QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
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(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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☒ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
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PAGE |
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PART I - |
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Item 1. |
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3 |
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4 |
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5 |
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7 |
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8 |
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Item 2. |
28 |
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Item 3. |
36 |
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Item 4. |
37 |
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PART II - |
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Item 1. |
38 |
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Item 1A. |
38 |
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Item 2. |
38 |
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Item 3. |
38 |
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Item 4. |
38 |
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Item 5. |
38 |
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Item 6. |
39 |
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40 |
ITEM 1. |
Financial Statements |
June 30, |
December 31, |
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2019 |
2018 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | |
$ | |
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Restricted cash |
|
— |
||||||
Accounts receivable, less reserve for doubtful accounts of $ June 30, 2019 and December 31, 2018, respectively |
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Royalties and other receivables |
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Unbilled receivables |
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Inventories, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Intangible assets, net |
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Goodwill |
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Deferred tax assets |
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Operating lease right of use assets |
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— |
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Other assets |
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Total assets |
$ | |
$ | |
||||
Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ | |
$ | |
||||
Operating lease liability |
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— |
||||||
Accrued liabilities |
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Convertible senior notes, current portion |
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Total current liabilities |
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Deferred tax liabilities |
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||||||
Operating lease liability, long-term |
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— |
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Other liabilities, long-term |
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Total liabilities |
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Commitments and contingencies (Note 10) |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ shares at December 31, 2018 issued and outstanding |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Accumulated earnings (deficit) |
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( |
) | |||||
Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ |
|
$ | |
||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
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Revenue: |
||||||||||||||||
Products |
$ | |
$ | |
$ | |
$ | |
||||||||
Royalty and other revenue |
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( |
) | |
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Total revenue |
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Costs and operating expenses: |
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Cost of product revenue |
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Research and development |
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Selling, general and administrative |
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Total costs and operating expenses |
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Income from operations |
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Other income (expenses): |
||||||||||||||||
Investment income |
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||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other (expenses) income |
( |
) | |
( |
) | |
||||||||||
Other expenses, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Income before income taxes |
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|
|
|
||||||||||||
Income tax provision |
|
|
|
|
||||||||||||
Net income |
$ | |
$ | 2,738 |
$ | |
$ | |
||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | |
$ | |
$ | |
$ | |
||||||||
Diluted |
$ | |
$ | |
$ | |
$ | |
||||||||
Weighted average common shares outstanding: |
||||||||||||||||
Basic |
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||||||||||||
Diluted |
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||||||||||||
Net income |
$ | |
$ | |
$ | |
$ | |
||||||||
Other comprehensive income (loss): |
||||||||||||||||
Foreign currency translation adjustment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Comprehensive income (loss) |
$ | |
$ | ( |
) | $ | |
$ | |
|||||||
Six Months Ended June 30, 2019 |
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Common Stock |
|||||||||||||||||||||||||
Number of Shares |
Par Value |
Additional Paid- In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Earnings (Deficit) |
Total Stockholders’ Equity |
||||||||||||||||||||
Balance at December 31, 2018 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
||||||||||||
Net income |
— |
— |
— |
— |
|
|
|||||||||||||||||||
Issuance of common stock for debt conversion |
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|
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— |
— |
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|||||||||||||||||||
Exercise of stock options and releases of restricted stock |
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|
|
— |
— |
|
|||||||||||||||||||
Issuance of common stock pursuant to the acquisition of C Technologies, Inc. |
|
|
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— |
— |
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|||||||||||||||||||
Proceeds from issuance of common stock, net of issuance costs of $ |
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|
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— |
— |
|
|||||||||||||||||||
Stock-based compensation expense |
— |
— |
|
— |
— |
|
|||||||||||||||||||
Translation adjustment |
— |
— |
— |
( |
) | — |
( |
) | |||||||||||||||||
Balance at June 30, 2019 |
|
$ | |
$ | |
$ | ( |
) | $ | |
$ | |
|||||||||||||
Three Months Ended June 30, 2019 |
|||||||||||||||||||||||||
Common Stock |
|||||||||||||||||||||||||
Number of Shares |
Par Value |
Additional Paid- In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Earnings (Deficit) |
Total Stockholders’ Equity |
||||||||||||||||||||
Balance at March 31, 2019 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
||||||||||||
Net income |
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|
|
|||||||||||||||||||
Issuance of common stock for debt conversion |
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|
|
— |
— |
|
|||||||||||||||||||
Exercise of stock options and releases of restricted stock |
|
|
|
— |
— |
|
|||||||||||||||||||
Issuance of common stock pursuant to the acquisition of C Technologies, Inc. |
|
|
|
— |
— |
|
|||||||||||||||||||
Proceeds from issuance of common stock, net of issuance costs of $ |
|
|
|
— |
— |
|
|||||||||||||||||||
Stock-based compensation expense |
— |
— |
|
— |
— |
|
|||||||||||||||||||
Translation adjustment |
— |
— |
— |
( |
) | — |
( |
) | |||||||||||||||||
Balance at June 30, 2019 |
|
$ | |
$ | |
$ | ( |
) | $ | |
$ | |
|||||||||||||
Six Months Ended June 30, 2018 |
|||||||||||||||||||||||||
Common Stock |
|||||||||||||||||||||||||
Number of Shares |
Par Value |
Additional Paid- In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Total Stockholders’ Equity |
||||||||||||||||||||
Balance at December 31, 2017 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
||||||||||||
Net income |
— |
— |
— |
— |
|
|
|||||||||||||||||||
Issuance of common stock for debt conversion |
|
|
|
— |
— |
|
|||||||||||||||||||
Exercise of stock options and releases of restricted stock |
|
|
|
— |
— |
|
|||||||||||||||||||
Stock-based compensation expense |
— |
— |
|
— |
— |
|
|||||||||||||||||||
Cumulative effect of accounting changes |
— |
— |
— |
— |
( |
) | ( |
) | |||||||||||||||||
Translation adjustment |
— |
— |
— |
( |
) | — |
( |
) | |||||||||||||||||
Balance at June 30, 2018 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
||||||||||||
Three Months Ended June 30, 2018 |
|||||||||||||||||||||||||
Common Stock |
|||||||||||||||||||||||||
Number of Shares |
Par Value |
Additional Paid- In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Total Stockholders’ Equity |
||||||||||||||||||||
Balance at March 31, 2018 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
||||||||||||
Net income |
|
2,737 |
|||||||||||||||||||||||
Issuance of common stock for debt conversion |
— |
|
|
— |
— |
— |
|||||||||||||||||||
Exercise of stock options and releases of restricted stock |
|
|
|
— |
— |
|
|||||||||||||||||||
Stock-based compensation expense |
— |
— |
|
— |
— |
|
|||||||||||||||||||
Translation adjustment |
— |
— |
— |
( |
) | — |
( |
) | |||||||||||||||||
Balance at June 30, 2018 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
||||||||||||
Six Months Ended June 30, |
||||||||
2019 |
2018 |
|||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | |
$ | |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
|
|
||||||
Non-cash interest expense |
|
|
||||||
Stock-based compensation expense |
|
|
||||||
Deferred tax expense |
|
|
||||||
Other |
|
|
||||||
Changes in operating assets and liabilities, excluding impact of acquisitions: |
||||||||
Accounts receivable |
( |
) | ( |
) | ||||
Royalties and other receivables |
|
|
||||||
Unbilled receivables |
|
— |
||||||
Inventories |
( |
) | ( |
) | ||||
Prepaid expenses and other assets |
|
( |
) | |||||
Operating lease right of use assets |
|
— |
||||||
Other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
( |
) | |||||
Accrued expenses |
|
( |
) | |||||
Operating lease liability |
( |
) | — |
|||||
Long-term liabilities |
( |
) | |
|||||
Total cash provided by operating activities |
|
|
||||||
Cash flows from investing activities: |
||||||||
Acquisition of C Technologies, Inc., net of cash acquired |
( |
) |
— |
|||||
Additions to capitalized software costs |
( |
) | — |
|||||
Purchases of property, plant and equipment |
( |
) | ( |
) | ||||
Total cash used in investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities: |
||||||||
Exercise of stock options |
|
|
||||||
Proceeds from issuance of common stock, net |
|
|
|
|
— |
|||
Repayment of senior convertible notes |
( |
) | ( |
) | ||||
Total cash provided by financing activities |
|
|
||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
( |
) | ( |
) | ||||
Net increase in cash, cash equivalents and restricted cash |
|
|
||||||
Cash, cash equivalents and restricted cash, beginning of period |
|
|
||||||
Cash, cash equivalents and restricted cash, end of period |
$ | |
$ | |
||||
Supplemental disclosure of cash flow information: |
||||||||
Income taxes paid |
$ | |
$ | |
||||
Supplemental disclosure of non-cash investing and financing activities: |
||||||||
Fair value of common stock issued for acquisition of C Technologies, Inc. |
$ | |
$ | — |
||||
Non-cash effect of adoption of ASU 2016-16 |
$ | — |
$ | |
||||
Business Acquisitions: |
|
|
|
|
|
|
|
|
Fair value of tangible assets acquired |
|
$ |
|
|
|
$ |
|
|
Fair value of accounts receivables |
|
|
|
|
|
|
|
|
Fair value of other assets |
|
|
|
|
|
|
|
|
Liabilities assumed |
|
|
( |
) |
|
|
|
|
Fair value of stock issued |
|
|
( |
) |
|
|
|
|
Cost in excess of fair value of assets acquired (goodwill) |
|
|
|
|
|
|
|
|
Acquired identifiable intangible assets |
|
|
|
|
|
|
|
|
Net cash paid for business acquisitions |
|
$ |
|
|
|
$ |
|
|
1. |
Basis of Presentation |
2. |
Fair Value Measurements |
Level 1 – |
Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. | |
Level 2 – |
Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. | |
Level 3 – |
Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
3. |
Acquisition of C Technologies, Inc. |
Cash consideration |
$ | |
||
Equity consideration |
|
|||
Fair value of net assets acquired |
$ | |
||
Cash and cash equivalents |
$ | |
||
Restricted cash |
|
|||
Accounts receivable |
|
|||
Inventory |
|
|||
Prepaid expenses and other current assets |
|
|||
Fixed assets |
|
|||
Operating lease right of use asset |
|
|||
Customer relationships |
|
|||
Developed technology |
|
|||
Trademark and tradename |
|
|||
Non-competition agreements |
|
|||
Goodwill |
|
|||
Accounts payable |
( |
) | ||
Accrued liabilities |
( |
) | ||
Accrued bonus |
( |
) | ||
Deferred revenue |
( |
) | ||
Operating lease liability |
( |
) | ||
Operating lease liability, long-term |
( |
) | ||
Fair value of net assets acquired |
$ |
|
||
Useful Life |
Fair Value |
|||||||
(Amounts in thousands) |
||||||||
Customer relationships |
|
$ | |
|||||
Developed technology |
|
|
||||||
Trademark and tradename |
|
|
||||||
Non-competition agreements |
|
|
||||||
$ | |
|||||||
Six Months Ended June 30, |
||||||||
2019 |
2018 |
|||||||
(Amounts in thousands, except per share data) |
||||||||
Total revenue |
$ | $ | ||||||
Net income |
$ | $ | ||||||
Earnings per share: |
||||||||
Basic |
$ | $ | ||||||
Diluted |
$ | $ | ||||||
4. |
Revenue Recognition |
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
(Amounts in thousands) |
||||||||||||||||
Product revenue |
$ | $ | $ | $ | ||||||||||||
Royalty and other income |
( |
) | ||||||||||||||
Total revenue |
$ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
(Amounts in thousands) |
||||||||||||||||
GE Healthcare |
$ | $ | $ | $ | ||||||||||||
MilliporeSigma |
$ | $ | $ | $ |
2019 |
||||
Balances from contracts with customers only: |
||||
Accounts receivable |
$ | |||
Deferred revenue (included in accrued liabilities in the consolidated balance sheets) |
||||
Revenue recognized during the six-month period ending June 30, 2019 relating to: |
||||
The beginning deferred revenue balance |
$ | |||
Changes in pricing related to products or services satisfied in previous periods |
— |
5. |
Leases |
As of June 30, 2019 |
Amount |
|||
2019 (remaining six months) |
$ | |||
2020 |
||||
2021 |
||||
2022 |
||||
2023 |
||||
2024 and thereafter |
||||
Total future minimum lease payments |
||||
Less amount of lease payment representing interest |
||||
Total operating lease liabilities |
$ | 23,496 |
||
As of June 30, 2019 |
||||
Operating lease liability |
$ | |
||
Operating lease liability, long-term |
|
|||
Minimum operating lease payments |
$ | |
||
Three Months Ended |
Six Months Ended |
|||||||
Lease Cost |
June 30, 2019 |
June 30, 2019 |
||||||
(Amounts in thousands) |
||||||||
Operating lease cost |
$ | |
$ | |
||||
Variable operating lease cost |
|
|
||||||
Lease cost |
$ | |
$ | |
||||
Six Months Ended |
||||
June 30, 2019 |
||||
Operating cash flows from operating leases |
$ | ( |
) |
Weighted average remaining lease term (years) |
|
|||
Weighted average discount rate |
|
% |
For the Years Ended December 31, |
Amount |
|||
2019 |
$ | |
||
2020 |
|
|||
2021 |
|
|||
2022 |
|
|||
2023 |
|
|||
2024 and thereafter |
|
|||
Minimum operating lease payments |
$ | |
||
6. |
Goodwill and Other Intangible Assets |
Balance as of December 31, 2018 |
$ | |
||
Cumulative translation adjustment |
( |
) | ||
Acquisition of C Technologies, Inc. |
|
|||
Balance as of June 30, 2019 |
$ | |
||
June 30, 2019 |
|||||||||||||||||
Gross Carrying Value |
Accumulated Amortization |
Net Carrying Value |
Weighted Average Useful Life (in years) |
||||||||||||||
(Amounts in thousands) |
|||||||||||||||||
Finite-lived intangible assets: |
|||||||||||||||||
Technology - developed |
$ | |
$ | ( |
) | $ | |
|
|||||||||
Patents |
|
( |
) | — |
|
||||||||||||
Customer relationships |
|
( |
) | |
|
||||||||||||
Trademarks |
|
( |
) | |
|
||||||||||||
Other intangibles |
|
( |
) | |
|
||||||||||||
Total finite-lived intangible assets |
|
( |
) | |
|
||||||||||||
Indefinite-lived intangible asset: |
|||||||||||||||||
Trademarks |
|
— |
|
— |
|||||||||||||
Total intangible assets |
$ | |
$ | ( |
) | $ | |
||||||||||
December 31, 2018 |
|||||||||||||||||
Gross Carrying Value |
Accumulated Amortization |
Net Carrying Value |
Weighted Average Useful Life (in years) |
||||||||||||||
(Amounts in thousands) |
|||||||||||||||||
Finite-lived intangible assets: |
|||||||||||||||||
Technology - developed |
$ | |
$ | ( |
) | $ | |
|
|||||||||
Patents |
|
( |
) | — |
|
||||||||||||
Customer relationships |
|
( |
) | |
|
||||||||||||
Trademarks |
|
( |
) | |
|
||||||||||||
Other intangibles |
|
( |
) | |
|
||||||||||||
Total finite-lived intangible assets |
|
( |
) | |
|
||||||||||||
Indefinite-lived intangible asset: |
|||||||||||||||||
Trademarks |
|
— |
|
— |
|||||||||||||
Total intangible assets |
$ | |
$ | ( |
) | $ | |
||||||||||
Estimated |
||||
Amortization |
||||
Three Months Ended June 30, |
Expense |
|||
2019 (remaining six months) |
$ | |
||
2020 |
|
|||
2021 |
|
|||
2022 |
|
|||
2023 |
|
|||
2024 and thereafter |
|
|||
Total |
$ | |
||
7. |
Consolidated Balance Sheet Detail |
As of |
||||||||
June 30, |
December 31, |
|||||||
2019 |
2018 |
|||||||
(Amounts in thousands) |
||||||||
Raw materials |
$ | |
$ | |
||||
Work-in-process |
|
|
||||||
Finished products |
|
|
||||||
Total inventories, net |
$ | |
$ | |
||||
As of |
||||||||
June 30, |
December 31, |
|||||||
2019 |
2018 |
|||||||
(Amounts in thousands) |
||||||||
Land |
$ | |
$ | |
||||
Buildings |
|
|
||||||
Leasehold improvements |
|
|
||||||
Equipment |
|
|
||||||
Furniture and fixtures |
|
|
||||||
Construction in progress (1) |
|
|
||||||
Other |
|
— |
||||||
Total property, plant and equipment |
|
|
||||||
Less - Accumulated depreciation |
( |
) | ( |
) | ||||
Total property, plant and equipment, net |
$ | 38,125 |
$ | 32,180 |
||||
|
(1) | Construction in progress as of June 30, 2019 includes $ internal-use software development costs and $ |
As of |
||||||||
June 30, |
December 31, |
|||||||
2019 |
2018 |
|||||||
(Amounts in thousands) |
||||||||
Employee compensation |
$ | |
$ | |
||||
Taxes |
|
|
||||||
Royalty and license fees |
|
|
||||||
Accrued purchases |
|
|
||||||
Warranties |
|
|
||||||
Professional fees |
|
|
||||||
Deferred revenue |
|
|
||||||
Other |
|
|
||||||
Total accrued liabilities |
$ | 20,618 |
$ | 15,865 |
||||
8. |
Convertible Senior Notes |
As of |
||||||||
June 30, |
December 31, |
|||||||
2019 |
2018 |
|||||||
(Amounts in thousands) |
||||||||
2.125% convertible senior notes due 2021: |
||||||||
Principal amount |
$ | |
$ | |
||||
Unamortized debt discount |
( |
) | ( |
) | ||||
Unamortized debt issuance costs |
( |
) | ( |
) | ||||
Total convertible senior notes |
$ | |
$ | |
||||
9. |
Stockholders’ Equity |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
(Amounts in thousands) |
||||||||||||||||
Cost of product revenue |
$ | |
$ | |
$ | |
$ | |
||||||||
Research and development |
|
|
|
|
||||||||||||
Selling, general and administrative |
|
|
|
|
||||||||||||
Total stock-based compensation |
$ | |
$ | |
$ | 6,283 |
$ | 4,893 |
||||||||
Shares |
Weighted average exercise price |
Weighted- Average Remaining Contractual Term (in Years) |
Aggregate Intrinsic Value (in Thousands) |
|||||||||||||
Options outstanding at December 31, 2018 |
|
$ | |
|||||||||||||
Granted |
|
$ | |
|||||||||||||
Exercised |
( |
) | $ | |
||||||||||||
Forfeited/expired/cancelled |
— |
$ | — |
|||||||||||||
Options outstanding at June 30, 2019 |
|
$ | |
|
$ | |
||||||||||
Options exercisable at June 30, 2019 |
|
$ | |
|
$ | |
||||||||||
Vested and expected to vest at June 30, 2019 (1) |
|
|
|
$ | |
|||||||||||
(1) | Represents the number of vested options as of June 30, 2019 plus the number of unvested options expected to vest as of June 30, 2019 based on the unvested outstanding options at June 30, 2019 adjusted for estimated forfeiture rates of non-executive level employees and |
Shares |
Weighted- Average Remaining Contractual Term (in Years) |
Aggregate Intrinsic Value (in Thousands) |
||||||||||
Unvested at December 31, 2018 |
|
|
|
|||||||||
Awarded |
|
|||||||||||
Vested |
( |
) | ||||||||||
Forfeited/expired/cancelled |
( |
) | |
|||||||||
Unvested at June 30, 2019 |
|
|
$ | |
||||||||
10. |
Commitments and Contingencies |
11. |
Accumulated Other Comprehensive Loss |
Foreign |
||||
Currency |
||||
Translation |
||||
Adjustment |
||||
Balance as of December 31, 2018 |
$ | ( |
) | |
Other comprehensive loss |
( |
) | ||
Balance as of June 30, 2019 |
$ | ( |
) | |
12. |
Income Taxes |
Jurisdiction |
Fiscal Years Subject to Examination |
|||
United States - federal and state |
|
|||
Sweden |
|
|||
Germany |
|
|||
Netherlands |
|
13. |
Earnings Per Share |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
(Amounts in thousands, except per share data) |
||||||||||||||||
Net income |
$ | |
$ | 2,738 |
$ | |
$ | |
||||||||
Weighted average shares used in computing net income per share - basic |
|
|
|
|
||||||||||||
Effect of dilutive shares: |
||||||||||||||||
Stock options and restricted stock awards |
|
|
|
|
||||||||||||
Convertible senior notes |
|
|
|
|
||||||||||||
Dilutive potential common shares |
|
|
|
|
||||||||||||
Weighted average shares used in computing net income per share - diluted |
|
|
|
|
||||||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | 0.17 |
$ | |
$ | 0.36 |
$ | |
||||||||
Diluted |
$ | 0.17 |
$ | |
$ | 0.34 |
$ | |
||||||||
14. |
Related Party Transactions |
15. |
Segment Reporting |
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Revenue by customers’ geographic locations: |
||||||||||||||||
North America |
|
% | |
% | |
% | |
% | ||||||||
Europe |
|
% | |
% | |
% | |
% | ||||||||
APAC |
|
% | |
% | |
% | |
% | ||||||||
Total revenue |
|
% | |
% | |
% | |
% | ||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
GE Healthcare |
|
% | |
% | |
% | |
% | ||||||||
MilliporeSigma |
|
% | |
% | |
% | |
% |
June 30, |
December 31, |
|||||||
2019 |
2018 |
|||||||
GE Healthcare |
|
% |
|
% | ||||
MilliporeSigma |
|
% |
|
% |
16. |
Subsequent Events |
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended June 30, |
Increase/ (Decrease) |
Six Months Ended June 30, |
Increase/ (Decrease) |
|||||||||||||||||||||||||||||
2019 |
2018 |
$ Change |
% Change |
2019 |
2018 |
$ Change |
% Change |
|||||||||||||||||||||||||
(Amounts in thousands, except for percentage data) |
||||||||||||||||||||||||||||||||
Revenue: |
||||||||||||||||||||||||||||||||
Products |
$ | 70,670 |
$ | 47,743 |
$ | 22,927 |
48.0 |
% | $ | 131,282 |
$ | 92,542 |
$ | 38,740 |
41.9 |
% | ||||||||||||||||
Royalty and other |
22 |
(12 |
) | 34 |
(283.3 |
%) | 44 |
19 |
25 |
131.6 |
% | |||||||||||||||||||||
Total revenue |
$ | 70,692 |
$ | 47,731 |
$ | 22,961 |
48.1 |
% | $ | 131,326 |
$ | 92,561 |
$ | 38,765 |
41.9 |
% | ||||||||||||||||
Three Months Ended June 30, |
Increase/ (Decrease) |
Six Months Ended June 30, |
Increase/ (Decrease) |
|||||||||||||||||||||||||||||
2019 |
2018 |
$ Change |
% Change |
2019 |
2018 |
$ Change |
% Change |
|||||||||||||||||||||||||
(Amounts in thousands, except for percentage data) |
||||||||||||||||||||||||||||||||
Cost of product revenue |
$ | 30,708 |
$ | 21,088 |
$ | 9,620 |
45.6 |
% | $ | 57,553 |
$ | 40,756 |
$ | 16,797 |
41.2 |
% | ||||||||||||||||
Research and development |
5,231 |
5,780 |
(549 |
) | (9.5 |
%) | 8,851 |
9,068 |
(217 |
) | (2.4 |
%) | ||||||||||||||||||||
Selling, general and administrative |
23,699 |
16,590 |
7,109 |
42.9 |
% | 42,697 |
32,488 |
10,209 |
31.4 |
% | ||||||||||||||||||||||
Total costs and operating expenses |
$ | 59,638 |
$ | 43,458 |
$ | 16,180 |
37.2 |
% | $ | 109,101 |
$ | 82,312 |
$ | 26,789 |
32.5 |
% | ||||||||||||||||
Three Months Ended June 30, |
Increase/ (Decrease) |
Six Months Ended June 30, |
Increase/ (Decrease) |
|||||||||||||||||||||||||||||
2019 |
2018 |
$ Change |
% Change |
2019 |
2018 |
$ Change |
% Change |
|||||||||||||||||||||||||
(Amounts in thousands, except for percentage data) |
||||||||||||||||||||||||||||||||
Investment income |
$ | 1,005 |
$ | 512 |
$ | 493 |
96.3 |
% | $ | 1,718 |
$ | 693 |
$ | 1,025 |
147.9 |
% | ||||||||||||||||
Interest expense |
(1,743 |
) | (1,669 |
) | (74 |
) | 4.4 |
% | (3,469 |
) | (3,321 |
) | (148 |
) | 4.5 |
% | ||||||||||||||||
Other (expenses) income |
(697 |
) | 251 |
(948 |
) | (377.7 |
%) | (339 |
) | 321 |
(660 |
) | (205.6 |
%) | ||||||||||||||||||
Total other expense, net |
$ | (1,435 |
) | $ | (906 |
) | $ | (529 |
) | 58.4 |
% | $ | (2,090 |
) | $ | (2,307 |
) | $ | 217 |
(9.4 |
%) | |||||||||||
Three Months Ended June 30, |
Increase/ (Decrease) |
Six Months Ended June 30, |
Increase/ (Decrease) |
|||||||||||||||||||||||||||||
2019 |
2018 |
$ Change |
% Change |
2019 |
2018 |
$ Change |
% Change |
|||||||||||||||||||||||||
(Amounts in thousands, except for percentage data) |
||||||||||||||||||||||||||||||||
Income tax provision |
$ | 1,524 |
$ | 629 |
$ | 895 |
142.3 |
% | $ | 3,987 |
$ | 1,757 |
$ | 2,230 |
126.9 |
% | ||||||||||||||||
Effective tax rate |
15.8 |
% | 18.7 |
% | 19.8 |
% | 22.1 |
% |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
(Amounts in thousands) |
||||||||||||||||
GAAP income from operations |
$ | 11,054 |
$ | 4,273 |
$ | 22,225 |
$ | 10,249 |
||||||||
Non-GAAP adjustments to income from operations: |
||||||||||||||||
Acquisition and integration costs |
4,822 |
853 |
6,621 |
1,508 |
||||||||||||
Intangible amortization |
3,051 |
2,634 |
5,662 |
5,298 |
||||||||||||
Inventory step-up charges |
1,169 |
— |
1,169 |
— |
||||||||||||
Non-GAAP adjusted income from operations |
$ | 20,096 |
$ | 7,760 |
$ | 35,677 |
$ | 17,055 |
||||||||
Three Months Ended June 30, |
||||||||||||||||
2019 |
2018 |
|||||||||||||||
Fully Diluted |
Fully Diluted |
|||||||||||||||
Earnings per |
Earnings per |
|||||||||||||||
Amount |
Share |
Amount |
Share |
|||||||||||||
(Amounts in thousands, except per share data) |
||||||||||||||||
GAAP net income |
$ | 8,095 |
$ | 0.17 |
$ | 2,738 |
$ | 0.06 |
||||||||
Non-GAAP adjustments to net income: |
||||||||||||||||
Acquisition and integration costs |
5,322 |
0.11 |
853 |
0.02 |
||||||||||||
Intangible amortization |
3,051 |
0.06 |
2,634 |
0.06 |
||||||||||||
Inventory step-up charges |
1,169 |
0.02 |
— |
— |
||||||||||||
Non-cash interest expense |
1,124 |
0.02 |
1,053 |
0.02 |
||||||||||||
Tax effect of intangible amortization and acquisition costs |
(3,444 |
) | (0.07 |
) | (1,076 |
) | (0.02 |
) | ||||||||
Non-GAAP adjusted net income |
$ | 15,317 |
$ | 0.31 |
$ | 6,202 |
$ | 0.14 |
||||||||
Six Months Ended June 30, |
||||||||||||||||
2019 |
2018 |
|||||||||||||||
Fully Diluted |
Fully Diluted |
|||||||||||||||
Earnings per |
Earnings per |
|||||||||||||||
Amount |
Share |
Amount |
Share |
|||||||||||||
(Amounts in thousands, except per share data) |
||||||||||||||||
GAAP net income |
$ | 16,148 |
$ | 0.34 |
$ | 6,185 |
$ | 0.14 |
||||||||
Non-GAAP adjustments to net income: |
||||||||||||||||
Acquisition and integration costs |
7,121 |
0.15 |
1,508 |
0.03 |
||||||||||||
Intangible amortization |
5,662 |
0.12 |
5,298 |
0.12 |
||||||||||||
Inventory step-up charges |
1,169 |
0.02 |
— |
— |
||||||||||||
Non-cash interest expense |
2,231 |
0.05 |
2,089 |
0.04 |
||||||||||||
Tax effect of intangible amortization and acquisition costs |
(3,961 |
) | (0.09 |
) | (2,108 |
) | (0.05 |
) | ||||||||
Non-GAAP adjusted net income |
$ | 28,370 |
$ | 0.59 |
$ | 14,054 |
$ | 0.29 |
||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
(Amounts in thousands) |
||||||||||||||||
GAAP net income |
$ | 8,095 |
$ | 2,738 |
$ | 16,148 |
$ | 6,185 |
||||||||
Non-GAAP EBITDA adjustments to net income: |
||||||||||||||||
Investment income |
(1,005 |
) | (512 |
) | (1,718 |
) | (693 |
) | ||||||||
Interest expense |
1,743 |
1,669 |
3,469 |
3,321 |
||||||||||||
Tax provision |
1,524 |
629 |
3,987 |
1,757 |
||||||||||||
Depreciation |
1,762 |
1,314 |
3,337 |
2,598 |
||||||||||||
Amortization |
3,079 |
2,634 |
5,716 |
5,298 |
||||||||||||
EBITDA |
15,198 |
8,472 |
30,939 |
18,466 |
||||||||||||
Other non-GAAP adjustments: |
||||||||||||||||
Acquisition and integration costs |
5,322 |
853 |
7,121 |
1,508 |
||||||||||||
Inventory step-up charges |
1,169 |
— |
1,169 |
— |
||||||||||||
Adjusted EBITDA |
$ | 21,689 |
$ | 9,325 |
$ | 39,229 |
$ | 19,974 |
||||||||
Six Months Ended June 30, |
Increase/(Decrease) |
|||||||||||
2019 |
2018 |
$ Change |
||||||||||
(Amounts in thousands) |
||||||||||||
Operating activities |
$ | 27,577 |
$ | 7,535 |
$ | 20,042 |
||||||
Investing activities |
(191,305 |
) | (4,412 |
) | (186,893 |
) | ||||||
Financing activities |
190,172 |
1,479 |
188,693 |
|||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
(2,449 |
) | (2,750 |
) | 301 |
|||||||
Net increase in cash, cash equivalents and restricted cash |
$ | 23,995 |
$ | 1,852 |
$ | 22,143 |
||||||
• | the expansion of our bioprocessing business; |
• | the ability to sustain sales and profits of our bioprocessing products; |
• | our ability to acquire additional bioprocessing products; |
• | our identification and execution of strategic acquisitions or business combinations; |
• | the resources required to successfully integrate our recently acquired businesses and recognize expected synergies; |
• | the scope of and progress made in our research and development activities; |
• | the extent of any share repurchase activity; and |
• | the success of any proposed financing efforts. |
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. |
CONTROLS AND PROCEDURES |
ITEM 1. |
LEGAL PROCEEDINGS |
ITEM 1A. |
RISK FACTORS |
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. |
MINE SAFETY DISCLOSURES |
ITEM 5. |
OTHER INFORMATION |
ITEM 6. |
EXHIBITS |
(a) |
Exhibits |
Exhibit Number |
Document Description | |||
2.1† |
||||
3.1 |
||||
3.2 |
||||
3.3 |
||||
4.1 |
||||
4.2 |
||||
4.3 |
||||
10.1 |
||||
10.2# |
||||
10.3# |
||||
31.1 + |
||||
31.2 + |
||||
32.1* |
||||
101.INS + |
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||
101.SCH + |
Inline XBRL Taxonomy Extension Schema Document | |||
101.CAL + |
Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF + |
Inline XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB + |
Inline XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE + |
Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||
104 + |
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) |
† | Portions of this exhibit (indicated by asterisks) have been omitted in accordance with the rules of the Securities and Exchange Commission. |
# | Management contract or compensatory plan or arrangement. |
+ | Filed herewith. |
* | Furnished herewith. |
REPLIGEN CORPORATION | ||||
Date: August 1, 2019 |
By: |
/ s Tony J. Hunt | ||
Tony J. Hunt | ||||
President and Chief Executive Officer | ||||
(Principal executive officer) | ||||
Repligen Corporation | ||||
Date: August 1, 2019 |
By: |
/ s Jon Snodgres | ||
Jon Snodgres | ||||
Chief Financial Officer | ||||
(Principal financial officer) | ||||
Repligen Corporation |
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) / RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Tony J. Hunt, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Repligen Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 1, 2019 | ||
/S/ TONY J. HUNT | ||
Tony J. Hunt | ||
President and Chief Executive Officer | ||
(Principal executive officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) / RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Jon Snodgres, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Repligen Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 1, 2019 | ||
/S/ JON SNODGRES | ||
Jon Snodgres | ||
Chief Financial Officer | ||
(Principal financial officer) |
Exhibit 32.1*
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Repligen Corporation (the Company) on Form 10-Q for the period ending June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned officers of the Company hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 1, 2019 |
By: |
/S/ TONY J. HUNT | ||
Tony J. Hunt | ||||
Chief Executive Officer and President | ||||
(Principal executive officer) | ||||
Date: August 1, 2019 |
By: |
/S/ JON SNODGRES | ||
Jon Snodgres | ||||
Chief Financial Officer | ||||
(Principal financial officer) |
* | This certification shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Accounts receivable, reserve for doubtful accounts | $ 330 | $ 227 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 48,086,422 | 43,917,378 |
Common stock, shares outstanding | 48,086,422 | 43,917,378 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Revenue: | ||||
Revenue | $ 70,692 | $ 47,731 | $ 131,326 | $ 92,561 |
Costs and operating expenses: | ||||
Cost of product revenue | 30,708 | 21,088 | 57,553 | 40,756 |
Research and development | 5,231 | 5,780 | 8,851 | 9,068 |
Selling, general and administrative | 23,699 | 16,590 | 42,697 | 32,488 |
Total costs and operating expenses | 59,638 | 43,458 | 109,101 | 82,312 |
Income from operations | 11,054 | 4,273 | 22,225 | 10,249 |
Other income (expenses): | ||||
Investment income | 1,005 | 512 | 1,718 | 693 |
Interest expense | (1,743) | (1,669) | (3,469) | (3,321) |
Other (expenses) income | (697) | 251 | (339) | 321 |
Other expenses, net | (1,435) | (906) | (2,090) | (2,307) |
Income before income taxes | 9,619 | 3,367 | 20,135 | 7,942 |
Income tax provision | 1,524 | 629 | 3,987 | 1,757 |
Net income | $ 8,095 | $ 2,738 | $ 16,148 | $ 6,185 |
Earnings per share: | ||||
Basic | $ 0.17 | $ 0.06 | $ 0.36 | $ 0.14 |
Diluted | $ 0.17 | $ 0.06 | $ 0.34 | $ 0.14 |
Weighted average common shares outstanding: | ||||
Basic | 46,367 | 43,743 | 45,174 | 43,683 |
Diluted | 49,056 | 45,016 | 47,692 | 44,695 |
Net income | $ 8,095 | $ 2,738 | $ 16,148 | $ 6,185 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (1,269) | (5,031) | (3,160) | (4,780) |
Comprehensive income (loss) | 6,826 | (2,293) | 12,988 | 1,405 |
Products | ||||
Revenue: | ||||
Revenue | 70,670 | 47,743 | 131,282 | 92,542 |
Royalty and Other Revenue | ||||
Revenue: | ||||
Revenue | $ 22 | $ (12) | $ 44 | $ 19 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Stock Issuance Cost | $ 0.5 | $ 0.5 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Business Acquisitions: | ||
Fair value of tangible assets acquired | $ 30,756 | |
Fair value of accounts receivable | 3,044 | |
Fair value of other assets | 3,929 | |
Liabilities assumed | (35,326) | |
Fair value of stock issued | (53,938) | |
Cost in excess of fair value of assets acquired (Goodwill) | 142,881 | |
Acquired identifiable intangible assets | 90,830 | |
Net cash paid for business acquisitions | $ 182,176 |
Basis of Presentation |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 | |||
Basis of Presentation |
The consolidated financial statements included herein have been prepared by Repligen Corporation (the “Company”, “Repligen” or “we”) in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X and do not include all of the information and footnote disclosures required by GAAP. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Repligen Sweden AB, Repligen GmbH, Spectrum LifeSciences, LLC and its subsidiaries (“Spectrum,” acquired on August 1, 2017), C Technologies, Inc. (“C Technologies,” acquired on May 31, 2019), and Repligen Singapore Pte. Ltd. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, consisting of only normal, recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for the entire year. Recent Accounting Standards Updates We consider the applicability and impact of all Accounting Standards Updates on our consolidated financial statements. Updates not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. Recently issued Accounting Standards Updates which we feel may be applicable to us are as follows: Recently Issued Accounting Standard Updates – Not Yet Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. (“ASU”) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” 2018-13 includes amendments that aim to improve the effectiveness of fair value measurement disclosures. The amendments in this guidance modify the disclosure requirements on fair value measurements based on the concepts in FASB Concepts Statement, “Conceptual Framework for Financial Reporting — Chapter 8: Notes to Financial Statements , ” including the consideration of costs and benefits. The amendments become effective for the Company in the year ending December 31, 2020 and early adoption is permitted. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance also requires the entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. The guidance becomes effective for the Company in the year ending December 31, 2020 and early adoption is permitted. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements.In November 2018, the FASB issued ASU 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606.” 2018-18 clarifies the interaction between Topic 808, “Collaborative Arrangements,” “Revenue from Contracts with Customers,” the scope of Topic 606 together with revenue accounted for under Topic 606. The guidance becomes effective for the Company in the year ending December 31, 2020 and early adoption is permitted. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements. Recently Issued Accounting Standard Updates – Adopted During the Period In February 2016, the FASB issued ASU
2016-02, “Leases (Topic 842).” 2016-02, along with subsequent ASUs issued to clarify certain provisions of ASU 2016-02 (collectively known as “ASC 842”), establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the consolidated balance sheet for all leases with terms longer than 12 months. Certain qualitative and quantitative disclosures are also required. The Company adopted ASU 2016-02 and related amendments on January 1, 2019 using an optional transition method allowed with the issuance of ASU 2018-11, “Leases – Targeted Improvements (Topic 842),” 2018-11 gives entities the option to not provide comparative period financial statements and instead apply the transition requirements as of the effective date of the new standard. Pursuant to additional guidance under ASC 842, the Company also elected the optional package of practical expedients, which allowed the Company to not reassess: (i) whether expired or existing contracts contain leases; (ii) lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. As a result, the consolidated balance sheet prior to January 1, 2019 was not restated, continues to be reported under ASC 840, “Leases”, non-lease components and not to record leases with an initial term of 12 months or less on the consolidated balance sheet. The Company adopted ASC 842 using the optional transition method for all leases existing at January 1, 2019. The adoption had a substantial impact on our balance sheet. The most significant impact was the recognition of the operating lease ROU assets and lease liabilities for operating leases. Upon adoption, leases that were classified as operating leases under ASC 840 were classified as operating leases under ASC 842, and we recorded ROU assets of $17.0 million and lease liabilities of $21.0 million, before considering deferred taxes. The lease liability is based on the present value of the remaining minimum lease payments, determined under ASC 840, discounted using our incremental borrowing rate at the effective date January 1, 2019. The difference between the ROU assets and the lease liabilities is due to $4.0 million of unamortized lease incentives and deferred rent at the Company’s Marlborough and Waltham facilities as of December 31, 2018. There was no impact to our beginning retained earnings upon adoption of ASC 842. See Note 5, “Leases,” |
Fair Value Measurements |
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Fair Value Measurements |
In determining the fair value of its assets and liabilities, the Company uses various valuation approaches. The Company employs a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:
The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level input that is significant to the overall fair value measurement. As of June 30, 2019 and December 31, 2018, cash and cash equivalents on the Company’s consolidated balance sheets included $118.4 million and $126.6 million, respectively, in a money market account. These funds are valued on a recurring basis using Level 1 inputs. In May 2016, the Company issued $115.0 million aggregate principal amount of the Notes due June 1, 2021 (the “2016 Notes”). Interest is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2016. As of June 30, 2019, the carrying value of the 2016 Notes was $105.7 million, net of unamortized discount, and the fair value of the 2016 Notes was $310.5 million. The fair value of the 2016 Notes is a Level 1 valuation and was determined based on the most recent trade activity of the 2016 Notes as of June 30, 2019. The 2016 Notes are discussed in more detail in Note 8, “Convertible Senior Notes” There were no remeasurements to fair value during the three months ended June 30, 2019 of financial assets and liabilities that are not measured at fair value on a recurring basis. |
Acquisition of C Technologies, Inc |
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Acquisition of C Technologies, Inc. |
Consideration Transferred The C Technologies Acquisition was accounted for as a purchase of a business under Accounting Standards Codification No. (“ASC”) 805, “Business Combinations” Total consideration transferred is as follows (amounts in thousands):
Acquisition related costs are not included as a component of consideration transferred but are expensed in the periods in which the costs are incurred. The Company incurred $3.5 million and $4.0 million in transaction costs for the three- and six- month periods ended June 30, 2019, respectively. The transaction costs are included in selling, general and administrative expenses in the consolidated statements of comprehensive income (loss). In connection with the transaction, an additional $9.0 million in cash will be due to employees based on their continued employment with the Company one year after the date of the close of the C Technologies Acquisition.Fair Value of Net Assets Acquired The allocation of purchase price is based on the fair value of assets acquired and liabilities assumed as of the acquisition date, based on the preliminary valuation. The Company obtains this information during due diligence and through other sources. In the months after closing, the Company may obtain additional information about these assets and liabilities as it learns more about C Technologies and will refine the estimates of fair value to more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. We will make appropriate adjustments to the purchase price allocation, if any, prior to the completion of the measurement period, which is up to one year from the acquisition date. The components and allocation of the purchase price consists of the following amounts (amounts in thousands):
Acquired Goodwill The goodwill of $142.9 million represents future economic benefits expected to arise from synergies from combining operations and commercial organizations to increase market presence and the extension of existing customer relationships. Substantially all of the goodwill recorded is expected to be deductible for income tax purposes. Intangible Assets The following table sets forth the components of the identified intangible assets associated with the C Technologies Acquisition and their estimated useful lives:
The preliminary purchase price allocation is subject to adjustment as purchase accounting is finalized. The final purchase price allocation will be determined upon completion of final valuation analysis, and the fair value allocation of assets acquired and liabilities assumed could differ materially from the preliminary valuation analysis. The final allocation may include, but not be limited to: (1) changes in the fair value of fixed assets, (2) changes in allocation to intangible assets such as tradenames, technology and customer relationships as well as goodwill and (3) other changes to assets and liabilities . Revenue, Net Income and Pro Forma Presentation The Company recorded revenue from C Technologies of $2.2 million and a net loss of $ 1.5 million from May 31, 2019 to June 30, 2019. The Company has included the operating results of C Technologies in its consolidated statements of comprehensive income (loss) since the May 31, 2019 acquisition date. The following pro forma financial information presents the combined results of operations of Repligen and C Technologies as if the acquisition had occurred on January 1, 2018 after giving effect to certain pro forma adjustments. The pro forma adjustments reflected herein include only those adjustments that are directly attributable to the C Technologies Acquisition, factually supportable and have a recurring impact. These pro forma adjustments include a $2.2 million and a $2.7 million net increase in amortization expense in 2019 and 2018, respectively, to record amortization expense for the $90.8 million of acquired identifiable intangible assets, adjustments to stock-based compensation of $0.3 million and $0.4 million, respectively, for equity compensation issued to C Technologies employees and the income tax effect of the adjustments made at the statutory tax rate of the United States (approximately 25%). In addition, acquisition-related transaction costs of $4.0 million and a $1.2 million purchase accounting adjustment to record inventory at fair value were excluded from pro forma net income in 2019.The pro forma financial information does not reflect any adjustments for anticipated expense savings resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on January 1, 2018 or of future results:
Prior to the C Technologies Acquisition, C Technologies did not generate monthly or quarterly financial statements that were prepared in accordance with U.S. GAAP. |
Revenue Recognition |
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Revenue Recognition |
We generate revenue from the sale of bioprocessing products, equipment devices, and related consumables used with these equipment devices to customers in the life science and biopharmaceutical industries. Under ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Disaggregation of Revenue Revenues for the three and six months ended June 30, 2019 and 2018 were as follows:
When disaggregating revenue, the Company considered all of the economic factors that may affect its revenues. Because all of its revenues are from bioprocessing customers, there are no differences in the nature, timing and uncertainty of the Company’s revenues and cash flows from any of its product lines. However, given that the Company’s revenues are generated in different geographic regions, factors such as regulatory and geopolitical factors within those regions could impact the nature, timing and uncertainty of the Company’s revenues and cash flows. In addition, a significant portion of the Company’s revenues are generated from two customers; therefore, economic factors specific to these two customers could impact the nature, timing and uncertainty of the Company’s revenues and cash flows. Disaggregated revenue from contracts with customers by geographic region can be found in Note 15, “Segment Reporting,” Revenue from significant customers is as follows:
Filtration Products The Company’s filtration products generate revenue through the sale of KrosFlo ® hollow fiber (“HF”) TFF membranes and modules, ProConnex® single-use flow path connectors, flat sheet TFF cassettes and hardware, and XCell™ alternating tangential flow (“ATF”) devices and related consumables.The Company markets the KrosFlo line of HF cartridges and TFF systems and the ProConnex line of single-use flow path connectors which were acquired as part of the acquisition of Spectrum LifeSciences, LLC (the “Spectrum Acquisition”). These products are used in the filtration, isolation, purification and concentration of biologics and diagnostic products. Sales of large-scale systems generally include components and consumables as well as training and installation services at the request of the customer. Because the initial sale of components and consumables are necessary for the operation of the system, such items are combined with the systems as a single performance obligation. Training and installation services do not significantly modify or customize these systems and therefore represent a distinct performance obligation.The Company’s other filtration product offerings are not highly interdependent of one another and are therefore considered distinct products that represent separate performance obligations. Revenue on these products is generally recognized at a point in time upon transfer of control to the customer. The Company invoices the customer for the installation and training services in an amount that directly corresponds with the value to the customer of the Company’s performance to date; therefore, revenue recognized is based on the amount billable to the customer in accordance with the practical expedient under ASC 606-10-55-18. The Company also markets flat sheet TFF cassettes and hardware. TFF is a rapid and efficient method for separation and purification of biomolecules that is widely used in laboratory, process development and process scale applications in biopharmaceutical manufacturing. The Company’s single-use SIUS™ The Company also markets the XCell ™ ATF System, a technologically advanced filtration device used in upstream processes to continuously remove cellular metabolic waste products during the course of a fermentation run, freeing healthy cells to continue producing the biologic drug of interest. ATF Systems typically include a filtration system and consumables (i.e., tube devices, metal stands) as well as training and installation services at the request of the customer. The filtration system and consumables are considered distinct products and therefore represent separate performance obligations. First time purchasers of the systems typically purchase a controller that is shipped with the tube device(s) and metal stand(s). The controller is not considered distinct as it is a proprietary product that is highly interdependent with the filtration system; therefore, the controller is combined with the filtration system and accounted for as a single performance obligation. The training and installation services do not significantly modify or customize the ATF system and therefore represent a distinct performance obligation. ATF system product revenue related to the filtration system (including the controller if applicable) and consumables is generally recognized at a point in time upon transfer of control to the customer. ATF system service revenue related to training and installation services is generally recognized over time, as the customer simultaneously receives and consumes the benefits as the Company performs. The Company invoices the customer for the installation and training services in an amount that directly corresponds with the value to the customer of the Company’s performance to date; therefore, revenue recognized is based on the amount billable to the customer in accordance with the practical expedient under ASC 606-10-55-18. Chromatography Products The Company’s chromatography products include a number of products used in the downstream purification and quality control of biological drugs. The majority of chromatography revenue relates to the OPUS pre-packed chromatography column line and Protein A chromatography resins. OPUS columns typically consist of the outer hardware of the column with a resin as ordered by the customer packed inside of the column. OPUS columns may also be ordered without the packed resin. In either scenario, the OPUS column and resin are not interdependent of one another and are therefore considered distinct products that represent separate performance obligations. Chromatography product revenue is generally recognized at a point in time upon transfer of control to the customer.Protein Products The Company’s Protein product line generates revenue through the sale of Protein A ligands and growth factors. Protein A ligands are an essential component of Protein A chromatography resins (media) used in the purification of virtually all monoclonal antibody (“mAb”)-based drugs on the market or in development. The Company manufactures multiple forms of Protein A ligands under long-term supply agreements with major life sciences companies, who in turn sell their Protein A chromatography media to end users (biopharmaceutical manufacturers). The Company also manufactures growth factors for sale under long-term supply agreements with certain life sciences companies as well as direct sales to its customers. Each protein product is considered distinct and therefore represents a separate performance obligation. Protein product revenue is generally recognized at a point in time upon transfer of control to the customer. Process Analytics Products On May 31, 2019, the Company consummated its acquisition of C Technologies and added a fourth franchise, Process Analytics, to our bioprocessing business. The Process Analytics product line generates revenue primarily through the sale of the SoloVPE and FlowVPE systems and consumables. These products will complement and support our existing Filtration, Chromatography and Proteins franchises as they allow end users to make in-line protein concentration measurements in filtration, chromatography and fill-finish applications, designed to allow for real-time process monitoring. Other Products The Company’s other products include operating room products sold to hospitals. Other product revenue is generally recognized at a point in time upon transfer of control to the customer. Transaction Price Allocated to Future Performance Obligations Remaining performance obligations represents the transaction price of contracts for which work has not been performed or has been partially performed. The Company’s future performance obligations relate primarily to the installation and training of certain of its systems sold to customers. These performance obligations are completed within one year of receipt of a purchase order from its customers. Accordingly, the Company has elected to not disclose the value of these unsatisfied performance obligations as provided under ASC 606-10-50-14. Contract Balances from Contracts with Customers The following table provides information about receivables and deferred revenues from contracts with customers as of June 30, 2019 (amounts in thousands):
The timing of revenue recognition, billings and cash collections results in the accounts receivables and deferred revenue balances on the Company’s consolidated balance sheets. There were impairment losses recognized on receivables during the three and six months ended Jno une 30, 2019. A contract asset is created when the Company satisfies a performance obligation by transferring a promised good to the customer. Contract assets may represent conditional or unconditional rights to consideration. The right is conditional, and recorded as a contract asset, if the Company must first satisfy another performance obligation in the contract before it is entitled to payment from the customer. Contract assets are transferred to billed receivables once the right becomes unconditional. If the Company has the unconditional right to receive consideration from the customer, the contract asset is accounted for as a billed receivable and presented separately from other contract assets. A right is unconditional if nothing other than the passage of time is required before payment of that consideration is due. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. Costs to Obtain or Fulfill a Customer Contract The Company’s sales commission structure is based on achieving revenue targets. The commissions are driven by revenue derived from customer purchase orders which are short term in nature. Applying the practical expedient in paragraph 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general, and administrative expenses. When shipping and handling costs are incurred after a customer obtains control of the products, the Company accounts for these as costs to fulfill the promise and not as a separate performance obligation.
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Leases |
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Leases |
On January 1, 2019, the Company adopted ASC 842 using the optional transition method which allows entities to initially apply the lease accounting transition requirements at the adoption date and recognize a cumulative effect adjustment to the opening balance sheet of retained earnings in the period of adoption without restating comparative prior periods presented. The Company recorded operating lease right of use assets of $17.0 million and operating lease liabilities of $21.0 million as of January 1, 2019. The difference between the right of use assets and the lease liabilities was due to $4.0 million of unamortized lease incentives and deferred rent at the Company’s Waltham and Marlborough facilities as of December 31, 2018. The Company is a lessee under leases of manufacturing facilities, office spaces, machinery, certain office equipment, vehicles and information technology equipment. A majority of the Company’s leases are operating leases with remaining lease terms between three months and 11 years. Finance leases are immaterial to our consolidated financial statements. The Company determines if an arrangement qualifies as a lease and what type of lease it is at inception. The Company elected the package of practical expedients permitted under the transition guidance within the new lease standard, which among other things, allowed it to continue to account for existing leases based on the historical lease classification. The Company also elected the practical expedients to combine lease and non-lease components and to exclude right of use assets and lease liabilities for leases with an initial term of 12 months or less from the balance sheet.Some of the lease agreements the Company enters into include Company options to either extend and/or early terminate the lease, the costs of which are included in our operating lease liabilities to the extent that such options are reasonably certain of being exercised. Leases with renewal options allow the Company to extend the lease term typically between 1 and 5 years per option, some of its leases have multiple options to extend. When determining if a renewal option is reasonably certain of being exercised, the Company considers several economic factors, including but not limited to, the significance of leasehold improvements incurred on the property, whether the asset is difficult to replace, underlying contractual obligations, or specific characteristics unique to that particular lease that would make it reasonably certain that the Company would exercise such options. As of June 30, 2019, operating lease right of use assets
were $ 19.5$ 23.5 million. During the second quarter of 2019 we added leases related to our acquisition of C Technologies on May 31, 2019 which resulted in an increase of right of use assets and lease liabilities of $3.8 million as of June 30, 2019. Amounts related to financing leases were immaterial. The maturity of the Company’s operating lease liabilities as of June 30, 2019 are as follows (amounts in thousands):
Total operating lease liabilities is included on the Company’s consolidated balance sheet as of June 30, 2019 as follows (amounts in thousands):
Lease expense for these leases is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred. For the three and six months ended June 30, 2019, total lease cost is comprised of the following:
The following information represents supplemental disclosure for the consolidated statements of cash flows related to operating leases (amounts in thousands):
Most of the leases do not provide implicit interest rates and therefore we determine the discount rate based on our incremental borrowing rate. The incremental borrowing rate for our leases is determined based on lease term and currency in which the lease payments are made. The weighted average remaining lease term and the weighted average discount rate used to measure our operating lease liabilities as of June 30, 2019 were:
As previously disclosed in the Company’s 2018 Annual Report on Form
10-K and under the previous lease accounting standard, ASC 840, “Leases,” non-cancelable operating leases was $18.0 million as of December 31, 2018 (amounts in thousands):
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Goodwill and Other Intangible Assets |
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Goodwill and Other Intangible Assets |
Goodwill Goodwill represents the difference between the purchase price and the estimated fair value of identifiable assets acquired and liabilities assumed. Goodwill acquired in a business combination and determined to have an indefinite useful life is not amortized, but instead is tested for impairment at least annually in accordance with ASC 350. The following table represents the change in the carrying value of goodwill for the six months ended June 30, 2019 (amounts in thousands):
During each of the fourth quarters of 2018, 2017 and 2016, we completed our annual impairment assessments and concluded that goodwill was not impaired in any of those years. The Company has not identified any “triggering” events which indicate an impairment of goodwill in the three months ended June 30, 2019. Other Intangible Assets Intangible assets, except for the ATF tradename, are amortized over their useful lives using the estimated economic benefit method, as applicable, and the amortization expense is recorded within selling, general and administrative expense in the Company’s statements of comprehensive income (loss). The Company reviews its indefinite-lived intangible assets not subject to amortization, including the ATF tradename, to determine if adverse conditions exist or a change in circumstances exists that would indicate an impairment. Intangible assets and their related useful lives are reviewed at least annually to determine if any adverse conditions exist that would indicate the carrying value of these assets may not be recoverable. More frequent impairment assessments are conducted if certain conditions exist, including a change in the competitive landscape, any internal decisions to pursue new or different technology strategies, a loss of a significant customer, or a significant change in the marketplace, including changes in the prices paid for our products or changes in the size of the market for our products. An impairment results if the carrying value of the asset exceeds the estimated fair value of the asset. If the estimate of an intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. The Company continues to believe that its intangible assets are recoverable at June 30, 2019. Intangible assets, net consisted of the following at June 30, 2019:
17 Intangible assets consisted of the following at December 31, 2018:
The increase in intangible assets during 2019 is related to the acquisition of C Technologies on May 31, 2019. See Note 3, “Acquisition of C Technologies, Inc.” Amortization expense for finite-lived intangible assets was $3.1 million and $2.6 million for the three months ended June 30, 2019 and 2018, respectively. Amortization expense for finite-lived intangible assets was $5.7 million and $5.3 million for the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019, the Company expects to record the following amortization expense (amounts in thousands):
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Consolidated Balance Sheet Detail |
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Consolidated Balance Sheet Detail |
Inventories, net Inventories, net consists of the following:
Property, Plant and Equipment Property, plant and equipment consist of the following:
Depreciation expenses totaled $1.8 million and $1.3 million for the three months ended June 30, 2019 and 2018, respectively. Depreciation expenses totaled $3.3 million and $2.6 million for the six months ended June 30, 2019 and 2018, respectively. Accrued Liabilities Accrued liabilities consist of the following:
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Convertible Senior Notes |
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Convertible Senior Notes |
The carrying value of the Company’s convertible senior notes is as follows:
On May 24, 2016, the Company issued $115.0 million aggregate principal amount of its 2016 Notes. The net proceeds from the sale of the 2016 Notes, after deducting the underwriting discounts and commissions and other related offering expenses, were $111.1 million. The 2016 Notes bear interest at the rate of 2.125% per annum, payable in arrears on June 1 and December 1 of each year, beginningsemiannually December 1, 2016 .The 2016 Notes will mature on unless earlier repurchased, redeemed or converted in accordance with their terms. Prior to March 1, 2021, the 2016 Notes will be convertible at the option of holders of the 2016 Notes only upon satisfaction of certain conditions and during certain periods, and thereafter, the 2016 Notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, holders of the 2016 Notes will receive shares of the Company’s common stock, cash or a combination thereof, at the Company’s election. It is the Company’s current intent and policy to settle all conversions through combination settlement, which involves satisfying the principal amount outstanding with cash and any note conversion value over the principal amount in shares of the Company’s common stock. On July 19, 2019, the Company exchanged, with a limited number of holders in privately negotiated transactions, $June 1, 2021 , 92.0 million aggregate principal amount of the existing 2016 Notes for a combination of cash and shares of the Company’s common stock. For more information on this transaction, see Note 16, “Subsequent Events – Exchange and Redemption of 2016 Notes,” below.2016 Notes with a par value of $17,000 were submitted for conversion in the first quarter of 2019, and the conversion was settled in the second quarter. 2016 Notes with a par value of $11,000 were submitted for conversion in the fourth quarter of 2017, and this conversion was settled in the first quarter of 2018. The conversions resulted in the issuance of a nominal-amount of shares of the Company’s common stock, and the Company recorded a loss on conversion of these notes of approximately $3,000 in the second quarter of 2019 and $1,000 in the first quarter of 2018 in their consolidated statements of comprehensive income (loss).During the second quarter of 2019, the closing price of the Company’s common stock continued to exceed 130% of the conversion price of the 2016 Notes for more than 20 trading days of the last 30 consecutive trading days of the quarter. As a result, the 2016 Notes are convertible at the option of the holders of the 2016 Notes during the third quarter of 2019, the quarter immediately following the quarter when the conditions were met, as stated in the terms of the 2016 Notes. These terms have been met each quarter since the second quarter of 2018 and, expecting to continue meeting these terms, the Company continues to classify the carrying value of the 2016 Notes as a current liability on the Company’s consolidated balance sheet as of June 30, 2019. As of June 30, 2019, the if-converted value of the 2016 Notes exceeded the aggregate principal amount by $195.5 million. As mentioned above, $17,000 par value notes were submitted for conversion at the end of the first quarter of 2019 and settled during the second quarter. In the event the closing price conditions are met in the third quarter of 2019 or a future fiscal quarter, the 2016 Notes will be convertible at a holder’s option during the immediately following fiscal quarter.The conversion rate for the 2016 Notes will initially be 31.1813 shares of the Company’s common stock per $1,000 principal amount of 2016 Notes, which is equivalent to an initial conversion price of $32.07 per common share, and is subject to adjustment under the terms of the 2016 Notes. Holders of the 2016 Notes may require the Company to repurchase their 2016 Notes upon the occurrence of a fundamental change prior to maturity for cash at a repurchase price equal to 100% of the principal amount of the 2016 Notes to be repurchased plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. Subsequent to June 5, 2019, the Company has had the ability to redeem the 2016 Notes, at its option, in whole or in part, on any business day prior to the maturity date if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides written notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2016 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date. The 2016 Notes contain customary terms and events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, the holders of at least 25% in aggregate principal amount of the outstanding 2016 Notes may declare 100% of the principal of, and any accrued and unpaid interest on, all of the 2016 Notes to be due and payable. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company, 100% of the principal of and accrued and unpaid interest, if any, on all of the 2016 Notes will become due and payable automatically. Notwithstanding the foregoing, the 2016 Notes provide that, to the extent the Company elects and for up to 270 days, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants consist exclusively of the right to receive additional interest on the 2016 Notes. The Company is not aware of any events of default, current events or market conditions that would allow holders to call or convert the 2016 Notes as of June 30, 2019. The cash conversion feature of the 2016 Notes required bifurcation from the 2016 Notes and was initially accounted for as an equity instrument classified to stockholders’ equity, as the conversion feature was determined to be clearly and closely related to the Company’s stock. Based on market data available for publicly traded, senior, unsecured corporate bonds issued by companies in the same industry and asset base and with similar maturity, the Company estimated the implied interest rate, assuming no conversion option. Assumptions used in the estimate represent what market participants would use in pricing the liability component, including market interest rates, credit standing, and yield curves, all of which are defined as Level 2 observable inputs. The estimated implied interest rate was applied to the 2016 Notes, which resulted in a fair value of the liability component of $96.3 million upon issuance, calculated as the present value of implied future payments based on the $115 million aggregate principal amount. The equity component of the 2016 Notes was recognized as a debt discount, recorded in additional paid-in capital, and represents the differencebetween the aggregate principal of the 2016 Notes and the fair value of the 2016 Notes without conversion option on their issuance date. The debt discount is amortized to interest expense using the effective interest method over five years, or the life of the 2016 Notes. The Company assesses the equity classification of the cash conversion feature quarterly, and it is not re-measured as long as it continues to meet the conditions for equity classification. Interest expense recognized on the 2016 Notes for the three months ended June 30, 2019 was
$0.6 million, $1.0 million and $0.2 million for the contractual coupon interest, the accretion of the debt discount and the amortization of the debt issuance costs, respectively. Interest expense recognized on the 2016 Notes for the six months ended June 30, 2019 was $1.2 million, $1.9 million and $0.3 million for the contractual coupon interest, the accretion of the debt discount and the amortization of the debt issuance costs, respectively. The effective interest rate on the 2016 Notes is 6.6%, which included the interest on the 2016 Notes, amortization of the debt discount and debt issuance costs. As of June 30, 2019, the carrying value of the 2016 Notes was $115.0 million and the fair value of the principal was $310.5 million. The fair value of the 2016 Notes was determined based on the most recent trade activity of the 2016 Notes as of June 30, 2019. |
Stockholders' Equity |
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Stockholders' Equity |
Public Offering of Common Stock On May 3, 2019, the Company completed a public offering in which 3,144,531 shares of its common stock, which includes the underwriters’ exercise in full of an option to purchase up to an additional 410,156 s hares, were sold to the public at a price of $64.00 per share. The total proceeds received by the Company from this offering, net of underwriting discounts and commissions and other estimated offering expenses payable by the Company, totaled approximately $189.6 million. Stock Option and Incentive Plans At our 2018 annual meeting of shareholders held on May 16, 2018, our shareholders approved the 2018 Stock Option and Incentive Plan (the “2018 Plan”). Under the 2018 Plan the number of shares of our common stock that are reserved and available for issuance is 2,778,000 plus the number of shares of common stock available for issuance under our Amended and Restated 2012 Stock Option and Incentive Plan (the “2012 Plan”). The shares of common stock underlying any awards under the 2018 Plan, 2012 Plan and the Second Amended and Restated 2001 Repligen Corporation Stock Plan (the “2001 Plan,” and together with the 2018 Plan and 2012 Plan, the “Plans”) that are forfeited, canceled or otherwise terminated (other than by exercise) shall be added back to the shares of stock available for issuance under the 2018 Plan. At June 30, 2019, 2,596,600 shares were available for future grant under the 2018 Plan. Stock-Based Compensation For the three months ended June 30, 2019 and 2018, the Company recorded stock-based compensation expense of $3.0 million and $2.6 million, respectively, for share-based awards granted under the Plans. The Company recorded stock-based compensation expense of $6.3 million and $4.9 million for the six-month periods ended June 30, 2019 and 2018. The following table presents stock-based compensation expense in the Company’s consolidated statements of comprehensive income (loss):
The 2018 Plan allows for the granting of incentive and nonqualified options to purchase shares of common stock, restricted stock and other equity awards. Employee grants under the Plans generally vest over a five-year period, with 20%-33% vesting on the first anniversary of the date of grant and the remainder vesting in equal yearly installments thereafter. Nonqualified options issued to non-employee directors and consultants under the Plans generally vest over one year . In the first quarter of 2018, to create a longer-term retention incentive, the Company’s Compensation Committee granted long-term incentive compensation awards to its Chief Executive Officer consisting of both stock options and restricted stock units (“RSUs”) that are subject to time-based vesting over nine years . Options granted under the Plans have a maximum term often years from the date of grant and generally, the exercise price of the stock options equals the fair market value of the Company’s common stock on the date of grant. At June 30, 2019, options to purchase 985,266 shares and 766,986 RSUs were outstanding under the Plans.The Company uses the Black-Scholes option pricing model to calculate the fair value of stock option awards on the grant date, and the Company uses the value of the common stock as of the grant date to value RSUs. The Company measures stock-based compensation cost at the grant date based on the estimated fair value of the award. The Company recognizes expense on awards with service-based vesting over the employee’s requisite service period on a straight-line basis. In the third quarter of 2017, the Company issued performance stock units to certain employees related to the Spectrum Acquisition which were tied to the achievement of certain 2018 revenue and gross margin metrics and the passage of time. Additionally, in the first quarter of 2018 and again in the first quarter of 2019, the Company issued performance stock units to certain individuals which are tied to the achievement of certain annual revenue and return on invested capital metrics. The Company recognizes expense on performance-based awards over the vesting period based on the probability that the performance metrics will be achieved. The Company recognizes stock-based compensation expense for options that are ultimately expected to vest, and accordingly, such compensation expense has been adjusted for estimated forfeitures. Information regarding option activity for the six months ended June 30, 2019 under the Plans is summarized below:
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing price of the common stock on June 28, 2019, the last business day of the second quarter of 2019, of $85.95 per share and the exercise price of each in-the-money option) that would have been received by the option holders had all option holders exercised their options on June 30, 2019. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2019 and 2018 was $3.6 million and $2.4 million, respectively.The weighted average grant date fair value of options granted during the six months ended June 30, 2019 and 2018 was $30.07 and $18.41, respectively. The total fair value of stock options that vested during the six months ended June 30, 2019 and 2018 was $2.7 million and $1.8 million, respectively. Information regarding RSU activity for the six months ended June 30, 2019 under the Plans is summarized below:
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (equal to the closing price of the common stock on June 28, 2019, the last business day of the second quarter of 2019, of $85.95 per share, as RSUs do not have an exercise price) that would have been received by the RSU holders had all holders exercised on June 30, 2019. The aggregate intrinsic value of RSUs vested during the six months ended June 30, 2019 and 2018 was $11.7 million and $4.2 million, respectively.The weighted average grant date fair value of RSUs vested during the six months ended June 30, 2019 and 2018 was $31.97 and $34.47, respectively. The total fair value of RSUs that vested during the six months ended June 30, 2019 and 2018 was $6.0 million and $3.3 million, respectively. As of June 30, 2019, there was $38.7 million of total unrecognized compensation cost related to unvested share-based awards. This cost is expected to be recognized over a weighted average remaining requisite service period of 4.15 years. The Company expects 1,672,980 unvested options and RSUs to vest over the next five years . |
Commitments and Contingencies |
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Commitments and Contingencies |
Lease Commitments In May 2019, the Company entered into a fifth amendment of the existing lease to expand the rented space from approximately 76,000 square feet to approximately 108,000 square feet at 41 Seyon Street, Waltham, Massachusetts, the Company’s corporate headquarters and primary location for all manufacturing, research and development, sales and marketing and administrative operations. The Company expects to be completely moved into the new space by the beginning of 2020. Under the terms of the fifth amendment lease, the initial fixed rental rate is $29.00 per square foot, per annum, of the additional square footage (approximately 32,000 square feet) and will increase at a rate of $1.00 per annum. Licensing and Research Agreements The Company licenses certain technologies that are, or may be, incorporated into its technology under several agreements and also has entered into several clinical research agreements which require the Company to fund certain research projects. Generally, the license agreements require the Company to pay annual maintenance fees and royalties on product sales once a product has been established using the technologies. Research and development expenses associated with license agreements were immaterial amounts for the three months ended June 30, 2019 and 2018. In September 2018, we entered into a collaboration agreement with Sartorius Stedim Biotech, a leading international supplier for the biopharmaceutical industry, to integrate XCell ™ ATF cell retention control technology into Sartorius’s BIOSTAT® STR large-scale, single-use bioreactors to create novel perfusion-enabled bioreactors. As a result of this collaboration, end-users will stand to benefit from a single control system for 50L to 2,000L bioreactors used in perfusion cell culture applications. The single interface is designed to control cell growth, fluid management and cell retention in continuous and intensified bioprocessing and, ultimately, simplify the development and manufacture of biotechnological drugs under current good manufacturing practices.In June 2018, we secured an agreement with Navigo for the exclusive
co-development of multiple affinity ligands for which Repligen holds commercialization rights. We are manufacturing and have agreed to supply the first of these ligands, NGL-Impact ™ NGL-Impact A and other potential additional affinity ligands that may advance from our Navigo collaboration. The Navigo and Purolite agreements are supportive of our strategy to secure and reinforce our proteins business. We made payments to Navigo of $2.4 million during the year ended December 31, 2018 in connection with this program, which were recorded to research and development expenses in our consolidated statements of comprehensive income (loss). |
Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Loss |
The following shows the changes in the components of accumulated other comprehensive loss for the six months ended June 30, 2019 which consisted of only foreign currency translation adjustments for the periods shown (amounts in thousands):
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Income Taxes |
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Income Taxes |
The Company’s effective tax rate for the three- and six-month periods ended June 30, 2019 was 15.8% and 19.8%, respectively, compared to 18.7% and 22.1% for the corresponding periods in the prior year. The effective tax rate for the three and six months ended June 30, 2019 and 2018 was lower than the U.S. statutory rate of 21% due primarily to windfall benefits on stock option exercises and the vesting of RSUs.ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory,” At December 31, 2018, the Company had federal business tax credit carryforwards of $2.9 million and state business tax credit carryforwards of $0.4 million available to reduce future domestic income taxes, if any. The business tax credits carryforwards will expire at various dates through December 2038 . The net operating loss and business tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and may be limited in the event of certain changes in the ownership interest of significant stockholders. On December 22, 2017, President Trump signed into law the Act. The Act made significant changes to federal tax law, including, but not limited to, a reduction in the federal income tax rate from 35% to 21%, taxation of certain global intangible low-taxed income, allowing for immediate expensing of qualified assets, stricter limits on deductions for interest and certain executive compensation, and a one-time transition tax on previously deferred earnings of certain foreign subsidiaries.In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of H.R.1. The Company recognized the provisional tax impacts related to deemed repatriated earnings and the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. During 2018, final adjustments noted below were made to the provisional amounts recorded during 2017, and the Company completed its accounting for various tax impacts of the Act. The Act lowered the Company’s U.S. statutory federal tax rate from 35% to 21% effective January 1, 2018. The Company recorded a tax benefit of $12.8 million in the year ended December 31, 2017 for the reduction in its US deferred tax assets and liabilities resulting from the rate change. The accounting for this item is complete and no adjustments were made to this amount during 2018. The Act included a one-time deemed repatriation transition tax whereby entities that are shareholders of a specified foreign corporation must include in gross income the undistributed and previously untaxed post-1986 earnings and profits of the specified foreign corporation. The Company’s provisional amount recorded at December 31, 2017 increased its tax provision by $3.3 million. As of December 31, 2018, the accounting for this item was complete and the Company recorded a tax benefit of $1.3 million as a result of refining our calculations of post-1986 earnings and profits for our foreign subsidiaries.The Company is subject to a territorial tax system under the Act, in which the Company is required to provide for tax on GILTI earned by certain foreign subsidiaries. The Company has adopted an accounting policy to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense. The Company’s tax returns are subject to examination by federal, state and international tax authorities for the following periods:
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Earnings Per Share |
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Earnings Per Share |
The Company reports earnings per share in accordance with ASC 260, “Earnings Per Share,” “in-the- money” stock options and warrants are assumed to be exercised at the beginning of the period or at issuance, if later. The assumed proceeds are then used to purchase common shares at the average market price during the period. Share-based payment awards that entitle their holders to receive non-forfeitable dividends before vesting are considered participating securities and are considered in the calculation of basic and diluted earnings per share. There were no such participating securities outstanding during the three-month periods ended June 30, 2019 and 2018.Basic and diluted weighted average shares outstanding were as follows:
At June 30, 2019, there were outstanding options to purchase 985,266 shares of the Company’s common stock at a weighted average exercise price of $30.16 per share and 766,986 shares of common stock issuable upon the vesting of RSUs. For the three and six months ended June 30, 2019, 119,026 and 180,160 options to purchase shares of the Company’s common stock, respectively, were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options were greater than or equal to the average price of the common shares and were therefore anti-dilutive. At June 30, 2018, there were outstanding options to purchase 1,058,834 shares of the Company’s common stock at a weighted average exercise price of $26.72 per share and 716,996 shares issuable upon the vesting of RSUs. For the three- and six- month periods ended June 30, 2018, 551,012 and 615,930 options to purchase shares of the Company’s common stock, respectively, were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options were greater than or equal to the average price of the common shares and were therefore anti-dilutive.As provided by the terms of the indenture underlying the 2016 Notes, the Company has a choice to settle the conversion obligation for the 2016 Notes in cash, shares or any combination of the two. The Company currently intends to settle the par value of the 2016 Notes in cash and any excess conversion premium in shares. The Company applies the provisions of ASC 260,
“Earnings Per Share”, Subsection 10-45-44, to determine the diluted weighted average shares outstanding as it relates to the conversion spread on the 2016 Notes. Accordingly, the par value of the 2016 Notes is not included in the calculation of diluted income per share, but the dilutive effect of the conversion premium is considered in the calculation of diluted net income per share using the treasury stock method. The dilutive impact of the 2016 Notes is based on the difference between the Company’s current period average stock price and the conversion price of the 2016 Notes, provided there is a premium. Pursuant to this accounting standard, there is no dilution from the accreted principal of the 2016 Notes for the periods shown. |
Related Party Transactions |
6 Months Ended | ||
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Jun. 30, 2019 | |||
Related Party Transactions |
Certain facilities leased by Spectrum LifeSciences, LLC (“Spe ctrum”) are owned by the former owner of Spectrum. The former owner held greater than 10% of the Company’s outstanding common stock until the Company completed its public offering of 3,144,531 shares of its common stock on May 3, 2019. The lease amounts paid to this former owner and current shareholder were negotiated in connection with the Spectrum Acquisition. The Company has incurred rent expense totaling $ 0.4 million for the six months ended June 30 , 2019 related to these leases. As part of the Spectrum Acquisition, the Company was responsible for filing all tax returns for Spectrum for the period from January 1 , 2017 through July 31 , 2017 , the day before the Spectrum Acquisition. The Company was responsible for collecting any tax refunds from federal and state authorities and remitting these refunds to the former shareholders of Spectrum, including the former owner of Spectrum who held greater than 10% of the Company’s outstanding common stock prior to May 3, 2019. During 2018 , the Company collected $ 1.7 million of these tax refunds, which the Company paid to the Spectrum shareholders during the fourth quarter of 2018 , net of $ 0.2 million of expenses paid by the Company on behalf of Spectrum for tax preparation and other fees. |
Segment Reporting |
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Segment Reporting |
The Company views its operations, makes decisions regarding how to allocate resources and manages its business as one operating segment. As a result, the financial information disclosed herein represents all of the material financial information related to the Company’s sole operating segment. Revenue from filtration products includes our XCell ATF Systems and consumables as well as our KrosFlo and SIUS filtration products. Revenue from chromatography products includes our OPUS and OPUS PD chromatography columns, chromatography resins and ELISA test kits. Revenue from protein products includes our Protein A ligands and cell culture growth factors. Revenue from our process analytics products includes the sale of our SoloVPE and FlowVPE systems and consumables. Other revenue primarily consists of revenue from the sale of operating room products to hospitals as well as freight revenue. The following table represents the Company’s total revenue by geographic area (based on the location of the customer):
Concentrations of Credit Risk and Significant Customers Financial instruments that subject the Company to significant concentrations of credit risk primarily consist of cash and cash equivalents, marketable securities and accounts receivable. Per the Company’s investment policy, cash equivalents and marketable securities are invested in financial instruments with high credit ratings and credit exposure to any one issue, issuer (with the exception of U.S. treasury obligations) and type of instrument is limited. At June 30, 2019 and December 31, 2018, the Company had no investments associated with foreign exchange contracts, options contracts or other foreign hedging arrangements. Concentration of credit risk with respect to accounts receivable is limited to customers to whom the Company makes significant sales. While a reserve for the potential write-off of accounts receivable is maintained, the Company has not written off any significant accounts to date. To control credit risk, the Company performs regular credit evaluations of its customers’ financial condition.Revenue from significant customers as a percentage of the Company’s total revenue is as follows:
Significant accounts receivable balances as a percentage of the Company’s total trade accounts receivable are as follows:
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Subsequent Event |
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Subsequent Event |
Public Offering of Common Stock On July 19, 2019, the Company completed a public offering in which 1,587,000 shares of its common stock, including the underwriters’ exercise in full of an option to purchase an additional 207,000 shares, were sold to the public at a price of $ 87.00 per share (the “Stock Offering”). The net proceeds of the Stock Offering, after deducting underwriting discounts and commissions and other estimated offering expenses payable by the Company, were approximately $ 130.7 million. Public Offering of Convertible Senior Notes On July 19, 2019, the Company issued $287.5 million aggregate principal amount of 0.375% Convertible Senior Notes due 2024 (“2019 Notes”), which includes the underwriters’ exercise in full of an option to purchase an additional $ 37.5The 2019 Notes will be senior, unsecured obligations of the Company, and will bear interest at a rate of 0.375% per year. Interest will be payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2020. The 2019 Notes will mature on the Company’s July 15, 2024 , unless earlier repurchased or converted. The initial conversion rate for the 2019 Notes is 8.6749 shares of common stock per $1,000 principal amount of 2019 Notes (which is equivalent to an initial conversion price of approximately $ 115.28 per share). Prior to the close of business on the business day immediately preceding April 15, 2024, the 2019 Notes will be convertible at the option of the holders of 2019 Notes only upon the satisfaction of specified conditions and during certain periods. Thereafter until the close of business on the second scheduled trading day preceding the maturity date, the 2019 Notes will be convertible at the options of the holders of 2019 Notes at any time regardless of these conditions. Conversion of the 2019 Notes will be settled in cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. The 2019 Notes are not redeemable by the Company prior to maturity. Holders of 2019 Notes may require the Company to repurchase their 2019 Notes upon the occurrence of certain events that constitute a fundamental change under the indenture governing the 2019 Notes at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of repurchase. In connection with certain corporate events, the Company will, under certain circumstances, increase the conversion rate for holders of 2019 Notes who elect to convert their 2019 Notes in connection with such corporate events. Exchange and Redemption of 2016 Notes Substantially concurrent with the closing of the Offerings, the Company used a portion of the net proceeds of the Offerings to exchange, with a limited number of holders in privately negotiated transactions,
$ 92.0 million aggregate principal amount of its existing 2.125% Convertible Senior Notes due 2021 (the “2016 Notes”) for a combination of cash and shares of the Company’s common stock (the “Note Exchanges”). The Company paid $ 92.3 million in cash, which represents the principal amount exchanged and accrued and unpaid interest thereon and issued $ 23.0 million principal amount of 2016 Notes, which the Company expects would result in the conversion of all or substantially all of the remaining 2016 Notes in accordance with their terms prior to the end of our third fiscal quarter of 2019. The Company intends to settle conversions of the remaining 2016 Notes with cash in an amount equal to the principal amount thereof and shares of the Company’s common stock in excess thereof. |
Acquisition of C Technologies, Inc. (Tables) |
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Schedule of Business Combination Consideration Transferred | Total consideration transferred is as follows (amounts in thousands):
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The components and allocation of the purchase price consists of the following amounts (amounts in thousands):
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Schedule of Identified Intangible Assets and Estimated Useful Lives | The following table sets forth the components of the identified intangible assets associated with the C Technologies Acquisition and their estimated useful lives:
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Unaudited Supplemental Pro Forma Information | The pro forma financial information does not reflect any adjustments for anticipated expense savings resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on January 1, 2018 or of future results:
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Revenue Recognition (Tables) |
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Disaggregation of Revenue | Revenues for the three and six months ended June 30, 2019 and 2018 were as follows:
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Revenue from Significant Customers | Revenue from significant customers is as follows:
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Summary of Receivables and Deferred Revenue from Contracts with Customers | The following table provides information about receivables and deferred revenues from contracts with customers as of June 30, 2019 (amounts in thousands):
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Leases (Tables) |
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Maturities of lease liabilities | Amounts related to financing leases were immaterial. The maturity of the Company’s operating lease liabilities as of June 30, 2019 are as follows (amounts in thousands):
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Abstract of operating lease liability | Total operating lease liabilities is included on the Company’s consolidated balance sheet as of June 30, 2019 as follows (amounts in thousands):
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Lease, Cost | For the three and six months ended June 30, 2019, total lease cost is comprised of the following:
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|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Supplemental Disclosure Of Cash Flows Related To Operating Leases | The following information represents supplemental disclosure for the consolidated statements of cash flows related to operating leases (amounts in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Discount Rate And Lease Term Used In Calculating Lease Liabilities And Assets | The weighted average remaining lease term and the weighted average discount rate used to measure our operating lease liabilities as of June 30, 2019 were:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prior Accounting Standard [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | As previously disclosed in the Company’s 2018 Annual Report on Form
10-K and under the previous lease accounting standard, ASC 840, “Leases,” non-cancelable operating leases was $18.0 million as of December 31, 2018 (amounts in thousands):
|
Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Carrying Value of Goodwill | The following table represents the change in the carrying value of goodwill for the six months ended June 30, 2019 (amounts in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets | Intangible assets, net consisted of the following at June 30, 2019:
Intangible assets consisted of the following at December 31, 2018:
The increase in intangible assets during 2019 is related to the acquisition of C Technologies on May 31, 2019. See Note 3, “Acquisition of C Technologies, Inc.” Amortization expense for finite-lived intangible assets was $3.1 million and $2.6 million for the three months ended June 30, 2019 and 2018, respectively. Amortization expense for finite-lived intangible assets was $5.7 million and $5.3 million for the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019, the Company expects to record the following amortization expense (amounts in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortization Expense for Amortized Intangible Assets | As of June 30, 2019, the Company expects to record the following amortization expense (amounts in thousands):
|
Consolidated Balance Sheet Detail (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories, net consists of the following:
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Property, Plant and Equipment | Property, plant and equipment consist of the following:
|
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Accrued Liabilities | Accrued liabilities consist of the following:
|
Convertible Senior Notes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value of Convertible Senior Notes | The carrying value of the Company’s convertible senior notes is as follows:
|
Stockholders' Equity (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense | The following table presents stock-based compensation expense in the Company’s consolidated statements of comprehensive income (loss):
|
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Estimated Weighted Average Assumptions | Information regarding option activity for the six months ended June 30, 2019 under the Plans is summarized below:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Stock Unit Activity | Information regarding RSU activity for the six months ended June 30, 2019 under the Plans is summarized below:
|
Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Accumulated Other Comprehensive Income | The following shows the changes in the components of accumulated other comprehensive loss for the six months ended June 30, 2019 which consisted of only foreign currency translation adjustments for the periods shown (amounts in thousands):
|
Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||
Summary of Tax Returns Periods Subject to Examination by Federal, State and International Taxing Authorities | The Company’s tax returns are subject to examination by federal, state and international tax authorities for the following periods:
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Weighted Average Shares Outstanding | Basic and diluted weighted average shares outstanding were as follows:
|
Segment Reporting (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of Revenue from Significant Customers | Revenue from significant customers as a percentage of the Company’s total revenue is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage by Geographic Area or Significant Customers | The following table represents the Company’s total revenue by geographic area (based on the location of the customer):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage by Geographic Area or Significant Customers | Significant accounts receivable balances as a percentage of the Company’s total trade accounts receivable are as follows:
|
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Mar. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Operating Lease, ROU assets | $ 19,501 | $ 19,500 | ||
Lease liabilities | $ 23,496 | |||
Deferred Rent Credit | $ 4,000 | |||
Accounting Standards Update 2016-02 [Member] | ||||
Operating Lease, ROU assets | $ 17,000 | |||
Lease liabilities | $ 21,000 |
Fair Value Measurement - Additional Information (Detail) - USD ($) |
Jul. 19, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
May 24, 2016 |
---|---|---|---|---|---|---|
Summary Of Significant Accounting Policies [Line Items] | ||||||
Cash and Cash Equivalents, at Carrying Value | $ 208,888,000 | $ 193,822,000 | ||||
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Cash and Cash Equivalents, at Carrying Value | 118,400,000 | 126,600,000 | ||||
2.125% Convertible Senior Notes due 2021 | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Principal amount | $ 92,000,000.0 | $ 17,000 | $ 11,000 | $ 115,000,000.0 | ||
Total convertible senior notes | 105,704,000 | $ 103,488,000 | ||||
Fair value of convertible senior notes | $ 310,500,000 |
Acquisition of C Technologies, Inc. (Consideration Transferred) (Detail) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Business Acquisition [Line Items] | ||
Cash consideration | $ 182,176 | |
Equity consideration | 53,938 | |
Spectrum Inc. | ||
Business Acquisition [Line Items] | ||
Cash consideration | 185,971 | |
Equity consideration | 53,938 | |
Fair value of net assets acquired | $ 239,909 |
Acquisition of C Technologies, Inc. (Estimated Useful Life and Fair Value) (Detail) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Fair Value | $ 90,830 |
Customer Relationships [Member] | |
Weighted Average Useful Life (in years) | 17 years |
Fair Value | $ 59,680 |
Developed Technology Rights [Member] | |
Weighted Average Useful Life (in years) | 18 years |
Fair Value | $ 28,920 |
Trademark and tradename [Member] | |
Weighted Average Useful Life (in years) | 20 years |
Fair Value | $ 1,570 |
Noncompete Agreements [Member] | |
Weighted Average Useful Life (in years) | 4 years |
Fair Value | $ 660 |
Acquisition of C Technologies, Inc. (Unaudited Supplemental Pro Forma Information) (Detail) - C Technologies [Member] - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Business Acquisition [Line Items] | |||
Total revenue | $ 140,515 | $ 102,535 | |
Net income | $ 1,500 | $ 20,560 | $ 8,060 |
Basic | $ 0.46 | $ 0.17 | |
Diluted | $ 0.43 | $ 0.17 |
Summary of Disaggregation of Product Revenues from Contracts with Customers by Major Product Line (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 70,692 | $ 47,731 | $ 131,326 | $ 92,561 |
Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 70,670 | 47,743 | 131,282 | 92,542 |
Royalty and Other Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 22 | $ (12) | $ 44 | $ 19 |
Revenue from Significant Customers (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Concentration Risk [Line Items] | ||||
Revenue | $ 70,692 | $ 47,731 | $ 131,326 | $ 92,561 |
GE Healthcare | ||||
Concentration Risk [Line Items] | ||||
Revenue | 11,083 | 6,777 | 18,749 | 14,510 |
MilliporeSigma | ||||
Concentration Risk [Line Items] | ||||
Revenue | $ 9,487 | $ 8,679 | $ 18,894 | $ 15,390 |
Summary of Receivables and Deferred Revenue from Contracts with Customers (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Balances from contracts with customers only: | ||
Accounts receivable | $ 43,045 | $ 33,015 |
Deferred revenue (included in accrued liabilities in the consolidated balance sheets) | 3,728 | |
Revenue recognized during the six-month period relating to: | ||
The beginning deferred revenue balance | $ 1,668 |
Revenue Recognition - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Other Revenues [Line Items] | ||
Impairment losses on receivables | $ 0 | $ 0 |
Leases - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|
Operating lease right of use assets | $ 19,501 | $ 19,500 | ||
Operating lease liabilities | 23,496 | |||
Deferred Rent Credit | $ 4,000 | |||
Operating leases | $ 18,034 | |||
C Technologies [Member] | ||||
Increase in right of use asset | 3,800 | |||
Increase in operating lease liabilities | $ 3,800 | |||
Accounting Standards Update 2016-02 [Member] | ||||
Operating lease right of use assets | $ 17,000 | |||
Operating lease liabilities | $ 21,000 |
Leases (Maturities of lease liabilities) (Detail) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
2019 (remaining six months) | $ 2,010 |
2020 | 4,657 |
2021 | 4,572 |
2022 | 3,620 |
2023 | 2,654 |
2024 and thereafter | 10,945 |
Total future minimum lease payments | 28,458 |
Less amount of lease payment representing interest | 4,962 |
Total operating lease liabilities | $ 23,496 |
Leases (Consolidated Balance Sheet) (Detail) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Operating lease liability | $ 3,287 |
Operating lease liability, long-term | 20,209 |
Minimum operating lease payments | $ 23,496 |
Leases (Consolidated Statements of Comprehensive Income) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Operating lease cost | $ 982 | $ 1,912 |
Variable operating lease cost | 379 | 660 |
Lease, cost | $ 1,361 | $ 2,572 |
Leases (Consolidated Statements of Cash flows Related to Operating Leases) (Detail) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Operating cash flows from operating leases | $ (1,978) |
Leases (Operating Lease Liabilities) (Detail) |
Jun. 30, 2019 |
---|---|
Weighted average remaining lease term (years) | 7 years 5 months 15 days |
Weighted average discount rate | 4.74% |
Leases (Obligations Under Non-Cancelable Operating Leases) (Detail) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Operating Leased Assets [Line Items] | |
2019 | $ 4,021 |
2020 | 3,599 |
2021 | 3,263 |
2022 | 2,213 |
2023 | 1,316 |
2024 and thereafter | 3,622 |
Minimum operating lease payments | $ 18,034 |
Changes in Carrying Value of Goodwill (Detail) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Goodwill [Line Items] | |
Balance as of December 31, 2018 | $ 326,735 |
Cumulative translation adjustment | (106) |
Acquisition of C Technologies, Inc. | 142,881 |
Balance as of June 30, 2019 | $ 469,510 |
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Finite-Lived Intangible Liabilities [Line Items] | ||||
Amortization expense | $ 3.1 | $ 2.6 | $ 5.7 | $ 5.3 |
Amortization Expense for Amortized Intangible Assets (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Finite-Lived Intangible Liabilities [Line Items] | ||
2019 (remaining nine months) | $ 8,306 | |
2020 | 15,167 | |
2021 | 14,656 | |
2022 | 14,654 | |
2023 | 14,654 | |
2024 and thereafter | 152,344 | |
Total | $ 219,781 | $ 134,738 |
Schedule of Inventories (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory [Line Items] | ||
Raw materials | $ 32,373 | $ 24,937 |
Work-in-process | 5,866 | 5,185 |
Finished products | 13,036 | 12,141 |
Total inventories, net | $ 51,275 | $ 42,263 |
Property, Plant and Equipment (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
||
---|---|---|---|---|
Property, Plant and Equipment [Line Items] | ||||
Land | $ 1,023 | $ 1,023 | ||
Buildings | 764 | 764 | ||
Leasehold improvements | 22,936 | 16,259 | ||
Equipment | 30,495 | 24,092 | ||
Furniture and fixtures | 6,941 | 5,448 | ||
Construction in progress | [1] | 7,343 | 12,906 | |
Other | 50 | |||
Total property, plant and equipment | 69,552 | 60,492 | ||
Less - Accumulated depreciation | (31,427) | (28,312) | ||
Total property, plant and equipment, net | $ 38,125 | $ 32,180 | ||
|
Consolidated Balance Sheet - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|||
Construction in Progress, Gross | [1] | $ 7,343 | $ 7,343 | $ 12,906 | ||||
Depreciation | 1,800 | $ 1,300 | 3,300 | $ 2,600 | ||||
Software Development [Member] | ||||||||
Construction in Progress, Gross | 5,600 | 5,600 | $ 2,100 | |||||
Casting Machine [Member] | ||||||||
Construction in Progress, Gross | $ 2,100 | |||||||
Marlborough facility [Member] | ||||||||
Construction in Progress, Gross | $ 300 | $ 300 | $ 7,300 | |||||
|
Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Schedule of Accrued Liabilities [Line Items] | ||
Employee compensation | $ 10,487 | $ 9,953 |
Taxes | 2,353 | 1,024 |
Royalty and license fees | 163 | 242 |
Accrued purchases | 407 | 683 |
Warranties | 796 | 546 |
Professional fees | 807 | 942 |
Deferred revenue | 3,728 | 1,290 |
Other | 1,877 | 1,185 |
Total accrued liabilities | $ 20,618 | $ 15,865 |
Carrying Value of Convertible Senior Notes (Detail) - 2.125% Convertible Senior Notes due 2021 - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Principal amount | $ 114,972 | $ 114,989 |
Unamortized debt discount | (7,882) | (9,781) |
Unamortized debt issuance costs | (1,386) | (1,720) |
Total convertible senior notes | $ 105,704 | $ 103,488 |
Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 3,031 | $ 2,625 | $ 6,283 | $ 4,893 |
Cost of product revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 292 | 234 | 616 | 500 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 319 | 227 | 641 | 397 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 2,420 | $ 2,164 | $ 5,026 | $ 3,996 |
Summary of Option Activity (Parenthetical) (Detail) - Employee Stock Option |
Jun. 30, 2019 |
---|---|
Awards Granted to Non-Executive Level Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Estimated forfeiture rates | 8.00% |
Awards Granted to Executive Level Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Estimated forfeiture rates | 3.00% |
Summary of Restricted Stock Unit Activity (Detail) - Restricted Stock Units (RSUs) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
shares
| |
Options Outstanding | |
Unvested at December 31, 2018 | 707,413 |
Awarded | 266,329 |
Vested | (187,617) |
Forfeited/expired/cancelled | (19,139) |
Unvested at June 30, 2019 | 766,986 |
Weighted-Average Remaining Contractual Term (in years) | |
Unvested at June 30, 2019 | 3 years 10 months 6 days |
Aggregate Intrinsic Value | |
Unvested at June 30, 2019 | $ | $ 65,922 |
Commitments and Contingencies - Additional Information (Detail) $ in Millions |
1 Months Ended | 6 Months Ended | 12 Months Ended |
---|---|---|---|
May 31, 2019
ft²
|
Jun. 30, 2019
l
|
Dec. 31, 2018
USD ($)
|
|
Maximum [Member] | |||
Commitments and Contingencies [Line Items] | |||
Bioreactors used in perfusion cell culture applications | l | 2,000 | ||
Minimum [Member] | |||
Commitments and Contingencies [Line Items] | |||
Bioreactors used in perfusion cell culture applications | l | 50 | ||
NGL Impact A [Member] | Research and Development Arrangement [Member] | |||
Commitments and Contingencies [Line Items] | |||
Payments to Navigo in connection with this program, which are recorded to research and development expenses | $ | $ 2.4 | ||
Before Amendment | |||
Commitments and Contingencies [Line Items] | |||
Lease agreement, space | ft² | 76,000 | ||
After Amendment | |||
Commitments and Contingencies [Line Items] | |||
Lease agreement, space | ft² | 108,000 | ||
Fifth Amendment [Member] | |||
Commitments and Contingencies [Line Items] | |||
Rate Per Square Feet | 29.00 | ||
Increase In Lease Agreement Area | 32,000 | ||
Increase Per Square Feet | 1.00 |
Change in Accumulated Other Comprehensive Loss (Detail) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | $ 615,568 |
Balance | 878,968 |
Foreign Currency Translation Adjustment | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | (11,893) |
Other comprehensive loss | (3,160) |
Balance | $ (15,053) |
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Jan. 01, 2018 |
|
Income Taxes [Line Items] | |||||||
Corporate tax rate | 21.00% | 35.00% | 21.00% | 35.00% | |||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ 12,800 | ||||||
Tax cuts and jobs Act, increased tax provision on undistributed and previously untaxed post-1986 earnings and profits of the specified foreign corporation | $ 1,300 | 3,300 | |||||
Impact on assets and liabilities due to change in accounting principle | $ (677) | ||||||
Income tax (benefit) provision | 15.80% | 18.70% | 19.80% | 22.10% | |||
Accounting Standards Update 2016-06 [Member] | Other Assets [Member] | |||||||
Income Taxes [Line Items] | |||||||
Impact on assets and liabilities due to change in accounting principle | $ 5,700 | ||||||
Accounting Standards Update 2016-06 [Member] | Deferred tax liablities [Member] | |||||||
Income Taxes [Line Items] | |||||||
Impact on assets and liabilities due to change in accounting principle | 5,000 | ||||||
Accounting Standards Update 2016-06 [Member] | accumulated deficit [Member] | |||||||
Income Taxes [Line Items] | |||||||
Impact on assets and liabilities due to change in accounting principle | $ 700 | ||||||
Latest Tax Year | |||||||
Income Taxes [Line Items] | |||||||
Net operating loss and business tax credit carry forwards expiration date | at various dates through December 2038 | ||||||
State | |||||||
Income Taxes [Line Items] | |||||||
Business tax credits carry forwards | $ 2,900 | ||||||
United States | |||||||
Income Taxes [Line Items] | |||||||
Business tax credits carry forwards | $ 400 |
Summary of Tax Returns Periods Subject to Examination by Federal, State and International Tax Authorities (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
United States | Earliest Tax Year | |
Income Tax Examination [Line Items] | |
Fiscal year subject to examination | 2015 |
United States | Latest Tax Year | |
Income Tax Examination [Line Items] | |
Fiscal year subject to examination | 2018 |
Sweden | Earliest Tax Year | |
Income Tax Examination [Line Items] | |
Fiscal year subject to examination | 2012 |
Sweden | Latest Tax Year | |
Income Tax Examination [Line Items] | |
Fiscal year subject to examination | 2018 |
Germany | Earliest Tax Year | |
Income Tax Examination [Line Items] | |
Fiscal year subject to examination | 2017 |
Germany | Latest Tax Year | |
Income Tax Examination [Line Items] | |
Fiscal year subject to examination | 2018 |
Netherlands | Earliest Tax Year | |
Income Tax Examination [Line Items] | |
Fiscal year subject to examination | 2012 |
Netherlands | Latest Tax Year | |
Income Tax Examination [Line Items] | |
Fiscal year subject to examination | 2018 |
Earnings Per Share - (Additional Information) (Detail) - $ / shares |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Stock options, outstanding | 985,266 | 985,266 | 998,226 | ||
Stock options, weighted average exercise price | $ 30.16 | $ 30.16 | $ 27.54 | ||
Common stock excluded from calculation of diluted earnings per share | 119,026 | 551,012 | 180,160 | 615,930 | |
Option To Purchase Common Stock [Member] | |||||
Stock options, outstanding | 985,266 | 1,058,834 | 985,266 | 1,058,834 | |
Stock options, weighted average exercise price | $ 30.16 | $ 26.72 | $ 30.16 | $ 26.72 | |
Restricted Stock Units (RSUs) [Member] | |||||
Restricted stock units, outstanding | 766,986 | 716,996 | 766,986 | 716,996 | 707,413 |
Earnings Per Share - (Reconciliation of Basic and Diluted Shares Amounts) (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||||
Net income | $ 8,095 | $ 2,738 | $ 16,148 | $ 6,185 |
Weighted average shares used in computing net income per share - basic | 46,367 | 43,743 | 45,174 | 43,683 |
Effect of dilutive shares: | ||||
Stock options and restricted stock awards | 791 | 481 | 760 | 434 |
Convertible senior notes | 1,898 | 792 | 1,758 | 578 |
Dilutive potential common shares | 2,689 | 1,273 | 2,518 | 1,012 |
Weighted average shares used in computing net income per share - diluted | 49,056 | 45,016 | 47,692 | 44,695 |
Earnings per share: | ||||
Basic | $ 0.17 | $ 0.06 | $ 0.36 | $ 0.14 |
Diluted | $ 0.17 | $ 0.06 | $ 0.34 | $ 0.14 |
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
May 03, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Spectrum Inc. | |||
Related Party Transaction [Line Items] | |||
Spectrum Acquisition, tax preparation and other fees | $ 0.4 | $ 0.2 | |
Principal Owner | |||
Related Party Transaction [Line Items] | |||
Accrued refunds current | $ 1.7 | ||
Principal Owner | Spectrum Inc. | IPO [Member] | |||
Related Party Transaction [Line Items] | |||
Outstanding common stock until the company completed its public offering | 3,144,531 | ||
Principal Owner | Minimum | Spectrum Inc. | IPO [Member] | |||
Related Party Transaction [Line Items] | |||
Non controlling ownership interest minimum | 10.00% |
Segment Reporting - (Percentage of Revenue by Geographic Area) (Details) - Geographic Concentration Risk - Total Revenue |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Concentration Risk [Line Items] | ||||
Revenues, percentage by country | 100.00% | 100.00% | 100.00% | 100.00% |
North America | ||||
Concentration Risk [Line Items] | ||||
Revenues, percentage by country | 51.00% | 47.00% | 49.00% | 46.00% |
Europe | ||||
Concentration Risk [Line Items] | ||||
Revenues, percentage by country | 38.00% | 41.00% | 39.00% | 42.00% |
APAC | ||||
Concentration Risk [Line Items] | ||||
Revenues, percentage by country | 11.00% | 12.00% | 12.00% | 12.00% |
Segment Reporting - Percentage of Revenue from Significant Customers (Detail) - Customer Concentration Risk - Sales Revenue |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
MilliporeSigma | ||||
Revenue, Major Customer [Line Items] | ||||
Revenue from significant customers as a percentage of total revenue | 13.00% | 18.00% | 14.00% | 17.00% |
GE Healthcare | ||||
Revenue, Major Customer [Line Items] | ||||
Revenue from significant customers as a percentage of total revenue | 16.00% | 14.00% | 14.00% | 16.00% |
Segment Reporting - Percentage of Accounts Receivable by Significant Customers (Detail) - Customer Concentration Risk - Accounts Receivable |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
GE Healthcare | ||
Concentration Risk [Line Items] | ||
Accounts receivable, percentage by customer | 18.00% | 17.00% |
MilliporeSigma | ||
Concentration Risk [Line Items] | ||
Accounts receivable, percentage by customer | 10.00% | 11.00% |
Subsequent Event - Additional Information (Detail) |
1 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jul. 19, 2019
USD ($)
$ / shares
shares
|
May 03, 2019
USD ($)
$ / shares
shares
|
May 24, 2016
USD ($)
$ / shares
|
Jul. 19, 2019
USD ($)
$ / shares
shares
|
Jun. 30, 2019
USD ($)
shares
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2018
shares
|
Dec. 31, 2017
USD ($)
|
|
Common stock, shares issued | shares | 3,144,531 | 48,086,422 | 43,917,378 | |||||
Common Stock Issue Price Per Share | $ / shares | $ 64.00 | |||||||
Exercised number of shares | shares | 57,956 | |||||||
Net proceeds | $ 189,600,000 | $ 189,623,000 | ||||||
Notes conversion ratio per $1,000 principal amount | 8.6749 | |||||||
2.125% Convertible Senior Notes due 2021 | ||||||||
Notes issued | $ 92,000,000.0 | $ 115,000,000.0 | $ 92,000,000.0 | $ 17,000 | $ 11,000 | |||
Notes, interest rate | 2.125% | |||||||
Proceeds from issuance of convertible senior notes, net of costs | $ 111,100,000 | |||||||
Notes, due date | Jun. 01, 2021 | |||||||
Notes conversion ratio per $1,000 principal amount | 31.1813 | |||||||
Notes initial conversion price | $ / shares | $ 32.07 | |||||||
Underwriters | Common Stock | ||||||||
Exercised number of shares | shares | 410,156 | |||||||
Subsequent Event [Member] | ||||||||
Common stock, shares issued | shares | 1,587,000 | 1,587,000 | ||||||
Common Stock Issue Price Per Share | $ / shares | $ 87.00 | $ 87.00 | ||||||
Net proceeds | $ 130,700,000 | |||||||
Subsequent Event [Member] | 0.375% Convertible Senior Notes due 2024 | ||||||||
Notes issued | $ 287,500,000 | $ 287,500,000 | ||||||
Notes, interest rate | 0.375% | 0.375% | ||||||
Proceeds from issuance of convertible senior notes, net of costs | $ 278,400,000 | |||||||
Interest repayment terms | Interest will be payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2020 | |||||||
Notes, due date | Jul. 15, 2024 | |||||||
Notes initial conversion price | $ / shares | $ 115.28 | $ 115.28 | ||||||
Notes redemption price | 100.00% | |||||||
Subsequent Event [Member] | 2.125% Convertible Senior Notes due 2021 | ||||||||
face amount of remaining convertible debt | $ 23,000,000.0 | $ 23,000,000.0 | ||||||
Subsequent Event [Member] | 2.125% Convertible Senior Notes due 2021 | Partial Private Settlement [Member] | ||||||||
Notes, interest rate | 2.125% | 2.125% | ||||||
Repurchased Face Amount | $ 92,000,000.0 | $ 92,000,000.0 | ||||||
Repayment Of Senior Debt | $ 92,300,000 | |||||||
Conversion of Convertible Securities Stock Issued | shares | 1,850,155 | |||||||
Subsequent Event [Member] | Underwriters | ||||||||
Exercised number of shares | shares | 37.5 | |||||||
Subsequent Event [Member] | Underwriters | Common Stock | ||||||||
Exercised number of shares | shares | 207,000 |
NA+
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