Full Press Release Details
Repligen Reports Third Quarter 2020 Financial Results
and Updates Full Year 2020 Financial Guidance
WALTHAM, Mass. November 5,
2020 Repligen Corporation (NASDAQ:RGEN), a life sciences company focused on bioprocessing technology leadership, today reported financial results for its third quarter of 2020. Provided in this press release are financial highlights for
the three- and nine- month periods ended September 30, 2020, updates to our financial guidance for the fiscal year 2020 and access information for today s webcast and conference call.
Tony J. Hunt, President and Chief Executive Officer said, We are pleased with our momentum during the third quarter, reporting over $94 million in
revenue and robust organic growth of 31%. COVID programs accounted for approximately 14% of revenue during the quarter, and approximately 55% of revenue growth. We continued to see strong revenue and order demand as both COVID customers and gene
therapy accounts drove accelerated growth across our franchises, with Filtration performing exceptionally well. Direct product orders were up over 100% year-on-year,
positioning us well for an excellent finish to 2020 and a strong start to 2021.
Mr. Hunt added, In addition to our strong business
performance we were delighted to close on our deal to acquire Non-Metallic Solutions and also sign an agreement to acquire ARTeSYN Biosolutions. These acquisitions broaden and strengthen our systems strategy -
where single-use systems and consumables - including flow path assemblies - come together for an enhanced customer offering with meaningful process and yield advantages.
Financial Highlights for the Third Quarter 2020
Financial Details for the Third Quarter and First Nine Months of 2020
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 2020
Our financial guidance for
the fiscal year 2020 is based on expectations for our existing business and includes the financial impact of our acquisitions of C Technologies (which closed on May 31, 2019), Engineered Molding Technology (which closed on July 13, 2020)
and Non-Metallic Solutions, Inc. (which closed on October 20, 2020). The guidance below does not include the impact of our proposed acquisition of ARTeSYN Biosolutions, which is expected to close during
the fourth quarter of 2020. The guidance also excludes the impact of potential additional acquisitions and future fluctuations in foreign currency exchange rates.
FISCAL YEAR 2020 GUIDANCE:
Our non-GAAP guidance for the fiscal year 2020 excludes the following items:
Our non-GAAP guidance for the fiscal year 2020 includes:
An income tax expense of $8.6 million, representing the tax impact of acquisition and integration, inventory step-up, and intangible amortization expenses, as well as non-cash interest expenses related to our convertible debt notes.
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, November 5, 2020, at 8:30 a.m. EST, to discuss third quarter 2020 financial results and corporate developments. The conference call will be accessible by dialing toll-free (844)
763-8274 for domestic callers or (412) 717-9224 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
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 SG&A, adjusted income tax expense and adjusted income tax rate. 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, inventory step-up
charges and intangible amortization costs related to the Company s acquisitions, as well as non-cash interest expenses related to the Company s convertible debt, and the related impact on tax of non-GAAP charges. 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, as well as EBITDA to adjusted EBITDA, 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 Rancho Dominguez, CA; Marlborough and Auburn, MA; Bridgewater, NJ; Clifton Park, NY; Dallas, TX; Ravensburg, Germany; Breda, the Netherlands and Lund, Sweden.
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, Engineered Molding Technology and Non-Metallic Solutions businesses, the expected closing of the acquisition of ARTeSYN Biosolutions, 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, our financing plans, and the projected impact of, and response to, the COVID-19 coronavirus pandemic on our business and on the U.S. and global economies 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 the following: the effect of the COVID-19 coronavirus pandemic, including mitigation efforts and economic effects, on our business operations and the operations of our customers and suppliers; the ultimate impact of the COVID-19 coronavirus pandemic on our business or financial results; 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, Engineered Molding Technology and Non-Metallic Solutions businesses successfully into our business and achieve the expected benefits of the acquisitions; 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 Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarter
ended March 31, 2020 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, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product revenue | $ | 94,029 | $ | 69,419 | $ | 257,521 | $ | 200,701 | ||||||||
| Royalty and other revenue | 31 | 26 | 91 | 70 | ||||||||||||
| Total revenue | 94,060 | 69,445 | 257,612 | 200,771 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of product revenue | 39,626 | 31,425 | 108,471 | 88,978 | ||||||||||||
| Research and development | 4,422 | 5,427 | 13,460 | 14,278 | ||||||||||||
| Selling, general and administrative | 29,051 | 24,629 | 83,277 | 67,326 | ||||||||||||
| 73,099 | 61,481 | 205,208 | 170,582 | |||||||||||||
| Income from operations | 20,961 | 7,964 | 52,404 | 30,189 | ||||||||||||
| Investment income | 82 | 1,898 | 1,699 | 3,616 | ||||||||||||
| Loss on extinguishment of debt | (5,650 | ) | (5,650 | ) | ||||||||||||
| Interest expense | (3,052 | ) | (2,857 | ) | (9,032 | ) | (6,326 | ) | ||||||||
| Other (expense) income, net | (248 | ) | 316 | (632 | ) | (23 | ) | |||||||||
| Income before income taxes | 17,743 | 1,671 | 44,439 | 21,806 | ||||||||||||
| Income tax provision | 3,191 | 12 | 4,211 | 3,999 | ||||||||||||
| Net income | $ | 14,552 | $ | 1,659 | $ | 40,228 | $ | 17,807 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.28 | $ | 0.03 | $ | 0.77 | $ | 0.38 | ||||||||
| Diluted | $ | 0.27 | $ | 0.03 | $ | 0.75 | $ | 0.37 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 52,545,100 | 50,851,623 | 52,341,037 | 47,086,779 | ||||||||||||
| Diluted | 53,468,658 | 51,809,289 | 53,299,544 | 47,929,581 |
| Balance Sheet Data: | September 30, 2020 | December 31, 2019 | ||||||
| Cash, cash equivalents and marketable securities | $ | 553,302 | $ | 528,392 | ||||
| Working capital | 645,744 | 593,515 | ||||||
| Total assets | 1,476,316 | 1,400,113 | ||||||
| Long-term obligations | 300,462 | 292,032 | ||||||
| Accumulated earnings | 46,071 | 5,843 | ||||||
| Stockholders equity | 1,124,870 | 1,059,768 |
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, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| GAAP INCOME FROM OPERATIONS | $ | 20,961 | $ | 7,964 | $ | 52,404 | $ | 30,189 | ||||||||
| ADJUSTMENTS TO INCOME (LOSS) FROM OPERATIONS: | ||||||||||||||||
| Acquisition and integration costs | 1,849 | 2,953 | 6,536 | 9,573 | ||||||||||||
| Intangible amortization | 3,925 | 3,900 | 11,677 | 9,562 | ||||||||||||
| Inventory step-up charges | 144 | 314 | 144 | 1,483 | ||||||||||||
| ADJUSTED INCOME FROM OPERATIONS | $ | 26,879 | $ | 15,131 | $ | 70,761 | $ | 50,807 |
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, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| GAAP NET INCOME | $ | 14,552 | $ | 1,659 | $ | 40,228 | $ | 17,807 | ||||||||
| ADJUSTMENTS TO NET INCOME: | ||||||||||||||||
| Acquisition and integration costs | 1,849 | 2,953 | 6,536 | 10,074 | ||||||||||||
| Inventory step-up charges | 144 | 314 | 144 | 1,483 | ||||||||||||
| Intangible amortization | 3,925 | 3,900 | 11,677 | 9,562 | ||||||||||||
| Loss on extinguishment of debt | 5,650 | 5,650 | ||||||||||||||
| Non-cash interest expense | 2,759 | 2,631 | 8,174 | 4,863 | ||||||||||||
| Tax effect of non-GAAP charges | (2,072 | ) | (3,781 | ) | (6,334 | ) | (7,742 | ) | ||||||||
| ADJUSTED NET INCOME | $ | 21,157 | $ | 13,326 | $ | 60,425 | $ | 41,697 |
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, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| GAAP NET INCOME PER SHARE - DILUTED | $ | 0.27 | $ | 0.03 | $ | 0.75 | $ | 0.37 | ||||||||
| ADJUSTMENTS TO NET INCOME PER SHARE - DILUTED: | ||||||||||||||||
| Acquisition and integration costs | 0.03 | 0.06 | 0.12 | 0.21 | ||||||||||||
| Inventory step-up charges | 0.00 | 0.01 | 0.00 | 0.03 | ||||||||||||
| Intangible amortization | 0.07 | 0.08 | 0.22 | 0.20 | ||||||||||||
| Loss on extinguishment of debt | 0.11 | 0.12 | ||||||||||||||
| Non-cash interest expense | 0.05 | 0.05 | 0.15 | 0.10 | ||||||||||||
| Tax effect of non-GAAP charges | (0.04 | ) | (0.07 | ) | (0.12 | ) | (0.16 | ) | ||||||||
| ADJUSTED NET INCOME PER SHARE - DILUTED | 0.40 | $ | 0.26 | $ | 1.13 | $ | 0.87 |
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, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| GAAP NET INCOME | $ | 14,552 | $ | 1,659 | $ | 40,228 | $ | 17,807 | ||||||||
| ADJUSTMENTS: | ||||||||||||||||
| Investment Income | (82 | ) | (1,898 | ) | (1,699 | ) | (3,616 | ) | ||||||||
| Interest Expense | 3,052 | 2,857 | 9,032 | 6,326 | ||||||||||||
| Tax Provision | 3,191 | 12 | 4,211 | 3,999 | ||||||||||||
| Depreciation | 2,757 | 1,810 | 7,820 | 5,147 | ||||||||||||
| Amortization (1) | 3,953 | 3,928 | 11,760 | 9,644 | ||||||||||||
| EBITDA | 27,422 | 8,368 | 71,353 | 39,307 | ||||||||||||
| OTHER ADJUSTMENTS: | ||||||||||||||||
| Acquisition and integration costs | 1,849 | 2,953 | 6,536 | 10,074 | ||||||||||||
| Loss on extinguishment of debt | 5,650 | 5,650 | ||||||||||||||
| Inventory step-up charges | 144 | 314 | 144 | 1,483 | ||||||||||||
| ADJUSTED EBITDA | $ | 29,415 | $ | 17,285 | $ | 78,033 | $ | 56,514 |
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, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| GAAP COST OF SALES | $ | 39,626 | $ | 31,425 | $ | 108,471 | $ | 88,978 | ||||||||
| ADJUSTMENT TO COST OF SALES: | ||||||||||||||||
| Acquisition and integration costs | (3 | ) | (519 | ) | (468 | ) | (670 | ) | ||||||||
| Inventory step-up charges | (144 | ) | (314 | ) | (144 | ) | (1,483 | ) | ||||||||
| Intangible amortization | (128 | ) | (254 | ) | (392 | ) | ||||||||||
| ADJUSTED COST OF SALES | $ | 39,479 | $ | 30,464 | $ | 107,605 | $ | 86,433 |
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, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| GAAP R&D | $ | 4,422 | $ | 5,427 | $ | 13,460 | $ | 14,278 | ||||||||
| ADJUSTMENT TO R&D: | ||||||||||||||||
| Acquisition and integration costs | (1 | ) | (278 | ) | (472 | ) | (405 | ) | ||||||||
| ADJUSTED R&D | $ | 4,421 | $ | 5,149 | $ | 12,988 | $ | 13,873 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP SG&A EXPENSE TO NON-GAAP (ADJUSTED) SG&A EXPENSE
(Unaudited, amounts in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| GAAP SG&A EXPENSE | $ | 29,051 | $ | 24,629 | $ | 83,277 | $ | 67,326 | ||||||||
| ADJUSTMENTS TO SG&A EXPENSE: | ||||||||||||||||
| Acquisition and integration costs | (1,845 | ) | (2,156 | ) | (5,596 | ) | (8,499 | ) | ||||||||
| Intangible amortization | (3,925 | ) | (3,772 | ) | (11,425 | ) | (9,170 | ) | ||||||||
| ADJUSTED SG&A EXPENSE | $ | 23,280 | $ | 18,701 | $ | 66,257 | $ | 49,657 |
REPLIGEN CORPORATION
RECONCILIATION OF GAAP NET INCOME GUIDANCE TO ADJUSTED (NON-GAAP NET INCOME GUIDANCE)