10-Q 1 rgen-20230630.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, 2023

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 31, 2023 was 55,756,322.

1


 

Table of Contents

 

 

 

PAGE

PART I -

FINANCIAL INFORMATION

 

 

 

 

 

 

Item 1.

Financial Statements (interim periods unaudited)

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

 

3

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022

 

4

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022

 

5

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022

 

7

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

8

 

 

 

 

Item 2.

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

 

22

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

31

 

 

 

 

Item 4.

Controls and Procedures

 

32

 

 

 

 

PART II -

OTHER INFORMATION

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

33

 

 

 

 

Item 1A.

Risk Factors

 

33

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

34

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

34

 

 

 

 

Item 4.

Mine Safety Disclosures

 

34

 

 

 

 

Item 5.

Other Information

 

34

 

 

 

 

Item 6.

Exhibits

 

35

 

 

 

Signatures

 

36

 

2


 

PART I – FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

REPLIGEN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands, except share data)

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

603,656

 

 

$

523,458

 

Marketable securities held to maturity

 

 

 

 

 

100,299

 

Accounts receivable, net of reserves of $1,571 and $1,365 at
   June 30, 2023 and December 31, 2022, respectively

 

 

120,304

 

 

 

116,247

 

Inventories, net

 

 

240,869

 

 

 

238,277

 

Prepaid expenses and other current assets

 

 

33,754

 

 

 

19,837

 

Total current assets

 

 

998,583

 

 

 

998,118

 

Noncurrent assets:

 

 

 

 

 

 

Property, plant and equipment, net

 

 

202,564

 

 

 

190,673

 

Intangible assets, net

 

 

351,704

 

 

 

353,676

 

Goodwill

 

 

870,688

 

 

 

855,513

 

Deferred tax assets

 

 

1,756

 

 

 

840

 

Operating lease right of use assets

 

 

122,044

 

 

 

125,023

 

Other noncurrent assets

 

 

1,664

 

 

 

815

 

Total noncurrent assets

 

 

1,550,420

 

 

 

1,526,540

 

Total assets

 

$

2,549,003

 

 

$

2,524,658

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

23,787

 

 

$

27,554

 

Operating lease liability

 

 

2,889

 

 

 

6,957

 

Current contingent consideration

 

 

16,363

 

 

 

13,950

 

Accrued liabilities

 

 

45,023

 

 

 

71,120

 

Convertible Senior Notes, net

 

 

285,521

 

 

 

284,615

 

Total current liabilities

 

 

373,583

 

 

 

404,196

 

Noncurrent liabilities:

 

 

 

 

 

 

Deferred tax liabilities

 

 

21,897

 

 

 

23,000

 

Noncurrent operating lease liability

 

 

134,438

 

 

 

131,389

 

Noncurrent contingent consideration

 

 

44,277

 

 

 

51,559

 

Other noncurrent liabilities

 

 

3,882

 

 

 

3,814

 

Total noncurrent liabilities

 

 

204,494

 

 

 

209,762

 

Total liabilities

 

 

578,077

 

 

 

613,958

 

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; 55,744,896
   shares at June 30, 2023 and
55,557,698 shares at December 31, 2022
   issued and outstanding

 

 

557

 

 

 

556

 

Additional paid-in capital

 

 

1,561,393

 

 

 

1,547,266

 

Accumulated other comprehensive loss

 

 

(37,189

)

 

 

(34,394

)

Accumulated earnings

 

 

446,165

 

 

 

397,272

 

Total stockholders’ equity

 

 

1,970,926

 

 

 

1,910,700

 

Total liabilities and stockholders’ equity

 

$

2,549,003

 

 

$

2,524,658

 

 

 

 

 

 

 

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

3


 

REPLIGEN CORPORATION

Condensed CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

 

 

Three Months Ended June 30,

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

159,133

 

 

$

207,597

 

 

$

341,754

 

 

$

413,960

 

Royalty and other revenue

 

 

36

 

 

 

36

 

 

 

75

 

 

 

73

 

Total revenue

 

 

159,169

 

 

 

207,633

 

 

 

341,829

 

 

 

414,033

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenue

 

 

79,307

 

 

 

86,260

 

 

 

161,152

 

 

 

168,616

 

Research and development

 

 

9,706

 

 

 

10,440

 

 

 

21,860

 

 

 

22,595

 

Selling, general and administrative

 

 

48,966

 

 

 

54,649

 

 

 

105,136

 

 

 

108,949

 

Contingent consideration

 

 

1,791

 

 

 

(6,884

)

 

 

3,026

 

 

 

(9,295

)

Total costs and operating expenses

 

 

139,770

 

 

 

144,465

 

 

 

291,174

 

 

 

290,865

 

Income from operations

 

 

19,399

 

 

 

63,168

 

 

 

50,655

 

 

 

123,168

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

Investment income

 

 

5,964

 

 

 

708

 

 

 

11,450

 

 

 

785

 

Interest expense

 

 

(274

)

 

 

(271

)

 

 

(544

)

 

 

(563

)

Amortization of debt issuance costs

 

 

(457

)

 

 

(453

)

 

 

(914

)

 

 

(905

)

Other expenses

 

 

528

 

 

 

(3,396

)

 

 

605

 

 

 

(3,798

)

Other income (expenses), net

 

 

5,761

 

 

 

(3,412

)

 

 

10,597

 

 

 

(4,481

)

Income before income taxes

 

 

25,160

 

 

 

59,756

 

 

 

61,252

 

 

 

118,687

 

Income tax provision

 

 

5,096

 

 

 

9,895

 

 

 

12,359

 

 

 

21,862

 

Net income

 

$

20,064

 

 

$

49,861

 

 

$

48,893

 

 

$

96,825

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.36

 

 

$

0.90

 

 

$

0.88

 

 

$

1.75

 

Diluted (Note 11)

 

$

0.35

 

 

$

0.88

 

 

$

0.86

 

 

$

1.68

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

55,705

 

 

 

55,444

 

 

 

55,648

 

 

 

55,399

 

Diluted (Note 11)

 

 

56,858

 

 

 

56,721

 

 

 

56,932

 

 

 

57,842

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

20,064

 

 

$

49,861

 

 

$

48,893

 

 

$

96,825

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(6,068

)

 

 

(15,517

)

 

 

(2,795

)

 

 

(20,205

)

Comprehensive income

 

$

13,996

 

 

$

34,344

 

 

$

46,098

 

 

$

76,620

 

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

4


 

REPLIGEN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, amounts in thousands, except share data)

 

 

 

Three Months Ended June 30, 2023

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

 

Par
Value

 

 

Additional
Paid-In Capital

 

 

Accumulated
Other Comprehensive
Loss

 

 

Retained
Earnings

 

 

Total
Stockholders'
Equity

 

Balance at March 31, 2023

 

 

55,644,301

 

 

$

556

 

 

$

1,544,956

 

 

$

(31,121

)

 

$

426,101

 

 

$

1,940,492

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,064

 

 

 

20,064

 

Issuance of common stock for debt conversion

 

 

6

 

 

 

0

 

 

 

(3

)

 

 

 

 

 

 

 

 

(3

)

Exercise of stock options and vesting of stock
   units

 

 

36,184

 

 

 

1

 

 

 

32

 

 

 

 

 

 

 

 

 

33

 

Tax withholding on vesting of restricted stock units

 

 

(9,631

)

 

 

(0

)

 

 

(1,547

)

 

 

 

 

 

 

 

 

(1,547

)

Issuance of common stock pursuant to the acquisition of
   FlexBiosys, Inc.

 

 

31,415

 

 

 

0

 

 

 

5,243

 

 

 

 

 

 

 

 

 

5,243

 

Issuance of common stock pursuant to the Avitide, Inc.
   contingent consideration earnout payment

 

 

42,621

 

 

 

0

 

 

 

7,229

 

 

 

 

 

 

 

 

 

7,229

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

5,483

 

 

 

 

 

 

 

 

 

5,483

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

(6,068

)

 

 

 

 

 

(6,068

)

Balance at June 30, 2023

 

 

55,744,896

 

 

$

557

 

 

$

1,561,393

 

 

$

(37,189

)

 

$

446,165

 

 

$

1,970,926

 

 

 

 

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, 2023

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

 

Par
Value

 

 

Additional
Paid-In Capital

 

 

Accumulated
Other Comprehensive
Loss

 

 

Retained
Earnings

 

 

Total
Stockholders'
Equity

 

Balance at December 31, 2022

 

 

55,557,698

 

 

$

556

 

 

$

1,547,266

 

 

$

(34,394

)

 

$

397,272

 

 

$

1,910,700

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

48,893

 

 

 

48,893

 

Issuance of common stock for debt conversion

 

 

6

 

 

 

 

 

 

(3

)

 

 

 

 

 

 

 

 

(3

)

Exercise of stock options and vesting of stock
   units

 

 

176,394

 

 

 

2

 

 

 

60

 

 

 

 

 

 

 

 

 

62

 

Tax withholding on vesting of restricted stock units

 

 

(63,238

)

 

 

(1

)

 

 

(11,139

)

 

 

 

 

 

 

 

 

(11,140

)

Issuance of common stock pursuant to the acquisition of
  FlexBiosys, Inc.

 

 

31,415

 

 

 

0