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, 2022,
together with other business updates. Highlights include:
- Record quarterly
revenue of $244.3 million, an increase of 65% over the prior
year;
- Nucleic Acid
Production base business revenue (excluding COVID-19 related
CleanCap® revenue) increased 55% over the prior year;
- Net income of
$146.9 million for the first quarter, representing growth of 95%
over the prior year;
- Record Adjusted
EBITDA margins of 77%;
- Increase to full
year 2022 guidance for Adjusted EBITDA and Adjusted Fully Diluted
Earnings per Share (EPS); and
- Expansion of our
Senior Leadership team with the addition of Deborah (“Deb”) Barbara
as Vice President, Business Development and Strategy.
"Maravai produced another solid quarter of
growth, delivering a record-setting first quarter with total
revenues reaching $244.3 million, up 65% over the first quarter of
2021. This excellent performance included 55% revenue growth in our
Nucleic Acid Production base business, after excluding
approximately $172.9 million of COVID-19 related CleanCap revenue
in the quarter,” said Carl Hull, Chairman and CEO. “Our base
business continues to deliver substantial revenue growth,
reflecting strong demand for our products in therapeutic and
vaccine development programs for non-COVID indications. We expect
momentum to continue to build across our global customer base as
mRNA research advances beyond COVID-19 and cell and gene therapy
development accelerates.”
Revenue for the First Quarter
2022
|
Three Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
Year-over-Year % Change |
Nucleic Acid Production |
$ |
223,650 |
|
|
$ |
123,932 |
|
|
|
80.5 |
% |
Biologics Safety Testing |
|
20,643 |
|
|
|
17,649 |
|
|
|
17.0 |
% |
Protein Detection (sold in
Sept. 2021) |
|
— |
|
|
|
6,630 |
|
|
|
(100.0 |
)% |
Total Revenue |
$ |
244,293 |
|
|
$ |
148,211 |
|
|
|
64.8 |
% |
First Quarter 2022 Financial Results
Revenue for the first quarter was $244.3
million, representing a 65% increase over the same period in the
prior year and was driven by the following:
- Nucleic Acid
Production revenue was $223.7 million for the first quarter,
representing an 80% increase year-over-year and reflecting $172.9
million of COVID-19 related CleanCap revenue. The increase in
Nucleic Acid Production revenue was the result of continued strong
demand for our proprietary CleanCap analogs for COVID-19 vaccines
and increased demand for mRNA products as this technology becomes
incorporated into more therapeutic and vaccine development programs
for a variety of indications.
- Biologics Safety
Testing revenue was $20.6 million for the first quarter,
representing a 17% increase year-over-year. The increase was driven
by higher demand as the result of growth in the underlying markets
supporting cell and gene therapies, biosimilar and other biologic
programs.
Net income and Adjusted EBITDA (non-GAAP) were
$146.9 million and $187.0 million, respectively, for the first
quarter of 2022, compared to $75.5 million and $100.9 million,
respectively, for the first quarter of the prior year.
Updated Financial Guidance for
2022
Our updated financial guidance for the full year
2022 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, uncertainties and other
factors, including those identified in “Forward-looking Statements”
below.
The Company continues to project total revenue
for 2022 in the range of $920.0 million to $960.0 million,
reflecting overall growth of 15% to 20%.
Adjusted EBITDA (non-GAAP) is now expected to be
in the range of $650.0 million to $690.0 million.
Adjusted fully diluted EPS (non-GAAP) is now
expected to be in the range of $1.74 - $1.90 per share. Adjusted
fully diluted EPS (non-GAAP) is based on the assumption that all
the units of Maravai Topco Holdings, LLC (paired with the
corresponding shares of Class B common stock) are converted to
shares of Class A common stock. The net income included in the
Adjusted fully diluted EPS (non-GAAP) has been adjusted to
eliminate the net income attributable to non-controlling interest
as a result of the assumed full conversion of the units of Maravai
Topco Holdings, LLC (paired with the corresponding shares of Class
B common stock) for shares of Class A common stock 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 midpoint of an assumed statutory tax rate range of 23% to
25%.
Maravai cannot provide guidance for the most
closely comparable GAAP measures or reconciliations for the
non-GAAP financial measures included in the updated 2022 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 Maravai Topco Holdings, LLC units (paired with shares
of Class B common stock) 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, 2022 interest
expense is expected to be in the range of $22.0 million to $25.0
million, 2022 depreciation and amortization is now expected to be
in the range of $30.0 million to $35.0 million, and 2022
equity-based compensation is expected to be in the range of $15.0
million to $20.0 million.
MARAVAI LIFESCIENCES HOLDINGS,
INC.
CONSOLIDATED STATEMENTS OF
INCOME(Unaudited)(in thousands, except per share
amounts)
|
Three Months EndedMarch 31, |
|
|
2022 |
|
|
2021(as adjusted)* |
Revenue |
$ |
244,293 |
|
|
$ |
148,211 |
|
Operating
expenses |
|
|
|
Cost of revenue |
|
40,032 |
|
|
|
31,391 |
|
Selling, general and administrative |
|
33,200 |
|
|
|
23,471 |
|
Research and development |
|
3,695 |
|
|
|
2,160 |
|
Total operating expenses |
|
76,927 |
|
|
|
57,022 |
|
Income from operations |
|
167,366 |
|
|
|
91,189 |
|
Other income
(expense) |
|
|
|
Interest expense |
|
(2,664 |
) |
|
|
(7,904 |
) |
Loss on extinguishment of debt |
|
(208 |
) |
|
|
— |
|
Change in payable to related parties pursuant to the Tax Receivable
Agreement |
|
2,340 |
|
|
|
5,886 |
|
Other income |
|
7 |
|
|
|
3 |
|
Income before income
taxes |
|
166,841 |
|
|
|
89,174 |
|
Income tax expense |
|
19,981 |
|
|
|
13,709 |
|
Net
income |
|
146,860 |
|
|
|
75,465 |
|
Net income attributable to
noncontrolling interests |
|
79,998 |
|
|
|
52,363 |
|
Net income
attributable to Maravai LifeSciences Holdings, Inc. |
$ |
66,862 |
|
|
$ |
23,102 |
|
|
|
|
|
Net income per share
attributable to Maravai LifeSciences Holdings, Inc.: |
|
|
|
Basic |
$ |
0.51 |
|
|
$ |
0.24 |
|
Diluted |
$ |
0.50 |
|
|
$ |
0.24 |
|
|
|
|
|
Weighted average
number of shares outstanding: |
|
|
|
Basic |
|
131,489 |
|
|
|
96,647 |
|
Diluted |
|
255,287 |
|
|
|
96,673 |
|
____________________
* As adjusted to reflect the impact of the adoption of
Accounting Standards Codification 842 (“ASC 842”)
MARAVAI LIFESCIENCES HOLDINGS,
INC.
RECONCILIATION OF NON-GAAP FINANCIAL
INFORMATION(Unaudited)(in thousands, except per share
amounts)
Net Income to
Adjusted EBITDA |
|
Three Months EndedMarch 31, |
|
|
2022 |
|
|
2021(as adjusted)* |
Net income |
$ |
146,860 |
|
|
$ |
75,465 |
|
Add: |
|
|
|
Amortization |
|
5,527 |
|
|
|
5,041 |
|
Depreciation |
|
1,855 |
|
|
|
1,256 |
|
Interest expense |
|
2,664 |
|
|
|
7,904 |
|
Income tax expense |
|
19,981 |
|
|
|
13,709 |
|
EBITDA |
|
176,887 |
|
|
|
103,375 |
|
Acquisition integration
costs (1) |
|
4,779 |
|
|
|
4 |
|
Equity-based
compensation (2) |
|
3,627 |
|
|
|
2,278 |
|
Merger and acquisition related
expenses (3) |
|
1,188 |
|
|
|
919 |
|
Financing costs (4) |
|
1,037 |
|
|
|
206 |
|
Tax receivable agreement
liability adjustment (5) |
|
(2,340 |
) |
|
|
(5,886 |
) |
Other (6) |
|
1,814 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
186,992 |
|
|
$ |
100,896 |
|
____________________
* As adjusted to reflect the impact of the adoption of ASC
842
Adjusted Net Income and Adjusted Net Income per Diluted
Share
|
|
Three Months EndedMarch 31, |
|
|
2022 |
|
|
2021(as adjusted)* |
Net income attributable to Maravai LifeSciences Holdings, Inc. |
$ |
66,862 |
|
|
$ |
23,102 |
|
Net income impact from pro
forma conversion of Class B shares to Class A common shares |
|
79,998 |
|
|
|
52,363 |
|
Adjustment to the provision
for income tax (7) |
|
(18,928 |
) |
|
|
(13,062 |
) |
Tax-effected net income |
|
127,932 |
|
|
|
62,403 |
|
Acquisition integration
costs (1) |
|
4,779 |
|
|
|
4 |
|
Equity-based
compensation (2) |
|
3,627 |
|
|
|
2,278 |
|
Merger and acquisition related
expenses (3) |
|
1,188 |
|
|
|
919 |
|
Financing costs(4) |
|
1,037 |
|
|
|
206 |
|
Tax receivable agreement
liability adjustment (5) |
|
(2,340 |
) |
|
|
(5,886 |
) |
Other (6) |
|
1,814 |
|
|
|
— |
|
Tax impact of
adjustments (8) |
|
(2,957 |
) |
|
|
6,051 |
|
Foreign-derived income cash
tax benefit (9) |
|
1,442 |
|
|
|
— |
|
Net cash tax benefit retained
from historical exchanges (10) |
|
1,850 |
|
|
|
958 |
|
Adjusted net
income |
$ |
138,372 |
|
|
$ |
66,933 |
|
|
|
|
|
Diluted weighted
average shares of Class A common stock outstanding |
|
255,288 |
|
|
|
257,647 |
|
|
|
|
|
Adjusted net income |
$ |
138,372 |
|
|
$ |
66,933 |
|
Adjusted fully diluted
EPS |
$ |
0.54 |
|
|
$ |
0.26 |
|
____________________Explanatory Notes to
Reconciliations
* As adjusted to reflect the impact of the adoption of ASC
842.
(1) Refers to incremental costs incurred
to execute and integrate completed acquisitions, and retention
payments in connection with these acquisitions.
(2) Refers to non-cash expense associated
with equity-based compensation.
(3) Refers to diligence, legal,
accounting, tax and consulting fees incurred associated with
acquisitions that were not consummated.
(4) Refers to transaction costs related to
the refinancing of our long-term debt and costs from our secondary
offering that are not capitalizable or cannot be offset against
proceeds from such transactions.
(5) Refers to the 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.
(6) Refers to the loss recognized during
the period associated with certain working capital and other
adjustments for the sale of Vector Laboratories, Inc., which was
completed in September 2021, and the non-cash expense incurred on
extinguishment of debt.
(7) Represents additional corporate income
taxes at an assumed effective tax rate of of 23.66% and 23.90% for
the three months ended March 31, 2022 and 2021, respectively,
applied to additional net income attributable to Maravai
LifeSciences Holdings, Inc. from the assumed proforma exchange of
all outstanding shares of Class B common stock for shares of Class
A common stock.
(8) 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 23.66% and 23.90% for the three
months ended March 31, 2022 and 2021, respectively.
(9) Represents income tax benefits at
Maravai LifeSciences Holdings, Inc. related to the income tax
treatment of income derived from sales to foreign-domiciled
customers.
(10) 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.
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
measures 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, and associated retention
payments; (ii) charges for in-process research and development
associated with completed acquisitions; (iii) non-cash expenses
related to share-based compensation; (iv) gain or loss on the sale
of businesses; (v) gain on sale and leaseback transactions; (vi)
expenses incurred for acquisitions that were not consummated
(including legal, accounting and professional consulting services);
(vii) transaction costs incurred for the initial public offering,
secondary public offerings, and debt refinancings; (viii) non-cash
expense incurred on loss on extinguishment of debt; and (ix) loss
or (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 shares of Class A common stock outstanding for
the applicable period, which assumes the proforma exchange of all
outstanding units of Maravai Topco Holdings, LLC (paired with
shares of Class B common stock) for shares of Class A common
stock.
These non-GAAP measures are supplemental
measures of operating performance that are not prepared in
accordance with GAAP and that do 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, help 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 them
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 2022. Approximately 10
minutes before the call, dial (800) 806-5484 or (416) 340-2217 and
enter the participant passcode 7725912#. For 72 hours following the
call, an audio replay can be accessed by dialing (800) 408-3053 or
(905) 694-9451 and using the passcode 6550591#. 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 and novel vaccines and to support research
on human diseases. Maravai’s companies are leaders in providing
products and services in the fields of nucleic acid synthesis and
biologics safety testing 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 2022, our expectations for superior growth
and profitability; our ability to make investments in R&D,
capacity and people; our predictions regarding demand for our
products; and our ability to capitalize on business development
opportunities, 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, development of alternative therapies 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.
- Continued demand
for our COVID-19 related products and services, which currently
comprise a significant portion of our revenue, may decrease as
populations are vaccinated, the COVD-19 pandemic subsides or
antiviral therapeutic alternatives are developed successfully.
- We are dependent on
our customers’ spending on and demand for outsourced nucleic acid
production and biologics safety testing products and services. A
reduction in spending or demand could have a material adverse
effect on our business, financial condition, results of operations,
cash flows and prospects.
- 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, 2021, 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.
Contact Information:
Media Contact: Sara Michelmore
MacDougall Advisors
+1 781-235-3060
maravai@macdougall.bio
Investor Contact: Deb Hart
Maravai LifeSciences
+ 1 858-988-5917
ir@maravai.com
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