Repligen Corporation (NASDAQ:RGEN) Q1 2015 Earnings Conference Call Transcript
May 07, 2015 • 08:30 am ET
Good day, ladies and gentlemen and welcome to Repligen Corporation's First Quarter of 2015 Earnings Conference Call. My name is Michelle and I will be your coordinator. Please note that there will be a question-and-answer period following the company's formal remarks. (Operator Instructions) I would now like to turn the call over to your host for today's call, Sondra Newman, Senior Director of IR for Repligen.
Thank you and good morning. The purpose of today's call is to discuss our first quarter of 2015 results to review our financial guidance for the year and to discuss recent business highlights. Joining me today are Walter Herlihy, our President and CEO; Jon Snodgres, our CFO; and Tony Hunt, our COO and Designated President and CEO.
(Forward-Looking Cautionary Statements)
Now, I'll turn the call over to Jon for a financial review.
Thank you, Sondra. Good morning. Today we reported our financial results for the first quarter of 2015, which were highlighted by record product sales of $20.8 million, an increase of approximately 45% compared to the first quarter of 2014 despite a 12% headwind from foreign currency fluctuations.
We saw strength in our sales of Protein A affinity ligand and growth factor products; solid revenue gains from our OPUS line of pre-packed chromatography columns and continued momentum in ATF System sales. As a reminder, in the first quarter of 2014, total revenue included an upfront payment of $2 million from BioMarin under the terms of our therapeutic out-licensing agreement. All revenue for the first quarter of 2015 was derived from bio processing product sales.
Gross profit for the first quarter of 2015 was $12.7 million or 61.2% of product revenue compared with $8 million or 55.3% of product revenue for the same period in 2014. The higher margin achieved in 2015 was a result of overall higher sales resulting in strong volume leverage in our factories as well as favorable product mix.
Research and development expenses of $1.6 million for the first quarter of 2015 were $400,000 higher than the first quarter of 2014. We continue to invest in the development of new products. During the first quarter of 2015, we've launched the first of three new products planned for 2015, which Tony will provide an update on later.
SG&A expenses of $6 million for the first quarter of 2015 were $2.6 million higher than the same period in 2014 driven by expected investments in our management and commercial teams and a $1.2 million increase in professional fees and other costs associated with the transfer and integration of the ATF business into our Waltham facility and systems.
Total operating expense for the first quarter of 2015 included $1.1 million of contingent consideration expense related to continued strength of sales in ATF Systems, which we acquired from Refine Technology, LLC in June of 2014. We reported this expense due to an increased probability that we will achieve the 2015 revenue milestone set forth in our asset purchase agreement with Refine.
Operating income for the first