RGEN - Earnings call 4 2023 | Repligen Corporation

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Operator

Good day, ladies and gentlemen, and welcome to Repligen Corporation's Fourth Quarter of 2023 Earnings Conference Call. My name is Sabrina, and I will be your coordinator. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the call over to your host for today's call, Sondra Newman, Head of Investor Relations for Repligen.

Sondra Newman

Thank you, and welcome to our fourth quarter of 2023 report. guidance will and highlights XX, XX-month we provide we for financial XXXX, call, XXXX. will X- year the periods financial this cover and business performance and On the for ending December

Repligen's CEO, Jason deliver call report, our the our then open for Garland, we'll will and up Hunt; Tony and CFO, Q&A.

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

information business other report reports filings reports XX-Q the and filings Commission, our Additional as annual Form related on risks and commission. with our on Form Form including concerning year's to quarterly on is included Exchange our current Securities well the our that our XX-K, in as annual make X-K XXXX we last with report,

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

measures this During included release to this providing non-GAAP financial otherwise noted. on the financial in are Repligen's morning, issued sec.gov. Reconciliations which of and call, is that to website non-GAAP and we guidance, press GAAP results we unless are posted

performance and measures an but our to not ongoing well net profit margins, of gross business share rate, operations and growth, Adjusted be from viewed excludes These non-GAAP the sales, pretax to figures adjusted R&D other on measures gross COVID revenue operations. of income, financial per tax this should and income, as following: income, margins. as expenses, GAAP book-to-bill revenue, including which base intended reflect cost income M&A, call organic EBITDA revenue EBITDA, adjusted margin; include operating EBITDA earnings best ratios, SG&A, adjusted the are and as alternative operating non-COVID effective diluted and

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

Anthony Hunt

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

QX key and believe reflect objective insight are our we a revenue seeing XXXX the In on addition year. Repligen coming to in our the general, had turn months positive call that few results, direction, are orders provide out see clear especially indicators through reporting strength this to the how out for results in beginning today, on we go XXXX for Having given in playing pacing of we out is some the markets a in last of we year. as to our financial into to

growth the as the drive will XXXX. move especially help company, we of into for This second half

As we was bioprocessing Repligen challenging industry. all the a know, in for year XXXX

China, accounts, of in saw and year pharma delays the half stock capital deterioration CDMO dropped spending opportunities both products off rapidly project levels orders conservative first and new the and companies at The elevated at pharma for and where declined.

half recovery. we year, second signs see the started to the of In positive some of

of CDMO We X indications overall to aren't strength. for funnel pharma but recovery is call see reason a and Repligen, optimism. We growth, there ordering patterns, improving opportunity recovery yet indicators full good for ready early book-to-bill

our So opportunity with let's start funnel.

we improved funnel in an and orders the more XX% placing the of the year. of to customers XXXX in term. sales Our metric XX% This than with above compared opportunities important up start that near likelihood reflects our is the believe

in were up rebound pharma where versus pharma especially demand, quarter. prior orders We also in XX% saw QX, a

up year, second in versus improved our at signs more time XXXX. the pharma of QX in XX% our up since fourth and the first than market positive some coming the book-to-bill customers second Again, improved We the QX year. last half finished Overall, for X.XX of half has also X.XX QX. second in first HX. orders of than the versus from quarter QX in in receiving year up the XX% more The versus half the XX% with XXXX with CDMO than orders in half greater and

Ex-COVID Our in X.XX filtration book-to-bill franchise respectively. at also was filtration had a positive the QX. book-to-bill and QX in X.XX X.XX, and both QX

of quarters strong COVID impacted for our X by in orders So a largest most row and franchise.

manage Two, When I the ourselves set accelerate of new on pleased at key four, and launch margin very challenges. year, the top and adoption make to to inroads focus I want pharma way the was products as advanced And XXXX, key our we look of a also analytics, further the accounts our systems staying to the want goals technologies, we Repligen organization focused to new rebalance with beginning we accounts. to one, to we filtration. strategically with team executed, CDMO into namely: full for the wanted on wanted especially modalities. at Three, we address

First, new on modality inroads.

modality up mRNA covers new business, ground, Our in and gene gain modalities to continues which and revenues fourth were therapy the wins X% in several cell late quarter XXXX stage and and commercial by year-on-year. driven

impressive across modalities For full new results up of and XXXX, our the only represented industry. are of total light the the XX% in still versus decline double-digit revenues slightly while year, in sales

year assemblies by orders strength accounts from were XX% for up year analytics XXXX and full up artisan compared and The order new filtration modality more of notable Chrome, franchises half front, XXXX. than and the driven Management systems. half versus was the first product second the the with greater strength of Fluid OPUS, XX% On in to the than line

XX accounts than new more added also in XXXX. We

our in market. position So we're important by encouraged this and really differentiation

team account out on pharma Next, key to us key and program CDMO in a accounts. objective our for key growth accounts. managing top A build at and drive to was XXXX

focus Again, were place XXXX, in half the on compared In versus we that signs were accounts XX nearly to this group portfolio and our but by year XXXX our when XX% XXXX compared team pharma to for visibility. accounts key momentum. full improving were from of the top to CDMO XX% second able Of directionally midyear, second our the growth show accounts, XXXX. up With orders are XX positive for to flat HX compared accounts XXXX. HX top our XX% the half year full beginning top in of orders to

product Moving XX now And been products. to XXXX, new to launches launched to goal our in it's adoption. and XX. year, Each we launch new X

year offerings, were of first million over XXXX. they generated these in year product partial $XX Although revenue in

the So the past despite that areas. the through proud record. our innovation our products quarter year's track number of XX% in total new of In our between was XXXX. X was products challenges, XX%. launched came we're alone, success year, of really from XXXX XXXX, the of In This fourth end revenue

benefits process customers monitoring. are the of real-time The first was RPM, where our analytics seeing

systems providing single-use market-leading the And for in portfolio. RS control was for Artisan automation and our we are intensification where marketplace and third new was controllers a have our process the more value well Second XL doing system where ATM, customers.

finally, And regarding rebalancing resources.

programs bottom this cost rolled prudent entire containment than workforce leadership XX%. by out reduced organization. from on Through to the Our team rightsize difficult for more focused and team to our top process, we our

merging We our of plants. are facilities facilities sister into X consolidating

to inventories year-end, for are We company. adjusting are XX% back and By the we nearly controlling we margin gross expenses. were

next by years. improve rebalancing to from complete expect we there, the few margins our as QX. improve of will over And We and that the streamlining activities end volumes anticipate our be

to QX business now So moving results. our

and revenue and included in up M&A, excludes with year. year-on-year highlights franchises. fourth revenue COVID growth our for million both our growth year-over-year the analytics for saw this business, proteins press nice morning, X% and down you and in base the As quarter we Base release our down XX% which X% sequentially, delivered in full sequential $XXX modest

As well as new the accounts. aforementioned positive impact from modality

were year-on-year. At a non-COVID our revenues, flat which M&A level, customer QX includes pharma

CDMOs revenues team QX For revenues the to in were right QX. The $X and in continues phases integration. to work respectively, came XXXX. through of down XX% compared of and Metenova at early of million QX track on integrators, XX%,

solutions as go We Metenova into to the are we Fluid portfolio are integrate happy through with making further and expect our year. we the Management progress mixing

starting than greater to The Moving From very orders orders Non-COVID especially year-on-year up and of XX%, recovery. year-over-year. QX performance for fourth in Base quarter both quarter signs were up are perspective for non-COVID orders. year-on-year, flat sequentially. were year-over-year. X% CDMO see customer early integrated were at the but we to a the orders X% order were fourth business pharma CDMOs encouraged, where accounts up is some

the demand. the XXXX, and full year down X% quarter lines our chromatography opportunity our X% resin the for down to now highlights. were revenues for XXXX. quarter the And level The driven to for the range the continues to and of higher The franchise OPUS business versus chromatography, down Chrom by in decline revenue growth X% In increase. we year-over-year full fourth of primarily approximately Moving columns product for quarter On expect orders, X%. year. XX% was fourth for in was mix

for proteins, were X% quarter down In and the our year. revenues the year-over-year in full up fourth X%

franchise and take and resins. we partners. franchise That goods had we orders will the expect Cytiva XXXX, our solid including affinity channel, where quarter it XXXX the customers, revenue said, driven $XX X ramp-down a inventory the in legacy some This for custom the by million think approximately discontinuation for is of other this drop-off reverse. we by our and and resins to reflecting in for weak proteins of factors finished see X demand of forecast lower [indiscernible] proteins excess from Our and growth

back the will XXXX to XX%, proteins proteins targeting expect a be have bounce as traction. and forecast in year gained in to fragment purification XXXX our antibody As XX% products new down antibody strong business we

this ligands closely a adoption ourselves working market-leading leader products. in as over will the these firmly space, the Purely to have years, X of and we drive technology built market establishing be set for with We last

the of off year-over-year revenue, XX% XX% full million COVID-related were in compared approximately year. by and the revenues QX XXXX. driven down $XX the was declines in were QX The our XXXX of drop to quarter million approximately in Infiltration, $X which for in fourth

with QX ratio of were in orders Filtration X.XX. again a strong book-to-bill

order ATF, our was by Filtration strong XX% of basis. COVID XX% X% assemblies. XX% for franchise driven XXXX expectation in X.XX contributions XL is in our that to base book-to-bill our this artisan strengthening With Excluding QX, will business and on systems a a on Fluid reported Management to up book, be demand

analytics a full modality orders X% Finally, was X% and quarter which for VPX analytics strong year. year accounts. up in RPM the solid for year. continued seeing the traction our story technology by and the XXXX quarter business Flow and We're analytics, and up was were of VPE the the our of fourth our product adoption for year-over-year the up XX% for lines The new of

As pick to grow in business expect we up, XX% the XXXX. XX% to the markets Analytics

potential our X% and business our to as projected In summary, growth guidance. despite the of other headwinds are at combined, on be reported in X showing midpoint base X% franchises XXXX, in proteins, solid up the

this the than year? industry, As of XXXX don't over the have full So transition recovery be what expect of first do and the moderately second months, we XXXX. in company until X through repeatedly last second expect do revenues see year we as stated we We year. as half see expect we and better to of a XXXX the a to the move half we the half the for

the our strength orders ability believe including the last our to reach over $XXX half. supports in seen months we've We first targets, X the million revenue in XXXX

revenues expect We the the over the up XX% of million HX guidance. $XXX of with orders in second stronger be revenues at year in HX XX% projects or our midpoint and to to half

with to is growth. X% our in, to range of contributing for for million X M&A $XXX million, points X% in of the $XXX All guidance business up non-COVID XXXX

growth funnel, in is some placed XXXX. really helping with stronger We that XXXX. along our key the the in investment environment expand our will also on We increased we real an The to momentum we combined opportunity head revenue team to with for provides that account reshape believe as our we've book-to-bill commercial management double-digit funnel. return improving emphasis into expect execution and businesses

management Two we five, markets; year. the successfully order to strategic around X Metenova tough our products finally, move is center and of systems. our portfolio launching go Three; through Number in controlling mixing we costs integrated our As is and the position Repligen priorities into is on margins our accounts. increasing with around a around is new a further up food model And through four, our is on PAT the in modality around in strengthen year, focus new expand building following; solutions will opportunity as wins the on and integrating launching marketplace. our

here forward moving be to happy are we summary, In XXXX. in

entered through right to expertise across and for bioprocessing on business continue We aspects have reward M&A. team all balance shareholders. care delivering finance to our the with sheet for efficiency and operations of from long-term our and and place bringing flexibility We've internal XXXX R&D commercial. to to in stronger We'll focus a plan a

for on call our turn to I'd financial the Jason Now to performance. over the like reports

Jason Garland

results year good everyone. we the XXXX. guidance Tony, financial Thanks, for of quarter morning, for and and our XXXX financial fourth Today, reported provided and full

is we the fourth third our quarter organic down stepped the delivered basis, ]over As for with or nearly $XXX a the point. COVID million and reported expected, in of quarter We acquisitions million total $X revenue $XX on of revenue the This fluctuations. quarter. of XX% an fourth sales quarter up which [ million, of in low XX% excludes impact currency decline approximately

the slight a and of for guidance. than in XXXX impact of Our our down was headwind. year, with total XX% on had basis. points provided negligible quarter. revenue organic a This the decrease October was XX% $XXX total And an growth a year aligned reported as basis less FX XX million, tailwind year-over-year of FX

our year, X% in $XXX Included the were million was basis. sales million. negligible which million recognized Biosys a which sales COVID reported and sales from ligand total of M&A $XX approximately business, [indiscernible] our M&A, is excludes be million of $XX Cytiva, and We For acquisition. base and our $XXX revenue over $X COVID the just will XXXX. million on revenue base down in Flex Therefore, Metenova in

revenue highlight our performance the but our Tony performance the shared let regions. global of across revenue me franchises,

the global declines while world our North Pacific regions, and saw context, Europe and approximately reported of for XX%, were year. XX% For XXXX. Europe a XX% down year momentum of the challenges nature, year. in flat XXXX on by the year total but XX% for positive for fourth the we Asia global represented all XX% Year-over-year, was the and sales total rest in year The the and XX% the represented by Asia quarter most America XX% for and America business, declined respectively. quarter but quarter. total of the across in the for Pacific the XX% the and basis, North the Europe down down And quarter, was for demonstrated

of total quarter the driver adjusted lower XX.X% China This percentage million the of versus revenue. was remained the for XXX XXX improved XXXX significant as gross higher year-over-year decline, from basis most from Delivering million, filtration XX% from Fourth protein and overhead down depreciation increase positive $XX the basis leverage year basis quarter. and increase still down XXXX. from from quarter down profit XX% gross points a capacity region's mix fourth and of and the higher a a fourth point XXX the margin, the lower third points costs. efficiencies points adjusted of XXXX. and XX% basis in third This adjustments in decrease on approximately X sales, level was COVID was $XX and quarter nearly XXX quarter, driven our labor though inventory points by about

margin from gross margin and year is less This gross revenue. XXXX down points was XX.X%. million exon XXX adjusted ] quarter fourth of this basis [ total $XXX With rate

actions margin on are across to XXXX productivity volumes That earlier, to coupled the taken the and As to The remain level. said, of prioritization higher in have and our cost XXXX, based on we our and take management believe we with within our remain have our first corner majority investment be going XX% leverage will actions focused profitability driving and We will for XX% will diligent efficiencies expect forward. spending, of in we Tony remain manufacturing our second resources rebalancing network. XXXX, turning increasing but on restructuring through on focused the gross shared half complete of we the the at on XXXX. half continue we XXXX, on we remained

revaluation the to charges to third our fourth consolidations. $X and inventory This from incurred of down charges actions, by we $XX related in mostly million in the noncash facility million Related charges of quarter, was quarter. restructuring driven

complete, charges year. restructuring our only fourth the these journey. current evaluate need in reflected quarter we discrete expansion margin are in Though total are are nature GAAP P&L the actions primarily we for of in continue our our as activities and All and future nonrecurring

adjusted X% quarter, year XX% gross million prior fourth down products. Total gross $XX SG&A in basis in through a expenses. million year-over-year Continuing new in R&D XXXX operating our year. the compared our down driven while lower down a down million $XX increase This SG&A from P&L, profit operating on essentially just is introduce is as sales innovative to million, our adjusted in adjusted the reported income in $XX sales flat, Total margin, $X the by was was in a slightly reduction the $XX operating was organization. drop held adjusted million described and on only with to continuing income slight by our year adjusted development which and offset total technology investments we year-over-year spend, nearly investment

year $XX income, provision. of on position by approximately our drop $XX adjusted was in million that This million, Our total $XX about adjusted was $XX $XX Adjusted total made depreciation, have the XXXX just driven in critical XXXX margin expense net cash million, the net $XX our down the This in was interest from we million excluding which the million for quarter income our X-point was income, year impact only for headwind offset EBITDA drop and XX% tax higher rates operating profitability, over of a capacity XXXX. $XXX of Total from more income of last rate reflective X-point our margin by net interest versus depreciation. a XX.X% reflective of less operating increased year. of and includes was down million. million was year interest income headwind and investments improved is

XX.X%. in rate from rate from in our quarter cash adjusted the and tax compensation. operation our third year of Swedish the stock-based of efficient was This to total acquisition benefited funding effective Our use the tax Metenova related

not the XXXX. for same EPS was fully decline of period have benefits Adjusted fourth $X.XX We of in assumed adjusted guidance, in these $X.XX compared a per was with year diluted XX%. quarter in $X.XX, for share the XXXX. October our fully total diluted repeat earnings Consistent our to year-over-year

for move financial Finally, equivalents. I'll from we flow quarter generation the proceeds and to million XXXX. guidance. with our debt year to and guidance ended exchange, I'll the cash speak now adjusted cash our with $XXX operating of convertible cash total

non-GAAP in GAAP that tables clarity, we So further earnings guidance is reconciliation please Biosys reconciliations for made our for the note XXXX to Flex today's guidance our our inclusive of in are release. and XXXX. in acquisitions included the press And Metenova fully

As $XXX the $XXX XXXX million of expected in our earlier, shared Tony is revenue million. range for be to to

to expect our X with M&A points on X% non-COVID growth We X% for growth. that business contributing of

as As reporting COVID de be will a this we note, XXXX, sales be not will in minimis. on

shared, half be of step we half for Tony As the second 'XX than expect revenues again. and the to up half of the of revenue first XXXX to expect better in XXXX, second we

to As expect forecasted to cast, resetting improvement. XXX impact increases, compensation points below mix offset XXXX. basis adjusted adjusted by incentive protein expected to our roughly from inflation from material is points I We XXX of back of that headwinds of with levels basis sales is manufacturing employees after productivity, normal be and from to margin range XX% which our reduced margin entirely The XXXX. generate our essentially XXXX in the in being the in deliver gross year-over-year for these flat we gross about earlier, mentioned see with force XX%, to headwind salary far

but to year, may raise price I'll also we note that selectively. assumed flat prices this is be

year-over-year from operations about In XXXX. of margin We XX% from be million to delivering expect to adjusted points income, midpoint line $XX or to operating down is to million our income rate, XXX productivity. basis XX% between which adjusted basis XXX $XX operating our income adjusted points our we of see sight from

a mix sales income at points incentive of total our protein compensation basis than However, level XXX the points from is majority adjusted the lower our creates increases, with headwind. of deleveraging XXX SG&A. material in incentive headwind inflation, from And operating total headwind and basis salary costs of of greater volume the resetting

We resources structure, actions immediate remain focused needed protecting the long investments grow on and balancing while to term. taking our cost

XX% EBITDA have expect the As roughly are XX% reflective fixed margins for of our with headwind to year, we Adjusted and exclusion depreciation expected grow the in volume we of grows, costs the profitability the capacity XXX range be basis to it. critical of of points to made. expansions

income higher an to debt, P&L, coupon down forecasts on expect but the X.XXX% the an on a to XXXX reflects down increasing reflects reduce This our be that million. convertible indicate million X.X%. other interest adjusted rates we favorable It $X as we our Continuing estimated by the year-over-year market similar investments $X our cash from course money will that most also earn assumption through to profile. of forward

related to benefits an driven compensation. Our XXXX we all repeating operating versus expect from half earlier acquisition these XX.X% tax half earnings and XXXX other adjusted XX%. stock-based lower both estimated and to XXXX by XX% funding the XXXX [ expected of ending rate down of effective be in from last versus to of the and reduction adjusted other Approximately increased Incorporating tax lower and income rate the the per increase is is that is I This increase to share not rate. $X.XX income this respectively, $X.XX, year. to XX% is between ], our and cited items,

cash stronger sheet entered and of with We've equivalents. cash with a XXXX $XXX million balance

We our will flexible dry while maintaining remain prudent in spending powder.

peak be to XXXX XXXX, Our versus XXXX is XX% our of expected spending more off was flat than FX by cut after spend. to X% down

the bioprocessing as Now course wrap, reiterate optimism year. and improving of our move to market in the we forward the me let through about our excitement XXXX

as new diligent the to year. accounts, differentiated laser-focused our more our control the strategic continuing execution we in margins and new on with productivity delivering remain innovation building to top of and products, go and position through remaining our Metenova support will increasing priorities, our wins on cost We expand successfully modalities, off integrating

back will operator turn to for open to the call questions. that, lines With the the I

Operator

Dan from with is question First Instructions] Arias Stifel. [Operator

Daniel Arias

Tony cadence like the that $XXX sounds or to calling just to year total. revenues. year, alluded the I'm in the before. if for Jason, start wondering you've to that you million on the there, to on in million just for maybe you're maybe outlook talk $XXX to of of the back year it your the acceleration I half still way the mean could

So to can just the maybe us trying that assumptions you under highlighted with for you sorry, step-up have you're think of second XQ of -- when to order and the XQ the to progress that XQ it the XQ? what and you a just beginning kind between here. the how looking how to year about to Just help spread the book you half and comes today, of year, the momentum end translates that

Anthony Hunt

Don. Thanks, Yes.

the the that quarters. not and couple over brought the orders the of think order a definitely ahead. out in us the spreads QX, half year, especially book It's helps we of QX. just in, quarter I in second in QX Typically,

half $XXX million, in around Our year expectation, million we're going remainder the that the get to and $XXX million the be the year to the midpoint. second to the to then in in probably $XXX probably million that of of $XXX half first

a it We're from midpoint. just looking at

dictate quarters next into QX. So of obviously, a orders an difference to I and going little going be very will the going be happens are huge from bit what of in there's don't think and amount they to QX couple of QX point important of view a QX, because between

Daniel Arias

handful that's hundred know but the a margins, margin guiding a the I of you then, basis is a time EBITDA on you're amount Jason, Okay. play a further, sounds year. -- margins that maybe good we Helpful. does couple here, it points good of sound It long-term are And like to factors like there spent look for not at down there. about. time a out bit if something of thinking

back when Do you've comes low pre-COVID picture point that that, just for resembling thoughts normalize the how you it you and should to some back As come line you closer Repligen have margin on on mid-XXs to to we think kind the that's in do done level comes to post-COVID margins. EBITDA more potential place? loose think Repligen a of about the something normalized top cost into comes at the once to any

Jason Garland

we're Look, lot really that Thanks. to details of I heard productivity we the more to the with a moving pleased Dan. the a the it's -- you and bridge hopefully, I'm in context tried question, and bit Great pieces. think, profit highlight on on know efficiencies of provide for the the the with 'XX. even was actions our some again, that in I incenting probably lot cost second driving. a first And talked about not of 'XX, company that compensation. we're resetting executed of half headwinds

So that's well. this for a real us year headwind as

I'll benefit the again, is we for other thing price, The again We're note flat right? have the is year, assuming profitability which don't of typically a driver as well.

where the as actions as I I XXXX think for the profitability well. that that see think a are setting taking that's ourselves line we're for we've about top improvement. for longer-term year talked like I transition up And

years, But got be It that. why couple there. I the to from going the just coming we're over think then takes. to think positive volume able long how up leverage the right benefit of could we've That's see. picks time take on about is I years we'll ensure about question few get right still really years, headed. where absolutely we're And to it to it your as continuing It's structure. that take to to a

Operator

The with from next Larew Blair. William question Matt is

Matthew Larew

match and just you the a cadence the give not side. color looks And what year the I year? sort how the profitability just wonder more way OpEx up, follow of may on little the cadence the throughout could on layer if to or I Jason cost maybe into so may the wanted like revenue savings will

Jason Garland

Yes.

So in leverage So OpEx right? the picks the a more see cadence as part second second continue follow specifically, top first from from there, -- volume the will we'll line, your half an the Matt, to up.

$X believe million I we've So midpoint. more the about I the million, of right? at we've you salary $X Metenova Again, be absolutely that's So year-over-year bit And the incentive piece. think there's got we that. From acquisition, merit not just right, on up a that impact OpEx, got, around a think from as compensation normal Again, million, that's an our from remind, will it's the $X baseline. in than on an increases primarily return again, then well.

on are pieces And that driving of go $XX-plus we're savings lot up, it call million so a and the those then of productivity.

So lot on of of savings. with again, think head some driving actions those we're I facing cost headwinds a and

Anthony Hunt

in to last that that's going add need volume on going in all volume, And the would we everything see drive to help I Matt, year. year. made year, the the the half we changes comment in Jason's through is us of to go second that we And as company the

So side. be year, are is and the to second of therefore, on be most half of to going going higher, to see leverage OpEx we're the going the revenues

Matthew Larew

headwinds you then seen you've a of Okay. trends CDMOs, term some China. couple categories And as then nebulous were was spoke the on of know and call I year were last far the that about other stage, which kind early

contemplated will in terms curious in the trend throughout the year? buckets those outlook of just how I'm So what's X

Anthony Hunt

XXXX. going doubt So China again to that the China bucket, is be in there's no weak

really it good might XXXX. that was because China you from were year, coming orders the of recall, last we in first revenue As placed had in half

at the brought looked lower than actually an in you into revenue think that much and I QX on order Orders company. were purely QX the we it basis.

pattern order really in in by for the the that China we outlook saw So XXXX. is driven XXXX

about this so to X% to expect be our we year. of X% would revenue And China

quarter pharma has couple QX pharma pharma, over in good some the exceptionally for quarters. X side, CDMO in side, order of quarters, We QX the best probably on QX. had last nice an order On order shown outside the order -- best I quarter resilience over the we in last or last had think a X strong the

So pharma think the everybody that good in we else our is hasn't reasonably part The part CDMO shape. in market, rebounded. the industry, of really like CDMO

and look QX X up said, of And to we're prior we the in the very that average quarters, had in the in quarter we probably XX%, a compared at QX. it if nice Now XX%. CDMOs and orders

to need say, And it's is see quarter. turn. more a beginning few but sign, I encouraging CDMOs the we an market quarters that's X from think before how So to we

Operator

Partners. comes question Souda with next from The Leerink Puneet

Puneet Souda

It's over Tony, at be the that pull bit The the a midpoint. to the seeing single from for we right you're year today. if you're maybe a I backdrop Thanks at digit Jason. level. all given why all getting improvement questions Thanks full investors the pharma. to question and appears When high Tony, the here. is little guide, for of which low is look could across that number details

a XX% book-to-bill improving. about about. the factors on us You talk maybe just CDMO number quarter-over-quarter, orders mean, business talked growing .. or business of filtration point across I is to

Sondra Newman

it's not We're and got mid-single-digit at breaking -- guide filtration. We the you're really -- really a lot. up

address don't [indiscernible] . why we So

Anthony Hunt

out, able to was make I Puneet.

You might phone static. be on a of a ton there's

static. might I it's be guy why But it question, given all because got guy So your the right -- is the Okay.

on Given market. what's in the going

XXXX. for part way look of our is it, the a business we on at think guide honestly, to our Xp I to have non-COVID X%

plus If you Metenova, X, essentially take which for is points we're X M&A, minus X. out

you reported about at for seeing we're business, the of in would it X if equation, other of growth be X%. as you actually proteins the year-on-year X% we're If actually headwinds kind seeing out franchises base on take -- the look our

and the book-to-bill, So is platform is filtration impact in our actually filtration from platform, franchise our I guide of a think actually showing the really the coming which solid it X.XX. our stronger predominantly a on took revenue had because side book-to-bill had COVID was in X.XX X.XX, COVID QX was QX, and but if in QX revenue it we we of in

biggest is showing is me which our So strength, really real franchise for some encouraging.

think other is and by driven fact that at guide, you franchise down is seem conservative really, the it really really lower while proteins I look the than it's to actually might may our and solid. expect, So

we guide So think the as it's the right year. we start

Puneet Souda

Hopefully, brief just you very can but just hear you can, okay question. if me now, a

protein, the you provide. On

Anthony Hunt

respect, I really in -- static. so we mean, due is it all

would I it be just think leave X it better with to question.

to the out I think it's almost make questions. impossible

think anyone that else just don't think Is had hard to that line. has I really issue. It's okay? phone it's hear. I the

Operator

Stevens. Johnson The next Jacob from question is with

Jacob Johnson

-- getting thing to inbound to me the I seem and XQ, just in annualize up get guidance. last is of question, following that other the about that that, the take maybe this at would I Tony, on midpoint orders least if your we're morning

much -- any from in revenue about this of assuming further much talk of what how you in you guidance? recovery a a orders can in So just or recovery are XQ saw you in

Anthony Hunt

and Yes. in came orders Clearly, QX year. impact the in that when you look in, at the QX, half definitely an have there the first of

be gets XX%, the XX%. that is in business down this I maybe our think piece lost will that proteins

look, And has of of kind kind trend. business, product we're that line counteracting every challenges. every So

on range. at you just we're what excuses around X% is. is But if I It's it look to coming of they're the in X think so making that not growth that. franchises, the And any other really X% it

the the good gone So the over actually whole really the we've through year. and has think given industry that I in through environment market gone last it's

been weakness it's think in masked I bit So a proteins. by the little

Jacob Johnson

maybe was try up, going think, Got it. or Puneet to go. following And to I maybe

-- flesh protein XXXX? going in Just the a what's onetime just this impact can on And kind business, out is Tony, why there? you of on

Anthony Hunt

Yes.

a I So think it's onetime impact.

everybody and think kind all knew away. Cytiva, year, I into we is going about going Cytiva of the

the think didn't a decent we our partners year, that through down reason good were happened off we and of X expecting. our year, I forecast XXXX And the partners materialize. of what starting what midyear other versus as from buying XXXX, in of what anticipation ligands is ligands -- QX a were ticked that QX really for was in

were ligand inventory It inventory. So expecting better they're more Jacob. it's year. last was turned it -- be a out not sitting people year like the wasn't It COVID build, on to and

it burn have they off. to So

we ligands are into of XXXX. the their have issue and tell has now the up onetime we that A innovative in in the terms ligands Protein far strategy can But on ligands products side, terms getting organization. place And put developed So you it's commercial a in by leader A A Protein protein of real I the been we've ramping marketplace. in the

the XX%-plus bullish XXXX, a we for be So ligands about for for long-term and us. year, grower really be growth the that's we continue to proteins going business. to And expect next

Operator

from comes question next Leonard Dan UBS. with The

Daniel Leonard

have first My seeing half Or China? the there first that the China. sequential you is I on trends a in Has bottomed? can But to XXXX. comp revenue appreciate question still of outlook the quarter-on-quarter? further are deterioration in tough you speak you

Anthony Hunt

say consistent each really I plus other. million. were that or Dan. quarters, our China if were really XXXX, -- Thanks, in they It would $X in we at pretty stable, the close Yes. right? across orders to looked was they minus They were pretty X

of XXXX. from has to an And would XXXX, our in be point look you orders that's it for annualize So China I from at bottomed view. essentially say and orders then if definitely a revenue it we going said

bit if probably So of half there little expect pickup, half a to there could don't and the the but first goodness year. in from it there's China the that come could second in we be a the in of be year, is of HX,

year. is it conservative, -- the China forecast And X%. around to turn a of it's to for I the at So only in second China if think, X% starts but conservative half

Daniel Leonard

on is gene that for how Tony, elaborate And for therapy you're how into Appreciate your could what follow-up, my base in about baked then So cell that. forecast? concentrated that you? and And customer business? in is you growth XXXX trends thinking

Anthony Hunt

Yes.

and and been cell I XXXX consistent, therapy in describing gene think we've Dan, mRNA.

So it new cell because now gene as the bucket we're broader of kind than using therapy. and is modalities

opportunity we we us. of growth benefit have into processes. contribute commercial wasn't put benefited year-on-year in We flat XXXX the in majority about the have XX, really and the revenue have And in into XX of growth, terms of for long customers revenue processes as late-stage XXXX majority the same and year, in the us vast it cell to accounts as is from The last but gave therapy in we of solid by will companies give were XXXX, that mRNA who and that for the commercial was a us expectation year XXXX, driven gene And same companies 'XX in at new year tail we us modalities solid versus XXXX. look opposed companies. it our 'XX a late-stage top that those XX are will

accounts And X% recovery long maybe tail of digit a for XXXX baking yet. we X% to haven't in little -- the that so really seen probably we're mid-single to because range

Operator

comes from Conor The RBC next with Capital Markets. question McNamara

Conor Noel McNamara

of Just on and orders, the start and about orders a looking there, maybe can the then things are the throughout follow-up. of year? I QX And at you start progression have how talk

Anthony Hunt

the second part, missed I Conor.

in QX. orders of progression the So

Conor Noel McNamara

year? then we're the looking And at how the of start

Anthony Hunt

the of starting year Versus the -- XXXX? start

Conor Noel McNamara

so Starting XXXX, how this progressing are things year far?

Anthony Hunt

Yes, yes.

Okay.

patterns had a XXXX. to exceptionally obviously December. We X contributed the QX. which of September, consistent had in very the terms the really in evenly the And QX. you November So and good would pacing I last I think kick give months quarter. of as we're order I'll actually We very an on off we're track strong say, say October, about year how is, distributed through I'd halfway we

where we So we're be. we to tracking thought would

Conor Noel McNamara

you exiting no basically you for my in guidance? book-to-bill book-to-bill your improvement Great. would through is, progression the this Okay. And your be guidance on are the at if throughout real then year? there Are order year, guidance? follow-on what growth to year you year basis And hit a the in where assuming you need assuming look that for to

Anthony Hunt

in is which happen the side, quarters, the no. go it to way order mid-XXXX. would bottom that back the over the was when No, we you I on say if X look started at really industry

X through you now quarters, if QX X.XX. had we And So about in QX X.XX, look a we've XXXX, Conor, 'XX, where quarters gone at was QX, row, book-to-bill QX like and our X X.X.

We expect year, XX%. pickup to half this XX% of a average the we're X:X of expecting year And the the in first second out half to X. then book-to-bill around of of

improve of book-to-bill So year. will with the in second the half the

XX%, the up. So for to is quarter right? be stronger, hit but will key be then QX, a a to be obviously little and going to us think has targets, XX% I require QX QX to QX

book-to-bill about where typically about would rate quarters X think so growing then moving at. -- X.X, And X be where quarters to quarters around X it's going to with book-to-bill X.XX. So grows up historically this way. if you're X.X, you you're there it around expect Repligen from to be with on the Four the at that

Conor Noel McNamara

you'll but point in above of XXXX, my confident. need be sounds about at question book-to-bill growth talked you you're above a to answers -- double-digit or or That it final X.X Perfect. [indiscernible] X like Okay.

Anthony Hunt

Conor quarters. -- is And encouraging, last the our filtration has of that business Absolutely. X.X what's for above Conor, been couple

the part that's most -- us. for probably So that's encouraging what

Operator

question The Matt comes Craig-Hallum Group. from Capital next Hewitt with

Matthew Hewitt

Maybe between release about rate? 'XX. we double-digit inventory the you've to about But are press maybe be rank to that China? in to double-digit the what look talked had at 'XX as XX%. of growth I target, back is growth at Previously, Like the lever you back to getting you you first maybe your talked that think growth back in to kind to one, and in that levels key thinking the -- about faster or drivers what should of get M&A, funding key how what CDMOs, getting

Anthony Hunt

a with you for the Thanks, than us, back, at CDMOs the Matt. markets are shape when have starting we were Pharma in clearly for So decent say XXXX, CDMO that what to QX. order it's I look right? market. would quarter where We come Yes. better seeing had is we in broadly

think in growth So mode back Those huge. XXXX. are recovery we in proteins went are moving out business And months CDMOs consistently drive then those like now, in XX not the the forward -- things will to in that China pharma mode, I the really back our mode. it's is growth from exposure

XXXX of is a be in positive out because in revenue. terms where we China in bottomed growth think at I in any going of we're have just So to terms

Matthew Hewitt

maybe Got just right. And more. helpful. it. All X That's

products there. On the some products still Or like the you're the OPUS Like sitting starting working that the pieces they that seeing it of pretty based? to inventory need that broad through. inventory and improvement just still CDMO through? broad-based? is it ton side, at or are bought that there and there's see shelves. that a filtration? adjustments CDMOs, Or I'm it Or is their mean, I they is obviously, is it specific still work they're think, are to of sounds are equipment trying Is you're to columns on corrections

Anthony Hunt

Yes.

fluid category to On on at that management. if is they side of and I probably impact the I its product say where pick side, the had components would Repligen CDMO X overstocked

multiyear all stock they think on you think about would So valves, plants you buy and that you would about and tubing that quantity. the up things people about with think

think not So I us columns. It's probably area the OPUS the that definitely that's most. impact

I right? phenomenon. that a other that be dynamic are Matt, there for in also -- think It being the destocking I projects, XXXX is projects, biotech less CDMOs It the it then just -- outsourcing more on less the markets forget about, to just CDMO was come think more outsourcing run. wasn't people projects And there have back, projects, projects. to were be running pharmas large companies more

seeing accounts, in positive are really prepared matter long some We nice my tail momentum you heard the as but yet. not CDMO XX remarks, on it's top

tail I environment, think has CDMOs et funding, et and with of biotech long the recover, cetera, cetera. increased a to going that's healthier to come

Operator

comes question with KeyBanc. from next Paul Knight The

Paul Knight

you give I'll question But guess Tony. Jason. break, for is I the a

what to kind to guided in margins I could it about to What's I beyond here, Repligen you've I XXXX? X think, express or With goal around X What EBITDA aspire think as XXXX. that? you've we does done of years the -- you are XX% like if Repligen mean XX%. the XX%

Jason Garland

Yes.

and mix XX a to ] you. really to the a certainly, if that just it's was think in we're [ opportunity And the sure, of to is absolutely way see of is where get margins are the there kind sustainable we're the of get business. points north back what Again, that just COVID for we drive, But about continue aren't going as in to that profitability XX milestone. looking there's I mid-XXs those think but we'll to see where really volume to mid-XXs then next that. at

Paul Knight

market And things you make approvals customer might we Association year. see what that ARM this in Tony, products you And have as this do XX-gene Do orders? the for well?

Anthony Hunt

lines. the that products start would systems our and are hollow the portfolio product then and let's -- modalities us filtration definitely X our systems new That quite like with like probably our Also, the start are and our well, the main say fiber for I marketplace. artisan be technology. Maybe products doing comps. in ATF drivers would OPUS

like obviously, use our We are, SoloVPE. almost likes technologies analytics company to every

and fourth would well in be So product probably gene. cell that that quite the does

approvals, approvals terms look, more this I Repligen. of In year, going yes, if XX it's there's to benefit think

I but were are into already have through we see customer ones XX spec-ed II Phase we haven't to the XX, which said, XX I the gone as that or opportunities have scaling. accounts

are XX, those we'll if then part from of So benefit the that. yes,

Operator

with Rachel JPMorgan. next The comes question Wanstall from

Rachel Vatnsdal Olson

just and asked, lot A maybe around I'll M&A. Perfect. X already in put been

few For had Metenova, a here. that months you've asset for

talk And how well? expectations then this for of there about talk about you can year environment going any is as state there? and just the for M&A the So integration

Anthony Hunt

Repligen well. Integration Yes, gone it's Yes. doing real fluid a Metenova so between far, There's is that Metenova, Thanks, doing. synergy exactly is Rachel. what going as the management business expected. and is

we've go So hasn't that trained. the very be our has are We're there sales months, we'll M&A, of I what to been are well. The back changed to someone's everything continue from and their are that the have last we after. with apologies, that available, out roof. [indiscernible] XX decided team then -- -- expect closely forces portfolio And very really And on working her companies really so selective terms far. obviously, positive integrated of so changed. over mean nothing's future much in there's

Operator

with question Bowers next Bank. Deutsche Our comes from Justin

Justin Bowers

you're at underlying X adding to confidence about you as seeing that you -- double-digit that what sort talk growth to return your of you you at the for growth then trajectory XXXX then beyond? Can point, into to me. site year in would assumptions the of you for return trajectory? terms X-parter the and of in and -- have And a capacity and some point Just the start would what consolidations, next double-digit gives

Anthony Hunt

I'll Yes, start site the with consolidation maybe piece.

in consolidation have next get little to out for that's in facilities. but we're site -- great capacity what we bit think capacity, of I doing for the X We're in going a terms have terms of us shape of we years.

more than we think there's a So lot I investment have don't to do.

probably we the be if investment, an a did exception. it and M&A course, Of would required capital then that's

around around recovery. of kind market broad XXXX, what really assumptions in terms double-digit market getting growth I is In it's earlier, back said recovery of of broad to kind

late-stage a are in significant of processes. number We

honestly, go XXXX into seeing our those going that, we nice product get some a I we're And as So commercial, pickup think for of Phase into from commercial. from lines. in III

go you're we've new is over systems to see -- been really we've Protein positive year, years. what launching that of out done products I few of and side a that's products, So come as on new think the number the some We're the going last through the like this on great we products as are side A going a to ligand well. proud

contribute a those very in in to growth XXXX. I think the double-digit all way of positive

Operator

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

Anthony Hunt

with Thanks, I everybody the in at for together join of progress Yes. start making. Look, to it's back about forward Sabrina. today. getting us and to great XXXX, the Obviously, talking look right everybody May we're

for So joining. again, thanks, everybody,

Operator

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

now may Thank disconnect. You you.

Repligen (RGEN) 21 Feb 242023 Q4 Earnings call transcript