Repligen(US:RGEN)2019-05-09 18:58Financial Data and Key Metrics Changes - The company reported record revenues of $60.6 million for Q1 2019, reflecting a 37% year-over-year organic growth, despite a 1.5% headwind from foreign exchange [30][31] - Adjusted operating income increased by 68% year-over-year to $15.6 million, with adjusted operating margins improving by 500 basis points to 25.7% [31][37] - Adjusted EPS rose by 66% year-over-year to $0.28 per fully diluted share [38] Business Line Data and Key Metrics Changes - The filtration business saw a record quarter with ATF product line sales up over 50% year-over-year, and single-use XCell ATF sales increased over 100% year-on-year [12][13] - Chromatography, particularly the OPUS pre-pack column business, delivered over 40% growth year-on-year, driven by demand for larger diameter columns [15] - The proteins business grew over 25% organically, with strong demand for growth factors and ligands [16][37] Market Data and Key Metrics Changes - Direct product revenue growth was strong across regions: Asia up 72%, North America up 42%, and Europe up 23% [32] - North America accounted for 54% of direct product revenue, Europe 28%, and Asia 18% [32] Company Strategy and Development Direction - The acquisition of C Technologies is expected to add a new franchise in process analytics, enhancing the product portfolio and expanding the addressable market [9][10] - The company is focused on commercial execution, M&A, strategic partnerships, and high-impact product launches from R&D [10][11] - Plans include launching new TFF and ATF controller products in the second half of the year and increasing operational capacity to meet demand [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the performance for the year, raising revenue and adjusted EPS guidance by $16.5 million and $0.035 respectively [8][41] - The company anticipates that the first half of the year will be stronger than the second half in terms of revenue and organic growth percentage [33] - Management expects continued strong demand for growth factors and a healthy pipeline of opportunities in Asia [53][54] Other Important Information - The company raised its full-year revenue guidance to $235 million to $241 million, reflecting growth of 21% to 24% [41] - Adjusted net income guidance was increased to a range of $41 million to $44 million, with adjusted EBITDA also raised to $60 million to $63 million [44] Q&A Session Summary Question: What drove the strong growth in the growth factor business? - Management indicated that increased usage in clinical pipelines and strong partnerships contributed to the growth, with a current market share of approximately 15% to 20% [50][53] Question: What is the underlying market growth in Asia? - Management noted that the strong performance in Asia is due to the technology standard of their products and a healthy pipeline of opportunities [54] Question: What is the outlook for gross margins? - Management expects gross margins to remain in the range of 56% to 57%, with potential for annual expansion of 20 to 40 basis points [56][57] Question: What is the status of revenue synergy capture from Spectrum? - Management reported $2.5 million of revenue synergies captured in Q1, on track to meet the target of $5 million to $7 million for 2019 [63] Question: Are there any production constraints? - Management confirmed that they are meeting customer demands but are focused on increasing production capacity, particularly in the large-scale OPUS business [90]