Full Press Release Details
Repligen Reports Fourth Quarter and Full Year 2018 Financial Results
WALTHAM, MA February 21, 2019 Repligen Corporation (NASDAQ:RGEN), a life sciences company
focused on bioprocessing technology leadership, today reported financial results for its fourth quarter and full year 2018. Provided in this press release are financial highlights for the three- and twelve-month periods ended December 31, 2018,
followed by our current financial guidance for the year 2019, and access information for today s webcast and conference call.
President and Chief Executive Officer said, We are delighted with the way we closed out 2018 with both revenues and orders accelerating in the second half of the year and overall organic growth coming in at 17% for the year and 25% for the
fourth quarter. Our direct products continue to gain broad market acceptance as we focus on improving yield and lowering biologic drug manufacturing costs for our customers. Our team delivered on major programs in 2018: we strengthened our position
in the chromatography and filtration markets through strategic partnerships; we increased our investment in R&D, bringing three key products to market; we completed the integration of Spectrum; and we invested in capacity expansion to stay ahead
of demand. We remain committed to bringing high-impact technologies and solutions to our bioprocessing customers and believe we are well-positioned to deliver another year of above-industry growth in 2019.
Fourth Quarter 2018 Highlights
Full Year 2018 Highlights
Financial Details for the Fourth Quarter and Full Year 2018
GROSS PROFIT and GROSS MARGIN
The operating income, net income, EPS, EBITDA and adjusted EBITDA figures below for the year 2018 include the impact of a $2.3 million upfront payment to
Navigo Proteins GmbH, which was recognized during the second quarter of 2018 as an R&D expense and had a ($0.04) tax-effected impact on EPS.
net income and EPS figures below include the impacts in fiscal year 2017 of valuation allowance reversals driven by our acquisition of Spectrum and benefits related to U.S. tax reform. Combined, these resulted in a positive net impact of $0.22 on
GAAP EPS in the fourth quarter of 2017, and a positive net impact of $0.55 on GAAP EPS for the full year 2017.
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.
Financial Guidance for 2019
Our financial guidance for the year 2019 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.
Our non-GAAP guidance for the year 2019 excludes the following items:
Our non-GAAP guidance for the year 2019 includes:
All reconciliations of GAAP to adjusted (non-GAAP) guidance are detailed in
the tables included later in this press release.
Repligen will host a conference call and webcast today, February 21, 2019, at 8:30 a.m. EST, to discuss fourth quarter and full year 2018 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 10128740.
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 and adjusted earnings per diluted share (EPS). The Company provides organic revenue growth rates in constant currency to
exclude the impact of both foreign currency translation, and the impact of acquisition revenue for current year periods that have no prior year comparable, in order to facilitate a comparison of its current revenue performance to its past revenue
performance. The Company provides revenue growth rates in constant currency 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.
Company s non-GAAP financial results and/or non-GAAP guidance exclude the impact of: acquisition costs related to the Company s acquisition 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 Inc., intangible amortization costs, non-cash interest expense, the impact on tax of intangible amortization, tax benefits associated with variable integration expenses 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, 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
About Repligen Corporation
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, TangenX SIUS TFF and Spectrum KrosFlo TFF filters and systems). The Protein A ligands and growth factor products that we produce are essential components of Protein A affinity resins
used in biologics purification, and cell culture media used to accelerate cell growth in a bioreactor. Our innovative line of OPUS chromatography
columns, used in bench-scale through commercial-scale biologics purification, are delivered pre-packed to our customers with their choice of affinity
resin. Our XCell ATF Systems, available in stainless steel and single-use configurations, are used in perfusion processes to continuously concentrate cells and increase product yield from a bioreactor. Single-use SIUS TFF cassettes and hardware are used for biologic drug concentration in downstream filtration processes. 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, demand in the markets in which we operate, the expected performance of the Spectrum business, the expected performance and success of our strategic partnerships, 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 successfully integrate any acquisitions, 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, amounts in thousands, except share and per share data)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product revenue | $ | 51,849 | $ | 41,572 | $ | 193,891 | $ | 141,089 | ||||||||
| Royalty and other revenue | 93 | 39 | 141 | 147 | ||||||||||||
| Total revenue | 51,942 | 41,611 | 194,032 | 141,236 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of product revenue | 23,014 | 19,137 | 85,953 | 67,050 | ||||||||||||
| Research and development | 3,099 | 3,068 | 15,768 | 8,672 | ||||||||||||
| Selling, general and administrative | 17,976 | 16,145 | 66,323 | 51,509 | ||||||||||||
| 44,089 | 38,350 | 168,044 | 127,231 | |||||||||||||
| Income from operations | 7,853 | 3,261 | 25,988 | 14,005 | ||||||||||||
| Investment income | 644 | 63 | 1,895 | 371 | ||||||||||||
| Interest expense | (1,701 | ) | (1,637 | ) | (6,709 | ) | (6,441 | ) | ||||||||
| Other expense, net | 75 | (138 | ) | 262 | (687 | ) | ||||||||||
| Income before income taxes | 6,871 | 1,549 | 21,436 | 7,248 | ||||||||||||
| Income tax provision (benefit) | 1,233 | (10,629 | ) | 4,819 | (21,105 | ) | ||||||||||
| Net income | $ | 5,638 | $ | 12,178 | $ | 16,617 | $ | 28,353 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.13 | $ | 0.28 | $ | 0.38 | $ | 0.74 | ||||||||
| Diluted | $ | 0.12 | $ | 0.27 | $ | 0.37 | $ | 0.72 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 43,881,151 | 43,568,706 | 43,767,402 | 38,233,527 | ||||||||||||
| Diluted | 46,291,014 | 44,385,472 | 45,471,169 | 39,150,374 |
| December 31, 2018 | December 31, 2017 | |||||||
| Balance Sheet Data: | ||||||||
| Cash, cash equivalents and marketable securities | $ | 193,822 | $ | 173,759 | ||||
| Working capital | 145,695 | 217,571 | ||||||
| Total assets | 770,766 | 743,519 | ||||||
| Long-term obligations | 24,474 | 126,760 | ||||||
| Accumulated deficit | (15,568 | ) | (31,508 | ) | ||||
| Stockholders equity | 615,748 | 591,548 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO NON-GAAP (ADJUSTED) INCOME FROM OPERATIONS
(Unaudited, amounts in thousands)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAAP INCOME FROM OPERATIONS | ||||||||||||||||
| ADJUSTMENTS TO INCOME FROM OPERATIONS: | $ | 7,853 | $ | 3,261 | $ | 25,988 | $ | 14,005 | ||||||||
| Acquisition and integration costs | $ | 615 | 1,354 | $ | 2,928 | 7,519 | ||||||||||
| Inventory step-up charges | $ | 1,096 | $ | 3,816 | ||||||||||||
| Intangible amortization | $ | 2,612 | 2,739 | $ | 10,518 | 6,215 | ||||||||||
| ADJUSTED INCOME FROM OPERATIONS | $ | 11,080 | $ | 8,450 | $ | 39,434 | $ | 31,555 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP (ADJUSTED) NET INCOME
(Unaudited, amounts in thousands)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAAP NET INCOME | $ | 5,638 | $ | 12,178 | $ | 16,617 | $ | 28,353 | ||||||||
| ADJUSTMENTS TO NET INCOME: | ||||||||||||||||
| Acquisition and integration costs | 615 | 1,354 | 2,928 | 7,519 | ||||||||||||
| Inventory step-up charges | 1,096 | 3,816 | ||||||||||||||
| Intangible amortization | 2,612 | 2,739 | 10,518 | 6,215 | ||||||||||||
| Non-cash interest expense | 1,088 | 1,019 | 4,248 | 3,977 | ||||||||||||
| Tax effect of intangible amortization and acquisition costs | (200 | ) | (101 | ) | (979 | ) | (882 | ) | ||||||||
| Release of valuation allowance on deferred tax assets | (12,236 | ) | ||||||||||||||
| Net impact of tax reform legislation | (9,586 | ) | (9,586 | ) | ||||||||||||
| ADJUSTED NET INCOME | $ | 9,753 | $ | 8,699 | $ | 33,332 | $ | 27,176 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME PER SHARE TO NON-GAAP (ADJUSTED) NET INCOME PER SHARE
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAAP NET INCOME PER SHARE - DILUTED | $ | 0.12 | $ | 0.27 | $ | 0.37 | $ | 0.72 | ||||||||
| ADJUSTMENTS TO NET INCOME PER SHARE - DILUTED: | ||||||||||||||||
| Acquisition and integration costs | 0.01 | 0.03 | 0.06 | 0.19 | ||||||||||||
| Inventory step-up charges | 0.02 | 0.10 | ||||||||||||||
| Intangible amortization | 0.06 | 0.06 | 0.23 | 0.16 | ||||||||||||
| Non-cash interest expense | 0.02 | 0.02 | 0.09 | 0.10 | ||||||||||||
| Tax effect of intangible amortization and acquisition costs | (0.00 | ) | (0.00 | ) | (0.02 | ) | (0.02 | ) | ||||||||
| Release of valuation allowance on deferred tax assets | (0.31 | ) | ||||||||||||||
| Net impact of tax reform legislation | (0.22 | ) | (0.24 | ) | ||||||||||||
| ADJUSTED NET INCOME PER SHARE - DILUTED | 0.21 | $ | 0.20 | 0.73 | $ | 0.69 |
Totals may not add due to rounding.
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(Unaudited, amounts in thousands)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAAP NET INCOME | ||||||||||||||||
| ADJUSTMENTS: | $ | 5,638 | $ | 12,178 | $ | 16,617 | $ | 28,353 | ||||||||
| Investment Income | (644 | ) | (63 | ) | (1,895 | ) | (371 | ) | ||||||||
| Interest Expense | 1,701 | 1,637 | 6,709 | 6,441 | ||||||||||||
| Tax Provision | 1,233 | (10,629 | ) | 4,819 | (21,105 | ) | ||||||||||
| Depreciation | 1,305 | 1,250 | 5,213 | 4,237 | ||||||||||||
| Amortization | 2,659 | 2,739 | 10,565 | 6,215 | ||||||||||||
| EBITDA | 11,892 | 7,112 | 42,028 | 23,770 | ||||||||||||
| OTHER ADJUSTMENTS: | ||||||||||||||||
| Acquisition and integration costs | 615 | 1,354 | 2,928 | 7,519 | ||||||||||||
| Inventory step-up charges | 1,096 | 3,816 | ||||||||||||||
| ADJUSTED EBITDA | $ | 12,507 | $ | 9,562 | $ | 44,956 | $ | 35,105 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP COST OF SALES TO NON-GAAP (ADJUSTED) COST OF SALES
(Unaudited, amounts in thousands)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAAP COST OF SALES | ||||||||||||||||
| ADJUSTMENT TO COST OF SALES: | $ | 23,014 | $ | 19,137 | $ | 85,953 | $ | 67,050 | ||||||||
| Acquisition and integration costs | 8 | (33 | ) | (162 | ) | (53 | ) | |||||||||
| Inventory step-up charges | (1,096 | ) | (3,816 | ) | ||||||||||||
| Intangible amortization | (135 | ) | (148 | ) | (565 | ) | (578 | ) | ||||||||
| ADJUSTED COST OF SALES | $ | 22,887 | $ | 17,860 | $ | 85,226 | $ | 62,603 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP SG&A EXPENSE TO NON-GAAP (ADJUSTED) SG&A EXPENSE
(Unaudited, amounts in thousands)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAAP SG&A EXPENSE | ||||||||||||||||
| ADJUSTMENTS TO SG&A EXPENSE: | $ | 17,976 | $ | 16,145 | $ | 66,323 | $ | 51,509 | ||||||||
| Acquisition and integration costs | (624 | ) | (1,291 | ) | (2,600 | ) | (7,416 | ) | ||||||||
| Intangible amortization | (2,477 | ) | (2,591 | ) | (9,953 | ) | (5,637 | ) | ||||||||
| ADJUSTED SG&A EXPENSE | $ | 14,875 | $ | 12,263 | $ | 53,770 | $ | 38,456 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME GUIDANCE TO NON-GAAP (ADJUSTED) NET INCOME GUIDANCE
| (in thousands) | Twelve months ending December 31, 2019 | |||||||
| Low End | High End | |||||||
| GUIDANCE ON NET INCOME | $ | 23,000 | $ | 25,000 | ||||
| ADJUSTMENTS TO GUIDANCE ON NET INCOME: | ||||||||
| Acquisition and integration costs | 1,167 | 1,167 | ||||||
| Anticipated pre-tax amortization of acquisition-related intangible assets | 10,401 | 10,401 | ||||||
| Non-cash interest expense | 4,538 | 4,538 | ||||||
| Tax effect of intangible amortization and integration | (778 | ) | (778 | ) | ||||
| Guidance rounding adjustment | (328 | ) | (328 | ) | ||||
| GUIDANCE ON ADJUSTED NET INCOME | $ | 38,000 | $ | 40,000 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME PER SHARE GUIDANCE TO
NON-GAAP (ADJUSTED) NET INCOME PER SHARE GUIDANCE
| Twelve months ending December 31, 2019 | ||||||||
| Low End | High End | |||||||
| GUIDANCE ON NET INCOME | $ | 0.48 | $ | 0.53 | ||||
| ADJUSTMENTS TO GUIDANCE ON NET INCOME: | ||||||||
| Acquisition and integration costs | $ | 0.02 | $ | 0.02 | ||||
| Anticipated pre-tax amortization of acquisition-related intangible assets | $ | 0.22 | $ | 0.22 | ||||
| Non-cash interest expense | $ | 0.10 | $ | 0.10 | ||||
| Tax effect of intangible amortization and integration | ($ | 0.02 | ) | ($ | 0.02 | ) | ||
| Guidance rounding adjustment | $ | 0.01 | $ | 0.00 | ||||
| GUIDANCE ON ADJUSTED NET INCOME | $ | 0.81 | $ | 0.86 |
Totals may not add due to rounding.