RGEN - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and welcome to Repligen Corporation Fourth Quarter and Full Year 2017 Earnings Conference Call. My name is Nichole and I will be your coordinator. [Operator Instructions]. I will now turn the call over to your host for today's call, Sondra Newman, Senior Director of Investor Relations for Repligen. Please go ahead.

Sondra Newman

morning good Nichole, you, everyone. Thank the we On for be our for results reporting fourth today's providing quarter guidance we’ll call, the and and financial XXXX are full XXXX. year financial year

our CEO, Tony financial discuss highlights will Our President CFO, Hunt Snodgrass, and John recent will business and report. provide

forward-looking we'll the business company. regarding goals financial and During this statements the of call, our performance be making our expectations for

are results subject cause So, differ. to and we such remind may or you, uncertainties actual statements events to that that risks

Additional on information information, comments or as future Today's make not law. factors or company and current discussed in does itself required except Form XX-K, The we commit events which reflect our obsolete on SEC. concerning management's risk which as new today, views, otherwise. obligate annual the Form filed that the update report current we become by as could forward-looking filings report to statements other with X-K, a of result

we operating the gross During margin, well Adjusted sec.gov. figures constant will that earnings per profit margin, we income, net results adjusted gross financial revenue as is growth in release press will to as and and at include the website measures this currency, are EBITDA. this morning, operating income non-GAAP on operating expenses, and following, and EBITDA our GAAP share, of be posted issued which adjusted call, Reconciliations included guidance. non-GAAP to providing

With Tony performance over turn measures for performance measures, Repligen's enables measures I'll peers benchmark should and call company investors financial adjusted viewed historical Hunt non-GAAP the to investment to an evaluate of results to these business be better against the current update. opportunity. and the While that, as alternative believes that not GAAP to

Tony Hunt

update. you, Sondra, end to everyone XXXX-year and welcome Thank and the morning, good

the year press and fourth and an another this outstanding of saw morning strong in you our in quarter overall growth expanding company. the finish excellent margins for year As we terms release with revenue

performance and and to solutions become an robust this new chromatography. share Our leader we're new out mission standards processing year. with fully demand to by our in industry developments order technology market innovative deliver positioned Combined QX, sets well performance of and filtration products delivering bioprocessing our and strong supports coming that and

leadership, of said direct drive XXXX sales year we M&A. continued million to presence and grew a Before comparable quarter XX few XX% these discussing strategic in to today strategy million not spend portfolio in customer technology and to want the our year over single portfolio. systems but XX% the long beginning points jumping commercial XXXX. as jumped integration set direct and a on into of million in X.X of and deals some our X.X We significantly our also our reach further direct expansion expands minutes come revenue. potential today, XXXX. with will adoption from be acquire months of only to discussed a filtration hollow bioprocessing of Spectrum expect in the XX% investments. up XX and and XXX flexible our our it the XXXX to chromatography how products expanded of in have completed accelerated to on the at surpassed and transformative which technology of expanded revenue represents use a details our the use diversification discussed We adoption revenue a and over growth achieved in our and Spectrum, and Execution of fiber through we solutions XXXX, execution sales of priorities presence We in we adoption share the the filtration culture year-over-year to sales I products TangenX total We guided our first because ago, which we XX% on strategy accelerating accomplishments achieve of X for will our way we of sales through importance for our million in A focus representing months. XX addressable million with simple markets in that We has XX.X year-on-year and growth. the and first direct last core guided X.X Spectrum period. million of ownership to accelerated And to the XX% sales We nine We and our billion. most force. delivered

staffed Xcell Spectrum flat XXXX in our OPUSR, seven capacity We new reducing ATF-XX, searching We stay customers, and of year operations our as increasing be identified breakeven deal future increased the launched to new XXX over will OPUS Scale Column production facility and last and for offering pre-packed Marlboro XX,XXX in operations flexibility cash pre-packed this investments. products We we cassettes TFF providing for our used and facility suites, processes. in in columns which already this We line, accretive. Mass, the to EPS equity it's square house our in demand. sheet a including and adjusted earlier exciting to leased systems. a to of and a single pre-packed our expanded for where Germany, foot expected million up signed moved We’ve a raised follow-on ahead column year, quarter times manufacturing we lead precision TangenX Pilot to used in our

of our growth over And filtration. year we and from in in the finally, launched the More the also innovation earnings achieved adjusted for end close expanded high team, a to XX with and OEM We above employees growth now field our Europe revenue XX% in organization that's of deeper direct in and million per a in hollow of Filtration benefit time Asia. X% the We combines a income margins depth hit and up organic in Protein share. TFTF our for than Spectrum, XX% fiber first and $XXX flow we technology, reach XX-person have a franchise. commercial target presence We US much our real products operating adjusted Tangential year, in market despite to growth the net across a with XX%. businesses, XX% flat the

and had a job our the our year. and Proteins, an a XXX customer infiltration worldwide the staying of the accomplished OEM products to demands of all for team exceptional customers our balancing shareholders. integration organic XX% We direct great another Excluding that goals, outstanding Truly delivering average expansion year has through company, year. for on our growth focused and chromatography now done well employees, of above this industry remarkable

QX performance. to now and full moving XXXX year So,

of full direct we and quarter addition today, filtration the XXX% growth the expanding reported a for to supported the by The the was product million business, our As a story filtration $XX.X had with Spectrum line contributed in record in quarter year. margins. of the performance which sales of

Our up and ATF record applications. a product of line over had technology driven and year-on-year XX% - quarter, adoption by one our strong

to see of adoption ATF robust also our products. use single We continue

full the of the Regionally quarter projects America the in key of accounts now number for in the we QX top Pharma new at revenues in XX% XX% of our base, growing For at opportunities emerged increase for for used North of XXXX. have and customer indeed customer the with pipeline in expansion single and new quarter. trend represented was year the year the than sales The XX%. greater and a

here flat year also strong another year. around expect Sius accounts here Our activity. healthy the in and business. we and quarter cassettes The load, TFF sheet was growth double-digit stimulus for TangenX business a order With new story increased had QX XXXX

for were XX% systems. months load great quarter including our Finally, had a demand year-on-year The bench-top of up was first Spectrum the sales systems record for around for filtration portfolio the story robust XX% and quarter, a here TFF ownership. cross five

direct year, We also on rebound but to year XX% nice Spectrum that basis the first and had a than in demand saw products, five QX grow filtration our half order flatten forma full XXXX will single-use our pro business in the to In the overall XX%. greater our approximately products, with of was in in XX% similar grow will pro-connect up business Spectrum range XX% accelerated we expected growth business all flow months our Overall QX. in and been the of first expectations a year-on-year. path exceeded which the

which chromatography resins. is and our [legislates] OPUS Moving driven to by of chromatography, family [ph] include so pre-packed not columns

more half we strong had we OPUS further was suits quarter What in Our to a business expand the made and up going impressive really expect and packing of terms and XXX, we've saw loads operators which online the second into to was additional the decision which doubled XXXX. over of the very come over XXXX will year year than the order for total fetching shift strong XX% column the year. increase from about growth

business this with for We to excess XX%. another year be revenue in chrome growth of expect strong our

QX quarter Our OEM for approaching in the full and like year. business was had a predicted flat

As dependent so came earlier user early end orders is who We this quarter however end large in quarter mentioned OEM late November encouraged by business users, customers always our reflect two to do on additional sales demand. resale not December. highly by and were that

initial strength forecast, achieve have digit expect versus as for that year XXXX year. Our will further the we growth the go our through and mid-single for ligands we in approaching during anticipate growth business forecast the factors and strengthening

time the performance significant Spectrum in focusing of product Beyond our a QX, integration. spend we amount on

bioprocess sales reaction team, by Spectrum now We're needs will Europe deal. XX world, process around or really in a our the we cross sales of in there. traveling combination the reps velocity the sales the opportunity our spend the QX customer's specialty and people the base. portfolio encouraged I bio and the of broader have With products. in and to the in that chromatography of fourfold number the filtration addition in the managers increase sells accounts was U.S. our specialist sales I confident with Spectrum meet growing And customer and to time

and will team new time addition, excited in into beginning commercial their direct phase sales We're customers we present beyond to time an our us territories as expanding in Asia the with our the be future moves the In QX. region. in with able strategy about move increase the

As opportunities team are markets products been doing great, and large still customer the selling have have in opportunities acquisition, integration is expected with works differentiated the with the we Spectrum emerging. increasing of the but has

very product growth will development M&A. continued to in this chromatography share generation five successful expansion year. had center strategic capacity and and in organic integration margin into and operational of product programs market market about So, XXXX of improvements, in our and and growth we’re on new In XXXX, move Commercial next expansion priorities filtration including in a areas. cost acceleration of launches as operating synergies, Spectrum revenue excited and our we to summary prospects finally Asia, we adoption

filtration and off for and will the these continues chromatography continue customer direct growth businesses our XXXX of beyond. major and businesses to be in is investments company that Our to in our the expectation pay drivers

new is offerings can ATF, Spectrum and rich to R&D TFS product expect and pipeline Our see CS filters... you spanning and continued systems OPUS,

the mix we to and around their Jon, parts for Finally, drugs. class our With to financial I company that, the preparedness wish outstanding people, over loyal shareholders have right in Repligen's best the report. enhance technology I becoming thank deliver of to our detailed trusted a a bioprocessing customers in to more and employees continue I'll in the for partner our growth and products towards and turn a results. of production globe, biological progress call trajectory believe

Jon Snodgres

non-GAAP our everyone. a an reported morning, were XXXX financial fourth the year in year sales financial increase versus dollar. reporting and quarter guidance proteins all This XXXX good and Today which well Krona, in most due foreign significantly to by Swedish of we experienced strength GAAP XXXX. our X.X% mentioned FX XXXX and otherwise in and We compared million, Tony currency as results measures the revenue as financial reporting XX% our providing for measures. driven business. as quarter fluctuation, constant discussed currency full to tailwind XX% was XXXX. impacted the of US tailwind are $XX.X the primarily the for Unless you, XXXX, We adjusted fourth quarter fourth reflect Thank of

we fourth Our a our pro single-use strong business, XXXX driven single-use filtration was cassettes basis. to on with well XX% revenue chromatography traction which in continue In as our gain systems direct-to-customer filtration quarter as forma our grew by TangenX ATF of with performance and growth businesses. our

supported quarter, continued by the of penetration accounts. saw pro sequential our The product be continues is a OPUS OPUS also uptick which for growth. and to XX% Spectrum family represented in columns. In chromatography base strength in sales We our year-over-year million business, forma deeper a on growth expanding pre-packed driven $XX.X basis within by to customer

increase over quarter the of the profit million quarter $X Our XXXX. of XX% an adjusted fourth was million for $XX.X gross fourth

margin margin versus XXXX with Our of on owning strong in by component XXXX sales forecast XX.X% adjusted on XXX-basis supplied our improved comparable an of impacts quarter filtration by now fourth was improvement of the the and of overall an columns. driven were have and line XX-centimeter increase quarter, for resin for devices the gross ATF from a mix column points lines customer the our our product were period. Gross products to OPUS Spectrum mix, synergies filter and resins XX in our driven

development quarter million The and in fourth million, the to which development Repligen organization related to compared of due and OPUS research related expenses prior to the $X next moving basis Spectrum SG&A million to comparable commercial our for to for expenses. operating remaining XX% is increase comparable spend TangenX were for infrastructure Adjusted not our $X.X year investments development quarter were the XXXX, of XXXX. the product our of of general is Approximately year-over-year ongoing XXXX. increase activities related projects. On in was the $X.X our is XX% quarter compared is the year-over-year of XX% ATF Approximately expenses to in for and figures. to into fourth in Now from included XXXX, milestones acquisitions timing activities. Spectrum and $XX.X for the addition a also million GAAP increase of fourth and of generation the period attributable to

Now moving to adjusted and EPS. earnings

XXXX, a XXX-basis quarter was adjusted fourth improvement point the operating For our margin XX.X%, year-over-year.

XXXX. operating infrastructure pull-through ongoing to growth, adjusted by organic income to net and sales companies support quarter $X.XX of an acquisition-related acquired investments The to XX% quarter from XXXX diluted global future grew XXXX costs the increase commercial and offset in million both our the quarter compared of of million growth. increase margin income from $X.X increase adjusted for current EPS And share was for by compared Our share, fourth for million, $X.X and $X.XX of of XXXX. quarter fourth fully $X was $X.X million XXXX. fourth a Adjusted year-over-year XXX% in or per for partially the the per period and from the was to same driven team fourth

revenue adjusted in driven performance. tax benefit This also GAAP one-time where stock tax provision financial on fourth strong quarter a income expenses growth tax tax to of of I year fourth benefited compensation report financial Xmm and and from than will realized from results the company mostly XXXX the from XXXX GAAP related net strong on combined transaction X. On our now U.S. our net adjusted the addition cost, we’ve non-GAAP In delivering million operations. of in offset a handling company’s operating tax reform. basis tax new more adjustments favorable benefits full income company was the adjusted X.X benefit results. M&A transition operational quarter, the from net treatments cost, of which to from favorable investing

of million an exchange For GAAP fully reporting the to this on XXXX. acquisition we're break million organic, overall compared understand full revenue year XXX.X XX% XXXX XX% reported foreign reflecting and growth. increase of out will in I impact XXX.X We increase

in growth customer our in overall reporting XX% businesses. filtration chromatography we’re direct X% growth of organic organic inclusive First, to

recent for of dollar X% the or our Full versus percentage third, half we the full the million in we acquisitions. from foreign XX.X year U.S. first XX% acquisitions experienced Atoll of weakness of by the million to XXXX. be a Second, TangenX of very net adjusted for and business continue compared headwind operating of related accounted our exchange grew to XXXX of an proteins increase and the year. the year Spectrum, year Swedish Primarily in krona XXXX. to income And performance points this for our encouraged growth XX% to X most

Our infrastructure. growth marketing adjusted organic actions investments and development margin margin from sales XX.X%. million, product in same offset year-over-year pull year driven and by and XX.X Full expansion gross was partially the increase diluted same margin net me was new sales for in operating acquisitive Full of excuse increase through per both was was an adjusted of an adjusted share, to or period XX.X XXXX. in XXXX earnings year the XX% million period year Full increase $X.XX $X.XX income XXXX, XXXX. compared by

XX, $XX.X cash Our in XXXX. cash We flow expansion, capital and at GAAP cash December million million maintenance operating for system are equivalents metrics of activities. were million improvements and XXXX into expenditures reinvested capacity $X.X and $XXX.X generated which

XXXX to year full moving guidance. Now

reconciliations non-GAAP are the XXXX of reconciliation tables press release. for earnings EPS guidance income GAAP in to in net included today's Our and financial

As discussed projection are tailwind GAAP maybe impacted non-GAAP. growth. reflecting year XX% range acquisitions. by be $XXX on the on XX% will to beyond And previously reported X% a to exchange mentioned, metric not million, mind potential including XX% of XXXX Please our in sales setting sales. organic XX% of guidance, all XXXX Today to XX% fluctuations full at and our XXXX also $XXX to financial as and new revenue keep a impact the basis, currency constant foreign include of XX% adjusted that guidance guidance we million growth rates does current in a our

businesses Within to and XX% grow filtration these projections to in chromatography XXXX grow our growth we approximately at to proteins our businesses expect XX%. OEM and direct-to-customer X%

$XX million and forma at contribute basis, XX% to Finally, in expect or revenues grow we the $XX million a range. Spectrum on above pro to

to acquisition the of to and margin reflecting is a XXX-basis our synergies to from million of to versus margin improvement adjusted to our a XXXX benefits XX% is OPUS guidance Spectrum income in be XX% operating for guidance $XX activities. points operating $XX the adjusted material Adjusted roughly from and sourcing Our XX margin range gross expected from is expected XX%, XXXX, from XX%. million improving

funded of million $X wave adjusted inclusive million of generation operations. expense our XX% the per giving income, for implementation company strong the are another us reform. in to XXXX. EPS company anticipate year-end for cash, million growth. income a an our to meaningful expected investments in the CapEx range the million cash Adjusted equivalents inclusive from in marketable impact of facility. of of We expecting $X pretax is of of our the in $XX.X first invest investments $X the securities, The expected range tax XXXX We healthy includes to million $X exited $X.XX full million adjusted also of for the our XXXX drive income flexibility to expects and continue XXXX and our sheet capital to being million US estimated is year of closing, share. expenditures million and ERP to global $XX GAAP XXXX second the $XX of in with XXXX of tax by year fully This we year performance diluted to ongoing excellent in expected year $XXX $X.XX [indiscernible] new $XXX with was half the approximately metric range million new and for a balance cash with and In net

to questions. I towards the will the look report the and efforts the in confident line We months XXXX operator ahead. our call results forward now to This back to turn our our reporting goals financial completes on are for in and our open

Operator

from question first Arias Group. Our go ahead. Please Dan comes Citi of Instructions] [Operator

Dan Arias

for momentum you an customers may in that ATF the seems Tony and your how that’s and be much and there filtration like some of the in you then come about filtration this talk from that use user portion just product, have you color customer opportunity new use do business you XXXX can to around the that see there right some important like put singly single base taken new seems just now. the good

Tony Hunt

we for year XXXX, customers. a systems are the have single for adoption and of that whole see, you these simple we barrier to had really that’s why new And of and the when because lowered portfolio we use so seen trials, a very, nice such was at first use look in systems ATF very increase number XXXX we

customers Now simplicity XX% the to when will I look at north that really the as to an are the willing from try ATF an year. terms of XXXX, they contribution coming in initial use system. just be to the we new And the don’t because people revenue for really of do order I are of and single said now plate technology ATF need evaluation more of expect

Dan Arias

the think great of order may may that opportunities you about given this on make can or the other selling be expectations in see is comment sales there synergies in vein for to and Spectrum you on the synergies then fiber, in investment incremental still be capitalizing between just hollow team on just feel have in the think you may if Okay a XXXX, comments I'm the and about that a opportunity and that you and there, you you corporate some XXXX you TangenX stuff what anything curious force made. kind then in , similar be portfolio, think place for like maximize that we

Tony Hunt

that product Spectrum an with a that We when force the opportunity neither in [indiscernible] we're have business account Spectrum, typically by to in the year us those can we a so from opportunity selling, to systems force been have cross a now, the systems opportunity right really TangenX TangenX hollow TFF a selling at push fiber as stage, portfolio sales but the associated problem problem, this some fiber business two sheet have little and ago, that go didn’t solve we systems nice about on the run we TangenX because with what's seeing nice any over are it's opportunities they So a install Where solve at cross beginning really have TFF of getting is TFF to did the some from products. having of have winds really and we and Spectrum look the TangenX's didn’t technology hollow we for we're we the opportunities that for have just to cassettes when we're cartridges that with easily base. that business, past, flat well. past, into combined the portfolio a as acquired some our run nice nice sales it have with that systems not And

The second of part is of around I force your the think which made sales there. lot question we a progress investment,

going because operating now for really have the in in more to applications of region that's really really either We key think as the have XX and get a up and because divided we face region and increased down, sales have up specialist, more around they complement till XX bioprocess in a sales or the to part Asia. or basis, move Europe now direct each have we put most that our of specialist each we we we in region. bioprocess account way or XX, people field team look sales in When manager to managers role America, Asia every everybody the be we in now bioprocess service. North it's we're sales have going in luxury through field for filtration and the play specialist managers and having account XXXX sales people I so number investments is a I big in accounts Obviously, been going specialist us we chromatography, I to in on is account think time will

double going ATF between it's that here application TFF a systems two the on really portfolio reps specialist per systems made we application it’s we that organization, XXXX scenario of but the one see on field and and progress, [indiscernible] need. started of as a will and in we Spectrum down on field a we're build think last growing or out at we and where building year, scenario now from a matter I really legacy nice our systems having service three We to that's focused side, where a some we nicely from are journey Repligen [ph] together the so have

Dan Arias

with guess at there pretty end kind considering that GE's respect manufacturing I unchanged and in-house Okay, were that's maybe to for one the or on helpful the I much so incremental moving am had anything have Analyst at long-term that sense one, of you could heard this is just you way I color, if you or is sure ask topic, conversations of thinking plenty you your from is Day. about point the pension last what

Tony Hunt

is the across into [indiscernible] a are latent in-house move we no to Analyst Repligen, volume they make we that different will definitely their than to next facility new the few Yes, years said today is really unchanged, what plan, the few moving over Day. going expect business certain continuity and from manufacturing that at so at

Operator

JPMorgan. comes Please next question ahead. Our Peterson, of Tycho go from

Unidentified Analyst

next prioritizing, Tycho. This Julia Asia is, actually, penetration about been talking on I the for My over in year. first accelerating one, your know you guys have

do Asia ramp So, in to sales the you expect when up?

Tony Hunt

in where that Spectrum, a have in are for up for and we think XXXX and XXXX. acceleration XXXX year in expect good XXXX was will see so terms made for ramp I we Repligen Yeah, and us in -- further very Asia today, a of I

force that in doing all just that it's on so on see getting we QX, everyone are trained will this sales matter products of an a year. the impact So, start fully the expect to

Unidentified Analyst

number? already your -- is into upside does to that represent guidance? that is And an Or factored

Tony Hunt

give emerge this for an guess that will we'll time insight up in essentially doing be get of my call and a there some factored other to that are into new give and opportunities QX and timely earnings we quite August, we follow obviously Asia. how I that in is assess think to going you to that's be good update as the we are probably to going most train year, sales team in

Unidentified Analyst

you a great. have as talking And then guys about opportunity business. my service next to Okay, build been out question, the

a So, elaborate bit? could and opportunity? you made little the on just What that progress that you've is far the is maybe big so how

Tony Hunt

ATF of the Repligen organization our Yeah that systems here year, with ramp second focusing to of portfolio strategy on really portfolio will really over when here that we're built into service have and We we now a this products, broad generate out little revenues there My on we be will something QX. there, that a the started portfolio a really ago. department fairly to is at a half there is really larger today. systems on service have service in we and of a Spectrum we year of group the able the service for is get addition so, of expectation that whole up need the the focused

Unidentified Analyst

And be what to this business -- the component? that of or...? the be would the service -- or margin overall implication accretive Would

Tony Hunt

run the we're with really Spectrum see through there going associated because the to is portfolio, calculations service Spectrum a we're yet, dig portfolio margins the we we this really something it with lot haven't to and not do for whole believe to that need we what that right on now on. of the service We service will with exactly revenues going execute

margins. quarter be bit So on again, that think give to more we guidance will able a little I another

Jon Snodgres

typical of little the I the would business. fees, overall that, be sourcing add labor global make will just the a lower on, margins bit part into should margin service a we rates

Unidentified Analyst

think you products pretty general, break similar one so and the maybe see know scale last competitors that your make growing drive maintain you down the about to prepacked you to of was quarter? padding business? share in What how it. trying target you, production XX% you columns move market And talked that's kind Got then impressive. much my on long-term your can in process And the now, I versus the the OPUS development just terms Could in guys in resins how and OPUS. in And do your do column the towards? is pricing of,

Tony Hunt

terms development in is we're all morning, large-scale process large of really what OPUS versus this to like sales Okay The referring growth year-over-year large the that’s products. scale. products script XX% in

focusing out is by doing tend on clinical on study scale but OPUS had call scale we large-scale customers. be small-scale really pretty large they development the they scale as We commercial our close current In are which customers to the growth and was terms customers the PD we it's OPUS well. then year and where side, little manufacturing on of similar an exceptional PD what OPUS focus portfolio, small I who to believe our clarification, XX%. the validation that that a process Again, studies, the didn’t somewhere customer to down manufacturing really is percentage different some it either

I scale think in large and strong to in again, our portfolio products So continue clearly invest decision capacity. OPUS year, to hence another that

to the years, market our to we've this XXX%, make obviously plus. share and of either terms lion's in continue four we year the years market where to to we In now last is XX% progress share huge grown last five take of XX% goal

market market. we get new our market, we're still and technology solidify of bringing is three of our years products share So, the north will products, OPUS runway think in to excited the is about think leadership the over and XX% lot for position up there and definitely our we overall next that goal XX% two,

Jon Snodgres

question. large that's your approximation you. but to good column think and a quarter-to-quarter for of I comes saw moves We that columns smaller XX% the to add roughly a XX% add, from as directionally just revenues And

Operator

comes next Our go Murphy from Please of question Blair. Amanda William ahead.

Amanda Murphy

morning. good Thanks,

question expect I if coming so the into of we quarter, Just was I are there that, assuming I kind your if backing think was just a wondering directionally it decline proteins accurate mid-single-digits. statement? were am that was on growth to organic trying are in if and Obviously, to related the that was sequential a just year sure an that and accurate you acceleration business. was next an for so we guidance but, giving make should

Tony Hunt

the chromatography XX% products closely. pretty and X% Yeah, and was that where were so overall and had mirrors around actually our filtration we organic year QX for

we is to closer side, of range. the end low think single-digit high your number were I the range So, the on

we were we in going to really knew are the little though with we we with did was the So, pleased be quarter in overall performance and dealing light that given bit strong the of business. under that see orders even increase a performance was given what QX proteins the business the proteins into going

Amanda Murphy

this a thought seen you an Yes, have again the business as it's side, I quarter see okay, positive into you think your coming And guess smaller signs sense. even increase know part then of maybe in but had would around it actually more we - makes becoming or I on proteins I that's protein well.

of business that said better of in in just market I of So do sense looking XXXX. terms the comfort part XXXX, and feel thinking how is have you overall others guidance there? But level a the comfortable for you about know versus your pretty are XXXX that in to wanted get

Tony Hunt

I a close XXXX we on well businesses last organically think our not really year, did so the see grew bioprocessing really because did Repligen XX% agree, in direct industry, was Yeah slowdown year obviously tough market that to year. side, the for the completely

the November, the which think well. protein our at the working as saw resin move into going overall growth similar our is of order and our was year, proteins said factors improving, we on we it's that's in through probably that we the strong clearly I working expect this ligands side, QX it of the to that I in think we the business peers we as in our load, And key that order are terms very we is as reduction to many As what through accounts. up, go is market in are QX load ligands through witnessed then inventory strengthen. working burn are not that and year the And necessary to more we we

Amanda Murphy

strength competitive the just you're kind from strength competitive be you because -- columns. just to this player's things, have curious seeing business curious the And resins like given you there, or side? any talked you is -- are have customs the of OPUS the type sort of be have anyone the can got able seeing last seeing willingness a to what in what you side the change one, of standpoint pack that [main] in it. just you larger more willing of other to you are pre-packed obviously solution, are there, And on Got then in advantage about these

Tony Hunt

diameter in market there. side, competitive to is is to competitors XX-centimeter bring are we the competition [indiscernible] do, one columns that an two pre-packed there really did On equivalent is what other so in GE column some XXXX, there GE the and

change at think but other resins any of that in resins, players terms any at least their willingness that pack our changing. seen change our other haven't beyond of strategy any from to from seen or indication that customers I haven't own that’s the will we've We in internal teams sales

our by yes that’s next so years. players we that when we five away space as committed is the but where this are themselves, competition, with Repligen the columns business, the pre-pack columns major think technology and I really in look to last we services self-packed really we the completely And innovation here competition, glass look trying GE at additional focus really move that this Analyst bringing we're the Day, we're know, differentiate said is. of our created to and into and larger place the at to a You over believe majority we expect few believe to years market I this continue market customer that, great columns are columns to from other competitors the customers [indiscernible] convince done over and will

Operator

comes question ahead. Drew next Jones from go Please of Our Stephens.

James Rutherford

for on Rutherford James is this Drew. morning Good

XX% Spectrum start, the growth, opportunities, the to digging I track something XX% since that growth on and there making would are acquired unique if quarters operation. then in the little the last repeat XXXX above growth XXXX. continue performance couple not of of about a given well about you north through strong wouldn’t just is you investments growth cross-sell business, reason through wondering there guess just that to kind just in the and a thinking that Just then of I

Tony Hunt

they they’ve XX% so had half second year, they clearly, close in growth about if X% year historically growth probably in in we the essentially, half, of a half the of second Spectrum of HX And had the XX%, the XXXX. that stronger had than so With year to first XX% you finished remember range.

where So exact of expect much the second of business in percentages the half to stronger. lighter year. right was than thing the don’t I would Same you finish. year the opened inline half first XXXX, but the half second the Obviously

if this think as so, trying really and about million $XX $XX year, we're get And we arms XX%. $XX million think there it’s go we guidance you that and are through the obviously revenue, on million to trend around a the some is do to our upsides so

we're XX of on be dollars least So, achieve that or may top can a we that. hit few expecting at million more

James Rutherford

the be likely only stronger that’s growth, would XXXX. now the well Okay half case all, but is revenue as seasonally kind than second for

is commercial a single a back you're in momentum when use single place you stepping an there there having place. do production, find but good XX% clearly, and so if use for little, the revenue quarter, on in think just that might a take opportunity So, kind to

Tony Hunt

into Absolutely, used XX, line I think the with single ATF QX really the in ATFXXs at of launch the of year, are use end last QX product of production.

in got that late expect So, not we're processes in any will use XXs we single if fully commercial for stage, sure, sure but XXX% that I'm happen.

James Rutherford

adjusted for and your EBITDA then you just XXXX? expectations can question, share excellent Okay last in

Tony Hunt

Sure, XXXX. we for are looking EBITDA for to at adjusted about $XX $XX million million

Operator

Matt next ahead. Hewitt, Please Hallum. of go comes from Our Craig question

Matt Hewitt

couple a for questions Good morning, just of me.

a the be thinking been amount we First to one, you related mentioned and but line segment XXXX was should expense Spectrum here variability quarter, that fourth product timing fair payments operating in launches and the that have into some could investing cadence of be there new how of related R&D in about you that will or create in XXXX? in any some

Tony Hunt

with actually the we and our benefits R&D what number all we to take we it's up I teaming are we And look years, that on years and it you not market. XXXX, so on line of of done the are a at product to Yes, to have of what product look XXXX, we last done line, of an real will to ATF I internally to should take TangenX we if products for that and as the new on too go the XXXX think bring spend OPUS R&D handle think you deals one the one basis, move you we a over much opportunities dissimilar with we the a a say as we all is Spectrum we next you get doing into better I how in are think that launches put the products product expect so have and launch. a X%, around through we and think as few should increase and in to XXXX, steady going deals I -- of stream to new are percent have the take I especially over see have two

Jon Snodgres

of least the of second we half, spend be in year of terms indication. to asked first the an slightly will that versus you be the gives you that it half at And in linearity expect the higher about, it

Matt Hewitt

forward there to reason or past is Thank this the should a it regarding down another And XX% be XX% great. the maybe to moving I know, then that would companies get stay lower are you. why we little up and that's does year? one that Thank many question, we as bit tick other tax beyond you. rate, going about XXXX thinking how that

Jon Snodgres

forecasting again non-GAAP a we're from Yes, XX%. perspective,

uptick rate. we I tax we such, the think in more overall see profitable continue as and a particularly move in and Asia locations in international slight to should forward, the be

Operator

from question comes Jefferies. ahead. go next Our Please Couillard of Brandon

Unidentified Analyst

This on you for Brandon. for Thank the questions. is taking Christian

growth in Just in core XXXX, of the a relative on terms XXXX is there would half outlook, maybe second anything half. quick pacing you to call first out of

Tony Hunt

when year and half. observed year whole stronger the Spectrum that that the at of our Yes, with be of between than say look we the at our look portfolio first proteins business, with the filtration couple the the and we chromatography we over half would, last and second years our slightly will that's business seasonality

Unidentified Analyst

comment maybe about, given have to this you in so in pipeline XXXX M&A, with capacity digest resources Spectrum? Got it. fifth and do would to M&A at the deal had at end, the being five internal prepared remarks going strategic all on you your Tony, think talked on that And another everything in you point you objectives Thanks. that

Tony Hunt

really right, a a Yeah, Repligen in on that we front, a the been deals Spectrum pretty opportunities to have active the next of strategy is I that type which very and great clearly technologies, the two just of years focused continue lot we it. clearly over or say done, years. they but the and think same pipeline to organization it busy the you're of very is tuck-ins of within will our for an M&A have pipeline depends companies terms are find transformative on the is be the our active couple of continues transformative deal have that on I have part strategy are and we last people whether of

We organic we with M&As are expect rich some of the growth see is R&D I we that being do going that part we pipeline other will obviously should think the by more as in that that and we the to products driven have well. launch

Operator

Our Janney. ahead. next go Knight comes from Please question of Paul

Paul Knight

yours, they, to can of customer going I they and to Tony, you there. running, they a talk color be are Hi are think already any up Purolite

Tony Hunt

Sure, they today. Purolite, a are customer

to of I this have date exact again come are one building their but think it the process year, will and continue in years I sure. emerging be an they I the Protein I resins they the they market next players online in that but facility, will over larger the expect Protein resin and among player for believe the don’t are of A A ligands few think

Paul Knight

to house in follow add MabSelect or the know and your color ligands the or like product that? to of others you I their that A you necessary, is saying other advancement GE isn’t up a talks protein could lot that mean PrismA any And your technology using that in is on is the

Tony Hunt

revenue of PrismA, essentially ligand that all business said partner some not Repligen as and in and a GE the through a for September, will really that in spent on really have based internally their impact times. for this over happened that back on the may longer-term that well, little involved about I And so that. ramp so we've think Sweden. be as resin manufacturing GE fairly PrismA the gone of impact, that amount volume announcement the taking really make we're the that fair I years through few up think that’s the is ligand small as across think an I earlier, will in have And overall we the number OEM On the go of a expect time we I next piece they forecasts. is continuity strategy The

Paul Knight

you ATF slow what’s it I it factor, but half the of last today. I it to it could to is of and penetration use bioreactors mean seems then what's all rate remember the increase ATF, is productivity the or then be, would And last large addressable market, appears where technology penetration by a was bioreactors

Tony Hunt

ATF market. perfusion XX% versus perfusion, used technology continuous XX% is in market in So, of really probably is of manufacturing fed-batch the being to and the or XX% the

majority bioreactors the a of So, vast fed-batch operating are note. in

technology. ATF So, they typically use would not

we're in in the leader really that or market perfusion manufacturing segment. continuous So,

ATF the from what within small I XX, where days train marketplace, don’t well is so we're a you called called bioreactor n-X we're I and penetrated, XX reacted over to beginning of let's using have there technology I is what's by an and to make very the progress say where think go application. the whole and production, we think number doing there exact fed-batch some seed process course the this is are

one the in smaller of and a in bioreactor large process. and not cells the the concentrating you vessel you're into eliminating the giving are So, that production steps

is manufacturing roads in where really So space are train the we application. in some fed-batch really in that's the seed and making

worrying immediately have benefits the by capital I on the one single-use really us allows helped about because been the think customers really technology their of to single-use do able of do expenditures ATF portfolio. have that's So, what to they evaluate and has it without that we to launching

Operator

instructions]. [Operator

ahead. question comes Analysis. Schwartz First go Our next Please of from Steve

Steven Schwartz

around question you're bridging to is really, your at growth just, one looking help Organically, revenue My XX%. in XX% for XXXX guidance. some

margin. if at 'XX, reported end we You're you're on X% guiding $X.XX EPS the look for the top gross looking for really on only versus But up you EPS growth.

for additional $X.X a tax that's the XXXX? growth just about your out comment R&D, why $X.XX, is and wondering million call do You beyond I'm EPS about little higher but

Tony Hunt

that help with think I can I Sure, Steve. you

going $X.X driver the of our incurred look at primary from $X tax we XXXX to your in you be only that's tax the we a basis you million million that's more that the look in about you at in a somewhere can non-GAAP of million obviously XX% expense going guidance, If see then add and of to of PDT, to $X range amount more. tax significant gave if rate

Steven Schwartz

you're it And if Because kind $X.XX that. benefit -- that quarters, to me the non-GAAP adjustments, a like how it. the quarter, did fact, it And of I fourth not that out in then benefit in to first close non-GAAP now included got there for your the you changes added looks was adjusting accounting? -- $X.XX X of it what expenses Okay, made work you that it's XXXX. in to reported are in -- was, obvious about What up XXXX? for add from a

Tony Hunt

non-GAAP I think there was benefit a the from accounting.

amortize intangible assets, take that we pieces - and look an or Spectrum equation items capitalize out costs If non-GAAP of we acquisitions through of TangenX from the for you you perspective. take are pretty significant non-GAAP obviously the well we deal example, and those as years a

definitely a helping to basis. from it's non-GAAP So, GAAP

Steven Schwartz

Okay.

adjustments adjusting And after first the tally was the the EPS. reported X example, non-GAAP you in for be $X.XX first EPS quarters then you that EPS So, than non-GAAP those calculate What accounting? of is It the previously in higher you X-quarter $X.XX. XXXX, would today, today now, reported? you're you announced non-GAAP how

Tony Hunt

so other question. to a looking we’ve understand to all think sure change made I'm and non-GAAP, that each trying not our Steve we're I at better your

Jon Snodgres

we Steve bit little that we changed in be offline haven't accounting. may cover So, detail our but can more

Steven Schwartz

what Okay. you're what I certainly, as reported quarter comparable last fourth you than was in quarter press the penny lower read that year a this changing, thought the release I were for the reporting and you year.

So can -- take it we but offline. certainly

Operator

the back our like any question conference This marks. for Tony and over I concludes Hunt answer closing turn would session. to to

Tony Hunt

on just a our thank catching joining QX you. with to morning I'd few months okay, in report to thank like results us more and up will forward this and for we you everybody look

Operator

for now today's is presentation. you attending concluded. conference The Thank

You disconnect. may now

Repligen (RGEN) 22 Feb 182017 Q4 Earnings call transcript