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 fourth quarter and the full year ended
December 31, 2020. Highlights include:
- Revenue of $98.4 million for the fourth quarter and $284.1
million for the full year of 2020, representing 173.5% and 98.5%
increases, respectively, over the corresponding periods of
2019;
- Expanded our IP Portfolio with a third U.S. patent granted for
CleanCap® technology for the co-transcriptional capping of
messenger RNA (mRNA);
- Expanded nucleic acid production capacity via infrastructure
investment and manufacturing process improvements, including
substantial expansion of our GMP capacity and plasmid DNA
capabilities; and,
- Established 2021 revenue guidance of $580.0 million to $630.0
million, representing growth of 104.2% to 121.8%.
"Maravai provides enabling technologies that allow scientists to
bring the miracles of science to life. Never before has this been
more evident than this past year, as the company devoted all of its
resources to deliver our proprietary CleanCap® technology to
support mRNA COVID-19 vaccine development programs,” said Carl
Hull, Chairman and CEO. “I am very proud of the ways in which our
extraordinary team, and our partners, rose to this occasion. We
also expect to continue to benefit from the accelerating drug
development pipeline for cell and gene therapies, which are driving
demand for our GMP-grade nucleic acids and associated pre-clinical,
non-GMP compounds. We are pleased to be able to report
exceptionally strong quarterly and full year results as a
newly-public company and to provide our initial financial
guidance,” added Hull.
Revenue for the Fourth Quarter and Full Year
2020
(In thousands) |
Three Months Ended December 31, |
|
|
|
Year Ended December 31, |
|
|
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Nucleic acid production |
$ |
77,751 |
|
|
$ |
17,735 |
|
|
$ |
60,016 |
|
|
$ |
206,320 |
|
|
$ |
72,602 |
|
|
$ |
133,718 |
|
Biologics safety testing |
14,125 |
|
|
11,597 |
|
|
2,528 |
|
|
54,897 |
|
|
44,416 |
|
|
10,481 |
|
Protein detection |
6,477 |
|
|
6,628 |
|
|
(151 |
) |
|
22,881 |
|
|
26,122 |
|
|
(3,241 |
) |
Total revenue |
$ |
98,353 |
|
|
$ |
35,960 |
|
|
$ |
62,393 |
|
|
$ |
284,098 |
|
|
$ |
143,140 |
|
|
$ |
140,958 |
|
Fourth Quarter 2020 Financial Results
Revenue was $98.4 million for the fourth quarter ended
December 31, 2020, representing a 173.5% increase from the
fourth quarter of the prior year and was driven by the
following:
- Nucleic Acid Production revenue was $77.8 million for the
fourth quarter, representing a 338.4% increase from the fourth
quarter of the prior year. The increase in Nucleic Acid Production
revenue was driven by: dramatically increased demand for our
proprietary CleanCap® analogs, which principally serve the growing
mRNA vaccine and therapeutic markets; ongoing demand for highly
modified RNA products, particularly mRNA; and, increased demand for
molecular diagnostic test components.
- Biologic Safety Testing revenue was $14.1 million for the
fourth quarter, representing a 21.8% increase from the fourth
quarter of the prior year. The increase was driven by a continued
growth in the number of biologics drug development programs and
customers that use our catalog of host-cell protein (HCP) ELISA
kits.
- Protein Detection revenue was $6.5 million for the fourth
quarter, representing a 2.3% decrease from the fourth quarter of
the prior year. The decrease was primarily due to prolonged
research laboratory closures as a result of the COVID-19
pandemic.
Net income (loss) and Adjusted EBITDA (non-GAAP) was $14.5
million and $64.3 million, respectively, for the fourth quarter of
2020, compared to $(5.5) million and $13.9 million, respectively,
for the fourth quarter of the prior year.
Full Year 2020 Financial Results
Total revenue was $284.1 million for the year ended
December 31, 2020 compared to $143.1 million for the year
ended December 31, 2019, representing an increase of $141.0
million, or 98.5% and was driven by the following:
- Nucleic Acid Production revenue was $206.3 million for the year
ended December 31, 2020 compared to $72.6 million for the year
ended December 31, 2019, representing an increase of $133.7
million, or 184.2%.
- Biologics Safety Testing revenue was $54.9 million for the year
ended December 31, 2020 compared to $44.4 million for the year
ended December 31, 2019, representing an increase of $10.5
million, or 23.6%.
- Protein Detection revenue was $22.9 million for the year ended
December 31, 2020 compared to $26.1 million for the year ended
December 31, 2019, representing a decrease of $3.2 million, or
12.4%.
Net income (loss) and Adjusted EBITDA was $78.8 million and
$169.2 million, respectively, for the year ended December 31,
2020, compared to $(5.2) million and $62.0 million, respectively,
for the prior year.
“Our operational accomplishments during 2020 were quite
significant, as well,” said Kevin Herde, Chief Financial Officer.
“We completed a substantial expansion of our Nucleic Acid
Production capacity in San Diego. We completed the acquisition and
integration of MockV, expanding our Biologic Safety Testing
offerings, and we commenced plasmid DNA manufacturing operations
late in the year.” Added Herde, “We made great strides that we
believe better position us for long term success and value creation
for our shareholders as we expect increased demand for cell and
gene therapy outsourcing, and broader acceptance of mRNA as a
treatment modality.”
Financial Guidance for 2021
Our 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. See Forward-Looking
Statements described in the section below.
Total revenue is projected to be in the range of $580.0 million
to $630.0 million, reflecting overall growth of 104.2% to
121.8%.
Adjusted EBITDA (non-GAAP) is expected to be in the range of
$350.0 million to $390.0 million.
Adjusted fully diluted EPS (non-GAAP) is expected to be in the
range of $0.80 - $0.90. 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 noncontrolling 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 an assumed statutory tax rate range of 24% to
26%.
Maravai does not provide reconciliations for the non-GAAP
financial measures included in the 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 (loss) before interest,
taxes, depreciation and amortization and adjustments to exclude, as
applicable: (i) additional expense resulting from purchase
accounting adjustment to record inventory at fair value and
adjustments to contingent consideration; (ii) incremental costs
incurred to execute and integrate completed acquisitions; (iii)
expenses incurred for acquisitions that were not consummated
(including legal, accounting, and professional consulting
services); (iv) charges for in-process research and development
associated with completed acquisitions; (v) non-cash expenses
related to share-based compensation; (vi) gain on sale and
leaseback transaction; and (vii) transaction costs incurred for the
initial public offering and debt refinancing. 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 (loss), 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 (loss), 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
fourth quarter and year-end 2020. 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 accelerating drug development
pipeline for cell, gene, and RNA therapies, demand for GMP-grade
nucleic acids and associated pre-clinical, non-GMP compounds,
increased demand for outsourcing, and broader acceptance of mRNA as
a treatment modality, 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 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 prospectus dated November 19, 2020 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 OPERATIONS |
(Unaudited) |
(in thousands, except shares and units data) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue |
$ |
98,353 |
|
|
$ |
35,960 |
|
|
$ |
284,098 |
|
|
$ |
143,140 |
|
Operating
expenses |
|
|
|
|
|
|
|
Cost of revenue |
23,395 |
|
|
17,830 |
|
|
79,649 |
|
|
66,849 |
|
Research and development |
2,092 |
|
|
979 |
|
|
9,304 |
|
|
3,627 |
|
Selling, general and
administrative |
41,621 |
|
|
15,784 |
|
|
94,245 |
|
|
48,354 |
|
Change in estimated fair value
of contingent consideration |
— |
|
|
81 |
|
|
— |
|
|
322 |
|
Gain on sale and leaseback
transaction |
— |
|
|
— |
|
|
(19,002 |
) |
|
— |
|
Total operating expenses |
67,108 |
|
|
34,674 |
|
|
164,196 |
|
|
119,152 |
|
Income from operations |
31,245 |
|
|
1,286 |
|
|
119,902 |
|
|
23,988 |
|
Other income
(expense) |
|
|
|
|
|
|
|
Interest expense |
(8,806 |
) |
|
(7,719 |
) |
|
(30,740 |
) |
|
(29,959 |
) |
Other income (expense) |
(7,598 |
) |
|
23 |
|
|
(7,466 |
) |
|
118 |
|
Income (loss) before income
taxes |
14,841 |
|
|
(6,410 |
) |
|
81,696 |
|
|
(5,853 |
) |
Income tax expense
(benefit) |
369 |
|
|
(960 |
) |
|
2,880 |
|
|
(652 |
) |
Net income
(loss) |
14,472 |
|
|
(5,450 |
) |
|
78,816 |
|
|
(5,201 |
) |
Net loss attributable to
noncontrolling interests |
(10,737 |
) |
|
(59 |
) |
|
(10,156 |
) |
|
(731 |
) |
Net income (loss)
attributable to Maravai LifeSciences Holdings, Inc. |
$ |
25,209 |
|
|
$ |
(5,391 |
) |
|
$ |
88,972 |
|
|
$ |
(4,470 |
) |
|
|
|
|
|
|
|
|
Net
income (loss) per share/unit attributable to Maravai LifeSciences
Holdings, Inc.: |
Basic |
$ |
0.60 |
|
|
$ |
(0.03 |
) |
|
$ |
7.43 |
|
|
$ |
(0.03 |
) |
Diluted |
$ |
0.13 |
|
|
$ |
(0.03 |
) |
|
$ |
2.36 |
|
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
Weighted
average number of shares/units outstanding: |
|
|
|
|
Basic |
40,443,472 |
|
|
253,916,941 |
|
|
10,351,137 |
|
|
253,916,941 |
|
Diluted |
114,350,917 |
|
|
253,916,941 |
|
|
28,907,979 |
|
|
253,916,941 |
|
|
MARAVAI LIFESCIENCES HOLDINGS, INC. |
|
RECONCILIATION OF NON-GAAP FINANCIAL
INFORMATION |
(Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income (loss) |
$ |
14,472 |
|
|
$ |
(5,450 |
) |
|
$ |
78,816 |
|
|
$ |
(5,201 |
) |
Add: |
|
|
|
|
|
|
|
Amortization |
5,164 |
|
|
5,156 |
|
|
20,320 |
|
|
20,274 |
|
Depreciation |
837 |
|
|
1,479 |
|
|
5,593 |
|
|
3,810 |
|
Interest Expense |
8,806 |
|
|
7,719 |
|
|
30,740 |
|
|
29,959 |
|
Income tax expense
(benefit) |
369 |
|
|
(960 |
) |
|
2,880 |
|
|
(652 |
) |
EBITDA |
29,648 |
|
|
7,944 |
|
|
138,349 |
|
|
48,190 |
|
Acquisition contingent
consideration |
— |
|
|
81 |
|
|
— |
|
|
322 |
|
Acquisition integration
costs |
269 |
|
|
2,109 |
|
|
3,857 |
|
|
6,170 |
|
Amortization of purchase
accounting inventory step-up |
— |
|
|
— |
|
|
— |
|
|
1,856 |
|
Acquired in-process research
and development costs |
— |
|
|
— |
|
|
2,881 |
|
|
— |
|
Equity-based compensation |
21,696 |
|
|
516 |
|
|
24,629 |
|
|
1,679 |
|
GTCR management fee |
125 |
|
|
102 |
|
|
680 |
|
|
523 |
|
Gain on sale and leaseback
transaction |
— |
|
|
— |
|
|
(19,002 |
) |
|
— |
|
Merger and acquisition related
expenses |
177 |
|
|
3,112 |
|
|
395 |
|
|
3,274 |
|
Financing costs |
4,818 |
|
|
— |
|
|
9,784 |
|
|
— |
|
Loss on extinguishment of
debt |
$ |
7,592 |
|
|
— |
|
|
7,592 |
|
|
— |
|
Adjusted EBITDA |
$ |
64,325 |
|
|
$ |
13,864 |
|
|
$ |
169,165 |
|
|
$ |
62,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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