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Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2019

 

 

REPLIGEN CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-14656   04-2729386

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

41 Seyon Street, Bldg. 1, Suite 100, Waltham, MA

(Address of principal executive offices, including zip code)

(781) 250-0111

(Registrant’s telephone number, including area code)

(Former Name or Former Address, if Changed Since Last Report)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading

Symbol(s)

  

Name of each exchange

on which registered

Common Stock, par value $0.01 per share    RGEN    The Nasdaq Global Select Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On August 1, 2019, Repligen Corporation announced its financial results for the second quarter ended June 30, 2019. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

 

99.1    Press Release by Repligen Corporation, dated August 1, 2019


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    REPLIGEN CORPORATION
Date: August 1, 2019     By:  

/s/ Tony J. Hunt

      Tony J. Hunt
      President and Chief Executive Officer
(Back To Top)

Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO      

Repligen Corporation

41 Seyon Street

Building #1, Suite 100

Waltham, Massachusetts 02453

 

 

Repligen Reports Second Quarter 2019 Financial Results and

Updates Full Year 2019 Financial Guidance

 

   

Reports record quarterly revenue of $70.7 million, representing 48% year-over-year growth and 46% organic growth

 

   

Raises revenue guidance to $264-$268 million for full year 2019, representing 29%-31% organic growth

 

   

Completes acquisition of process analytics innovator C Technologies

 

   

Closes follow-on equity and convertible debt offerings for net proceeds of $599 million

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

 

   

Revenue increased by 48% year-over-year, and 46% organically, to a record $70.7 million

 

   

GAAP income from operations increased 670 bps to 15.6% of revenue

 

   

Adjusted (non-GAAP) income from operations increased 1,220 bps to 28.4% of revenue

 

   

GAAP fully-diluted EPS increased to $0.17 compared to $0.06 for the second quarter of 2018

 

   

Adjusted (non-GAAP) fully-diluted EPS increased to $0.31 compared to $0.14 for the second quarter of 2018

 

1


First Half 2019 Highlights

 

   

Revenue increased by 42% year-over-year, and 42% organically, to $131.3 million

 

   

GAAP income from operations increased 580 bps to 16.9% of revenue

 

   

Adjusted (non-GAAP) income from operations increased 870 bps to 27.2% of revenue

 

   

GAAP fully-diluted EPS increased to $0.34 compared to $0.14 for the first half of 2018

 

   

Adjusted (non-GAAP) fully-diluted EPS increased to $0.59 compared to $0.29 for the first half of 2018

Financial Details for the Second Quarter and First Half of 2019

REVENUE

 

   

Total revenue for the second quarter of 2019 increased to $70.7 million compared to $47.7 million for the second quarter of 2018, a year-over-year gain of 48% as reported and 46% constant currency.

 

   

Total revenue for the first half of 2019 increased to $131.3 million compared to $92.6 million for the first half of 2018, a year-over-year gain of 42% as reported and at constant currency.

GROSS PROFIT and GROSS MARGIN

 

   

Gross profit (GAAP) for the second quarter of 2019 was $40.0 million, a year-over-year increase of $13.3 million or 50%, and representing 56.6% gross margin. Adjusted gross profit (non-GAAP) for the second quarter of 2019 was $41.4 million, a year-over-year increase of $14.6 million, or 54%, and representing 58.6% gross margin.

 

   

Gross profit (GAAP) for the first half of 2019 was $73.8 million, a year-over-year increase of $22.0 million or 42%, and representing 56.2% gross margin. Adjusted gross profit (non-GAAP) for the first half of 2019 was $75.4 million, a year-over-year increase of $23.1 million, or 44%, and representing 57.4% gross margin.

OPERATING INCOME

 

   

Operating income (GAAP) for the second quarter of 2019 was $11.1 million, which includes the impact of approximately $4.8 million in deal-related costs associated primarily with our acquisition of C Technologies. This represents an increase of $6.8 million from the second quarter of 2018. Adjusted operating income (non-GAAP) for the second quarter of 2019 was $20.1 million, an increase of $12.3 million from the second quarter of 2018.

 

   

Operating income (GAAP) for the first half of 2019 was $22.2 million, which includes the impact of approximately $6.1 million in deal-related costs associated primarily with our acquisition of C Technologies. This represents an increase of $12.0 million from the first half of 2018. Adjusted operating income (non-GAAP) for the first half of 2019 was $35.7 million, an increase of $18.6 million from the first half of 2018.

 

2


NET INCOME

 

   

Net income (GAAP) for the second quarter of 2019 was $8.1 million, an increase of $5.4 million from $2.7 million for the second quarter of 2018. Adjusted net income (non-GAAP) for the second quarter of 2019 was $15.3 million, an increase of $9.1 million from $6.2 million for the second quarter of 2018.

 

   

Net income (GAAP) for the first half of 2019 was $16.1 million, an increase of $10.0 million from $6.2 million for the first half of 2018. Adjusted net income (non-GAAP) for the first half of 2019 was $28.4 million, an increase of $15.4 million from $13.0 million for the first half of 2018.

EARNINGS PER SHARE

 

   

Earnings per share (GAAP) for the second quarter of 2019 increased to $0.17 on a fully diluted basis, compared to $0.06 for the second quarter of 2018. Adjusted EPS (non-GAAP) for the second quarter of 2019 increased to $0.31 per fully diluted share, compared to $0.14 for the 2018 period.

 

   

Earnings per share (GAAP) for the first half of 2019 increased to $0.34 on a fully diluted basis, compared to $0.14 for the first half of 2018. Adjusted EPS (non-GAAP) for the first half of 2019 increased to $0.59 per fully diluted share, compared to $0.29 for the 2018 period.

EBITDA

 

   

EBITDA, a non-GAAP financial measure, for the second quarter of 2019 was $15.2 million, an increase of 79% compared to $8.5 million for the second quarter of 2018. Adjusted EBITDA for the second quarter of 2019 was $21.7 million, an increase of 133% compared to $9.3 million for the second quarter of 2018.

 

   

EBITDA for the first half of 2019 was $30.9 million, an increase of 68% compared to $18.5 million for the second quarter of 2018. Adjusted EBITDA for the first half of 2019 was $39.2 million, an increase of 96% compared to $20.0 million for the second quarter of 2018.

CASH

 

   

Our cash, cash equivalents and marketable securities at June 30, 2019 were $208.9 million, an increase of $15.1 million from $193.8 million at December 31, 2018.

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.

 

3


FISCAL YEAR 2019 GUIDANCE:

 

   

Total revenue is projected to be in the range of $264-$268 million, an increase from our previous guidance of $235-$241 million. Our current guidance reflects overall revenue growth of 36%-38%, and organic revenue growth of 29%-31%.

 

   

Gross margin is expected to be 55%- 56% basis, compared to our previous guidance of 56%-57%. Adjusted gross margin is expected to be 56%-57%, consistent with our previous guidance.

 

   

Income from operations is expected to be in the range of $33-$35 million on a GAAP basis, which includes the impact of $12.3 million in deal-related costs associated primarily with our acquisition of C Technologies. This compares to our previous guidance of $39-$42 million. Adjusted (non-GAAP) income from operations is expected to be in the range of $60-$62 million, an increase from our previous guidance of $52-$55 million.

 

   

Net income is expected to be in the range of $17.0-$19.0 million on a GAAP basis, compared to our previous guidance of $24.5-$27.5 million. Adjusted (non-GAAP) net income is expected to be in the range of $47-$49 million, an increase from our previous guidance of $41-$44 million. Our current guidance reflects a higher expected tax rate of 24% on adjusted pre-tax net income compared to our previous guidance of 20%.

 

   

Fully diluted GAAP EPS is expected to be in the range of $0.34-$0.38, compared to our previous guidance of $0.50-$0.56. Adjusted (non-GAAP) fully diluted EPS is expected to be in the range of $0.94-$0.98, an increase from our previous guidance of $0.84-$0.90. Both GAAP and adjusted EPS guidance include the impact of the equity component of our July offering, and shares issued in conjunction with our acquisition of C Technologies, which resulted in a weighted average addition of 2.6 million shares outstanding.

Our non-GAAP guidance for the fiscal year 2019 excludes the following items:

 

   

$12.3 million estimated acquisition and integration expenses associated with our acquisitions of Spectrum Inc. and C Technologies.

 

   

Inventory step-up charges of $1.5 million related to the acquisition of C Technologies.

 

   

$13.5 million estimated intangible amortization expense; $0.6 million in cost of product revenue and $12.9 million in G&A.

 

   

$7.4 million of non-cash interest expense (Other income (expense)) related to our debt financings.

 

   

$5.7 million of expense related to the extinguishment of our 2016 Notes due 2021.

 

4


Our non-GAAP guidance for the fiscal year 2019 includes:

 

   

An income tax increase of $10.6 million, representing the tax impact of acquisition costs and intangible amortization.

All reconciliations of GAAP to adjusted (non-GAAP) guidance are detailed in the tables included later in this press release.

Conference Call

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.

 

5


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.

Repligen Contact:

Sondra S. Newman

Global Head of Investor Relations

(781) 419-1881

[email protected]

 

6


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  

 

7


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  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Effective as of the quarter ended June 30, 2019, the Company changed its methodology for calculating its non-GAAP financial measures to reflect certain tax effects related to acquisition and integration costs, inventory step-up charges, intangible amortization and non-cash interest expense. Accordingly, the non-GAAP financial measures for the three and six months ended June 30, 2018 have been updated to be consistent with the methodology used to calculate such measures for the current periods.

 

8


REPLIGEN CORPORATION

RECONCILIATION OF GAAP NET INCOME PER SHARE TO

NON-GAAP (ADJUSTED) NET INCOME PER SHARE

(Unaudited)

 

     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.

 

(1)

Effective as of the quarter ended June 30, 2019, the Company changed its methodology for calculating its non-GAAP financial measures to reflect certain tax effects related to acquisition and integration costs, inventory step-up charges, intangible amortization and non-cash interest expense. Accordingly, the non-GAAP financial measures for the three and six months ended June 30, 2018 have been updated to be consistent with the methodology used to calculate such measures for the current periods.

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  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Fiscal 2019 includes amortization of milestone payments in accordance with GAAP of $28 and $56 for the three- and six-month periods, respectively.

 

9


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  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

10


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  
  

 

 

   

 

 

 

REPLIGEN CORPORATION

RECONCILIATION OF GAAP NET INCOME PER SHARE GUIDANCE TO

ADJUSTED (NON-GAAP) NET INCOME PER SHARE GUIDANCE

 

     Twelve months ending December 31, 2019  
     Low End     High End  

GUIDANCE ON NET INCOME PER SHARE - DILUTED

   $ 0.34     $ 0.38  

ADJUSTMENTS TO GUIDANCE ON NET INCOME PER SHARE - DILUTED:

    

Acquisition and integration costs

   $ 0.25     $ 0.25  

Inventory step-up charges

   $ 0.03     $ 0.03  

Anticipated pre-tax amortization of acquisition-related intangible assets

   $ 0.27     $ 0.27  

Non-cash interest expense

   $ 0.15     $ 0.15  

Loss on debt extinguishment

   $ 0.11     $ 0.11  

Tax effect of intangible amortization and integration

   ($ 0.21   ($ 0.21

Guidance rounding adjustment

   $ 0.01     $ 0.01  
  

 

 

   

 

 

 

GUIDANCE ON ADJUSTED NET INCOME PER SHARE - DILUTED

   $ 0.94     $ 0.98  
  

 

 

   

 

 

 

Totals may not add due to rounding.

    

# # #

 

 

11

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