Maravai LifeSciences Holdings, Inc. (Maravai)(NASDAQ:
MRVI), a global provider of life science reagents and
services to researchers and biotech innovators, today reported
financial results for the first quarter ended March 31, 2021.
Highlights include:
- Revenue increased 190.7% to $148.2
million for the first quarter;
- Updated 2021 revenue guidance of
$680.0 million to $720.0 million, representing full year growth of
139.4% to 153.5%.
"As reported in our pre-announcement, Maravai’s
strong momentum continued in the first quarter of 2021, primarily
driven by the continued strength of our Nucleic Acid Production
business,” said Carl Hull, Chairman and CEO. “I am very proud of
the ways in which our extraordinary team, and our partners,
continue to scale meaningfully to address the global COVID-19
pandemic. We are pleased to be able to report exceptionally strong
quarterly results and to provide updated financial guidance,” added
Hull.
Revenue for the First Quarter of Fiscal
2021
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
|
Year-over-Year % Change |
Revenue |
|
|
|
|
|
Nucleic Acid Production |
$ |
123,932 |
|
|
$ |
30,490 |
|
|
306.5 |
% |
Biologics Safety Testing |
17,649 |
|
|
14,293 |
|
|
23.5 |
% |
Protein Detection |
6,630 |
|
|
6,198 |
|
|
7.0 |
% |
Total revenue |
$ |
148,211 |
|
|
$ |
50,981 |
|
|
190.7 |
% |
First Quarter Fiscal 2021 Financial Results
Revenue for the first quarter was $148.2
million, representing a 190.7% increase over the same period prior
year and was driven by the following:
- Nucleic Acid Production revenue was
$123.9 million for the first quarter, representing a 306.5%
increase year-over-year. The increase in Nucleic Acid Production
revenue was driven by: continued strong demand for our proprietary
CleanCap® analogs as COVID-19 vaccine manufacturers scale
production; increasing demand for highly-modified RNA products,
particularly mRNA, due to resumption of mRNA therapeutic programs;
and lifting of shelter-in-place COVID-19 restrictions.
- Biologic Safety Testing revenue was
$17.6 million for the first quarter, representing a 23.5% increase
year-over-year. The increase was driven by higher demand and
consumption of our products as a result of increased COVID-19
related diagnostic needs; and increased demand for contract
services.
- Protein Detection revenue was $6.6
million for the first quarter, representing a 7.0% increase
year-over-year. The increase was primarily due to the resumption of
research laboratory work from prior shutdowns as a result of the
COVID-19 pandemic, coupled with increased demand for our
products.
Net income and Adjusted EBITDA (non-GAAP) were
$75.9 million and $101.9 million, respectively, for the first
quarter of 2021, compared to $23.9 million and $29.6 million for
the first quarter of the prior year.
Updated Financial Guidance for
2021
Our updated financial guidance for the full year
2021 is based on expectations for our existing business and does
not include the financial impact of potential new acquisitions, if
any, or items that have not yet been identified or quantified. This
guidance is subject to a number of risks and uncertainties
identified in the Forward-Looking Statements below.
Total revenue is projected to be in the range of
$680.0 million to $720.0 million, reflecting overall growth of
139.4% to 153.5%.
Adjusted EBITDA (non-GAAP) is expected to be in
the range of $440.0 million to $470.0 million.
Adjusted fully diluted EPS (non-GAAP) is
expected to be in the range of $1.04 - $1.12 per share. Adjusted
fully diluted EPS (non-GAAP) is based on the assumption that all
Class B shares are converted to Class A shares. The net income
(loss) included in the Adjusted fully diluted EPS (non-GAAP) has
been adjusted to eliminate the net income (loss) attributable to
non-controlling interest as a result of the assumed full conversion
of Class B shares for Class A shares and is further adjusted for
certain items that we do not believe directly reflect our core
operations. All such adjustments have been tax effected at the
mid-point of an assumed statutory tax rate range of 23.0% to
25.0%.
Maravai does not provide guidance for the most
closely comparable GAAP measures or reconciliations for the
non-GAAP financial measures included in the updated 2021 guidance
above because we are unable to provide a meaningful or accurate
calculation or estimation of certain reconciling items without
unreasonable effort. This is due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliation, including net income attributable to
noncontrolling interest, variations in effective tax rate, expenses
to be incurred for acquisition activities, and the diluted weighted
average number of shares of Class A common stock outstanding for
the applicable period from potential proforma exchanges of
outstanding Class B common shares for shares of Class A common
stock. Thus, we are unable to present a quantitative reconciliation
of the aforementioned forward-looking non-GAAP financial measures
to their most directly comparable forward-looking GAAP financial
measures because such information is not available. However, 2021
interest expense is expected to be in the range of $30.0 million to
$35.0 million, 2021 depreciation and amortization is also expected
to be in the range of $30.0 million to $35.0 million, and 2021
equity-based compensation is expected to be in the range of $10.0
million to $12.0 million.
Non-GAAP Financial
Information
This press release contains financial measures
that have not been calculated in accordance with accounting
principles generally accepted in the U.S. (GAAP). These non-GAAP
measure include: Adjusted EBITDA, and Adjusted fully diluted
Earnings Per Share (EPS).
We define Adjusted EBITDA as net income before
interest, taxes, depreciation and amortization and adjustments to
exclude, as applicable: (i) incremental costs incurred to execute
and integrate completed acquisitions; (ii) charges for in-process
research and development associated with completed acquisitions;
(iii) non-cash expenses related to share-based compensation; (iv)
gain on sale and leaseback transaction; (v) expenses incurred for
acquisitions that were not consummated (including legal,
accounting, and professional consulting services); (vi) transaction
costs incurred for the initial public offering and debt
refinancing; and (vii) loss (income) recognized during the
applicable period due to changes in the tax receivable agreement
liability. We define Adjusted Net Income as tax-effected earnings
before the adjustments described above, and the tax effects of
those adjustments. We define Adjusted Diluted EPS as Adjusted Net
Income divided by the diluted weighted average number of Class A
common stock outstanding for the applicable period, which assumes
the proforma exchange of all outstanding Class B common stock for
shares of Class A common stock.
These non-GAAP measures are supplemental
measures of operating performance that is not prepared in
accordance with GAAP and that does not represent, and should not be
considered as, an alternative to net income, as determined in
accordance with GAAP.
We use these non-GAAP measures to understand and
evaluate our core operating performance and trends and to develop
short-term and long-term operating plans. We believe the measures
facilitate comparison of our operating performance on a consistent
basis between periods and, when viewed in combination with our
results prepared in accordance with GAAP, helps provide a broader
picture of factors and trends affecting our results of
operations.
These non-GAAP financial measures have
limitations as an analytical tool, and you should not consider it
in isolation, or as a substitute for analysis of our results as
reported under GAAP. Because of these limitations, they should not
be considered as a replacement for net income, as determined by
GAAP, or as a measure of our profitability. We compensate for these
limitations by relying primarily on our GAAP results and using
non-GAAP measures only for supplemental purposes. The non-GAAP
financial measures should be considered supplemental to, and not a
substitute for, financial information prepared in accordance with
GAAP.
Conference Call and Webcast
Maravai’s management will host a conference call
today at 2:00 p.m. PT/5:00 p.m. ET to discuss its financial results
for the first quarter of fiscal year 2021. Approximately 10 minutes
before the call, dial (833) 693-0536 or (661) 407-1576 and enter
the conference ID number 4090862. For 72 hours following the call,
an audio replay can be accessed by dialing (855) 859-2056 or (404)
537-3406 and using the conference number above. The call will also
be available via live or archived webcast on the "Investors"
section of the Maravai web site at
https://investors.maravai.com/.
About Maravai Maravai is a
leading life sciences company providing critical products to enable
the development of drug therapies, diagnostics, novel vaccines and
support research on human diseases. Maravai’s companies are leaders
in providing products and services in the fields of nucleic acid
synthesis, bioprocess impurity detection and analysis, and protein
labeling and detection to many of the world's leading
biopharmaceutical, vaccine, diagnostics, and cell and gene therapy
companies.
For more information about Maravai LifeSciences,
visit www.maravai.com.
Forward-looking Statements
This press release contains, and our officers
and representatives may from time-to-time make, “forward-looking
statements” within the meaning of the safe harbor provisions of the
U.S. Private Securities Litigation Reform Act of 1995. Investors
are cautioned that statements in this press release which are not
strictly historical statements constitute forward-looking
statements, including, without limitation, statements regarding our
financial guidance for 2021, the strength of our business momentum
and Nucleic Acid Production business, demand for CleanCap,
highly-modified RNA and mRNA products, and molecular diagnostic
test components, continued growth in the number of biologics drug
development programs and related demand for our HCP ELISA kits, and
increased demand for contract services, constitute forward-looking
statements and are identified by words like “believe,” “expect,”
“may,” “will,” “should,” “seek,” “anticipate,” or “could” and
similar expressions.
Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based only on our current beliefs, expectations and
assumptions regarding the future of our business, future plans and
strategies, projections, anticipated events and trends, the economy
and other future conditions. Because forward-looking statements
relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict
and many of which are outside of our control. Our actual results
and financial condition may differ materially from those indicated
in the forward-looking statements. Therefore, you should not rely
on any of these forward-looking statements. Important factors that
could cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the following:
- Certain of our products are used by
customers in the production of vaccines and therapies, some of
which represent relatively new and still-developing modes of
treatment. Unforeseen adverse events, negative clinical outcomes,
or increased regulatory scrutiny of these vaccines and therapies
and their financial cost may damage public perception of the
safety, utility, or efficacy of these vaccines and therapies or
other modes of treatment and may harm our customers’ ability to
conduct their business. Such events may negatively impact our
revenue and have an adverse effect on our performance.
- We compete with life science,
pharmaceutical and biotechnology companies who are substantially
larger than we are and potentially capable of developing new
approaches that could make our products, services and technology
obsolete.
- We depend on a limited number of
customers for a high percentage of our revenue. If we cannot
maintain our current relationships with customers, fail to sustain
recurring sources of revenue with our existing customers, or if we
fail to enter into new relationships, our future operating results
will be adversely affected.
- We rely on a limited number of
suppliers or, in some cases, sole suppliers, for some of our raw
materials and may not be able to find replacements or immediately
transition to alternative suppliers.
- Such other factors as discussed
throughout the “Risk Factors” section of our Annual Report on Form
10-K for the year ended December 31, 2020, as well as other
documents on file with the Securities and Exchange Commission.
Any forward-looking statement made by us in this
release is based only on information currently available to us and
speaks only as of the date on which it is made. We undertake no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
MARAVAI LIFESCIENCES HOLDINGS, INC. |
|
CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
(in thousands, except share and unit amounts and per share and per
unit amounts) |
|
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
Revenue |
$ |
148,211 |
|
|
$ |
50,981 |
|
Operating
expenses |
|
|
|
Cost of revenue |
30,368 |
|
|
15,297 |
|
Research and development |
2,164 |
|
|
3,744 |
|
Selling, general and
administrative |
23,237 |
|
|
16,126 |
|
Gain on sale and leaseback
transaction |
— |
|
|
(19,002 |
) |
Total operating expenses |
55,769 |
|
|
16,165 |
|
Income from operations |
92,442 |
|
|
34,816 |
|
Other income
(expense) |
|
|
|
Interest expense |
(8,770 |
) |
|
(7,622 |
) |
Change in payable to related
parties pursuant to the Tax Receivable Agreement |
5,886 |
|
|
— |
|
Other income |
3 |
|
|
320 |
|
Income before income
taxes |
89,561 |
|
|
27,514 |
|
Income tax expense |
13,709 |
|
|
3,635 |
|
Net
income |
75,852 |
|
|
23,879 |
|
Net income attributable to
noncontrolling interests |
52,605 |
|
|
490 |
|
Net income
attributable to Maravai LifeSciences Holdings, Inc. |
$ |
23,247 |
|
|
$ |
23,389 |
|
|
|
|
|
Net income
per share/unit attributable to Maravai LifeSciences Holdings,
Inc.: |
|
|
Basic |
$ |
0.24 |
|
|
$ |
0.09 |
|
Diluted |
$ |
0.24 |
|
|
$ |
0.09 |
|
|
|
|
|
Weighted average
number of shares/units outstanding: |
|
|
|
Basic |
96,646,515 |
|
|
253,916,941 |
|
Diluted |
96,672,968 |
|
|
253,916,941 |
|
MARAVAI LIFESCIENCES HOLDINGS,
INC.
RECONCILIATION OF NON-GAAP FINANCIAL
INFORMATION(Unaudited)(in thousands,
except share amount and per share amounts)
Net Income
to Adjusted EBITDA |
|
|
|
|
|
Three Months EndedMarch 31, |
|
2021 |
|
2020 |
Net income |
$ |
75,852 |
|
|
$ |
23,879 |
|
Add: |
|
|
|
Amortization |
5,041 |
|
|
5,075 |
|
Depreciation |
1,854 |
|
|
1,691 |
|
Interest Expense |
8,770 |
|
|
7,382 |
|
Income tax expense |
13,709 |
|
|
3,635 |
|
EBITDA |
105,226 |
|
|
41,662 |
|
Acquisition integration costs
(1) |
(811 |
) |
|
689 |
|
Acquired in-process research
and development costs (2) |
— |
|
|
2,881 |
|
Equity-based compensation
(3) |
2,278 |
|
|
508 |
|
GTCR management fee (4) |
— |
|
|
211 |
|
Gain on sale and leaseback
transaction (5) |
— |
|
|
(19,002 |
) |
Merger and acquisition related
expenses (6) |
919 |
|
|
902 |
|
Financing costs (7) |
206 |
|
|
1,700 |
|
Tax receivable agreement
liability adjustment (8) |
(5,886 |
) |
|
— |
|
Adjusted EBITDA |
$ |
101,932 |
|
|
$ |
29,551 |
|
Adjusted Net
Income and Adjusted Net Income per Diluted Share |
|
Three Months EndedMarch 31, |
|
2021 |
|
2020 |
Net income attributable to Maravai LifeSciences Holdings, Inc. |
$ |
23,247 |
|
|
* |
Net income impact from pro
forma conversion of Class B shares to Class A common shares |
52,605 |
|
|
* |
Adjustment to the provision
for income tax (9) |
(13,058 |
) |
|
* |
Tax-effected net income |
62,794 |
|
|
* |
Acquisition integration
costs |
(811 |
) |
|
* |
Share-based compensation |
2,278 |
|
|
* |
Merger and acquisition related
expenses |
919 |
|
|
* |
Financing costs |
206 |
|
|
* |
Tax receivable agreement
liability adjustment (10) |
(5,886 |
) |
|
* |
Deferred tax expense related
to change in state tax rate (11) |
5,246 |
|
|
|
Tax impact of adjustments
(12) |
904 |
|
|
* |
Other adjustments (13) |
958 |
|
|
* |
Adjusted net
income |
$ |
66,608 |
|
|
|
|
|
|
|
Diluted weighted
average shares of Class A common stock outstanding |
257,647,098 |
|
|
* |
|
|
|
|
Adjusted net income |
$ |
66,608 |
|
|
* |
Adjusted fully diluted
EPS |
$ |
0.26 |
|
|
* |
____________________Explanatory Notes to
Reconciliations
(*) Information not presented for Pre-IPO period.
(1) Refers to incremental costs incurred to execute and
integrate completed acquisitions.
(2) Refers to in-process research and development charge
associated with the acquisition of MockV Solutions, Inc.
(3) Refers to non-cash expense associated with equity-based
compensation.
(4) Refers to cash fees paid to GTCR, LLC (“GTCR”), pursuant to
the advisory services agreement that was terminated in connection
with our IPO.
(5) Refers to the gain on the sale of our Burlingame, California
facility, which was leased back to the Company in 2020.
(6) Refers to diligence, legal, accounting, tax and consulting
fees incurred associated with acquisitions that were not
consummated.
(7) Refers to transaction costs related to our IPO and the
refinancing of our long-term debt that are not capitalizable or
cannot be offset against proceeds from such transactions.
(8) Refers to the adjustments to our tax receivable agreement
related party liability primarily due to changes in our estimated
effective tax.
(9) Represents additional corporate income taxes at an assumed
effective tax rate of 23.9% applied to additional net income
attributable to Maravai LifeSciences Holdings, Inc. from the
assumed proforma exchange of all outstanding Class B common stock
for shares of Class A common stock.
(10) Refers to gain related to the adjustment of our tax
receivable agreement liability primarily due to changes in our
estimated state apportionment and the corresponding reduction of
our estimated state tax rate.
(11) Refers to deferred tax expense related to the adjustment of
our deferred tax asset primarily due to changes in our estimated
state apportionment and the corresponding reduction of our
estimated state tax rate.
(12) Represents income tax impact of non-GAAP adjustments and
assumed proforma exchange of all outstanding Class B common stock
for shares of Class A common stock at an assumed effective tax rate
of 23.9%.
(13) Represents tax benefits due to the amortization of
intangible assets and other tax attributes resulting from the tax
basis step up associated with the purchase or exchange of Maravai
Topco Holdings, LLC units and Class B common stock, net of payment
obligations under the tax receivable agreement.
Contact Information:
Media Contact: Sara Michelmore
MacDougall
+1 781-235-3060
maravai@macbiocom.com
Investor Contact: Deb Hart
Maravai LifeSciences
+ 1 858-988-5917
ir@maravai.com
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