Earnings call transcript Q4 2022

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Operator

Good day, ladies and gentlemen, and welcome to the Repligen Corporation’s Fourth Quarter of 2022 Earnings Conference Call. My name is Chuck, and I will be your coordinator. All participants will be in a listen-only mode. [Operator Instructions]. Please note that there will be a question-and-answer session following the company’s formal remarks. all be wish questions a time. accommodate question, ask at to will there limit order individuals to who a that In of two

would over the today’s I Ms. to host call, our for call like now to turn

Repligen. Sondra ma’am. go Relations ahead, Please Newman, Investor Head of for

Sondra Newman

the our report. full Tony highlights XX-month Chuck, the everyone and for XXXX. for three XXXX. and year-end then financial also Repligen’s CFO, ended you, CEO, guidance We’ll call, for December provide open and we fourth year Hunt; quarter to performance Thank Jon this President our will periods financial Q&A. XX, and and welcome On cover business we’ll up call Snodgres, report, our and will deliver and the

that those differ. call, statements may expectations uncertainties during As cause company, goals of and and events the we regarding to the business subject or a including financial performance are that actual for the forward-looking this our risks make to reminder, results

related Commission. is report of Additional our are Form Securities we current the concerning make on filings included XX-K, other annual X-K Exchange report with our which XX-Q, and report quarterly risks and filing Form we Form information that our on in to today, the business

forward-looking Today’s except result The future update change events commit as management’s company or views, or required law. does as comments statements, reflect of which to could itself otherwise. current by a new information, not obligate

Web that and issued site non-GAAP our Reconciliations included non-GAAP providing this GAAP is results the measures guidance. in sec.gov. which on posted this call, we are we release During are financial and of morning, to press to

current results per SG&A; should investors and gross adjusted are against our as expenses, but R&D well when of income EBITDA opportunities. including an margin; Repligen’s growth viewed the and in expense; operating and today’s figures better to intended as to enable report to financial performance Non-GAAP and income operating These Revenue earnings the adjusted income following. net as be performance gross operating and tax margin; GAAP benchmark share; at currency; EBITDA. peers not investment constant measures alternative profit measures include evaluating historical and

Now Tony to over the I’ll Hunt. turn call

Tony Hunt

Thank you, year-end Sondra. XXXX to report. welcome everybody, our morning, Good and

with base really market out the the finished the the second played vaccine growth. headwinds, changing given declining industry, pleased of close where to with by COVID inflation. cost driven the XXX the business especially demand are bioprocessing dynamics million we FX at way year half in in the patterns, year, order We and dealt in year We revenue

business the for quarter quarter XX% base up the overall was XX% up company in and the was in and while X% for the year. organic XX% our for Organically, full growth year the

given Our in an essentially recovered revenue. QX sales year-over-year we were base especially drop revenue increase $XX with COVID-related in impressive, million

primarily XXXX, business XX% year respectively. the up of For market driven outstanding, performance Within our ourselves growth our was our XX%, market, and was filtration results allowed us our franchises, by these the and grow consistently which over to chromatography differentiate overall our base were franchises, each to has the rate. Overall, XX%. to continue bioprocessing business up ability above in demonstrate which

in more through detail one I progress became drivers of change this the we declined revenues which As and margin of year, discuss in mix as will our product COVID the performance major fourth did later. the quarter,

to accomplishments QX strategic key priorities of our and performance highlight I our and for our into moving Before the want in our five progress against some outlook XXXX. XXXX, discussion of

was one number advancing innovation. Priority

team and XXXX with on pace years, have few of a our of was year. exception, We giving and we set launches disruptive of us R&D foundation focused systems and last holdup R&D Over architecture. infiltration increasing one build software a in three on four the new XX technologies. common launched to product during the volumes systems, complete our innovative no delivering products chromatography, the with ARTeSYN low

consumables XXXX with the to and the well optimizing sell filtration our be flow mRNA and this for to and paths company. therapy will the of are these meet positioned about recurring and needs systems We gene portfolio markets. now chromatography cell consumable increasing stream the

concentration The R&D on where real-time RPM to exciting fully time, The an automated and in which but to monitor system, the team first a process not also measure, stands we ability QX. KrosFlo customers the market real KRXi way. control for gives market launched into and management in delivered also System downstream in drug only RPM

XXXX; viral four in monoclonal We also affinity purification leveraged fragment three AAV our antibody one Avitide developed and on and purification. on launched ligands vector and resins focused and acquisition focused

controllers, completed automated we ATF the generation large GMP for more with customers providing scale next a technical Finally, launch solution ATF our our applications. of

continue revenues positive and our products year. a impact to XXXX generated New of our last Products business. have X% in on very XXXX launched

We expect here since this number XXXX to to launched for XXXX. jump in products XX%

and XX than We in out million and revenues to was $X scaled in therapy gene stellar build generating grew cell and XX% with finished and XXXX over a priority cell gene accounts and mRNA. accounts. accounts implemented and year in was Repligen therapy for The business active us greater top over year market presence second our therapy. technologies. our gene XXX Our the as well cell over

mRNA mRNA the building We had we off manufacturing. success in also vaccine made COVID market inroads the in

XXXX. products capture comps share, can well market here and you to Our XXXX of growth to gene overall cell Repligen as in additional in expect is this portfolio therapy coming very and XX% market hitting grows And XX% to the and tough see positioned in expands. off

and and in integrated build assembly XXXX third coming support site with of here Waterford, fluid XXXX. made was we acquisitions Ireland are XXXX management that The out from the Our fluid in build our integrate in to of XXXX on the management support Hopkinton, acquisitions. our now Mass out fully in priority our center

our in with are and systems now that awareness We a team, fluid dedicated capabilities. a of strategy, commercial synergistic have our management increasing of management community bioprocess and portfolio products growing the

the full was component which organic in to management we hampered we the XX% side. quarter by growth XX% the fluid the XXXX, off saw growth on and year the destocking saw organic for We build expect fourth for

in be expect We recognized to deliver franchise. XX% filtration plus growth in our revenue XXXX. This will to continue

fourth partnerships and portfolios A to expand M&A in opportunities pursue XXXX strategic markets. our priority was and to

Following for analytics real-time on Repligen DRS that Daylight year. string us and the DRS now of fluid partnerships complements Solutions last which Purolite, with we Daylight FlowVPX PAT bioprocessing. is company acquisitions, management and two gives The advanced leading position in technology strategic deal another in-line important a and puts an Ecolab signed

Jetted our through developed by our ligands markets. deal for include expands products technology in to XXXX extends with new the combine well marketplace. that Purolite mAb both relationship The to partnership our ligands current the do mAb continued Avitide fragment and out resin B Purolite NGL and The

ligand and stronger The through us puts position in our combination portfolio XXXX. of our in has to digit single content the this with consistent phase through transform Avitide Navigo final high over get last once partnership reductions here helped a This five of generated Purolite Cytiva to years. the drive growth strategy and much the in us we

was key facilities. fifth to our three complete expansion at finally, XXXX priority capacity And in

foundation fully consumable in sales. Our an for with flow demand completed qualified our supporting and gives recurring system our to assemblies market, in ultimately assembly strategy in support This and center important paths in June increased Hopkinton the was us September.

that We cassettes, capabilities and out fibers a Marlborough, It's build of our systems years the also Rancho, provide to for customers plan. continuity a plan over our sites. flat robust hollow key manufacturing sheet California dual ATF, with and expanded been at capacity part three business Mass last our business

of product manufacturing our nine-fold. increased years and we've majority We capacity years, next for capacity the two to last five the between have the lines. ample now Over three three across our

fluid XXXX, Waltham expansion capabilities customer and further dual of the application bring manufacturing complete our in we to Waterford in to assembly management. our extending center plan Here our in online, center

bringing In in additional addition, process of a new for capacity Estonia in online business. our we're systems growing opening up ligand facility and rapidly in Hopkinton the

XXX business While in to we continuity XXXX our points, continue our impact expanding as we foundation bioprocessing. will here believe place gross to share our in margins important in investments the have market capacity it's by pursue basis

year priorities to and now and from full performance. our XXXX Shifting moving business QX our

for XX% another products columns, our quarter the the reported Within million overall in As COVID we our OPUS the fluid strong charge base business major systems, today, growth growth chromatography despite management business $XX quarter. line drivers and X% ATF with scale of quarter. our up organic filtration base large performance our had XCell of in were our franchises, and the

this sales QX versus down were from customers and in XX% demand. over COVID a down the XX% position lowered the quarter. sequentially into revenues full reinforcing our XX% main XXXX, revenues and therapy gene quarter market. in the over up perspective, COVID-related revenues market were overall QX XX% as approximately year, accounts their approximately vaccine XXXX for XX% our contributed in From COVID

margin, ramp down products basis had the This sequentially and a for where and product higher gross much contribution in QX change a both mix from demand we lower in versus products chromatography accounted QX in decline from increase fluid in contribution filtration material points COVID and our costs in total plus proteins and management XXXX. and of XXX the

million For revenues. were of the year, or COVID XXX XX% approximately revenues overall our

and revenues to divided to majority revenues of COVID be range expected quarters of fourth expect The first XX between million. continue XXXX million in down ramp a XXXX. We XX to COVID the to to of are

margins. and Based continue cost than a gross of with in for margins see midpoint expect guiding in costs greater facilities, with manufacturing on material anticipated XXX and million the gross new XXXX XX% to to occupancy COVID inflation now revenues along in we our we were somewhat the pressure our where the year, last will depreciation QX We drop in recover and to do XXXX. on are from associated

to improve second of volumes basis in margin XXXX. shift our product to by the increase will mix higher margins and expand to products, points in XXXX As expect and XXX XXX gross we half

fourth QX the the non-COVID front, business total in XX% XXXX. versus slightly On up and were orders were quarter, orders orders down

QX orders business up were slightly. also Sequentially, versus base in QX,

positive in processes. late-stage quarter were quarter. as QX, However, our customers in signs we very had strongest products the pharma by commercial XXXX into for specified encouraged some in our We

We accounts versus also gene orders saw a XX% step in at up QX. our therapy

the as continues levels to offset down management demand the CDMOs see for some and orders the but orders areas CDMOs in this business with XX%. weaker base by total inventory at where weakness QX, work a Cytiva were and fluid continues elevated during were year, is QX that demand XX% full their We about the down to to as built pickup up was up OEM For saw we ligands through customers. in pandemic. of anticipated at continue component side order The ramp business

of half XXXX is believe that we the and second order confined growth the this in a expectation OEMs, We will that with to that first back and mode XXXX. CDMOs through continue move of challenge to will the half the

now moving franchise performance. to level So

and Our XX% chromatography over resin second for full growth, driven XXXX. was business demand half for in outstanding Growth quarter delivered as OPUS the especially year. columns of XX% for by pre-packed improved, the the increased availability up

up therapy and cell revenues OPUS saw and also orders We accounts. pick significantly gene at

sales also more strong with were the fourth more scale accounts QX versus Large in versus period. into up prior OPUS XX% demand the doubling quarter were OPUS year than of these XXXX. than Orders

remains has a we QX the in resin of supply and in resin saw here significant deliveries again softened XXXX, second pickup Although in the half tight.

XXXX. in have the resin we versus down are times which XX first still months expect growth of elevated While ago, they limit will half lead OPUS come

We expect approximately growth as Overall, for supply half we open in chromatography our more the expect business year, of up comes of to capacity XX%. online. in second XXXX the

year, in lower offset QX, to partially franchise The our proteins volumes Overall, in down guidance Our line our quarter demand proteins with by Cytiva. ligands lighter by were driven much business Cytiva for for we X% the supply demand NGL a was decreased XXXX. a had which to strong Purolite. from very

in In which down expect XXXX, line signed be two the XX% ago. we demand with we another Cytiva to years is contract

we Overall, in lower in NGL revenues and will growth proteins expect be XXXX strength demand, family factors by of Avitide AAV the our expect ligand flat. resins. growth be to offset We

was quarter franchise the the franchise for $XX million filtration XX% this down in $XX drop COVID million Our absorbed revenues of as year-on-year.

for XX% and the strength However, systems, in fiber consumables. ATF business up base by was driven quarter, hollow filtration

success the development. processes year, stellar had focus driven new continued ATF commercial account quarter by in and on and a

kits had also year as in seeing and business strong systems developed with filtration quarter are XXXX. new Our ARTeSYN we traction launched a and the

With Other the filtration the XX% gene up KrosFlo in XX% filtration quarter million an to range key for large-scale of to challenge XX% XXXX, the our with launch highlights launch base expect our additional $XXX to system of but for included ATF. in COVID XX therapy, franchise RS controllers overall, be the business. we of for our along down GMP the filtration X% in

softer the year versus Finally, for years. year year-end light were up our range traction and and the in fourth a XX%. on fewer the to relatively saw In quarter of of we process XX% as hit and franchise with expect our new we analytics products prior had in XXXX capital XX% in the RPM be quarter, Revenues strength, expanded dollars XXXX. market. opportunities equipment gain we based platform funnel The quarter pipeline for growth the to

our headwinds I expect position we for year be remain through will summary, XXXX marketplace. Despite optimistic the we work in destocking our these challenging very about In all and as bioprocessing challenges, COVID a industry the industry and challenges.

ahead win position to the in biosimilars new and of including opportunities gene investments demand share cell therapy, our Our mAbs and and markets, stay in to commitment ourselves market. support mRNA,

and customers QX level also optimistic high. and out here of the visiting again significant I and QX a investment drug Our that in we are time development in of is believe amount accounts. scale spent in

they're scaling, the fronts on of and overall are robustness multiple investing confirming markets. the customers is Our

XXXX. range ahead, expect XX% growth our coming of XX% the growth in business business XXXX, look organic organic base we base we to deliver As off XX% in in to

can As assembly move on products center our will the we advanced with Waterford a XXXX, build of strategic out filtration, analytics into and and our the priorities in following. therapy systems on cell new gene mRNA in especially center completing technologies, we adoption key strategically finally, center Launching through focus in Waltham, and inroads application managing markets so and making of further pharma. accelerate our large our accounts and

we year bioprocessing well turnaround be business industry. XXXX. share half in right expect as robust to to and in industry of differentiated I for much mix in team progress a plan more a second this win the our continue to continue products, and have with believe We XXXX through disrupt we right place of positioned the and the

over Now I'd Jon like performance. the a to call report turn to for financial our on

Jon Snodgres

you, Thank providing Unless reporting well XXXX the quarter XXXX. guidance non-GAAP and are we measures our the results financial financial day, good everyone. mentioned, as otherwise discussed for our fourth Tony, as financial measures. for reflect Today, adjusted all year

and year. base was XXX.X The highlight business As by shared XX% in our the organically for in press XXX.X our full delivered of million for of release million this which strength the morning, we continued year. in XX% quarter grew again the the the revenue and full once organically fourth quarter

strength respectively, and our Within year. as our XX% XX% at and XX% revenue XX% we continued fourth for therapy base total represented quarter business, full saw and the the gene cell between grew which and year, for reported and of in business,

fourth was growth quarter, For was in revenue the the constant total organic currency reported business and overall growth X% flat revenue X% while year-over-year. was

growth and was growth revenue reported For full was organic XX% XX%. XX%, the currency constant year, growth was

year on headwinds respectively, X full million reflecting X for a reported and slightly periods. million, both than point XX greater FX for and headwind the were growth quarter

We we remain for to to foreign first half the expect headwinds X full of XXXX expect point year. overall, through headwind exchange the be a these and

performance, the overall our fourth quarter organic Inorganic approximately favorable the offset for by nearly on of point M&A business in of X revenue growth our XX% impact and XX deeper positive revenue had of quarter in million. Digging X into for year. essentially reductions reported impact full the COVID-related base growth fourth was points

than than COVID-related the in million. revenue of year the the in offset XXX of period, base more XX revenues increase million For greater full overall decline

Asia, to overall growth we North strong regional and relates had America a XXXX revenue As in Europe. growth, year it

North and For region. the increases significant from year, the world by grew COVID XX%, the increased of grew despite Asia/rest full overall the America XX% by XX% Europe by in headwind

Regarding global XX%, business. of the and for Asia our overall North represented of distribution revenue represented full XXXX, region XX% by Europe year represented America XX%

margin XX.X% income the quarter in our down prior gross X.X fourth the or of Now was XX.X% XX.X X% fourth profit to the a reduction year Adjusted quarter. compared in period moving million the gross down in of from million, of was XXXX XXXX. statement. quarter same in Adjusted

multiple inflation quarter, gross less factories, the mix, going Gross the foreign levels related margin impact of the in product weakening leverage by including and material factors and on lighter and expansions depreciation profit our currencies, were favorable capacity volume impacted cost live during facilities to quarter.

in gross multiple we demand to and a partially margins product from was change Cytiva fluid were related A in factors, decrease these Of gains where margin OPUS declines a Revenue like decline revenue product due systems. to mix in demand. lower of largest and driver revenue the fiber assemblies in management lower drop-off Protein significant product in saw COVID pre-packed the sales filtration lines lines by hollow directly these offset columns, ligand the

Adjusted XXXX increase for points of and for the factors was margin are drivers adjusted The or year. an million, XXX that decrease basis XX% gross gross the profit finished year-over-year. highlighted for performance year of representing XX.X the full a full XX%, consistent quarter million at XXX.X fourth the

the transitioning fourth of expenses. expenses total full best-in-class Now the we new launched products P&L revenue, and our and XX XXXX franchises. technologies down products development with were quarter adjusted respectively. for research to operating differentiate X.X% we continue XXXX, and In to and year X.X% Adjusted across our

live and level Year-over-year related and for total Adjusted in of to depreciation SG&A year and expenses capacity respectively, and as realized support team facilities XX% are increases for being same expenses going to the from investments dollar XX.X% long-term commercial revenue, XXXX full business compared the expansions periods. growth. in their were XXXX continued fourth our XX.X% the are quarter to our

compared quarter income of quarter also fourth of levels income margin and fourth adjusted fourth was operating to the in related are XX.X to million of inflation and in quarter. reduced of XXXX operating quarter fourth was to XX.X Adjusted XXXX. XX% for and the the product quarter aforementioned XX% XXXX The the moving mix compared of in adjusted XXXX. million the earnings in And operating margin to the Now EPS.

Adjusted operating offset Factors XX margin were margin XXXX. at income XXXX. in year. partially of year XX% to full lighter we Adjusted the finished full compared XXXX operating as operating million the was for or the an finished million, compared gross XXXX our XXX.X XX.X% X% in year by for to highlighted of commentary increase expenses

At we product development invest to deliver Here to years. to we programs to expenses commercial growth, the year. in gains the as plan in been operating we which has same that actively and revenue time, improving success managing with continue several so to progress important are operating in financial over through last resources returns continue can the our margin support XXXX, we our paramount

to was X% full of decrease a for year $X.XX increase $X.XX Fourth to was of quarter XXXX for XXXX quarter Adjusted XXXX XX.X X.X or income period. XXXX to EPS the or in $X.XX, of XXXX. the year Adjusted an adjusted XX.X or compared diluted net million the period. of a million, full compared or EPS year quarter. share, million at compared XXXX was to of compared XXX.X decrease XX% $X.XX $X.XX XXXX of Adjusted fourth the net diluted for XX% for per of million, full finished $X.XX fully X% income an increase fully XXXX the

projects to sheet California company expenditures, fiber, As expectations manufacturing expansion the Rancho, capacity continuity increasing expansions in XXXX provide million flat and significantly most demand. of relates sites and to business and Massachusetts. specifically, capital included it address systems XXXX, invested our related XX hollow for our More to Marlborough, in

were facility the of and SAP our business important assembly Other Hopkinton, proteins capacity completed platform. our and in to We our investments related fluid also Massachusetts. investments in continued validation build-out management

Our cash and are investments, million December XX, short-term and XXX.X totaled which equivalents cash GAAP XXXX. at metrics,

now We'll XXXX transition year to our guidance. full

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

otherwise guidance previously financial XXXX all noted, mentioned, unless non-GAAP. be discussed As will

does may X% impact XXXX that Please current year guidance in impacted fluctuations of pursue. include projection of that acquisitions the full any rates a headwind our future our not also keep on exchange in the potential foreign may beyond mind be and company sales by

This to flat We XXX million guidance minus revenue are setting GAAP a to million, X% our million, at XXX X% organically. to reported and growth of XX% XXX as of XX% reported guidance, to XXXX revenue full representing includes to to minus growing business XX% range in million revenue plus the base of organic metric, XXX at growth year XX% X%. and

of reduction at million includes also guidance Our million COVID-related XX million, midpoint. to of year-over-year a XXX XX revenues

the of XX.X% our are at gross margin down points versus of showing XXX We and basis QX improvement from XXXX to XXXX. to the midpoint adjusted range XXXX guiding low XX.X% XX.X%

that QX impact in us headwinds gross The continue margin we will experienced in to XXXX. here

we expenses, will depreciation manufacturing which headwinds facility offset major margins XXX our on implications, XXX or costs leaving of optimized approximately in approximately points product basis as have We expect and points. mix at the XX% basis the XXXX

expect margin with we points volumes higher XXX to through further and deliver We in XXXX, to we move expect to XXXX. XXX basis half the of as improve expansion margins of second

We guidance XXX are income XXX million adjusted of operating million. range the to in setting

sales. We are of in margins XX.X% guiding to of the XX.X% adjusted range operating

versus approximate We XXXX. expect cost facilities product basis and decline drive and an impact to the point mix, inflation XXX depreciation material of

of headwind operating for to be year, of of depreciation pre-tax and in margin XX% XXX adjusted approximately will income XX% product income costs income. XXXX Optimization approximately as a offset of adjusted the tax expect points. facility other operating be XXXX and manufacturing Adjusted we significant the and XX basis to implications, at expenses million is approximately leaving mix expected on income

to $X.XX guiding range share. adjusted per to adjusted the income range XXX XXX the net million, guidance million of are diluted to fully $X.XX EPS in with of We

guidance average year-end weighted at shares million adjusted XXXX. fully XX.X Our outstanding diluted assumes EPS

and are a to guiding XX% XXX and to to range to XXX of year. million, Adjusted XX% of EBITDA approximately for amortization the is expenses with million intangible expected are XX EBITDA million to expected margins and expected Adjusted in strong, depreciation the range be million, we be XX.X continue to respectively.

in with covered to expenditure million which where to earlier. plans, XXXX projects, four on XX primary shifting we spend Tony focus Now a expansions expect capital

in a cash year-end expect We from generation being again the cash to CapEx our with operations. of million be our and XXX range metric, funded GAAP XXX by to million, cash equivalents, investments

the our back operator open update, report financial This questions. the the and completes lines to I to for call turn and guidance now will

Operator

We will now begin Johnson Instructions]. will the question-and-answer the And [Operator Jacob Stephens. from with go session. come question Please ahead. first

Jacob Johnson

you Hi. Tony, start, XX% to Good Maybe, morning. about last year, call to third talked just quarter the XX% on base business growth.

You're kind guiding is just this that Has the to XX% in XX% or end still seeing terms markets XX% to end morning. you're and to you anything demand building conservatism year of of the this closer some changed to XX%? the perhaps or could in

Tony Hunt

I and were in beginning chromatography versus call say changed where a at earnings we business. it's in our area it's that where the our I changed at little year where would is bit. were think we -- the now, main Yes. the QX of And

eight availability slowed in terms the higher availability. in is growth first half kind the last resin capacity from probably on new biggest coming it that thing, have we resin it's much were based driver traction QX. control. the That of But Jacob, slower accept point can from first half are We've has really facilities the to had difference conversations. in the of and on. from in manufacturing one and to where We I the what the had to really where expecting players six in we because softened and coming do say, to that's outside where Customers we that's November our year would today. the if between we of weeks, in chromatography actually down softened we were know over versus It's were in January industry. main So XXXX on I our

Jacob Johnson

opportunity I that, just this a over a that's like process for the you it's bit maybe key but seems Tony. all integral seems a next your it at have. it to you five analytics was real It system then Day. side, And seem on focus think that the strategy softer the And Thanks for Okay. like does years, quarter. Investor

the you the performance could near-term kind So of opportunity? long-term maybe there square versus

Tony Hunt

opportunities this at-line, love look we Yes. of have have that activity any higher. we I business. high. technologies marketplace, it's the funnel the that The When need couldn't and be at for in the in-line really you

the in of differentiator other of the want for the So to up there's a doing We're products at that to foundation process encouraging. very think I terms business go getting We just benchtop of is with we dollars marketplace. major that technology. lot customers the using was some of kit versus what launched We from this level the spend demos ARTeSYN approval in everything to through We are approval allows of all capital which purchases. technology kind RPM these in a our from customer they on the got like that think the piece in some our KRXi orders way December, system QX. and analytics pushed conservatism our the be equipment the to

I in a have marketplace. don't the in companies year Jacob, than products products, different, was control lower much while of who quality think the are that growth, last terms it's So that yes, other lot of analytical overall

And of so I a think it's that. function

-- would about where I shipped the an say quarter thing the so two, we our orders franchises operating it's other be the or other of might business analytics The with that in, three, ahead any come book. is like months not order in don't that quarter, in four is you

Jacob Johnson

questions, the for Tony. taking Got Thanks it.

Tony Hunt

Thanks, Jacob.

Operator

Stifel. Dan Arias will ahead. with Please go come from question next The

Dan Arias

again, that improvement thinking the to is quarter? should the phenomenon and better getting that subsiding the questions. on versus half year base the on now Thanks morning, of of with year be the the that sort availability similar improvement and the or XQ Tony, Good for quarters resin really you assume XQ for parsing just first the split just that being second lends But does I guys. an in idea evidence through know the XQ the half see destocking case some right of we difficult. 'XX, is maybe about outlook XQ is

Tony Hunt

it being Dan, The I it's our orders our highest so half book year. on half XXXX that QX looked right, at you than of QX, in the when pharma of think the look -- was bill, year When really second was quarter at X. it of personally that QX the first to -- more pharma. in orders for I in found we was piece, nicely the in improving, we better over had was encouraging all

bill. we also at places where actually at for if And were see are year you look the that's to challenges the for So the level. over we encouraging. Repligen, The really X pharma book CDMO a on

So begin back, QX, we I me of improvement it continue much think QX? year. but first right that's does it of now, going say the the say, to year half the some bounce half how the I looking second in would it's to stronger So hey, at for if and saw QX, enough not definitely than -- CDMOs

are QX to other The is be in and with pretty COVID going revenues QX, remember little thing QX. in to split our QX and QX very much in evenly revenue

second half a up of would see I the I base in But QX. the So beginning pick revenue expect of point orders would definitely we business, to view, year. think it's from

Dan Arias

more point 'XX, XQ than be the op for feels maybe the step And jumping okay. you on like way should be rather from a off a year, it's And factor. of land think Jon, of at rather end volume the at the to it felt as thing it describing XX.X, given year. bit then, down a order then flattish Is the margin, a or is It just of the I a mix were being a a XQ like the that year in you Yes, maybe of leverage end midpoint to you things called the about should feels right? that thing also of and which a we like phenomenon. thinking to at deviation as XX.X out little mix that than

add then might margin much. so and on some pieces So the can flexibility have color the you cost at Thanks to just spending? you and might or line the that moving not

Jon Snodgres

Sure. Yes.

XXXX midpoint from kind XXXX. we'll kind end the guidance off question below of first Yes, or stepping start that think on I hopefully to QX back year, But range the that sorry, that think getting level. -- XX.X% -- of the at margins that I XX.X the lower through build between full and we move and So part operating around we'll XX.X% into then definitely and the in the and was hopefully of as point slightly to of your XX%. on back

So it. that's I’d where start

the I themes looking Dan. margin, that gross overarching can a two at look bit more we're It's at there, you give you really here. color If

points. was that and here a as the material of first overall I'll a higher That's the the increasing, related we've most that seeing facilities significant QX And we're continuity work down about We which finished in been comp, then capacity you. depreciation business to QX The our quarter, percentage decline sequential basis is bit a in give 'XX revenue costs doing. that expansions QX XX%. costs at XXX I'll quarter, kind fourth and break further our a also was one of XX.X%. comp QX and the of about little 'XX a for to 'XX 'XX.

down bit points. QX, inflation volume cost the basis of cost market break side, product to mix from then cost and on about us suppliers, QX decliner a So XXX little material was our when decline another points from Dan. materials XXX And at about we this coming basis

basis about two the fourth costs And basis on the points overall the then the in material those components, were of primary XXX side. points depreciation-related were about and facilities decline quarter. So XXX

breakdown. the gives you So that

Dan Arias

much, very Thanks Okay. Jon.

Operator

Puneet question Souda go ahead. will from The with come Please Securities. next SVB

Puneet Souda

Hi, Thanks Jon. questions. Tony the and taking for

given on So wondering XXXX-'XX sure of should be. quarter you if by business heard I'm I then your still growth us $X what's growth first you top base provide just line, revenue base stand do for can billion? that. first and business And the not if estimate the XX% the the Jon, of ex-COVID one, long-term

Tony Hunt

Yes.

me that one, take Let Puneet.

absolutely. our differentiated and We we're in So how long believe in company our doing and and how term, we the products are. market

QX to Everybody industry But versus kind year, HX. is QX, year. comment for in exactly obviously, go the on the XX% what organic I And of we HX year. this And year. has kind the is we're happens guidance unique a business unique as through will XXXX think year. through in is growth. saying growth What XX% to a we on of yes, have don't our for base I get

organically been we even grew of has though so think with ahead XX% is don't where is base finished, XXXX growing. forget I That our -- business. industry far that our

and to We're medium, the a chromatography I really This years. long XX% to lot we said XX% have our work through there's the on grow we challenging love think be the that future the can't going we're we with XX% the So term, of of end, XXXX headwinds. lot going to what We market. yes, the we like that what but goodness, a of position momentum reason don't for over see I a foreseeable be range. as in plus challenge we products. is exception why the built year, company any has is guys. the And in these doing we love up

Puneet Souda

Got it.

accounting margin if And Jon, helpful. this pressure gross on that on expiration, you downs product was then be obsoletion, that in question. Tony, space large that's you could a any any are squeeze product maybe side, a there acquisition Okay, might just bit in wondering that? the on for? was elaborate at taking write just And pricing just There if And least. CDMOs for was PAT there? I more PAT, on Could

Daylight that you. of competitor? how recently Solutions wondering by capabilities versus light Thank acquired So the a scattering DRS is sort were positioned

Tony Hunt

Yes.

know start I'll you great with maybe well. them company, of acquisition Wyatt. So Great Waters pretty the technology,

at and have, of look in FlowVPX really I setting. terms key I position at When I our what doing a manufacturing what good in a think laser with think in we're with in-line DRS, C in technology we our put industry. can light you line we're when technologies, in Technologies right? you scattering look

to put monitoring. getting able in-line or technology more to testing real-time be will We quality the control line. around as monitoring monitoring, to opposed strategy offline DRS And our Daylight in is

So company. more how We're an in-line we I kind view piece it. is think of that

question on -- the of obsolescence terms In

Puneet Souda

in pricing the Just obsolescence. Thank you.

Tony Hunt

Yes, I was going to answer it.

that So the really it. buildup question answer I customer an as work issue, then margin. our that obsolescence, level the just we're on through think has Jon can right? And And inventory not to it's seeing at

Jon Snodgres

the you it get right. on make I sure to margin? question Could Just want repeat

Puneet Souda

pricing Yes, pricing or in from Just wondering pricing, for just are And impact pricing if an Jon, you. seeing assumptions that that decline there's Thank you the 'XX? what's in you a have impact? gross margin?

Jon Snodgres

Yes.

with pushback not toward. did had 'XX been indicated of significance. price pricing we have achievement gunning We seeing as we X% just above were We finish

issue. that major wasn't So a

raised intent customers we working expect able to be again, to have X% X% this XXXX, our cover definitely that the XXXX For get inflation, and price with we with should prices we for to year. achievement

Puneet Souda

guys. Thanks,

Tony Hunt

Puneet. Thanks,

Operator

go with JPM come come question from with Please Nazarovets Garcia from question next will go ahead. Please Chase will Marta The next The UBS. [ph]. Liza ahead.

Elizabeth Garcia

morning. Hi, guys. questions. the taking Thank you for Good

book with generating little let's cadence to of order start know book it gene than obviously in over it kind Obviously, and lower moment? bit a great comps, XX maybe for Can accounts, And -- seems I in there. like the So good. million assumptions be It seems cell at therapy. talk tough now doing XXXX pretty those but would across your about kind The dig million. of the you to feels growth the there? the $X order a to think how

Tony Hunt

Yes.

the gene and like of half cell business we the every year therapy, right, great year, we about saw orders it. year. But a have, other So doubt no second last slowdown in

therapy XX% of CDMOs. people our forget revenue cell comes what think I that and from is gene

we're and And up. out book so light, to pick order really been and CDMO got it's has calling that telling

when coming and to in of XXXX. in about back gene from to our part they and early therapy where cell think growth upside gene the cell So and going therapy, come CDMOs it's the you were any

Elizabeth Garcia

about how It's to kind better to little to was in this a year. It this Great. hoping be for the dig cadence Thanks. And X then maybe kind of just year? It understand XX of there for? new the obviously in would think product introductions great XX. what and and bit you're

Tony Hunt

Yes.

XX%. in last things XXXX. the prepared bringing to cadence remarks, really So products 'XX see, more we're one focused last in market. launched the the in we're big on running for X% then with on We're going three-plus into R&D, be X.X%. of new company. said the at the of you and new this than level doing and launched investing Overall, as go products exactly the around is products year. we traction to we've And right? had year, you R&D this of getting been in my marketplace I year. to That's XXXX, cost our covering the year And increasing from launched years came our add a what get of right, if we XXXX really good And can X% products, the to see at will XXXX products want a revenue you of the based

growth. the So you portfolio with our catalyst well gaining that innovative want and disruptive, are going, our what thrilled R&D really they a company how in products that traction a R&D we're become for have from the programs Repligen like and actually we are exactly products it's would

us so a back are come going It's because products R&D to from behind going This out about to stepping what maybe the five-plus our are extra on for long-term X%, the Jacob why doing Puneet even where it's think maintain like X% we to tough So important is side basis. to was an XXXX, I on next sure from and we're standing -- I'm is growth. the in in or not to, it come years. stones year investment R&D, they the foundation that's and the continue to get annual

Elizabeth Garcia

guys. Thanks, Great.

Operator

ahead. Matt next The come with Blair. Please Larew go will question from William

Matt Larew

on issue more like? and on customers demand you're products customers the raw waiting XX% from top outside availability the other resin Tony words, look point, not to you are as is the Hi. Good biggest a the XX% like? would In you by delta and problem, resin customers? this the in Could waiting or COVID of look new the material the Obviously, if going help -- 'XX chromatography, be actually does you availability maybe out called was in accepted what is still then growth availability, product will on And line accept us 'XX. at morning. what to

Tony Hunt

Yes.

back how we our of chromatography synopsis manage business quick a maybe So with comps.

five back went years Repligen to into pack was procuring chromatography you ago, our If column. resins

of shipping customers or to suppliers the XXXX-XXXX away But really from was conscious us the we interaction procuring decision really So having directly the in supplier. the resin made shipped the resins. a from with move dropped to it Repligen

with customers. not our So They're the It's players resins our main interaction the conversation or fast supply. on the enough. getting our actually resin it's not

XX% around if was that there we think we resin, no have book. large would in order we -- be were limitation if a right so growth. mark of quite on And And terms I

it's in our XX, And -- have that even coming was supply know get online. is those people qualify there conversations it I new and to players. control. manufacturing capacity and think your coming not It's right, an is just at pace we We've piece also location happens used. in a acceptance so resin in in, QX, disappointing. to outside where But the coming And had with that starts QX the definitely so when you at is you're therefore, various it that

to it's anticipating in it's January. back I were So we than even think definitely we the do improve through as going year, but lower much go

Matt Larew

could as margins, on Dan's two any help building just in side if half be for you guess on and helpful. XX% years, how that and half, headwind. to having initial to our and one could I about a we again, us just pace 'XX. the begin should particularly should obviously 'XX facilities think out about op year we're of margins about depreciation would there. building -- moderate the depreciation the half. QX then about that CapEx and throughout we as sort back gross help were But in you But the the helpful. from And that's understanding 'XX I think 'XX, Okay, then, comments presume talked Jon, question low versus heavy

Jon Snodgres

Yes, sure.

just 'XX one. a number, XX million on the that we So a clear that mentioned number, be of CapEx to is not 'XX

go from costs, for the at look end I start of my the through then overall at be the the recommendation facilities as we lower As would the and it year. and margin would margin say the year the time. maybe you we gross current of will scale depreciation -- at a perspective, gross beginning modeling up they That

Tony Hunt

a and volumes piece is right, cost important depreciation And that, But right? on I improve. margins are going so it's to fixed increase, our as think cost, most the facility

last So plans. capacity business three out us the as knows, and dual continuity we've over big build to to years capacity everybody this made investment, give manufacturing

this next margins So off going years will the we and is pay few to as go improve. through

Jon Snodgres

of think from I even half the second And of XXXX improve should XXXX. half first the

in; layering that of scaling So about first the we lighter the that's kind and half, second talked better half.

Matt Larew

for questions. Okay, great. Thanks the

Operator

The Please Brandon next Jefferies. question go Couillard will from with ahead. come

Brandon Couillard

morning. exactly to are Good dynamics, segments COVID the lowest on gross Hi. highest from? come margin margin? those the from from you the Jon, Thanks. mix gross the could Aside rank just mix 'XX, runoff, what stack in where

Jon Snodgres

replaced you've those and so spread can we've pace. was every talked really volume So pump costs We in as I stuff, then And filtration, in and And for OPUS that for systems we the Tony margin specific much you high it's are coming and tell better I a lower filters over about margin out, declining very are right? are which sheet consumables. coming than they're than related that and but to get hallow specific us, are traction clearly lower product, components. the through OPUS, tell fluid the being as products. a replaced the high I and for think time, time. earlier, a facilities, and systems filtration, COVID those as facilities products others bit got of with built we the So bit revenues But margin you margins, don't flat are fiber, can out the high long contribution give management consumable Brandon, filtration lower being gain XXXX? margin we'll a known start at our from volume it's will fluid products management the with margins In

Brandon Couillard

[indiscernible] feeling then reset about the valuations are portfolio you company at all how [indiscernible]? And Obviously then it. pipeline? Got the and M&A Tony,

Tony Hunt

XXXX of question. would I pipeline but little Yes, XXXX. is similar saw bit, I up as broke a you M&A got in in say the pretty the gist we

in we to. that talking of lots the that We we're to active be sense have continue companies different

Brandon, our to too last pace be years. not of think five the is I going M&A, or to seen dissimilar four we've what over

think during that probably we the pace your our do systematically of pickup all question, But it's I a big think think have were down of but second COVID deal in bit, come assumption. where had in I the we business. a And management year part XXXX-XXXX I little building multiples the good to beholder. eye that a fluid out a a is

Operator

from question Craig-Hallum. Please Hewitt next ahead. with Matt go The will come

Matt Hewitt

comments taking Good for one, the Maybe I'm the two piece morning. for made trying together. you different Thanks first questions. that to

customers issues and or about those you've of problem to a is it are the then First, of been channel little by where then shipped bit some your of inventory the couple or having you were the to talking lengthen this that the kind obviously facing that you. also that kind a churn acquired inventory? Does through availability issues, are inventory resin customers Does that fact completely and and over quarters the resins create different past of exacerbate the issue?

Tony Hunt

it's a think issue, different I Matt.

view years, exact I more demand is it's I'm at resin high. and exceptionally think the three certain major that last think or give if two would I same looked that this suppliers the the I you

come in, industry as has six the out. the to not think placing months whereas orders I of capacity That come customers has, are has online. rest nine

it come procured times, hasn't. the not in one takes get, to order delivered, the enough really pattern or for us. time terms change little length it's a a or that's directly our it drop whether to to ship of It's a, then in of down but customer to where area lead resins So bit industry the and the those

Matt Hewitt

you And couple the built it. of capacity last Got obviously of lot years. out then a

some hiring far demand do you're from plans you Thank headcount you're 'XX? roles you good fill standpoint of anticipate As to year in a into you. half the as the or in are that that more feeling place pretty given are concerned, needing anticipating the and back

Tony Hunt

support to piece, done been we've think we COVID, that optimization be pretty we of forecast the looking couple that about at hired, where months. And the the We're year, tried days optimize, hired, a again and during to what QX, of we we here even which we continue that prudent we the Yes. as through in on what headcount headcount have where last the the facilities. for -- need is, lot and would went we've to QX demand of we right? over I

Matt Hewitt

you. Thank Understood.

Tony Hunt

Matt. Thanks,

Operator

next question with come The will from Please ahead. RBC Conor McNamara Capital Markets. go

Conor McNamara

Hi, guys. Thanks for the taking I it. question. appreciate

X% at relative cut were math, that's XX And you sales. about talking the million by in in giving, you're you it's my If about guidance to just about QX. what look that

else? any the impact So the of level customer that is anything the way out? much is that at inventory break How to versus there resin destock versus

Tony Hunt

January in X about FX, we a versus how so timeframe. right? Yes, there's point somewhere X we talking all were between it's points think and X depending the I on of So do math, what

of But dispersed that in than of X% just coming I it would lower at from majority where really the the -- chromatography. now I or it chromatography. business think say I it's no kind other is the There's we are the is rest is say, And across main overall. versus look where we might and difference of would business. thinking it -- be one were X% we we were lower where January

Conor McNamara

thinking you. margins, go term in Thank we to the XXs longer be of then it. term? $X can high you just mid-XXs that get range? billion, what the gross Can you you. margins of longer back if And 'XX-'XX Got term longer targets gross towards Thank get margin about or should kind

Tony Hunt

have capital we especially do made out the investments XXXX pretty it’s the now. on from margins -- are to give I work capacity exact years I that think timeframe. much made way to us would But XXXX, finishing say be in that five in where to gives XXXX, challenging some that under that obviously going between in investments all we we think XXXX off you to numbers we've

go So is our are going margins to up. expectation

next add basis knowing points, do onto Conor. might it But the becomes to our XX And the just expectations M&As exact after is hard give what what will can an basis definitely XXX march points few basis that gross or and XXX years margin XX number. over Our to it product without year maybe next XXX, is, points whatever that, we mix it up, we line.

Conor McNamara

for that, Tony. Thanks it. it. I appreciate Got

Operator

will with Deutsche go The come next Please question ahead. Bank. from Justin Bowers

Unidentified Analyst

[ph] Hi. Asaf of Good Justin. morning. It’s behalf speaking on

questions. Just two quick

significantly in Which firstly, XXXX, So therapy gene gene a a And 'XX, are XX% slowdown in growing therapy indications look mentioned QX. in cell are and you and therapy cell step-up rates in you in? at gaining you as the thinking well also as XXXX gene about and how these business traction during you modalities? and growth little

Tony Hunt

Yes.

also needs business made So through CDMOs. clearly coming increase pharma QX, the way. positive gene a quarters. we in I I -- comments and And said, gene in go to we while is I The few in cell to saw next QX, it the our half therapy my as from challenge, think in when impacting pickup comment very that as therapy that definitely on was continue

customers Phase But market developing therapy, cell because be we're products and the Phase while using they're calling actually a could have of and gene overall X, than on to growth we getting lot So sitting and they're that. So XX% X. through higher right? products them inventory, for XX% that's just

term, years. out mRNA XX% in on CDMO long of in this a because XX% just therapy level. growing at with average But is the destocking and to think the I probably unique cell year bundled be to all gene is going

Unidentified Analyst

cost which at [indiscernible] the much the some the levels for contemplate some release does than material And areas so XXXX greater guide you were inflation there in or color. of point these like appreciate I Thank anticipated? in is lastly, just And it. year? at

Jon Snodgres

areas those Yes, the and plastics lot we where and of a see stainless areas it's inflation. types steel like significant of

going believe is contemplates for yes. guidance the the period, to inflation Our we be 'XX what

Unidentified Analyst

you right. much. All Thank so

Operator

any Hunt would over our closing the conference session. back I for concludes question-and-answer Please sir. remarks. Tony This Mr. turn to to like ahead, go

Tony Hunt

I the headwinds half but as Great. covered today. Obviously, got appreciate this Obviously, I the stellar XXXX move We we've joining Thank year. of year, you, lot. everybody. through think we some everybody forward first we're to of and in where are to very call the on we and about you of the speed getting the second a in look on optimistic a back QX. up couple half and overall bringing year months

for everybody thanks So joining.

Operator

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

You may now disconnect.

Repligen (RGEN) 22 Feb 232022 Q4 Earnings call transcript