Repligen(RGEN) - 2019 Q3 - Quarterly Report

PART I—FINANCIAL INFORMATION This section presents the unaudited interim financial statements and management's analysis of Repligen Corporation's financial condition and operational results Item 1. Financial Statements Interim unaudited financial statements for Q3 and YTD 2019 show significant growth in assets, liabilities, and equity, driven by acquisitions and financing activities Consolidated Balance Sheets The balance sheets reflect significant increases in total assets, liabilities, and stockholders' equity from December 2018 to September 2019 Consolidated Balance Sheet Summary (in thousands) | Metric | September 30, 2019 (in thousands) | December 31, 2018 (in thousands) | | :--------------------------------- | :-------------------------------- | :--------------------------------- | | Total Assets | $1,378,708 | $774,621 | | Cash and cash equivalents | $513,454 | $193,822 | | Accounts receivable, net | $41,968 | $33,015 | | Inventories, net | $51,579 | $42,263 | | Property, plant and equipment, net | $43,034 | $32,180 | | Intangible assets, net | $216,289 | $135,438 | | Goodwill | $468,845 | $326,735 | | Total Liabilities | $333,590 | $159,053 | | Total Stockholders' Equity | $1,045,118 | $615,568 | Consolidated Statements of Comprehensive Income (Loss) Revenue increased significantly for both the three and nine months ended September 30, 2019, with mixed net income performance Comprehensive Income (Loss) Summary (in thousands) | Metric (in thousands) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenue | $69,445 | $49,529 | $200,771 | $142,090 | | Income from operations| $7,964 | $7,886 | $30,189 | $18,135 | | Net Income | $1,659 | $4,794 | $17,807 | $10,979 | | Basic EPS | $0.03 | $0.11 | $0.38 | $0.25 | | Diluted EPS | $0.03 | $0.10 | $0.37 | $0.24 | - Net income for the three months ended September 30, 2019, decreased to $1,659k from $4,794k in the prior year, while for the nine months ended September 30, 2019, it increased to $17,807k from $10,979k[12] Consolidated Statements of Stockholders' Equity Stockholders' equity substantially increased, driven by net income, stock issuances for acquisitions, and convertible notes - Total stockholders' equity increased significantly from $615,568k at December 31, 2018, to $1,045,118k at September 30, 2019[15] - Key drivers include net income, issuance of common stock for debt conversion, issuance of common stock for the C Technologies acquisition, the equity component of 0.375% senior convertible notes, and proceeds from common stock issuance[15] Change in Stockholders' Equity (Nine Months Ended Sep 30, 2019, in thousands) | Change in Stockholders' Equity (Nine Months Ended Sep 30, 2019, in thousands) | Amount | | :---------------------------------------------------------------- | :----- | | Balance at December 31, 2018 | $615,568 | | Net income | $17,807 | | Issuance of common stock for debt conversion | $198,757 | | Issuance of common stock for C Technologies, Inc. acquisition | $53,938 | | Equity component of 0.375% senior convertible notes, net of tax | $38,088 | | Proceeds from issuance of common stock, net | $320,713 | | Balance as of September 30, 2019 | $1,045,118 | Consolidated Statements of Cash Flows Cash flows show significant increases from financing activities, largely due to new debt and equity, while investing activities reflect acquisition outlays Cash Flow Activity (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity (Nine Months Ended Sep 30, in thousands) | 2019 | 2018 | | :------------------------------------------ | :----------- | :---------- | | Operating activities | $49,542 | $27,215 | | Investing activities | $(198,197) | $(8,580) | | Financing activities | $485,047 | $2,363 | | Effect of exchange rate changes | $(7,785) | $(4,453) | | Net increase in cash, cash equivalents and restricted cash | $328,607 | $16,545 | - Investing activities in 2019 were significantly impacted by the $182.2 million cash outlay for the C Technologies, Inc. acquisition[20] - Financing activities saw a substantial increase due to $278.6 million from new convertible debt and $320.7 million from common stock issuance, partially offset by $115.0 million for the repayment of senior convertible notes[20] Notes to Unaudited Consolidated Financial Statements These notes provide detailed context on accounting policies, fair value measurements, acquisitions, revenue, leases, and other financial statement items Note 1. Basis of Presentation The financial statements adhere to GAAP and SEC rules, consolidating subsidiaries and adopting new lease accounting standards - The consolidated financial statements are prepared in accordance with GAAP and SEC rules for Form 10-Q, including the accounts of Repligen and its wholly-owned subsidiaries, such as C Technologies, Inc. (acquired May 31, 2019)[22][24] - The company adopted ASU 2016-02 (ASC 842) on Leases on January 1, 2019, recognizing operating lease Right-of-Use (ROU) assets of $17.0 million and lease liabilities of $21.0 million[31] Note 2. Fair Value Measurements The company utilizes a three-level fair value hierarchy, with significant cash and convertible notes valued using Level 1 inputs - The company uses a three-level fair value hierarchy for assets and liabilities[32] - As of September 30, 2019, cash and cash equivalents included $414.7 million in money market accounts, valued using Level 1 inputs[33][35] - The fair value of the 0.375% Convertible Senior Notes due 2024 was $287.9 million as of September 30, 2019, determined by a Level 1 valuation based on recent trade activity[36] Note 3. Acquisition of C Technologies, Inc. Details the acquisition of C Technologies for $239.9 million, resulting in significant goodwill and intangible assets - Repligen acquired C Technologies, Inc. on May 31, 2019, for a total purchase price of $239.9 million, consisting of $186.0 million in cash and 779,221 unregistered shares of common stock valued at $53.9 million[40][42] - The acquisition resulted in an estimated $142.9 million in goodwill and $90.8 million in identifiable intangible assets, including customer relationships ($59.7M) and developed technology ($28.9M)[40][43][46] - C Technologies contributed $7.0 million in revenue and a net loss of $1.2 million for the three months ended September 30, 2019[47] Note 4. Revenue Recognition Revenue primarily from product sales, with contributions from C Technologies and significant customers like MilliporeSigma and GE Healthcare Revenue Summary (in thousands) | Revenue (in thousands) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :--------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Product revenue | $69,419 | $49,500 | $200,701 | $142,042 | | Royalty and other | $26 | $29 | $70 | $48 | | Total revenue | $69,445 | $49,529 | $200,771 | $142,090 | Revenue from Significant Customers (in thousands) | Revenue from Significant Customers (in thousands) | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :------------------------------------------------ | :-------------------------- | :-------------------------- | | GE Healthcare | $23,759 | $22,253 | | MilliporeSigma | $28,354 | $24,181 | - The acquisition of C Technologies added a new Process Analytics product line, including SoloVPE and FlowVPE systems, which complement existing Filtration, Chromatography, and Proteins franchises by enabling in-line protein concentration measurements[61] Note 5. Leases Adoption of ASC 842 led to recognition of operating lease ROU assets and liabilities, increasing due to facility expansion - Upon adopting ASC 842 on January 1, 2019, Repligen recognized operating lease ROU assets of $17.0 million and operating lease liabilities of $21.0 million[70] - As of September 30, 2019, these balances increased to $24.8 million and $29.1 million, respectively, partly due to new leases for facility expansion[73] Lease Cost (in thousands) | Lease Cost (in thousands) | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2019 | | :------------------------ | :-------------------------- | :-------------------------- | | Operating lease cost | $1,207 | $3,119 | | Variable operating lease cost | $242 | $902 | | Total lease cost | $1,449 | $4,021 | Note 6. Goodwill and Other Intangible Assets Goodwill and intangible assets significantly increased due to the C Technologies acquisition, with associated amortization expense - Goodwill increased from $326,735k at December 31, 2018, to $468,845k at September 30, 2019, primarily due to the $142,903k goodwill recognized from the C Technologies acquisition[76] - Net intangible assets increased from $135,438k at December 31, 2018, to $216,289k at September 30, 2019, also driven by the C Technologies acquisition[79] - Amortization expense for finite-lived intangible assets was $9.6 million for the nine months ended September 30, 2019[80] Note 7. Consolidated Balance Sheet Detail Provides detailed breakdowns of inventories, property, plant and equipment, and accrued liabilities, including construction in progress Balance Sheet Item Detail (in thousands) | Balance Sheet Item (in thousands) | September 30, 2019 | December 31, 2018 | | :-------------------------------- | :----------------- | :---------------- | | Inventories, net | $51,579 | $42,263 | | Property, plant and equipment, net| $43,034 | $32,180 | | Accrued liabilities | $25,770 | $15,865 | - Construction in progress as of September 30, 2019, includes $4.9 million primarily for manufacturing expansion projects at Waltham, MA, and Rancho Dominguez, CA facilities[82] Note 8. Convertible Senior Notes Details the issuance of new 0.375% Convertible Senior Notes due 2024 and the settlement of prior 2.125% notes - In July 2019, Repligen issued $287.5 million aggregate principal amount of 0.375% Convertible Senior Notes due 2024 (2019 Notes), generating net proceeds of approximately $278.6 million[85] - The company settled its outstanding 2.125% Convertible Senior Notes due 2021 (2016 Notes) during Q3 2019, resulting in a $5.6 million loss on extinguishment of debt[93][94] - As of September 30, 2019, the 2019 Notes had a carrying value of $230.2 million and a fair value of $287.9 million, classified as a long-term liability[91][92] Note 9. Stockholders' Equity Highlights public offerings of common stock, stock-based compensation expense, and shares available for future grants - Repligen completed public offerings in May and July 2019, raising approximately $189.6 million and $131.1 million, respectively, from the issuance of common stock[99][100] Stock-Based Compensation Expense (in thousands) | Stock-Based Compensation Expense (in thousands) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :---------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total stock-based compensation | $3,175 | $2,779 | $9,459 | $7,672 | - As of September 30, 2019, 2,571,611 shares were available for future grant under the 2018 Stock Option and Incentive Plan[101] Note 10. Commitments and Contingencies Outlines facility lease expansions and strategic collaboration agreements with Sartorius Stedim Biotech and Navigo - The company expanded its Waltham, Massachusetts facility lease by approximately 32,000 square feet, with full occupancy expected by Q3 2020[109] - Repligen entered a collaboration agreement with Sartorius Stedim Biotech to integrate XCell™ ATF cell retention control technology into bioreactors for continuous bioprocessing[111] - An agreement with Navigo for co-development of affinity ligands and a long-term supply agreement with Purolite for NGL-Impact™ A support the proteins business[112] Note 11. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss increased, primarily due to foreign currency translation adjustments - Accumulated other comprehensive loss increased from $(11,893)k at December 31, 2018, to $(21,794)k at September 30, 2019, primarily due to foreign currency translation adjustments[113] Note 12. Income Taxes The effective tax rate decreased in Q3 2019 due to windfall benefits from stock option exercises and RSU vesting Effective Tax Rate | Effective Tax Rate | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :----------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Effective Tax Rate | 0.7% | 27.6% | 18.3% | 24.6% | - The lower effective tax rate in 2019 was primarily due to windfall benefits from stock option exercises and the vesting of restricted stock units[115] - The company adopted ASU 2016-16 in Q1 2018, which impacted deferred tax assets/liabilities and accumulated deficit[116] Note 13. Earnings Per Share Basic and diluted EPS figures are presented, alongside an increase in weighted average diluted shares outstanding EPS Metric | EPS Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :--------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic EPS | $0.03 | $0.11 | $0.38 | $0.25 | | Diluted EPS| $0.03 | $0.10 | $0.37 | $0.24 | - Weighted average diluted shares outstanding increased to 51,809k for the three months ended September 30, 2019, from 45,828k in the prior year[126] Note 14. Related Party Transactions Details rent expense incurred for facilities leased from a former owner of Spectrum LifeSciences, LLC - Repligen incurred $0.4 million in rent expense for the nine months ended September 30, 2019, related to facilities leased from a former owner of Spectrum LifeSciences, LLC[130] Note 15. Segment Reporting The company operates as a single segment, with revenue disaggregated by geographic region and significant customers - The company operates as one operating segment, with revenue disaggregated by geographic region and significant customers[133] Revenue by Geographic Location | Revenue by Geographic Location | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :----------------------------- | :-------------------------- | :-------------------------- | | North America | 51% | 47% | | Europe | 37% | 41% | | APAC | 12% | 12% | Revenue from Significant Customers (% of Total Revenue) | Revenue from Significant Customers (% of Total Revenue) | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :------------------------------------------------------ | :-------------------------- | :-------------------------- | | GE Healthcare | 12% | 16% | | MilliporeSigma | 14% | 17% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses strong revenue growth from bioprocessing products and the C Technologies acquisition, alongside increased operating expenses and financing activities Overview Repligen is a leading provider of advanced bioprocessing technologies, offering solutions to enhance manufacturing efficiencies for biologic drugs - Repligen is a leading provider of advanced bioprocessing technologies and solutions, focused on increasing manufacturing efficiencies and flexibility for biologic drugs[138] - Key product lines include OPUS® pre-packed chromatography columns, XCell ATF™ systems, TangenX flat-sheet filters, Spectrum filtration brands (KrosFlo®, ProConnex®), Protein A ligands, and growth factors[139][140][141] C Technologies Acquisition The acquisition of C Technologies, Inc. for $239.9 million enhances bioprocessing with real-time protein concentration measurement platforms - The acquisition of C Technologies, Inc. was consummated on May 31, 2019, for a total purchase price of $239.9 million[143][146] - C Technologies provides SoloVPE and FlowVPE instrument platforms for measuring protein concentration using Slope Spectroscopy, enabling real-time process monitoring in bioprocessing[144] Critical Accounting Policies and Estimates The company refers to its Annual Report on Form 10-K for a detailed description of its critical accounting policies and estimates - The company refers to its Annual Report on Form 10-K for the year ended December 31, 2018, for a description of its critical accounting policies and estimates[147] Results of Operations Analysis of revenue, costs, operating expenses, and other income/expenses for the three and nine months ended September 30, 2019 Revenues Product revenue experienced significant growth, driven by increased adoption of chromatography and filtration products and the C Technologies acquisition Revenue Summary (in thousands) | Revenue (in thousands) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | % Change | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | % Change | | :--------------------- | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | Products | $69,419 | $49,500 | 40.2% | $200,701 | $142,042 | 41.3% | | Total revenue | $69,445 | $49,529 | 40.2% | $200,771 | $142,090 | 41.3% | - Product revenue growth was driven by increased adoption of chromatography and filtration products and contributions from C Technologies ($7.0 million for Q3 2019 and $9.1 million for YTD 2019)[152] - Direct sales accounted for approximately 80% of product revenue in Q3 2019 and 75% for YTD 2019, with an expectation for this trend to continue[150] Costs and operating expenses Cost of product revenue, R&D, and SG&A all increased, influenced by the C Technologies acquisition and operational expansion Costs and Operating Expenses (in thousands) | Expense (in thousands) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | % Change | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | % Change | | :--------------------- | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | Cost of product revenue| $31,425 | $22,183 | 41.7% | $88,978 | $62,939 | 41.4% | | Research and development| $5,427 | $3,601 | 50.7% | $14,278 | $12,669 | 12.7% | | Selling, general and administrative | $24,629 | $15,859 | 55.3% | $67,326 | $48,347 | 39.3% | | Total costs and operating expenses | $61,481 | $41,643 | 47.6% | $170,582 | $123,955 | 37.6% | - Gross margins were 54.7% for Q3 2019 and 55.7% for YTD 2019, or 55.2% and 56.4% respectively, excluding $0.3 million (Q3) and $1.5 million (YTD) of inventory step-up amortization from the C Technologies acquisition[157] - SG&A costs increased due to the C Technologies acquisition ($4.7 million for Q3 and $6.2 million for YTD), expansion of customer-facing activities, administrative infrastructure buildout, and $4.0 million in acquisition-related transaction fees (YTD)[162][163] Other expenses, net Investment income increased, but a significant loss on debt extinguishment and higher interest expense led to increased net other expenses Other Expenses, Net (in thousands) | Other Expenses, Net (in thousands) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | % Change | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | % Change | | :--------------------------------- | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | Investment income | $1,898 | $558 | 240.1% | $3,616 | $1,251 | 189.0% | | Loss on extinguishment of debt | $(5,650) | — | 100.0% | $(5,650) | — | 100.0% | | Interest expense | $(2,857) | $(1,687) | 69.4% | $(6,326) | $(5,008) | 26.3% | | Total other expense, net | $(6,293) | $(1,263) | 398.3% | $(8,383) | $(3,570) | 134.8% | - Investment income increased due to higher average invested cash balances and interest rates[165] - A $5.6 million loss on extinguishment of debt resulted from settling the 2016 Convertible Senior Notes[166] - Interest expense rose due to the issuance of the 2019 Convertible Senior Notes and related amortization, partially offset by the settlement of the 2016 Notes[167][168] Income tax provision The income tax provision and effective tax rate were significantly lower in Q3 2019 due to windfall benefits from stock-based compensation Income Tax Metric | Income Tax Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | % Change | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | % Change | | :---------------- | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | Income tax provision | $12 | $1,829 | (99.3%) | $3,999 | $3,586 | 11.5% | | Effective tax rate| 0.7% | 27.6% | | 18.3% | 24.6% | | - The effective tax rate for Q3 2019 was significantly lower (0.7%) compared to Q3 2018 (27.6%), primarily due to windfall benefits from stock option exercises and RSU vesting[171] Non-GAAP Financial Measures Presents adjusted income from operations, net income, and EBITDA, excluding specific non-recurring and non-cash items for operational clarity Non-GAAP Metric (in thousands) | Non-GAAP Metric (in thousands) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :----------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Adjusted income from operations| $15,131 | $11,299 | $50,807 | $28,354 | | Adjusted net income | $13,326 | $8,215 | $41,697 | $21,187 | | Adjusted EBITDA | $17,285 | $12,438 | $56,514 | $32,412 | - Non-GAAP measures exclude acquisition and integration costs, intangible amortization, inventory step-up charges, loss on extinguishment of debt, non-cash interest expense, and their tax effects to provide a more accurate comparison of ongoing operational performance[173] Liquidity and Capital Resources Cash and working capital significantly increased, providing adequate liquidity for at least the next 24 months, excluding potential acquisitions - Non-restricted cash and cash equivalents increased to $513.5 million at September 30, 2019, from $193.8 million at December 31, 2018[179] - Working capital increased by approximately $436.9 million to $582.8 million at September 30, 2019, from $145.9 million at December 31, 2018[191] - The company believes current cash balances are adequate for at least the next 24 months, absent acquisitions, and expects increased operating expenses for new product development and commercial capabilities[192] Cautionary Statement Regarding Forward-Looking Statements Highlights various risks and uncertainties associated with forward-looking statements, including collaborations, acquisitions, and market acceptance - The report contains forward-looking statements subject to various risks and uncertainties, including the success of collaborations, ability to grow the bioprocessing business (including acquisitions), regulatory approvals, intellectual property, manufacturing capabilities, market acceptance, competition, and ability to raise additional capital[197][198] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company assesses market risks, primarily interest rate and foreign exchange, with no direct interest rate exposure and unhedged foreign currency exposures Interest Rate Risk The company has no direct interest rate exposure due to the absence of investments in interest-sensitive securities - As of September 30, 2019, the company held no investments in commercial paper, U.S. Government/agency securities, or corporate bonds, resulting in no direct interest rate exposure[199] - A hypothetical 100 basis point increase in interest rates would have no effect on the company's cash position[199] Foreign Exchange Risk Primary foreign currency exposures include the Swedish kronor, Euro, and British pound, which are currently unhedged - The company's primary foreign currency exposures are the Swedish kronor, Euro, and British pound[201] - Fluctuations in exchange rates may adversely affect results of operations, financial position, and cash flows, but the company does not currently hedge this exposure[201] Item 4. Controls and Procedures Disclosure controls were effective, with internal control assessment excluding C Technologies and new ERP system implementation modifying controls Disclosure Controls and Procedures Management affirmed the effectiveness of the company's disclosure controls and procedures as of September 30, 2019 - Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2019[202] Changes in Internal Control Internal control assessment excluded C Technologies, and a new ERP system implementation led to control modifications - The assessment of internal control over financial reporting excluded the C Technologies business, acquired on May 31, 2019, in accordance with SEC guidance for newly acquired businesses[204] - The company initiated the phased implementation of a new ERP system, which resulted in modifications to existing internal controls and implementation of new controls over financial reporting as of September 30, 2019[205] PART II—OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, and other miscellaneous information Item 1. Legal Proceedings The company is not currently aware of any legal proceedings or claims that are expected to have a material adverse effect on its business, financial condition, or results of operations - The company is not currently aware of any material adverse legal proceedings or claims[208] Item 1A. Risk Factors There are no material changes to the risk factors previously described in the company's Quarterly Report on Form 10-Q for the period ended March 31, 2019 - No material changes to the risk factors described in the Quarterly Report on Form 10-Q for the period ended March 31, 2019[209] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported unregistered sales of equity securities related to the acquisition of C Technologies and the exchange and redemption of its 2016 Convertible Senior Notes C Technologies Acquisition Unregistered shares were issued as part of the C Technologies acquisition consideration, relying on Rule 506(b) of Regulation D - On May 31, 2019, the company issued 779,221 unregistered shares of common stock, valued at $53.9 million, as part of the consideration for the C Technologies acquisition, in reliance upon Rule 506(b) of Regulation D[210] Exchange and Redemption of 2016 Notes The company exchanged and settled its 2016 Convertible Senior Notes for cash and common stock in private transactions - The company exchanged $92.0 million aggregate principal amount of its 2016 Convertible Senior Notes for cash and 1,850,155 shares of common stock in private placement transactions[211][213] - The remaining 2016 Notes were settled for $23.0 million in cash and 466,045 shares of common stock[213] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[214] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[215] Item 5. Other Information No other information to report - None[216] Item 6. Exhibits This section lists the exhibits filed as part of the Form 10-Q, including organizational documents, indentures for convertible notes, and certifications - Key exhibits include the Restated Certificate of Incorporation, Second Amended and Restated Bylaws, Base Indenture and First Supplemental Indenture for the 0.375% Convertible Senior Notes due 2024, and Rule 13a-14(a)/15d-14(a) Certifications[218] Signatures The report was officially signed by the President and CEO, and the Chief Financial Officer on October 31, 2019 - The report was signed by Tony J. Hunt, President and Chief Executive Officer, and Jon Snodgres, Chief Financial Officer, on October 31, 2019[222]