Full Press Release Details
Repligen Reports Third Quarter 2019 Financial Results and
Updates Full Year 2019 Financial Guidance
October 31, 2019 Repligen Corporation (NASDAQ:RGEN), a life sciences company focused on bioprocessing technology leadership, today reported financial results for its third quarter of 2019. Provided in this press release
are financial highlights for the three- and nine-month periods ended September 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 pleased with our strong performance in the third quarter, reporting over
$69 million in revenue and robust organic growth of 28%. Our filtration and chromatography franchises continued to track ahead of expectations and in process analytics, our C Technologies acquisition is tracking to plan, with the build out of
the commercial team close to completion. We expect to launch important new products in the fourth quarter, including our innovative TFDF systems and next generation ATF controllers. With a strong Q4 order book, we are confident about finishing
the year with revenues in the range of $267 to $270 million.
Third Quarter 2019 Highlights
First Nine Months of 2019 Highlights
Financial Details for the Third Quarter and First Nine Months 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). We expect C Technologies to contribute
$16-$17 million in revenue over the seven months of Repligen s ownership in 2019. The guidance below excludes the impact of potential additional acquisitions and future fluctuations in foreign
currency exchange rates.
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, October 31, 2019, at 8:30 a.m. EDT, to discuss third 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 10136347.
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 net income per share, adjusted earnings per diluted share (EPS), adjusted cost of sales, 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.
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 life sciences company that develops and commercializes highly innovative bioprocessing technologies and systems that increase
efficiencies in the process of manufacturing biological drugs. We are inspiring advances in bioprocessing for the customers we serve; primarily biopharmaceutical drug developers and contract development and manufacturing organizations (CDMOs)
worldwide. Our corporate headquarters are located in Waltham, MA (USA), and we have 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 September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product revenue | $ | 69,419 | $ | 49,500 | $ | 200,701 | $ | 142,042 | ||||||||
| Royalty and other revenue | 26 | 29 | 70 | 48 | ||||||||||||
| Total revenue | 69,445 | 49,529 | 200,771 | 142,090 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of product revenue | 31,425 | 22,183 | 88,978 | 62,939 | ||||||||||||
| Research and development | 5,427 | 3,601 | 14,278 | 12,669 | ||||||||||||
| Selling, general and administrative | 24,629 | 15,859 | 67,326 | 48,347 | ||||||||||||
| 61,481 | 41,643 | 170,582 | 123,955 | |||||||||||||
| Income from operations | 7,964 | 7,886 | 30,189 | 18,135 | ||||||||||||
| Investment income | 1,898 | 558 | 3,616 | 1,251 | ||||||||||||
| Loss on extinguishment of debt | (5,650 | ) | (5,650 | ) | ||||||||||||
| Interest expense | (2,857 | ) | (1,687 | ) | (6,326 | ) | (5,008 | ) | ||||||||
| Other income, net | 316 | (134 | ) | (23 | ) | 187 | ||||||||||
| Income before income taxes | 1,671 | 6,623 | 21,806 | 14,565 | ||||||||||||
| Income tax provision | 12 | 1,829 | 3,999 | 3,586 | ||||||||||||
| Net income | $ | 1,659 | $ | 4,794 | $ | 17,807 | $ | 10,979 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.03 | $ | 0.11 | $ | 0.38 | $ | 0.25 | ||||||||
| Diluted | $ | 0.03 | $ | 0.10 | $ | 0.37 | $ | 0.24 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 50,851,623 | 43,822,472 | 47,086,779 | 43,728,503 | ||||||||||||
| Diluted | 51,809,289 | 45,828,175 | 47,929,581 | 45,132,115 |
| Balance Sheet Data: | September 30, 2019 | December 31, 2018 | ||||||
| Cash, cash equivalents and marketable securities | $ | 513,454 | $ | 193,822 | ||||
| Working capital | 584,563 | 145,897 | ||||||
| Total assets | 1,378,708 | 774,621 | ||||||
| Long-term obligations | 292,287 | 29,211 | ||||||
| Accumulated earnings (deficit) | 2,239 | (15,568 | ) | |||||
| Stockholders equity | 1,049,444 | 615,568 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO
NON-GAAP (ADJUSTED) INCOME FROM OPERATIONS
(Unaudited, amounts in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP INCOME FROM OPERATIONS | $ | 7,964 | $ | 7,886 | $ | 30,189 | $ | 18,135 | ||||||||
| ADJUSTMENTS TO INCOME FROM OPERATIONS: | ||||||||||||||||
| Acquisition and integration costs | 2,953 | 805 | 9,573 | 2,313 | ||||||||||||
| Intangible amortization | 3,900 | 2,608 | 9,562 | 7,906 | ||||||||||||
| Inventory step-up charges | 314 | 1,483 | ||||||||||||||
| ADJUSTED INCOME FROM OPERATIONS | $ | 15,131 | $ | 11,299 | $ | 50,807 | $ | 28,354 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP (ADJUSTED) NET INCOME
(Unaudited, amounts in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP NET INCOME | $ | 1,659 | $ | 4,794 | $ | 17,807 | $ | 10,979 | ||||||||
| ADJUSTMENTS TO NET INCOME: | ||||||||||||||||
| Acquisition and integration costs | 2,953 | 805 | 10,074 | 2,313 | ||||||||||||
| Inventory step-up charges | 314 | 1,483 | ||||||||||||||
| Intangible amortization | 3,900 | 2,608 | 9,562 | 7,906 | ||||||||||||
| Loss on extinguishment of debt | 5,650 | 5,650 | ||||||||||||||
| Non-cash interest expense | 2,631 | 1,071 | 4,863 | 3,160 | ||||||||||||
| Tax effect of intangible amortization and acquisition costs (1) | (3,781 | ) | (1,063 | ) | (7,742 | ) | (3,171 | ) | ||||||||
| ADJUSTED NET INCOME | $ | 13,326 | $ | 8,215 | $ | 41,697 | $ | 21,187 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME PER SHARE TO
NON-GAAP (ADJUSTED) NET INCOME PER SHARE
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP NET INCOME PER SHARE - DILUTED | $ | 0.03 | $ | 0.10 | $ | 0.37 | $ | 0.24 | ||||||||
| ADJUSTMENTS TO NET INCOME PER SHARE - DILUTED: | ||||||||||||||||
| Acquisition and integration costs | 0.06 | 0.02 | 0.21 | $ | 0.05 | |||||||||||
| Inventory step-up charges | 0.01 | 0.03 | $ | |||||||||||||
| Intangible amortization | 0.08 | 0.06 | 0.20 | $ | 0.18 | |||||||||||
| Loss on extinguishment of debt | 0.11 | 0.12 | $ | |||||||||||||
| Non-cash interest expense | 0.05 | 0.02 | 0.10 | $ | 0.07 | |||||||||||
| Tax effect of intangible amortization and acquisition costs (1) | (0.07 | ) | (0.02 | ) | (0.16 | ) | $ | (0.07 | ) | |||||||
| ADJUSTED NET INCOME PER SHARE - DILUTED | $ | 0.26 | $ | 0.18 | $ | 0.87 | $ | 0.47 | ||||||||
| Totals may not add due to rounding. |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(Unaudited, amounts in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP NET INCOME | $ | 1,659 | $ | 4,794 | $ | 17,807 | $ | 10,979 | ||||||||
| ADJUSTMENTS: | ||||||||||||||||
| Investment Income | (1,898 | ) | (558 | ) | (3,616 | ) | (1,251 | ) | ||||||||
| Interest Expense | 2,857 | 1,687 | 6,326 | 5,008 | ||||||||||||
| Tax Provision | 12 | 1,829 | 3,999 | 3,586 | ||||||||||||
| Depreciation | 1,810 | 1,273 | 5,147 | 3,871 | ||||||||||||
| Amortization (1) | 3,928 | 2,608 | 9,644 | 7,906 | ||||||||||||
| EBITDA | 8,368 | 11,633 | 39,307 | 30,099 | ||||||||||||
| OTHER ADJUSTMENTS: | ||||||||||||||||
| Acquisition and integration costs | 2,953 | 805 | 10,074 | 2,313 | ||||||||||||
| Loss on extinguishment of debt | 5,650 | 5,650 | ||||||||||||||
| Inventory step-up charges | 314 | 1,483 | ||||||||||||||
| ADJUSTED EBITDA | $ | 17,285 | $ | 12,438 | $ | 56,514 | $ | 32,412 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP COST OF SALES TO NON-GAAP (ADJUSTED) COST OF SALES
(Unaudited, amounts in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP COST OF SALES | $ | 31,425 | $ | 22,183 | $ | 88,978 | $ | 62,939 | ||||||||
| ADJUSTMENT TO COST OF SALES: | ||||||||||||||||
| Acquisition and integration costs | (519 | ) | (59 | ) | (670 | ) | (170 | ) | ||||||||
| Inventory step-up charges | (314 | ) | (1,483 | ) | ||||||||||||
| Intangible amortization | (128 | ) | (137 | ) | (392 | ) | (430 | ) | ||||||||
| ADJUSTED COST OF SALES | $ | 30,464 | $ | 21,987 | $ | 86,433 | $ | 62,339 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP R&D EXPENSE TO NON-GAAP (ADJUSTED) R&D EXPENSE
(Unaudited, amounts in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP R&D EXPENSE | $ | 5,427 | $ | 3,601 | $ | 14,278 | $ | 12,669 | ||||||||
| ADJUSTMENTS TO R&D EXPENSE: | ||||||||||||||||
| Acquisition and integration costs | (278 | ) | (405 | ) | ||||||||||||
| ADJUSTED R&D EXPENSE | $ | 5,149 | $ | 3,601 | $ | 13,873 | $ | 12,669 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP SG&A EXPENSE TO NON-GAAP (ADJUSTED) SG&A
(Unaudited, amounts in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| GAAP SG&A EXPENSE | $ | 24,629 | $ | 15,859 | $ | 67,326 | $ | 48,347 | ||||||||
| ADJUSTMENTS TO SG&A EXPENSE: | ||||||||||||||||
| Acquisition and integration costs | (2,156 | ) | (746 | ) | (8,499 | ) | (2,143 | ) | ||||||||
| Intangible amortization | (3,772 | ) | (2,471 | ) | (9,170 | ) | (7,476 | ) | ||||||||
| ADJUSTED SG&A EXPENSE | $ | 18,701 | $ | 12,642 | $ | 49,657 | $ | 38,728 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME GUIDANCE TO ADJUSTED (NON-GAAP NET INCOME
| (in thousands) | Twelve months ending December 31, 2019 | |||||||
| Low End | High End | |||||||
| GUIDANCE ON NET INCOME | $ | 19,000 | $ | 21,000 | ||||
| ADJUSTMENTS TO GUIDANCE ON NET INCOME: | ||||||||
| Acquisition and integration costs | 12,645 | 12,645 | ||||||
| Inventory step-up charges | 1,483 | 1,483 | ||||||
| Anticipated pre-tax amortization of acquisition-related intangible assets | 13,442 | 13,442 | ||||||
| Non-cash interest expense | 7,521 | 7,521 | ||||||
| Loss on debt extinguishment | 5,650 | 5,650 | ||||||
| Tax effect of intangible amortization and integration | (9,966 | ) | (9,966 | ) | ||||
| Guidance rounding adjustment | 225 | 225 | ||||||
| GUIDANCE ON ADJUSTED NET INCOME | $ | 50,000 | $ | 52,000 |