10-Q 1 rgen-20220630.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2022

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to___________

Commission File Number 000-14656

 

REPLIGEN CORPORATION

(Exact Name of Registrant as Specified in its Charter)

 

 

 

 

Delaware

04-2729386

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

 

 

41 Seyon Street, Bldg. 1, Suite 100

Waltham, MA

02453

(Address of Principal Executive Offices)

(Zip Code)

 

(781) 250-0111

Registrant’s Telephone Number, Including Area Code

 

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

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

 

 

 

Common Stock, par value $0.01 per share

RGEN

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

 

 

 

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes No

The number of shares outstanding of the registrant’s common stock on July 29, 2022 was 55,491,199.

 

 

1


 

Table of Contents

 

 

 

 

PAGE

PART I -

FINANCIAL INFORMATION

 

 

 

 

 

 

Item 1.

Financial Statements (interim periods unaudited)

 

 

 

 

 

 

 

Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021

 

3

 

 

 

 

 

Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2022 and 2021

 

4

 

 

 

 

 

Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021

 

5

 

 

 

 

 

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021

 

6

 

 

 

 

 

Notes to Unaudited Consolidated Financial Statements

 

7

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

27

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

37

 

 

 

 

Item 4.

Controls and Procedures

 

38

 

 

 

 

PART II -

OTHER INFORMATION

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

39

 

 

 

 

Item 1A.

Risk Factors

 

39

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

39

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

39

 

 

 

 

Item 4.

Mine Safety Disclosures

 

39

 

 

 

 

Item 5.

Other Information

 

39

 

 

 

 

Item 6.

Exhibits

 

40

 

 

 

Signatures

 

41

 

2


 

PART I – FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

REPLIGEN CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands, except share data)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

596,512

 

 

$

603,814

 

Accounts receivable, net of reserves of $1,279 and $1,417 at
   June 30, 2022 and December 31, 2021, respectively

 

 

121,050

 

 

 

117,420

 

Inventories, net

 

 

239,117

 

 

 

184,494

 

Prepaid expenses and other current assets

 

 

19,316

 

 

 

25,949

 

Total current assets

 

 

975,995

 

 

 

931,677

 

Noncurrent assets:

 

 

 

 

 

 

Property, plant and equipment, net

 

 

168,370

 

 

 

124,964

 

Intangible assets, net

 

 

322,208

 

 

 

337,274

 

Goodwill

 

 

854,328

 

 

 

860,362

 

Deferred tax assets

 

 

1,907

 

 

 

1,903

 

Operating lease right of use assets

 

 

121,339

 

 

 

101,559

 

Other noncurrent assets

 

 

769

 

 

 

615

 

Total noncurrent assets

 

 

1,468,921

 

 

 

1,426,677

 

Total assets

 

$

2,444,916

 

 

$

2,358,354

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

40,379

 

 

$

36,203

 

Operating lease liability

 

 

11,692

 

 

 

8,303

 

Current contingent consideration

 

 

17,046

 

 

 

 

Accrued liabilities

 

 

70,693

 

 

 

75,498

 

Convertible Senior Notes, net

 

 

283,712

 

 

 

255,258

 

Total current liabilities

 

 

423,522

 

 

 

375,262

 

Noncurrent liabilities:

 

 

 

 

 

 

Deferred tax liabilities

 

 

23,651

 

 

 

33,480

 

Noncurrent operating lease liability

 

 

121,271

 

 

 

102,492

 

Noncurrent contingent consideration

 

 

67,897

 

 

 

94,238

 

Other noncurrent liabilities

 

 

3,211

 

 

 

2,815

 

Total noncurrent liabilities

 

 

216,030

 

 

 

233,025

 

Total liabilities

 

 

639,552

 

 

 

608,287

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares
   issued or outstanding

 

 

 

 

 

 

Common stock, $0.01 par value; 80,000,000 shares authorized; 55,465,918
   shares at June 30, 2022 and
55,321,457 shares at December 31, 2021
   issued and outstanding

 

 

555

 

 

 

553

 

Additional paid-in capital

 

 

1,533,762

 

 

 

1,572,340

 

Accumulated other comprehensive loss

 

 

(37,091

)

 

 

(16,886

)

Accumulated earnings

 

 

308,138

 

 

 

194,060

 

Total stockholders’ equity

 

 

1,805,364

 

 

 

1,750,067

 

Total liabilities and stockholders’ equity

 

$

2,444,916

 

 

$

2,358,354

 

The accompanying notes are an integral part of these consolidated financial statements.

3


 

REPLIGEN CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, amounts in thousands, except per share data)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

207,597

 

 

$

162,920

 

 

$

413,960

 

 

$

305,657

 

Royalty and other revenue

 

 

36

 

 

 

40

 

 

 

73

 

 

 

140

 

Total revenue

 

 

207,633

 

 

 

162,960

 

 

 

414,033

 

 

 

305,797

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenue

 

 

86,260

 

 

 

61,990

 

 

 

168,616

 

 

 

121,737

 

Research and development

 

 

10,440

 

 

 

8,389

 

 

 

22,595

 

 

 

16,001

 

Selling, general and administrative

 

 

54,649

 

 

 

44,341

 

 

 

108,949

 

 

 

83,436

 

Contingent consideration

 

 

(6,884

)

 

 

 

 

 

(9,295

)

 

 

 

Total costs and operating expenses

 

 

144,465

 

 

 

114,720

 

 

 

290,865

 

 

 

221,174

 

Income from operations

 

 

63,168

 

 

 

48,240

 

 

 

123,168

 

 

 

84,623

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

Investment income

 

 

708

 

 

 

41

 

 

 

785

 

 

 

93

 

Interest expense

 

 

(271

)

 

 

(2,787

)

 

 

(563

)

 

 

(5,541

)

Amortization of debt issuance costs

 

 

(453

)

 

 

(357

)

 

 

(905

)

 

 

(709

)

Other expenses

 

 

(3,396

)

 

 

(779

)

 

 

(3,798

)

 

 

(1,003

)

Other expenses, net

 

 

(3,412

)

 

 

(3,882

)

 

 

(4,481

)

 

 

(7,160

)

Income before income taxes

 

 

59,756

 

 

 

44,358

 

 

 

118,687

 

 

 

77,463

 

Income tax provision

 

 

9,895

 

 

 

8,125

 

 

 

21,862

 

 

 

11,780

 

Net income

 

$

49,861

 

 

$

36,233

 

 

$

96,825

 

 

$

65,683

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.90

 

 

$

0.66

 

 

$

1.75

 

 

$

1.20

 

Diluted (Note 12)

 

$

0.88

 

 

$

0.64

 

 

$

1.68

 

 

$

1.16

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

55,444

 

 

 

54,931

 

 

 

55,399

 

 

 

54,868

 

Diluted (Note 12)

 

 

56,721

 

 

 

56,786

 

 

 

57,842

 

 

 

56,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

49,861

 

 

$

36,233

 

 

$

96,825

 

 

$

65,683

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(15,517

)

 

 

3,125

 

 

 

(20,205

)

 

 

(6,454

)

Comprehensive income

 

$

34,344

 

 

$

39,358

 

 

$

76,620

 

 

$

59,229

 

The accompanying notes are an integral part of these consolidated financial statements.

4


 

REPLIGEN CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, amounts in thousands, except share data)

 

 

 

Six Months Ended June 30, 2022

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

 

Par
Value

 

 

Additional
Paid-In Capital

 

 

Accumulated
Other Comprehensive
Loss

 

 

Retained
Earnings

 

 

Total
Stockholders'
Equity

 

Balance at December 31, 2021

 

 

55,321,457

 

 

$

553

 

 

$

1,572,340

 

 

$

(16,886

)

 

$

194,060

 

 

$

1,750,067

 

Impact of the adoption of ASU 2020-06

 

 

 

 

 

 

 

 

(39,070

)

 

 

 

 

 

17,253

 

 

 

(21,817

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

96,825

 

 

 

96,825

 

Issuance of common stock for debt conversion

 

 

12

 

 

 

0

 

 

 

(5

)

 

 

 

 

 

 

 

 

(5

)

Exercise of stock options and vesting of stock
   units

 

 

222,727

 

 

 

3

 

 

 

460

 

 

 

 

 

 

 

 

 

463

 

Tax withholding on vesting of restricted stock units

 

 

(78,278

)

 

 

(1

)

 

 

(14,758

)

 

 

 

 

 

 

 

 

(14,759

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

14,900

 

 

 

 

 

 

 

 

 

14,900

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

(20,205

)

 

 

 

 

 

(20,205

)

Other

 

 

 

 

 

 

 

 

(105

)

 

 

 

 

 

 

 

 

(105

)

Balance at June 30, 2022

 

 

55,465,918

 

 

$

555

 

 

$

1,533,762

 

 

$

(37,091

)

 

$

308,138

 

 

$

1,805,364

 

 

 

 

Three Months Ended June 30, 2022

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

 

Par
Value

 

 

Additional
Paid-In Capital

 

 

Accumulated
Other Comprehensive
Loss

 

 

Retained
Earnings

 

 

Total
Stockholders'
Equity

 

Balance at March 31, 2022

 

 

55,429,046

 

 

$

554

 

 

$

1,529,144

 

 

$

(21,574

)

 

$

258,277

 

 

$

1,766,401

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

49,861

 

 

 

49,861

 

Issuance of common stock for debt conversion

 

 

4

 

 

 

(0

)

 

 

(3

)

 

 

 

 

 

 

 

 

(3

)

Exercise of stock options and vesting of stock
   units

 

 

51,737

 

 

 

1

 

 

 

166

 

 

 

 

 

 

 

 

 

166

 

Tax withholding on vesting of restricted stock units

 

 

(14,869

)

 

 

(0

)

 

 

(2,448

)

 

 

 

 

 

 

 

 

(2,448

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

6,985

 

 

 

 

 

 

 

 

 

6,985

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

(15,517

)

 

 

 

 

 

(15,517

)

Other

 

 

 

 

 

 

 

 

(82

)

 

 

 

 

 

 

 

 

(82

)

Balance at June 30, 2022

 

 

55,465,918

 

 

$

555

 

 

$

1,533,762

 

 

$

(37,091

)

 

$

308,138

 

 

$

1,805,364

 

 

 

 

Six Months Ended June 30, 2021

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

 

Par
Value

 

 

Additional
Paid-In Capital

 

 

Accumulated
Other Comprehensive
Income (Loss)

 

 

Retained
Earnings

 

 

Total
Stockholders'
Equity

 

Balance at December 31, 2020

 

 

54,760,837

 

 

$

548

 

 

$

1,460,748

 

 

$

2,085

 

 

$

65,769

 

 

$

1,529,150

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

65,683

 

 

 

65,683

 

Issuance of common stock for debt conversion

 

 

3

 

 

 

0

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

Exercise of stock options and vesting of stock
   units

 

 

208,641

 

 

 

2

 

 

 

858

 

 

 

 

 

 

 

 

 

860

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

13,684

 

 

 

 

 

 

 

 

 

13,684

 

True-up of costs related to the December 2020 issuance
     of common stock

 

 

 

 

 

 

 

 

145

 

 

 

 

 

 

 

 

 

145

 

Translation adjustment