Full Press Release Details
Repligen Reports Second Quarter 2019 Financial Results and
Updates Full Year 2019 Financial Guidance
WALTHAM, Mass. August 1, 2019 Repligen
Corporation (NASDAQ:RGEN), a life sciences company focused on bioprocessing technology leadership, today reported financial results for its second quarter of 2019. Provided in this press release are financial highlights for the three- and six-month periods ended June 30, 2019, updated financial guidance for the fiscal year 2019, and access information for today s webcast and conference call.
Tony J. Hunt, President and Chief Executive Officer said, We are very pleased with the company s performance during the second quarter, which
included record revenue and 46% organic growth. In May, we closed on our acquisition of C Technologies and then raised approximately $600M in two follow-on financings, adding $290M to our balance sheet
net of the C Technologies acquisition and the redemption of the 2016 Notes due 2021. With strong market momentum and a healthy balance sheet, we are well positioned to execute on our long-term growth strategy and we remain very confident about our
ability to grow and continue to differentiate ourselves in the bioprocessing arena.
Second Quarter 2019 Highlights
First Half 2019 Highlights
Financial Details for the Second Quarter and First Half of 2019
GROSS PROFIT and GROSS 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.
Financial Guidance for 2019
Our financial guidance for
the fiscal year 2019 is based on expectations for our existing business and includes the financial impact of our acquisition of C Technologies (which closed on May 31, 2019). This guidance excludes the impact of potential additional
acquisitions and future fluctuations in foreign currency exchange rates. We have not previously included in our guidance the impact of C Technologies, which we expect to contribute
$16-$17 million in revenue and $0.06-$0.07 adjusted earnings per fully diluted share over seven months of Repligen ownership in 2019.
FISCAL YEAR 2019 GUIDANCE:
Our non-GAAP guidance for the fiscal year 2019 excludes the following items:
Our non-GAAP guidance for the fiscal 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, August 1, 2019, at 8:30 a.m. EDT, to discuss second quarter of 2019 financial results and
corporate developments. The conference call will be accessible by dialing toll-free (844) 701-1063 for domestic callers or (412) 317-5487 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 10133911.
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 earnings per diluted share (EPS),
adjusted research & development expense, adjusted selling, general and administrative expense and income tax expense. 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.
The Company s non-GAAP financial results and/or non-GAAP guidance exclude the impact of: acquisition and integration costs related to the Company s acquisitions of TangenX Technology
Corporation, Spectrum Lifesciences, LLC (formerly known as Spectrum, Inc.), and C Technologies Inc.; inventory step-up charges; intangible amortization costs; non-cash
interest expense; the impact on tax of intangible amortization and acquisition costs; and, in the case of EBITDA, cash interest expense related to the Company s convertible debt. 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 is a global bioprocessing company that develops and commercializes highly innovative products that deliver cost and process efficiencies
to biological drug manufacturers worldwide. Repligen s corporate headquarters are in Waltham, MA (USA), with additional administrative and manufacturing operations in Marlborough, MA; Bridgewater, NJ; Rancho Dominguez, CA; Lund, Sweden; Breda,
The Netherlands 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 our business, the expected performance of the C Technologies 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; our ability to integrate the C Technologies business successfully into our business and achieve the expected benefits of the
acquisition; 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 U.S. 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.
Global Head of Investor Relations
REPLIGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except share and per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product revenue | $ | 70,670 | $ | 47,743 | $ | 131,282 | $ | 92,542 | ||||||||
| Royalty and other revenue | 22 | (12 | ) | 44 | 19 | |||||||||||
| Total revenue | 70,692 | 47,731 | 131,326 | 92,561 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of product revenue | 30,708 | 21,088 | 57,553 | 40,756 | ||||||||||||
| Research and development | 5,231 | 5,780 | 8,851 | 9,068 | ||||||||||||
| Selling, general and administrative | 23,699 | 16,590 | 42,697 | 32,488 | ||||||||||||
| 59,638 | 43,458 | 109,101 | 82,312 | |||||||||||||
| Income from operations | 11,054 | 4,273 | 22,225 | 10,249 | ||||||||||||
| Investment income | 1,005 | 512 | 1,718 | 693 | ||||||||||||
| Interest expense | (1,743 | ) | (1,669 | ) | (3,469 | ) | (3,321 | ) | ||||||||
| Other income, net | (697 | ) | 251 | (339 | ) | 321 | ||||||||||
| Income before income taxes | 9,619 | 3,367 | 20,135 | 7,942 | ||||||||||||
| Income tax provision | 1,524 | 629 | 3,987 | 1,757 | ||||||||||||
| Net income | $ | 8,095 | $ | 2,738 | $ | 16,148 | $ | 6,185 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.17 | $ | 0.06 | $ | 0.36 | $ | 0.14 | ||||||||
| Diluted | $ | 0.17 | $ | 0.06 | $ | 0.34 | $ | 0.14 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 46,367,187 | 43,743,356 | 45,174,134 | 43,682,650 | ||||||||||||
| Diluted | 49,055,814 | 45,015,720 | 47,691,772 | 44,694,745 |
| Balance Sheet Data: | June 30, 2019 | December 31, 2018 | ||||||
| Cash, cash equivalents and marketable securities | $ | 208,888 | $ | 193,822 | ||||
| Working capital | 175,581 | 145,897 | ||||||
| Total assets | 1,068,267 | 774,621 | ||||||
| Long-term obligations | 48,386 | 29,211 | ||||||
| Accumulated earnings (deficit) | 580 | (15,568 | ) | |||||
| Stockholders equity | 878,968 | 615,568 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO
NON-GAAP (ADJUSTED) INCOME FROM OPERATIONS
(Unaudited, amounts in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP INCOME FROM OPERATIONS | $ | 11,054 | $ | 4,273 | $ | 22,225 | $ | 10,249 | ||||||||
| ADJUSTMENTS TO INCOME FROM OPERATIONS: | ||||||||||||||||
| Acquisition and integration costs | 4,822 | 853 | 6,621 | 1,508 | ||||||||||||
| Intangible amortization | 3,051 | 2,634 | 5,662 | 5,298 | ||||||||||||
| Inventory step-up charges | 1,169 | 1,169 | ||||||||||||||
| ADJUSTED INCOME FROM OPERATIONS | $ | 20,096 | $ | 7,760 | $ | 35,677 | $ | 17,055 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP (ADJUSTED) NET INCOME
(Unaudited, amounts in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP NET INCOME | $ | 8,095 | $ | 2,738 | $ | 16,148 | $ | 6,185 | ||||||||
| ADJUSTMENTS TO NET INCOME: | ||||||||||||||||
| Acquisition and integration costs | 5,322 | 853 | 7,121 | 1,508 | ||||||||||||
| Inventory step-up charges | 1,169 | 1,169 | ||||||||||||||
| Intangible amortization | 3,051 | 2,634 | 5,662 | 5,298 | ||||||||||||
| Non-cash interest expense | 1,124 | 1,053 | 2,231 | 2,089 | ||||||||||||
| Tax effect of intangible amortization and acquisition costs (1) | (3,444 | ) | (1,076 | ) | (3,961 | ) | (2,108 | ) | ||||||||
| ADJUSTED NET INCOME | $ | 15,317 | $ | 6,202 | $ | 28,370 | $ | 12,972 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME PER SHARE TO
NON-GAAP (ADJUSTED) NET INCOME PER SHARE
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP NET INCOME PER SHARE - DILUTED | $ | 0.17 | $ | 0.06 | $ | 0.34 | $ | 0.14 | ||||||||
| ADJUSTMENTS TO NET INCOME PER SHARE - DILUTED: | ||||||||||||||||
| Acquisition and integration costs | 0.11 | 0.02 | 0.15 | $ | 0.03 | |||||||||||
| Inventory step-up charges | 0.02 | 0.02 | $ | |||||||||||||
| Intangible amortization | 0.06 | 0.06 | 0.12 | $ | 0.12 | |||||||||||
| Non-cash interest expense | 0.02 | 0.02 | 0.05 | $ | 0.04 | |||||||||||
| Tax effect of intangible amortization and acquisition costs (1) | (0.07 | ) | (0.02 | ) | (0.09 | ) | $ | (0.05 | ) | |||||||
| ADJUSTED NET INCOME PER SHARE - DILUTED | 0.31 | $ | 0.14 | $ | 0.59 | $ | 0.29 |
Totals may not add due to rounding.
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(Unaudited, amounts in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP NET INCOME | $ | 8,095 | $ | 2,738 | $ | 16,148 | $ | 6,185 | ||||||||
| ADJUSTMENTS: | ||||||||||||||||
| Investment Income | (1,005 | ) | (512 | ) | (1,718 | ) | (693 | ) | ||||||||
| Interest Expense | 1,743 | 1,669 | 3,469 | 3,321 | ||||||||||||
| Tax Provision | 1,524 | 629 | 3,987 | 1,757 | ||||||||||||
| Depreciation | 1,762 | 1,314 | 3,337 | 2,598 | ||||||||||||
| Amortization (1) | 3,079 | 2,634 | 5,716 | 5,298 | ||||||||||||
| EBITDA | 15,198 | 8,472 | 30,939 | 18,466 | ||||||||||||
| OTHER ADJUSTMENTS: | ||||||||||||||||
| Acquisition and integration costs | 5,322 | 853 | 7,121 | 1,508 | ||||||||||||
| Inventory step-up charges | 1,169 | 1,169 | ||||||||||||||
| ADJUSTED EBITDA | $ | 21,689 | $ | 9,325 | $ | 39,229 | $ | 19,974 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP COST OF SALES TO NON-GAAP (ADJUSTED) COST OF SALES
(Unaudited, amounts in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP COST OF SALES | $ | 30,708 | $ | 21,088 | $ | 57,553 | $ | 40,756 | ||||||||
| ADJUSTMENT TO COST OF SALES: | ||||||||||||||||
| Acquisition and integration costs | (133 | ) | (64 | ) | (151 | ) | (110 | ) | ||||||||
| Inventory step-up charges | (1,169 | ) | (1,169 | ) | ||||||||||||
| Intangible amortization | (130 | ) | (142 | ) | (264 | ) | (293 | ) | ||||||||
| ADJUSTED COST OF SALES | $ | 29,276 | $ | 20,882 | $ | 55,969 | $ | 40,353 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP R&D EXPENSE TO NON-GAAP (ADJUSTED) R&D EXPENSE
(Unaudited, amounts in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP R&D EXPENSE | $ | 5,231 | $ | 5,780 | $ | 8,851 | $ | 9,068 | ||||||||
| ADJUSTMENTS TO R&D EXPENSE: | ||||||||||||||||
| Acquisition and integration costs | (100 | ) | (55 | ) | (127 | ) | (73 | ) | ||||||||
| ADJUSTED R&D EXPENSE | $ | 5,131 | $ | 5,725 | $ | 8,724 | $ | 8,995 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP SG&A EXPENSE TO NON-GAAP (ADJUSTED) SG&A EXPENSE
(Unaudited, amounts in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP SG&A EXPENSE | $ | 23,699 | $ | 16,590 | $ | 42,697 | $ | 32,488 | ||||||||
| ADJUSTMENTS TO SG&A EXPENSE: | ||||||||||||||||
| Acquisition and integration costs | (4,590 | ) | (734 | ) | (6,343 | ) | (1,325 | ) | ||||||||
| Intangible amortization | (2,921 | ) | (2,492 | ) | (5,398 | ) | (5,005 | ) | ||||||||
| ADJUSTED SG&A EXPENSE | $ | 16,188 | $ | 13,364 | $ | 30,956 | $ | 26,158 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME GUIDANCE TO ADJUSTED (NON-GAAP NET INCOME GUIDANCE)
| (in thousands) | Twelve months ending December 31, 2019 | |||||||
| Low End | High End | |||||||
| GUIDANCE ON NET INCOME | $ | 17,000 | $ | 19,000 | ||||
| ADJUSTMENTS TO GUIDANCE ON NET INCOME: | ||||||||
| Acquisition and integration costs | 12,284 | 12,284 | ||||||
| Inventory step-up charges | 1,483 | 1,483 | ||||||
| Anticipated pre-tax amortization of acquisition-related intangible assets | 13,469 | 13,469 | ||||||
| Non-cash interest expense | 7,365 | 7,365 | ||||||
| Loss on debt extinguishment | 5,666 | 5,666 | ||||||
| Tax effect of intangible amortization and integration | (10,645 | ) | (10,645 | ) | ||||
| Guidance rounding adjustment | 378 | 378 | ||||||
| GUIDANCE ON ADJUSTED NET INCOME | $ | 47,000 | $ | 49,000 |