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| Statement |
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| So we continue to be really bullish about the long-term growth for ligands and for the Protein business |
| And third was ATR, where the new XCell controllers are doing well in the marketplace and providing value in the from of more automation and control for our process intensification customers |
| As you might recall, the first half of last year, we had really good revenue in China because it was coming from orders that were placed in 2022 |
| I think all of those contribute in a very positive way to the double-digit growth in 2025 |
| We see 4 indicators for Repligen; opportunity funnel growth, improving pharma ordering patterns, early indications of CDMO recovery and overall book-to-bill strength |
| Our sales funnel improved in 2023 with our 50% and above opportunities up more than 50% compared to the start of the year |
| We also saw a rebound in pharma demand, especially in Q3, where pharma orders were up 50% versus prior quarter |
| And then as volume picks up over the coming years, we'll be able to really benefit from a leverage on that |
| The CDMO market has also improved in the second half of 2023 with orders up more than 25% in Q4 versus Q3 and up more than 20% versus the fourth quarter of last year |
| Again, some positive signs from more customers for the first time since the first half of 2022 |
| We had an exceptionally strong order quarter in Q3 |
| Our Filtration franchise also had a positive book-to-bill in both Q3 and Q4 at 1.15 and 1.03, respectively |
| I'm really pleased with the productivity and the cost efficiencies we're driving |
| We had a good order quarter in Q4 for pharma, probably the best order in the last -- outside Q3, best order over the last 4 or 5 quarters |
| So we think that pharma is in reasonably good shape |
| Now that said, we had a very nice quarter in Q4 |
| For the full year, new modalities represented 18% of total revenues and while up only slightly versus 2022, the results are still impressive in light of the double-digit decline in sales across our industry |
| Now as we wrap, let me reiterate our excitement to move forward in 2024 and our optimism about the bioprocessing market improving through the course of the year |
| We're seeing solid orders for Analytics, which were up 10% for the year |
| So we're really encouraged by our position and differentiation in this important market |
| We're really proud of what we've done on the systems side |
| So I actually think the guide is actually -- really solid and showing the impact of a stronger book-to-bill, which is predominantly coming from our Filtration platform |
| So our biggest franchise is showing some real strength, which for me is really encouraging |
| So I think to look at the guide, while it may seem conservative and lower than you might expect, it's really driven by the fact that Protein is down and our other franchises are actually really, really solid |
| Again, directionally positive signs that our top accounts are beginning to show growth momentum |
| So despite the year's challenges, we're really proud of our innovation track record |
| As Tony shared, we expect revenues in the first half of 2024 to be better than the second half of 2023, and we expect revenue for the second half of '24 to step up again |
| So I think it's actually really good given the environment in the market that the whole industry has gone through and we've gone through over the last year |
| So expect -- everything has been very positive so far |
| The Analytics story of the quarter and the year was the strong traction for our FlowVPX and our RPM product lines and the continued adoption of VPE technology by new modality accounts |
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| As we all know, 2023 was a challenging year for Repligen in the bioprocessing industry |
| In Chromatography, our year-over-year revenues were down approximately 25% in the fourth quarter and down 4% for the full year |
| In Filtration, our year-over-year revenues were down approximately 20% in the fourth quarter and 30% for the full year |
| That said, we expect weak demand for Protein in 2024, reflecting the Cytiva drop-off of approximately $10 million and lower forecast for ligands from our other customers, including the discontinuation and ramp-down of some legacy resins by one of our partners |
| Total year 2023 adjusted operating income was $94 million, down 59% on lower sales and gross margin, offset by a nearly $3 million year-over-year reduction in total operating expenses |
| Fourth quarter 2023 adjusted gross profit was $77 million, a 20% decrease year-over-year and nearly $31 million of lower revenue, delivering a 49.1% adjusted gross margin |
| Year-over-year, on a reported basis, sales declined in North America by 20% for the fourth quarter and by 19% for the total year 2023 |
| And look, every business, every product line has challenges |
| China remained as the most significant driver of the region's decline, down 62% in the fourth quarter and down 41% for the total year 2023 |
| For CDMOs and integrators, Q4 revenues were down 20% and 10%, respectively, compared to Q4 of 2022 |
| Orders in Q1 and Q2 were much lower than the revenue that we brought into the company |
| Adjusted net income for the quarter was $19 million, down $20 million versus last year |
| We see about 200 basis points of headwind from mix with our reduced Protein sales forecast, salary increases, material inflation and from resetting our incentive compensation back to normal levels for our employees in 2024 after being far below that in 2023 |
| Total year adjusted net income was $98 million, down $90 million |
| And Asia Pacific was down 35% for the quarter and down 26% for the total year |
| For the total year, our base business, which excludes COVID revenue and M&A, was down 9% on a reported basis |
| This was a year-over-year decrease of 20% as reported and down 21% on an organic basis |
| Consistent with our October guidance, our total year adjusted fully diluted EPS was $1.75, a year-over-year decline of 47% |
| This is a reported decline of 17% for the fourth quarter or down 21% on an organic basis, which excludes the impact of acquisitions and currency fluctuations |
| The first half of the year saw elevated stock levels at both CDMO and pharma accounts, conservative capital spending and project delays at pharma companies and the deterioration in China where orders dropped off rapidly and new opportunities for products declined |
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