, a webcast will be accessible via the Investor Relations section of the Company s website. Both the conference call and webcast will be archived for a period of time following the
live event. The replay dial-in numbers are (877) 344-7529 from the U.S., (855)-669-9658
from Canada and (412) 317-0088 for international callers. Replay listeners must provide the passcode 10117070.
Non-GAAP Measures of Financial Performance
To supplement our financial statements, which are presented on the basis of U.S. generally accepted accounting principles (GAAP), the following non-GAAP measures of financial performance are included in this release: revenue growth rate at constant currency, adjusted gross profit and adjusted gross margin, adjusted income from operations and adjusted
operating margin, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA, adjusted net income, adjusted other expense, adjusted income tax benefit and adjusted earnings per diluted share (EPS). The Company provides
revenue growth rates in constant currency to exclude the impact of foreign currency translation in order to facilitate a comparison of its current revenue performance to its past revenue performance. To calculate revenue growth rates in constant
currency, the Company converts actual net sales from local currency to U.S. dollars using constant foreign currency exchange rates in the current and prior period.
The Company s non-GAAP financial results and/or non-GAAP guidance exclude
the impact of: contingent consideration related to the Company s June 2014 asset purchase agreement with Refine Technology (Refine contingent consideration was triggered by the achievement of annual XCell ATF system sales milestones
through the year 2016) and its April 2016 acquisition of Atoll GmbH, acquisition costs related to the Company s acquisitions of Atoll GmbH, TangenX Technology Corporation, and Spectrum Lifesciences, LLC (formerly known as Spectrum, Inc.,
inventory step-up charges related to the acquisition of Spectrum, intangible amortization costs, non-cash interest expense, and in the case of EBITDA, cash interest
expense related to the Company s May 2016 convertible debt issuance. Also excluded are tax benefits associated with valuation allowances on deferred tax assets, the impact on tax of intangible amortization, tax benefits associated with variable
integration expenses and tax benefits associated with tax reform. These costs are excluded because management believes that such expenses do not have a direct correlation to future business operations, nor do the resulting charges recorded
accurately reflect the performance of our ongoing operations for the period in which such charges are recorded.
A reconciliation of GAAP to adjusted non-GAAP financial measures is included as an attachment to this press release. When analyzing the Company s operating performance and guidance investors should not consider
non-GAAP measures as substitutable for the comparable financial measures prepared in accordance with GAAP.
About Repligen Corporation
Repligen Corporation
(NASDAQ:RGEN) is a global bioprocessing company that develops and commercializes highly innovative products that deliver cost and process efficiencies to biological drug manufacturers worldwide. Our portfolio includes protein products (Protein A
affinity ligands, cell culture
growth factors), chromatography products (OPUS pre-packed columns, chromatography resins, ELISA
kits) and filtration products (including XCell ATF systems, TangenX Sius flat sheet TFF cassettes, and Spectrum KrosFlo hollow fiber TFF cartridges and systems). The Protein A ligands and growth factor products that we
produce are essential components of Protein A affinity resins and cell culture media, respectively. Protein A affinity resins are the industry standard for downstream separation and purification of monoclonal antibody-based therapeutics. Our growth
factors are used in upstream processes to accelerate cell growth and productivity in a bioreactor. Our innovative line of OPUS chromatography columns, used in downstream processes for
bench-scale through clinical-scale purification needs, are delivered pre-packed to our customers with their choice of resin. Our XCell ATF Systems, available in stainless steel and single-use configurations, are used upstream to continuously eliminate waste from a bioreactor, to concentrate cells and increase product yield. Single-use Sius TFF
cassettes and hardware are used for biologic drug concentration in downstream filtration processes. Spectrum KrosFlo TFF cartridges and systems are used in both upstream and downstream filtration processes. Repligen s corporate
headquarters are in Waltham, MA (USA), with additional administrative and manufacturing operations in Shrewsbury, MA, Rancho Dominguez, CA, Lund, Sweden and Ravensburg, Germany.
The following constitutes a Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: This press release contains
forward-looking statements, which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that
statements in this press release which are not strictly historical statements, including, without limitation, express or implied statements or guidance regarding current or future financial performance and position, including cash and investment
position, the potential impairment of future earnings, the expected performance of the Spectrum business or our integration of Spectrum, management s strategy, plans and objectives for future operations or acquisitions, product development and
sales, selling, general and administrative expenditures, intellectual property, development and manufacturing plans, availability of materials and product and adequacy of capital resources and financing plans constitute forward-looking statements
identified by words like believe, expect, may, will, should, seek, anticipate, or could and similar expressions. Such forward-looking statements are
subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including, without limitation, risks associated with: our ability to successfully grow our bioprocessing business, including
as a result of acquisition, commercialization or partnership opportunities; our ability to develop and commercialize products and the market acceptance of our products; reduced demand for our products that adversely impacts our future revenues, cash
flows, results of operations and financial condition; our ability to compete with larger, better financed bioprocessing, pharmaceutical and biotechnology companies; our compliance with all Food and Drug Administration and EMEA regulations; our
volatile stock price; and other risks detailed in Repligen s most recent Annual Report on Form 10-K on file with the Securities and Exchange Commission and the other reports that Repligen periodically
files with the Securities and Exchange Commission. Actual results may differ materially from those Repligen contemplated by these forward-looking statements. These forward looking statements reflect management s current views and Repligen does
not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date hereof except as required by law.
Senior Director Investor Relations
REPLIGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| (unaudited) | ||||||||||||||||
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| (in thousands, except share and per share data) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Revenue: | ||||||||||||||||
| Product revenue | $ | 41,572 | $ | 25,499 | $ | 141,089 | $ | 104,441 | ||||||||
| Royalty and other revenue | 39 | 100 | 147 | 100 | ||||||||||||
| Total revenue | 41,611 | 25,599 | 141,236 | 104,541 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of product revenue | 19,137 | 12,162 | 67,050 | 47,117 | ||||||||||||
| Research and development | 3,068 | 2,040 | 8,672 | 7,355 | ||||||||||||
| Selling, general and administrative | 16,145 | 8,567 | 51,509 | 30,853 | ||||||||||||
| Contingent consideration - fair value adjustments | (75 | ) | 3,242 | |||||||||||||
| 38,350 | 22,694 | 127,231 | 88,567 | |||||||||||||
| Income from operations | 3,261 | 2,905 | 14,005 | 15,974 | ||||||||||||
| Investment income | 63 | 112 | 371 | 346 | ||||||||||||
| Interest expense | (1,637 | ) | (1,570 | ) | (6,441 | ) | (3,768 | ) | ||||||||
| Other (expense) income | (138 | ) | 119 | (687 | ) | (860 | ) | |||||||||
| Income before income taxes | 1,549 | 1,566 | 7,248 | 11,692 | ||||||||||||
| Income tax (benefit) provision | (10,629 | ) | (3,463 | ) | (21,105 | ) | 11 | |||||||||
| Net income | $ | 12,178 | $ | 5,029 | $ | 28,353 | $ | 11,681 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.28 | $ | 0.15 | $ | 0.74 | $ | 0.35 | ||||||||
| Diluted | $ | 0.27 | $ | 0.15 | $ | 0.72 | $ | 0.34 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 43,568,706 | 33,833,287 | 38,233,527 | 33,572,883 | ||||||||||||
| Diluted | 44,385,472 | 34,368,769 | 39,150,374 | 34,098,898 |
| December 31, 2017 | December 31, 2016 | |||||||
| Balance Sheet Data: | ||||||||
| Cash, cash equivalents and marketable securities | $ | 173,759 | $ | 141,780 | ||||
| Working capital | 217,571 | 163,078 | ||||||
| Total assets | 743,464 | 288,913 | ||||||
| Long-term obligations | 126,760 | 99,074 | ||||||
| Accumulated deficit | (31,508 | ) | (59,861 | ) | ||||
| Stockholders equity | 591,548 | 168,764 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO NON-GAAP (ADJUSTED) INCOME FROM OPERATIONS
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| (in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| GAAP INCOME (LOSS) FROM OPERATIONS | $ | 3,261 | $ | 2,905 | $ | 14,005 | $ | 15,974 | ||||||||
| ADJUSTMENTS TO INCOME (LOSS) FROM OPERATIONS: | ||||||||||||||||
| Acquisition and integration costs | 1,354 | 952 | 7,519 | 2,214 | ||||||||||||
| Inventory step-up charges | 1,096 | 59 | 3,816 | 59 | ||||||||||||
| Intangible amortization | 2,739 | 568 | 6,215 | 2,052 | ||||||||||||
| Contingent consideration - fair value adjustments | (75 | ) | 3,242 | |||||||||||||
| ADJUSTED INCOME FROM OPERATIONS | $ | 8,450 | $ | 4,409 | $ | 31,555 | $ | 23,541 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP (ADJUSTED) NET INCOME
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| (in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| GAAP NET INCOME | $ | 12,178 | $ | 5,029 | $ | 28,353 | $ | 11,681 | ||||||||
| ADJUSTMENTS TO NET INCOME: | ||||||||||||||||
| Acquisition and integration costs | 1,354 | 952 | 7,519 | 2,214 | ||||||||||||
| Inventory step-up charges | 1,096 | 59 | 3,816 | 59 | ||||||||||||
| Contingent consideration - fair value adjustments | (75 | ) | 3,242 | |||||||||||||
| Intangible amortization | 2,739 | 568 | 6,215 | 2,052 | ||||||||||||
| Non-cash interest expense | 1,019 | 954 | 3,977 | 2,274 | ||||||||||||
| Tax effect of intangible amortization and acquisition costs | (101 | ) | (102 | ) | (882 | ) | (415 | ) | ||||||||
| Release of valuation allowance on deferred tax assets | (4,269 | ) | (12,236 | ) | (4,269 | ) | ||||||||||
| Net impact of tax reform legislation | (9,586 | ) | (9,586 | ) | ||||||||||||
| ADJUSTED NET INCOME | $ | 8,699 | $ | 3,116 | $ | 27,176 | $ | 16,838 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME PER SHARE TO NON-GAAP (ADJUSTED) NET INCOME PER SHARE
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| GAAP NET INCOME PER SHARE - DILUTED | $ | 0.27 | $ | 0.15 | $ | 0.72 | $ | 0.34 | ||||||||
| ADJUSTMENTS TO NET INCOME PER SHARE - DILUTED: | ||||||||||||||||
| Acquisition and integration costs | 0.03 | 0.03 | 0.19 | 0.06 | ||||||||||||
| Inventory step-up charges | 0.02 | 0.00 | 0.10 | 0.00 | ||||||||||||
| Contingent consideration - fair value adjustments | (0.00 | ) | 0.10 | |||||||||||||
| Intangible amortization | 0.06 | 0.02 | 0.16 | 0.06 | ||||||||||||
| Non-cash interest expense | 0.02 | 0.03 | 0.10 | 0.07 | ||||||||||||
| Tax effect of intangible amortization and acquisition costs | (0.00 | ) | (0.00 | ) | (0.02 | ) | (0.01 | ) | ||||||||
| Release of valuation allowance on deferred tax assets | (0.12 | ) | (0.31 | ) | (0.13 | ) | ||||||||||
| Net impact of tax reform legislation | (0.22 | ) | (0.24 | ) | ||||||||||||
| ADJUSTED NET INCOME PER SHARE - DILUTED | 0.20 | $ | 0.09 | $ | 0.69 | $ | 0.49 |
Totals may not add due to rounding.
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| (in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| GAAP NET INCOME | $ | 12,178 | $ | 5,029 | $ | 28,353 | $ | 11,681 | ||||||||
| ADJUSTMENTS: | ||||||||||||||||
| Investment Income | (63 | ) | (112 | ) | (371 | ) | (346 | ) | ||||||||
| Interest Expense | 1,637 | 1,570 | 6,441 | 3,768 | ||||||||||||
| Tax Provision | (10,629 | ) | (3,463 | ) | (21,105 | ) | 11 | |||||||||
| Depreciation | 1,250 | 910 | 4,237 | 3,269 | ||||||||||||
| Amortization | 2,739 | 568 | 6,215 | 2,052 | ||||||||||||
| EBITDA | 7,112 | 4,502 | 23,770 | 20,435 | ||||||||||||
| OTHER ADJUSTMENTS: | ||||||||||||||||
| Acquisition and integration costs | 1,354 | 952 | 7,519 | 2,214 | ||||||||||||
| Inventory step-up charges | 1,096 | 59 | 3,816 | 59 | ||||||||||||
| Contingent consideration - fair value adjustments | (75 | ) | 3,242 | |||||||||||||
| ADJUSTED EBITDA | $ | 9,562 | $ | 5,438 | $ | 35,105 | $ | 25,950 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME GUIDANCE TO ADJUSTED (NON-GAAP NET INCOME GUIDANCE)
| Twelve months ending December 31, 2018 | ||||||||
| (in thousands) | Low End | High End | ||||||
| GUIDANCE ON NET INCOME | $ | 14,000 | $ | 15,500 | ||||
| ADJUSTMENTS TO GUIDANCE ON NET INCOME: | ||||||||
| Acquisition and integration costs | 2,748 | 2,748 | ||||||
| Anticipated pre-tax amortization of acquisition-related intangible assets | 10,744 | 10,744 | ||||||
| Non-cash interest expense | 4,249 | 4,249 | ||||||
| Tax effect of intangible amortization and integration | (1,230 | ) | (1,230 | ) | ||||
| Guidance rounding adjustment | (11 | ) | (11 | ) | ||||
| GUIDANCE ON ADJUSTED NET INCOME | $ | 30,500 | $ | 32,000 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME PER SHARE GUIDANCE TO
ADJUSTED (NON-GAAP) NET INCOME PER SHARE GUIDANCE
| Twelve months ending December 31, 2018 | ||||||||
| Low End | High End | |||||||
| GUIDANCE ON NET INCOME | $ | 0.31 | $ | 0.35 | ||||
| ADJUSTMENTS TO GUIDANCE ON NET INCOME: | ||||||||
| Acquisition and integration costs | $ | 0.06 | $ | 0.06 | ||||
| Anticipated pre-tax amortization of acquisition-related intangible assets | $ | 0.24 | $ | 0.24 | ||||
| Non-cash interest expense | $ | 0.10 | $ | 0.10 | ||||
| Tax effect of intangible amortization and integration | ($ | 0.03 | ) | ($ | 0.03 | ) | ||
| Guidance rounding adjustment | ($ | 0.00 | ) | ($ | 0.00 | ) | ||
| GUIDANCE ON ADJUSTED NET INCOME | $ | 0.68 | $ | 0.72 |
Totals may not add due to rounding.