RGEN - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to Repligen Corporation’s First Quarter 2018 Earnings Conference Call. My name is Alison and I will be your coordinator. All participants will be in listen-only mode. [Operator Instructions]. Please note that there will be a question-and-answer period following the company’s formal remarks. this being note Please Instructions] event recorded. is [Operator turn over Sondra to would Repligen. Senior now host call to like for Relations call, I your the for of Investor Director Newman, today’s go Please ahead.

Sondra Newman

financial financial morning, Good of call, reporting first On Thank the results updating year. you. the our everyone. for and for we today’s are our guidance XXXX quarter

report. John Our the quarter for our business Snodgrass, provide President will highlights and CEO, Tony Hunt a financial our will CFO, share and

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

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

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

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

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

Tony Hunt

call. to and our QX Sondra. you, welcome Good morning, everyone, Thank earnings

organic our had chromatography total Repligen the filtration with from growth to year, a very strong XX% morning, reporting reported XX% and year-on-year direct growth than revenue As this start franchises. greater

encouraging quarter strong where the in sequential excellent to saw Overall, industry presence. our on quarter, in XXXX. being and reflects an with XX% bioprocessing diversifying direct-to-market so leading focus also QX our signs innovator growth OEM product We strengthened that demand compared Protein resulting through a our in lines the on franchise,

our XXXX. we some of on reported very priorities call As specific in February, for the set first-half

and year commercial portfolio Spectrum training First, broader integration the the performance. commercial changes necessary on roll training out We’ve our plan. the started of We implementing products integration, focusing Asia. on implemented sales in a force and collective the and completed

the followed we’ve of roll with QX. pro to forma team North combined The QX, the excellence growth the complete of performance by which has integration first Europe, months been strong the changes business by during in through the a of started team. result will execution in this in period, Here out America be eight of Spectrum XX% ownership

in with March new innovations. development we several in the OPUS launched time and launches planned. was is product new Second, XXR products about products have on new XXXX additional all multiple pipeline.

bench-top ATF that, systems R&D controller is our developing examples. team important as delivers expectation the throughout new Our year functionality expanded will for XCell series product technology have a launches we for on systems of as TFF and

points. reinforce of direct-to-customer strong On broaden addition third, our top to to to XXX our our fuel growth product building we R&D We execution. markets, expect these and M&A. business commitment delivering to by in internal portfolio line margins new performance, expanded top revenue And new gross products basis

main the performance the product performance our of the and in to now lines Moving first three by region quarter.

established of of acquisition a many have and expanded regions August, As we across global Spectrum last result our much footprint. a larger

months, perfusion from we greater in XX%. up North family Jon ATF single use were momentum, section. sales regional continues total and XX% representing Asia performance drive America, goal the use with threefold in our of quarter. technology on filtration has provide ATF capture and of will XX% for contributing with continue adoption clear increasing Spectrum first our last the awareness customers XX% was Pac. detail the XXXX, in as XX in first which more the of customers his quarter with Europe, rate America base. sales from to was installed additional to run quarter and benefits further quarter. than in gain strong our direct the product $XX more of opportunities in On throughout ATF and trial first products, North the When from to the of consumable last during applications. franchise million in resulted during grown the products has XX% than performance, developed particularly gain During over of This our traction lower quarters barriers Single line the of few we the Asia, performance

customers feedback Our remainder and for performance the and new funnel early strong sales very the of the from positive. on is year our QX of controller is

system cassettes. with hollow continue these this systems track KRXi will feedback product our the plan pro-connect also away the related single second-half developments, especially systems terms of automation. the the process fiber U.V. products for demands well, market additional functionality provides called provide cartridges In in pH, from module perform launch walk and on customers products, systems. to launch the TFF year-on-year. our to it product and second-half unit customers XXX% here systems taken rapidly R&D up customers. strong Basically in our story With our Lab lab-based Demand flat XXXX, measuring for a is into new and demand we conductivity lab-based use and and has which grown We’re of sheet to with has XXXX. in for team over of systems, TFF conduit the for

revenue TFF fiber TFF our synergies. systems hollow of our from cross-selling creating more Spectrum customer seeing flat sheet base into also We’re TangenX

continues accelerate. TFF flat business to Our sheet

a a the of with to revenue in Spectrum start XXXX expanded wins representing coming and order sales strong really force, load result of off significant good and direct synergies a very another Europe deal. from example in Asia We’re as

now Moving chromatography. to

Our in chrome of OPUS strong number – franchise quarter shift sizes. our and we various We the columns growth led a strong by across record of family had column has strong the products. have demand

nice also for XXR format the the recent This to is recovery We in and processes, second-half in the at of clinical resin especially addition which of end on Proteins XX columns in most launched product opens our this available the up largest also the result, see as And pickup the our feature. and in sales centimeter a OPUS the Interest pre-packed includes a column is markets market. late-stage strong. commercial we recombinant year. expect QX,

market team more expect the progress on to continues products make coming offerings to R&D technology year. the to new second-half to and chromatography we maintain of have Our main good – edge in our

Finally, franchise is our Protein improving.

with As In factor you and know, solid while filtration $XXX performance pleased growth expectations direct in continued Spectrum momentum the With to was we’re we and with the look in tracking will we’re core both positive. business. had QX, expand on. QX, for healthy demand positive year-on-your demand tough, to ligand $XXX further a and a and strength QX And the in summary, which remains outlook in franchises, second-half with our ahead saw million, full-year and a revenue in our we and forward company for of we guidance full-year our to raising of is growth for very year to the signs XXXX. the very chromatography strengthening XX% growth date challenging comp plus sequential Jon the million

and about believe key in quickly that excited company’s and becoming our drivers our for future portfolio. We key for will development significant expect be our as that company, really our we drivers execute and R&D We’re portfolio strategic customer accelerate a our differentiator potential we growth. adoption the products on is products

Now the over turn Jon QX reports. I’ll for financial for our call

Jon Snodgres

mentioned, financial Thank morning, XXXX, all we’re as you, otherwise our first of reflect Today, our year. for Unless non-GAAP measures quarter financial measures. for good financial the well guidance as and updating adjusted results the discussed Tony, reporting everyone.

XX% first compared We are GAAP quarter $XX.X increase at revenue first reported constant reporting the XXXX. of as an of million, XX% currency to quarter XXXX of and

earlier, From primary a base. mentioned perform we America, filtration key growth Asia and experienced and now well, a filtration our quarter product Asia we in The basis, portfolio. portfolio region chromatography pro total on continue perspective, in direct our regions company’s Spectrum. and Overall, direct-to-customer to expanding overall lines where forma commercial Pacific, increase a by XX% driven team was in revenues strong Tony revenue the Europe, the product of the including regional was North with broader performance highlight Pacific. our our approaching each As saw XX% of in of

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

XX.X% first the was quarter margin XXX XXXX, XXXX gross for adjusted of the point versus basis improvement period. comparable Our a

from our of resin and to our XX% our Our mix year. products, in in is gross positive line column Spectrum the of of to the growing filtration drivers XX% component impact positive for systems Key franchise. guidance filter owning include margin the OPUS our with synergies ATF

to million XXXX. operating period were the XXXX for GAAP in expenses. million, $X.X expenses comparable moving quarter development the compared and first Now to a On of research $X.X basis, for

ATF for controller market OPUS launch was Spectrum and conduit on QX products. Our new and XXR on focus in new our finalizing developing column our

We related the XX% of to to Adjusted as our Spectrum as ongoing to X% build related first million of our growth. out field expect for remaining our applications spend revenue of our million, infrastructure to of XXXX. well this was the R&D is with Approximately field expenses compared our to first departments, support portion pipeline. service and quarter quarter increase SG&A for to to $XX.X the X.X% year-over-year year XXXX $X.X required of support from acquisition,

earnings adjusted Moving to and EPS. now

operating quarter XX.X%. XXXX, first the For our margin adjusted was

margin for compared first an operating the adjusted in of the to income or for increase XXXX. period same $X.X EPS to was quarter sales Adjusted XXXX diluted to growth. compared quarter increase per million, $X.X first the first was an the net from $X.X the share, XX% by increase fully million, of XXXX $X.XX share XXXX. quarter XXXX, grew adjusted of million, first for per $X.XX and for from $X.X was XX% year-over-year million of driven The of income pull-through quarter Our

first to delivering income the quarter favorable the In from in of points investing adjusted related for first in remaining tax adjusted from that benefited addition income to net stock not percentage approximately the company’s XXXX. compensation of benefits also recur X quarters will the strong three one-time a position quarter, operating of

reinvested million of $X.X nearly flow $X.X of and cash quarter. capital the generated we’ve annual metrics are the equivalents quarter compensation Our operating GAAP at cash into million were cash March during inclusive million $XXX.X which payouts, XXXX. in expenditures We bonus XX, and first

to Now XXXX full-year guidance. moving

Our the reconciliations GAAP XXXX press to our release. in non-GAAP earnings reconciliation tables for today’s included guidance are financial in

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

We are maintaining margin XX% gross range for XX%. of to XXXX the guidance in adjusted our

revenue. holding guidance our $XX range the operating in of of XX% to million adjusted also margin income are to adjusted million, reflecting of XX% operating We $XX

tax our at adjusted income are XXXX expense XX% pre-tax maintaining We income. adjusted of

and we of and a the EPS We the to fully our are our a for million have income of diluted guiding net $XX.X $XX.X $X.XX $X.XX XXXX increased adjusted increasing to to range are guidance adjusted to million now top-end per full-year of range year, share.

of the million for continues of our to in upcoming We to XXXX investments $XX continue expenditures Company EBITDA $XX the the range of build $XX and our global expect facility out in invest million. of component to adjusted Marlboro implementation. filtration ERP inclusive new capital expect templating to million

be And financial completes to call operator will at We compared back expect to GAAP $XXX.X to XXXX. report. to lines the end $XXX of for million XXXX cash year-end This million, open metrics and cash now I the our equivalents turn the the questions. approximately

Operator

question-and-answer session. the Daniel Citigroup. question We will first begin come now our go Instructions] from Please of And Arias [Operator ahead. will

Daniel Arias

or you’ve through full-year? then you. might little where see plan?. – the XQ good add And the versus million sort I’m our in bit a here, this Tony, I’m the this Hey, morning. second-half can you to on quarter the you past in whether Thank Spectrum, seen first-half that make year just weighting of color I’m above wondering year? way year, the you think we as you you’re on a $XX you’ll you of out did the trying that this put that for the smooth that thinking are context just just

Tony Hunt

as Yes, down, we some just I think, finished understand last Spectrum. we for markets building were momentum I think, Yes, year sure. nice getting off to the up

And the single in so systems in we’re those we’ve early use systems, especially acceleration in and the nice and in the for QX really both process demand pro-connect systems, here and in two the QX. seen seeing probably is again products the areas lab-based really

stronger versus coming Historically, revenue push sales year make to point be little Obviously, the incremental real we’re sure first-half. Spectrum working stronger that really had second-half of that to quarter. expect trying has the every We where from first. than the still that’s to is view of the a second-half So been we’ve from. a

Daniel Arias

maybe the we or be contributions If in XXXX? out the of that second-half thinking we’re of highlighted more to of Spectrum Then side the products. into revenues you’re things new year there. out coming and of products Okay. looking that doing about the incremental the then terms Should coming you on TangenX some VX just

Tony Hunt

is of products to XX. be for Yes, products on the business, the chromatography new the which are really new side, going most OPUS

through expect some to year. of for revenue in the So OPUS our comps XXR coming see second-half absolutely the should you

think that. QX conduit The other revenue, the the of so then the other second-half a again, on areas definitely in some And we should launch year and on are is product pickup should would product Spectrum, nice timeframe. picking controller up that areas for the I some the ATF, probably revenue

hit – about in really for And these future, more XXXX add XXXX. embedded going right. that So nothing would all get I marketplace. I is products We significantly think, in but talking have that’s the the the products XXXX, to setting really TangenX development, definitely products still we’re we up are under much as us pretty in

Daniel Arias

since sounds like And once giving okay. then it maybe Right, more you’re us three-year.

the driver something year? this portfolio, shipments XXXX? operating fair? above there mix on Opus overall into you being stay XX% corporate that the year, more On can the guess, or then, this a And I is margins, for do that that’s margins XXXX see Is

Tony Hunt

Yes.

maybe think, the Opus I is So the XX% on side, fair.

versus number wants in so revenue, increase to shipped resin-driven, now target exactly off than we’re I of we’d the… think come that’s what Obviously, that to our in to be going so has years I is column for the of – number going continue mix a more a will on comment – been that’s on bigger And be terms of year. see Jon maybe the the the percentage and overall expect growth column-driven where stellar. a would to

Jon Snodgres

margin have the positive of to one versus key margins. basis, revenue of a that’s important from larger definitely component us. revenue XX% in guidance column non-GAAP an the resin so on of our of percentage for that’s component And on the XX% the will Dan Sure. impact components of a that, absolutely

And in good. things so far looking QX, are

Tony Hunt

positive a for to to and that Dan, if think going I be continue go XXXX, us. is mix be you And I think, mix XXXX the into future, for

Daniel Arias

Super. Great.

much. Okay, thanks very

Operator

of Our next Stephens question Drew ahead. Inc. come from Jones will Please go

Drew Jones

you bit fully to expand European for be what’s little to American can and Tony, the then sales North Thanks. on do left a organizations cross-trained?

Tony Hunt

Sure.

we we region. off, the year by the take felt started we that could really when integration So,

Asia two managers much sales XX and XX, engaged. Asia simply challenging had So around because wasn’t our Spectrum was had it pretty And people. in we that really team QX getting

pace quarter did quarter then So we and think the reps that, all for disruptive the least we we way, in on organization the to really finalize this is America. business. way FAS do the the it’s this North drive focus on And just integrated to in QX. in next those. sales side we Europe side that for product the decided would training on then what management our We in and And to

in of it’s the basically right really portfolio So what’s left, product – the for management team, is collective Spectrum – terms really the now, for Repligen team it management Europe and product traveling the teams with has FAS we’ll and done. been Europe. people. – training are deep in sales the we working working training All and together what from product all learn do

reps today. we’ll into between the integrated done moving as and of we’re have quarter, This guys reps North interaction those America America for the training a the said, in mode QX. in an happening North all there’s That lot well,

teams together. numbers. the for working reps, working it’s the Repligen like they’re a versus from running of we’re So number silos, is in not everybody But still Spectrum

Drew Jones

And the of is to there? shrink more the be rebound, it. run or Got ligands a Any helpful? rate, of function Proteins in that color some on normal then life will on a returning that is IGS more there more from

Tony Hunt

Yes, our between I split this in in say of we of saw it again growth ligands orders and in that, and Proteins QX you during business quarter. if and the look year, year you incremental at would overall, factors, QX coming last

the growth Board seen but that uptick the an and in So terms that, the players for main again, first-half of of go through saw saw factor we we in that as across demand we’ve QX, the year. have ligands, we in we

growth really X% the think, So And be of – feel growth the business. a factor from this we business end business. on Proteins the about rebound that I the we’ll growth for year, year, good pretty good the by at

Drew Jones

guys. Thanks,

Operator

will question Please Peterson go ahead. Our from of next come JPMorgan. Tycho

Tycho Peterson

as quarter? you at through inventory can of worked on levels on Tony, point? drawdown, that the the note, maybe inventory the just thanks. that And comment this of last been has Hey, GE end

Tony Hunt

get us the drawdown. on a read it’s to Yes, really good inventory hard for

the we’re encouraging. get coming we that are we in QX. we’re of the seeing saw second-half the signs long-term that, very drawdown of and in is we positive be saw My that forecast QX, the complete, into these think, additional seeing are will by through I sense it the orders that, that most year, time

Tycho Peterson

to scaling guess, about I the accounts how focus you demand then, your launch from process customers? of around end And important overall as we reading And a you’re business? about as existing can sense think just much versus growing a new seeing markets, the is us then give how conduit analytics, by

Tony Hunt

Yes.

the with start I’ll So conduit launch.

us, customers For versions and add-on detection. to our features And something systems. conductivity, they’ve pH, TFF over five nice to And that’s It’s system years to basically – end U.V. KRXi U.V., of a was or to now product last different asking it’s the really has really the pH, as want that KRXi ability and users the able measure that trials. be have been to for. the has to conductivity that, they been the is bench-based all this system large-scale a four launched as that run feedback got have it like the

So would want customers feature. XX% that will expect we future that of probably

will in when opportunities really new a – of to be have centric being installed you Asia been all The focusing that’s of there fold. that Tycho. an new how new but question sell our we We’ve have only and that both. go the in customers with able North to an it there’s look do looking little bit how and for seeing base percentages really sell the the you what we East doubt business run was other and base But going to was coming add do question an our versus in what’s with TangenX is, on the been with and that’s exact to the business, at happening, absolutely we’ve existing I are customers quarter KRXi, doing successfully one Coast customers don’t we’re growing that accounts really business grow that’s at It’s been in there’s that be rapidly. new drivers pretty we a been module opportunity, no accounts business start how So new every for up? on scaling into businesses. new that. much installed not and are from Board been reviews customers very major back across been, And that America example, into we’ve coming to many Europe, into

So part an it’s important do. we what of

XX%, seeing on to new in Tycho, contribute the – number XX% of any terms really the – think, individual also is annual demand, some of existing what I from nice of is basis recollection on customers. percent But business. an my one the customers revenue kind of we’re

scaling we’re seeing on So that who clearly those are folks up, ATF.

OPUS with line. product that seeing We’re the

We’re that from the technology definitely fiber seeing Spectrum. with hollow

customers So it number but is the coming through. we keep are a balance, clearly, on that eye new of an

Tycho Peterson

announcement month, one, on anniversary And I then up point? you M&A next How bit come you at looking deployment? a are little this just last we the the capital Okay. guess, talk actively as guys can on of Spectrum at

Jon Snodgres

to on combination Yes, for also think, great able a the later, new and technology is I M&A side, a success there. develop continue year out blueprint our for of to of that’s part products look yes, being

So of we’re from also when done into really the then and it. that think, importance our out take you funnel do and conversations for or of able And That R&D – call we’ve acquisitions makes with us. look new think technology that should before. had act do the being from I sense roll things turn programs probably away We’ll this at continuing of hasn’t said, comes and a absolutely on opportunities. ton something to these we along them absolutely been to that

able success out been being single-use ATF. of ATF the products to take that’s in we’ve huge ATF, So

technology that and which the on you’re here, more reflection core really what to acquire. products launches strategy a from of see I year this think, our is that to and year lot we a is develop be should product next Repligen going based

Tycho Peterson

you. Thank Okay.

Operator

Our ahead. March Please Montgomery Janney will next go from William Scott. come question of

William March

Hey, guys, how are you?

Tony Hunt

Hey, Bill.

Jon Snodgres

hi. Bill,

William March

impacted has Spectrum sales First, how maybe Asia? sales legacy Repligen the could in you team that having there in just maybe more the talk bit region? force larger product a And about little

Tony Hunt

side the in what region direct we’re Spectrum were process. Spectrum in way in It’s Korea, on went leaders Asia distributors And with team India. invested that had and days, organized it’s that but had the Japan, individual in good in across and Yes. running we really is, very two sales in some sales the were early a that China replacing

started now with think, and the And interact leaders integration managers sales of Our of are the described. to country that biggest that being just biggest our those the the is each have deal benefit I countries really running beneficiary the I and filtration portfolio.

So we’re seeing into market. more ATF opportunities to drive the

a We’re TangenX sheet definitely seeing lot on more flat cassettes. the opportunities

say, compete the perfusion unified have So on in applications. good I with would other TangenX we cassettes that’s a region. would go front we’re the the flat little – is, bit the whole a probably sheet able benefit and to the most that customer happened Spectrum been thing with for to product we now just portfolio. eliminate with the really We’ve positioning But

three So region. the benefits in really main the there are

William March

around we that about terms to of terms Do column of concerned may closer the there be to gears you OPUS XX switching expanded about how place? where with new then need in market? the has maybe And Can columns? be column. are secondly, a larger column, the larger to talk you these clients in then manufacturing And be new to anything the takes need the shipping it. Got logistics addressable

Tony Hunt

the that – a impact on no we testing a and of we do shipping columns through logistics I the make drop significant larger development that any simply, in for of there in the do real OPUS there’s Yes, how part – of anything happen studies concern the if – dropped some sure we because crate be columns don’t on as of go product. was would the these think question, to part logistics drops shipping

we got did the the a done XX and product we’ve lot in of is testing what before it to with the XXs. of very past the So extensive which launched, similar

III So XX We the aren’t regionally, able want. diameter we’ll it a in like centimeter that think concerned the we’re lead They’re an well a for column, because deliver to probably the about think about that lead if you processes advance. And looking the with in not XX timeframe looking XX-week Phase be that column six-week really people with simply products customers planned for commercial type really time, to you time. and that, Bill.

market of the part the In is us, Protein the addressable terms opened the market. – the what’s of I recombinant part for question, really up think, of

think you made plays XX diameter that tend if to out proteins centimeter east, proteins XX Proteins, of centimeter, for about column, nicely so columns, made XX E. really centimeter mainly quite people recombinant into an XXs. out diameter of coli, use So the

all So start the to to the portfolio from X, pre-packed force those opportunity pre-clinical to proteins now recombinant sell for sales that’s you whole can our an and that use really into all accounts way Phase doing the are way columns through commercial.

definitely column is opportunities in The we other for centimeter XX for there. opportunities area there is up the Phase X pick MabS, where had a of little bit

be when sales. we’ll challenge so So more to and the years of interest, but timing we’ve a the when got of columns just we required, a little sort bit the see of of lot will the lineup planning, think are interest sucking out we’ve

William March

in then the in the single-use, Thanks. greater last the quarter? seeing think was that just that more I Maybe clients of switching ATF is be over? where new of clients, the And about sales taking company said ATF you XX% penetration and you, or more – just is new talking you’re single-use Got legacy about just with that one. may than

Tony Hunt

Yes, clients. it’s think definitely I new

in decision bench-top basically ATF system, single-use It’s go, really our into test ready new of that And accelerated. just and go and up there people of accounts. I up which down testing put terms pretty to it processes. the and seeing. adopting of we on your are easy it’s I autoclaves, it’s consumable reflective the to real ease-of-use, our for product but is really X it’s a it’s basically into at more products, think look you XXXX buy sales to XXXX ramp and and ease to in to you we’ve and quite people setup, the nicely a comes that’s and seen for down were here push If that consumables, you that it in growth picked through putting need to team it that’s not terms don’t We going steady big

William March

guys. Thanks

Operator

will go Our from next Murphy with Blair. Amanda Please question come ahead. William

Amanda Murphy

just a that asked, I column. have been morning. good specifically already had centimeter questions on few XX follow-up the Hi,

is in be lot you time? how trying a to contribute. that – meaningful you laid get for terms of contribution just segment If over in a obviously obviously centimeter could time? growth think be incremental, that to – sort targets trying of there terms or could sense growth of magnitude that of a the to have I’m over can OPUS tell line, columns start of that of that to expect sense centimeter there how you get So the you line just how XX product to a is XX product does that include that product of with out way longer-term

Tony Hunt

up orders ramp what I about be and with from switch, then pretty centimeter think and it’s we it’ll revenue of think in have and will coming product Yes, the – way XXs clearly sell good similar rate XXs XXXX to reasonable in the number to we’ll column, ramping that XXXX. XX the

then an thinking the now pre-pack I that’s not can probably we resistance less have about the about piece where switch to got if columns and you fact you XXs probably column, Phase diameter won’t is X I well, fleet get Phase XX everybody to apparent customer go sell that we only is, more have that super a and X or many once to centimeter the to a think that, stainless. I portfolio how is end-to-end, about it’s

we’re of portfolio. complete world So going the the a sales of it��s whole to to MabS, at of into opportunities. we’re to to And at will be people lift as proteins push well be world the products going in it recombinant think portfolio to able look in Phase now other least I able because X going the just get

Amanda Murphy

sorry revenue seeing discussed gave with synergies. and a actually you you to Okay, of terms and curious did, fair enough, number, you I anyway in Spectrum the think there if in of I of, was had Is that know don’t things like of looks also have at us, efforts around synergies viruses And kind into which you just if us I’m and opportunity? I give commentary of some of terms I the of outlined you some acquisition what more missed, to beginning sort then that the beyond are various do a number an move quantified you of and like? a antibodies as

Tony Hunt

are going the this track with on for in world we’re we We $X of million systems. are revenue goal definitely year the – sheets, and the synergies, that. $X activities right TFF flat Sure KRXi hitting on to it for see with can is that million our on the seeing

the… the now just terms broader having the in growth each are We definitely sales team second it push a sales of the the region then was seeing together. into part direct having able Asia and of sorry is part force portfolio Amanda, in And result was, what of being the to the I’m combined

Amanda Murphy

there looking that’s yes, to commentary looking, I around, of that just like at just had opportunity viruses was more just you did an acquisition around, beginning like I I the expand you sorry, was or the was acquisition antibodies that, for commentary how was outlined into so for progressing? areas when beyond just the things I’m and looking

Tony Hunt

the TangenX look and is there. that world, like big at market vaccine – both opportunities So so portfolio in of products. gene is We drivers terms addressing most, of their going one cross-selling was Spectrum the Spectrum with for the therapy, that the world the – when is you definitely it encouraging the most not there and things on so portfolio really but were

with those So that in unified and customers. go more message really we’ve into a position able been and portfolio to

opportunities that, to the sales move it’s really we then sell that seeing our start encouraged, look at sales and a matter early us as some we’re that force, just in lot Amanda, these comfortable making a of there’s beyond combined other how we’re whole signs, health we there is force even to with opportunities prioritizing and the up knows opportunities that on. of get to are XXXX there popping for So portfolio are product and everybody sure vaccines, of animal really

Amanda Murphy

a curious plans moving you but direct about sort part you that of are investors and commentary of this of smaller that continuity course just this the seems are growth half – line, about of the on talk quite becoming to at had years, and just thinking how product on if it the obviously number – last in able it’s point? still though contracts focused as are Okay over of about then if have any could it obviously a the you even to business in like still over I time you business terms of how kind possibly is and you protein place, you are provide one expectations thinking but rest

Tony Hunt

it’s specifically of at purely we look a around thinking proteins has continuity if this, GE, with we no on out their on the business, I and facility with and terms the way and don’t our feel it. relationships Purolite. that is There just GE’s with business business implementing changed. new And but plan, MilliporeSigma, building have ligands in think we the about Yes, news – intention that’s

have piece much in – for years. we’ll that impact is the we couple time work see the from continue of general, look And pretty but view and think that to a watch we’ll at you’re plays we part see part continue our total next will products how over portfolio invest and something for important the our the R&D develop that out over opportunities in next business be to same so continuity there an We’re we’ll business, to at year so. to still right, still point marketplace out and of and going the we’d to so it’s it’s an that’s us with an partners or smaller

Amanda Murphy

thanks very much. Okay,

Operator

come will next from question Capital The Matt Craig-Hallum ahead. Hewitt Please go Group. of

Charlie Eidson

Matt Purolite on you Hi, could taking this questions. facility for their A when any visibility thanks on can come on additional my larger you update is couple provide Hewitt, for do relationship, have Charlie the me, Eidson an for online?

Tony Hunt

again Yes, to check that but scheduling of me. yes my would got we’ve that – that’s something bring believe so Purolite. online their by probably as relation facility you they tells put, with that’s with I But I said a want I recollection the are that’s summer. to the good few think Purolite my agarose ago, a team, the end minutes

Charlie Eidson

and the then in is impact at Okay tariff to that’s Repligen China helpful expected situation all?

Tony Hunt

with No, we’ll are can’t continue I confidence don’t, I don’t obviously we – in we I like what say honestly to – so, don’t do we selling a but something know and that, XXX% have general that. we think

Charlie Eidson

thanks. great Okay,

Operator

come of Steve ahead. go Analysis. Schwartz First will question next The from Please

Steve Schwartz

morning good Well, everyone.

Tony Hunt

Good morning Steve.

Steve Schwartz

up expect activity? to of Tony, in is given remarks of on expense and new that the expense highlighted give this was what year the you how product your and the prepared across you idea Can you us an you, new year-over-year. R&D R&D fact introductions course a year rollout product have the

Tony Hunt

Yes, Jon I’ll you R&D the through line walk for let year. the

Jon Snodgres

Yes.

perspective, a spend we from to in products. new increase So to non-GAAP expect our continue

remainder that The earlier, lower at mentioned X.X% and expect that be of slightly we in revenue. of to should I of spend somewhere throughout high-end to the X% range be about it As spend the year a QX bit rate, again, then our expect to to but X% around X%. a increase we levelized

Steve Schwartz

at what the from sheet. the cash And bit a is Okay, like then quarter, business respect is But for number you’re either don’t statement I what’s quarter balance of know the flat cash your balance is? first consume about on your consumption? your the sound to that operations looking And cash. first that little Typically, or just with you good. cash your

Tony Hunt

Yes.

So the that I is we of driver first bonuses employee payout think the quarter. management biggest fact in that and the

the accrue occurs we then outflow the in each So expense, throughout QX year. those but year recognizing the cash

that I have So phenomenon. lot that’s the biggest of driver there. companies And a think

Steve Schwartz

Okay.

Jon Snodgres

Hey, and Steve, maybe just one comment back on R&D.

dollar ranges of it million R&D basis, I this of the a is terms at for think, in I $X.X million year quarter. to per kind range $X on quarter right per think looking spend

Steve Schwartz

to million. that in million talked level to X% Tony past the $X And you spending. $X.X getting for have about R&D

is be rate you right? this where to want So

Tony Hunt

of think you’re Absolutely. that, I go and through products, is year. think, to the right, And we we part other going I the the as see have to that launch equation

Steve Schwartz

Yes, yes.

one Okay. And small just then thing.

improved gross the I in about prepared procurement the on did business? your dynamics fact you the something going think, behind drivers your the chromatography there’s when with allude margin, Jon, you resin in to remarks, talked that

Jon Snodgres

Yes, there’s…

Steve Schwartz

that Does helps?

Jon Snodgres

Yes.

the some of component to of owning margin our are right. filters, of drivers the ATF So going performance the be, Spectrum one, key

mix our definitely – So of that’s our revenue is a big driver. in A second the the driver in column.

on the and lower margins So pass-through margin on type margin basically, columns we larger make resins.

and and they able that better big the they of performance take tends providers. better that customers the discounts And from And our to for get so, the typically margin economics gross platform OEM on that themselves us. as resin buying generate improves themselves, also it mix to but advantage as from products, source for generates they’re larger resin

Steve Schwartz

Yes.

it, it’s the with In roughly So, past, never talked, just to pass-through. we’ve numbers we’ve help on maybe – us that element. XX-XX the been gotten on the one into sensitivity it’s but hard I mean,

is margin, if on the our or And it the better they will, in it factor like purposes it’s something, different I gross is like XX-XX sense, for numbers? in got this a this immaterial behind side you so or where mean, of quarter a significantly XX-XX? from change

Jon Snodgres

we But mix. year we directionally And quarter, where It’s was this every aligned three points two get maybe budgeted. – it to of in it to four could that with move. shift expect in

to overall In So not with and improved going was it be numbers. huge this line expected quarter, last be year. right we our year where in it’s versus slightly to just

Steve Schwartz

Okay.

Tony Hunt

And who’s Steve, a given business, [Multiple it’s a on depends lumpy right? Speakers] ordering it somewhat in quarter. So

demand it’s more of quarter, be lot more So CMO a versus dropship. that it – lot will a in procure a we to pharma would probably if you’ve given is going demand, if be the resin got

little who’s ordering. it a bit of on So depends

incremental going to so when what’s at an is you type improvement of that And look it basis and on annual happen.

Jon Snodgres

as that And I’ll on well. to Yes. Steve, add

for be move or the that any ongoing range, is XX% that expect it We would quarter within above guidance on to an year shouldn’t around significantly year Our the that basis below range. to XX%.

ranges So all in terms plan your I be of building to out quarter. would each models, in guys you those

Operator

go Brandon come will question of Please ahead. next Jefferies. the And Couillard from

Brandon Couillard

morning. Good Thanks.

Tony Hunt

Brandon. Good morning,

Brandon Couillard

give Spectrum is tracking range number this the us the million that to say now Jon, to safe Jon for quarter? is can above flow you million $XX And for $XX it then first year? cash or operating the just Tony,

Tony Hunt

probably but the range, Brandon, in high-end business, Spectrum the towards think, I on range. we’re tracking the we’re Yes, still the of

Jon Snodgres

range million. That to being million $XX $XX

Tony Hunt

Yes.

Brandon Couillard

figure? have cash do Yes. flow you the Then, operating Jon,

Jon Snodgres

Yes.

the $X.X into million. $X.X you spent it in cash back flow, the cash So flow million CapEx. operating was we almost And then if about free

Q end of So into we – neutral were between on QX. QX cash basically and

Brandon Couillard

just the business can Then Then be first the in up last tough actually okay. us give of how comp? helpful? quarter any you – – for last progresses Tony, against of just remind base whether the the through one, on comparison us the would then And one, color Tony was year-over-year that it Protein more the segment, any balance that year

Jon Snodgres

sure. Yes,

So year-on-year, tough. was the was down comp incredibly the – business but it just

and in not If look be example, pretty actually over that business, you first-half tends to ligand of of ligands came actually the lumpy last XX% it the at normal. the year, was revenue year the for in

think the So that for tough. I year comp just that first-half in general of really is the

this balanced a as I year. more to demand go see we think, bit through little going we’re

a should like So XX-XX. type – probably going to scenario. like shouldn’t XX-XX This be more it’s be year, it it

Brandon Couillard

you. Very good. Thank

Operator

[Operator Instructions] question Please from Westenberg of David come C.L. will Our ahead. next King. go

David Westenberg

you taking for Thank my question.

the of a So of I last continuation kind question. have

what in with catch-up slack So about market? the you business year reminder is is, in sort question opportunity why of to in the of this the the that the can kind a the I’m you. the getting seen the of year? – that you us there second-half first-half we’ve Thank of And on year of any first-half the Protein lumpiness there’s give at versus of some

Tony Hunt

to when demand tend be in the Repligen at businesses, It’s at. you’re look looking think, a I you OEM not that they lumpy, general, Yes, – right?

seen has demand. inventory has a year been little you’re light are in second-half. sense the levels. at down first-half know you’re a looking a we’ve think, that GE we little port a demand, in the GE ligand drawing year dynamics the pure that mill versus looking had demand, I the been a of looking this Historically, You’re stronger different But at at

And so up to picking get the when end we the they’re as we look year. longer-term forecast, at their of

encouraging. that’s So I think

our increased increased seeing our other ligand factor. providers seeing growth and and from demand for we’re We’re forecasts demand

the are XXXX little just than other that that’s a different dynamics in So years.

David Westenberg

– inputs your if that price there maybe see in Is currency remind on in Thank And to impact questions. or even price that you maybe price local Okay. I And say, that in dollars. U.S. on poor maybe any the you. see product that’s expect you you me, mostly on, believe U.S. other currencies? you’d it dollars competitors for are my

Jon Snodgres

Yes.

I say the to smaller of XX% in And think – dollars. in then bigger U.S. remainder would piece David, currencies, much European our XX% So, about out I revenue priced about was actually Asian in with a piece the currencies.

regions time, offices competitive available acquired Repligen likely various the it into open have with the pricing to local that in we’ve a plans migrate as in in local we situation. And products. the former are selling We’re our currencies currencies products as Spectrum over becomes to

benefit So in as about And will going we little in position. it’s that on a but a us putting us to bit think we all expect we change competitive of forward. move see certainly a basis it more forward,

David Westenberg

you. Thank

Operator

to gentlemen, any conclude like Tony and will our session. I would this conference to Ladies Hunt for the question-and-answer closing over turn remarks. back

Tony Hunt

in for to like thank everybody today. participating just call the I’d Great.

we’re I in think, here company. good for XXXX off start to a really the

QX. to we’ll to on with progress catching and development in are the that in and everybody up in products new bringing our about excited up definitely We’re look August speed forward

So thank you.

Operator

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

You may now disconnect.

Repligen (RGEN) 8 May 182018 Q1 Earnings call transcript