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Maravai LifeSciences Reports Fourth Quarter and Full Year 2023 Financial Results

SAN DIEGO, Feb. 22, 2024 (GLOBE NEWSWIRE) — 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 full year ended December 31, 2023, together with other business updates. Recent highlights include:

Financial:

Product Innovation, Partnerships and Awards:

“We closed out a challenging 2023 with better than forecasted demand for our Nucleic Acid Production products, including for CleanCap and custom chemistry,” said Trey Martin, Chief Executive Officer of Maravai. “Thanks to our team’s strong execution, the cost reductions we implemented in the fourth quarter and our revenue outperformance, we delivered a 28% adjusted EBITDA margin in the fourth quarter.”

Martin continued, “Maravai remains focused on expanding our product portfolio, advancing our market leadership in the mRNA space, and accelerating the introduction of innovations that support our customers’ rapidly evolving needs. We see continued pipeline progression among our customers’ development programs and are excited for our base business opportunities in 2024.”

Revenue for the Fourth Quarter 2023

  Three Months Ended December 31,  
(Dollars in 000’s)   2023       2022       Year-over-Year % Change  
Nucleic Acid Production $ 58,825     $ 189,290       (68.9 )%
Biologics Safety Testing   15,316       15,423       (0.7 )%
Total Revenue $ 74,141     $ 204,713       (63.8 )%

Revenue for the Full Year 2023

  Year Ended December 31,  
(Dollars in 000’s)   2023       2022       Year-over-Year % Change  
Nucleic Acid Production $ 224,769     $ 813,069       (72.4 )%
Biologics Safety Testing   64,176       69,932       (8.2 )%
Total Revenue $ 288,945     $ 883,001       (67.3 )%

Fourth Quarter 2023 Financial Results

Revenue for the fourth quarter was $74.1 million, representing a 64% decrease over the same period in the prior year and was driven by the following:

Net loss and Adjusted EBITDA (non-GAAP) were $(110.0) million and $20.5 million, respectively, for the fourth quarter of 2023, compared to net income and Adjusted EBITDA (non-GAAP) of $87.4 million and $129.8 million, respectively, for the fourth quarter of the prior year.

Full Year 2023 Financial Results

Revenue for the year ended December 31, 2023, was $288.9 million, representing a 67% decrease over the same period in the prior year and was driven by the following:

Net loss and Adjusted EBITDA (non-GAAP) were $(138.4) million and $65.3 million, respectively, for the year ended December 31, 2023, compared to net income and Adjusted EBITDA (non-GAAP) of $490.7 million and $637.8 million, respectively, for the prior year.

Financial Guidance for 2024

Maravai’s financial guidance for the full year 2024 is based on expectations for its 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.

Revenue for 2024 is projected to be in the range of $265.0 million to $285.0 million.

Adjusted EBITDA (non-GAAP) margins are expected to be in the range of 23% to 25%.

As it relates to forward-looking Adjusted EBITDA margin, Maravai cannot provide guidance for the most directly comparable GAAP measure or a reconciliation of this non-GAAP financial measure because it is unable to provide a meaningful or accurate calculation or estimation of certain significant reconciling items without unreasonable effort.

MARAVAI LIFESCIENCES HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
 
  Three Months Ended
December 31,
  Year Ended
December 31,
    2023       2022       2023       2022  
Revenue $ 74,141     $ 204,713     $ 288,945     $ 883,001  
Operating expenses              
Cost of revenue   35,108       53,253       148,743       168,957  
Selling, general and administrative   38,478       37,203       151,390       129,259  
Research and development   4,594       5,011       17,280       18,369  
Change in estimated fair value of contingent consideration   (3,355 )           (3,286 )     (7,800 )
Restructuring   6,466             6,466        
Total operating expenses   81,291       95,467       320,593       308,785  
(Loss) income from operations   (7,150 )     109,246       (31,648 )     574,216  
Other income (expense)              
Interest expense   (15,400 )     (10,180 )     (45,892 )     (20,414 )
Interest income   7,459       2,338       27,727       2,338  
Loss on extinguishment of debt                     (208 )
Change in payable to related parties pursuant to the Tax Receivable Agreement   671,228       (6,442 )     668,886       (4,102 )
Other income (expense)   49       914       (1,337 )     (358 )
Income before income taxes   656,186       95,876       617,736       551,472  
Income tax expense   766,168       8,447       756,111       60,809  
Net (loss) income   (109,982 )     87,429       (138,375 )     490,663  
Net (loss) income attributable to non-controlling interests   (4,023 )     49,795       (19,346 )     270,458  
Net (loss) income attributable to Maravai LifeSciences Holdings, Inc. $ (105,959 )   $ 37,634     $ (119,029 )   $ 220,205  
               
Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:              
Basic $ (0.80 )   $ 0.28     $ (0.90 )   $ 1.67  
Diluted $ (0.80 )   $ 0.28     $ (0.90 )   $ 1.67  
               
Weighted average number of shares outstanding:              
Basic   132,140       131,627       131,919       131,545  
Diluted   132,140       131,651       131,919       255,323  
MARAVAI LIFESCIENCES HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(Unaudited)
(in thousands, except per share amounts)
         
Net (Loss) Income to Adjusted EBITDA        
  Three Months Ended
December 31,
  Year Ended
December 31,
    2023       2022       2023       2022  
Net (loss) income $ (109,982 )   $ 87,429     $ (138,375 )   $ 490,663  
Add:              
Amortization   6,869       6,236       27,356       24,269  
Depreciation   3,932       1,962       12,898       7,566  
Interest expense   15,400       10,180       45,892       20,414  
Interest income   (7,459 )     (2,338 )     (27,727 )     (2,338 )
Income tax expense   766,168       8,447       756,111       60,809  
EBITDA   674,928       111,916       676,155       601,383  
Acquisition contingent consideration(1)   (3,355 )           (3,286 )     (7,800 )
Acquisition integration costs(2)   3,497       2,720       12,695       13,362  
Stock-based compensation(3)   9,342       5,995       34,588       18,670  
Merger and acquisition related expenses(4)   684       1,221       4,392       2,416  
Financing costs(5)         7             1,078  
Acquisition related tax adjustment(6)   (77 )     (915 )     1,293       349  
Tax Receivable Agreement liability adjustment(7)   (671,228 )     6,442       (668,886 )     4,102  
Chief Executive Officer transition costs(8)         2,426       28       2,426  
Restructuring(9)   6,567             6,567        
Other(10)   176             1,763       1,814  
Adjusted EBITDA $ 20,534     $ 129,812     $ 65,309     $ 637,800  
Adjusted Net Income and Adjusted Fully Diluted Earnings Per Share        
  Three Months Ended
December 31,
  Year Ended
December 31,
    2023       2022       2023       2022  
Net (loss) income attributable to Maravai LifeSciences Holdings, Inc. $ (105,959 )   $ 37,634     $ (119,029 )   $ 220,205  
Net (loss) income impact from pro forma conversion of Class B common shares to Class A common shares   (4,023 )     49,795       (19,346 )     270,458  
Adjustment to the provision for income tax(11)   948       (12,265 )     4,618       (64,474 )
Tax-effected net (loss) income   (109,034 )     75,164       (133,757 )     426,189  
Acquisition contingent consideration(1)   (3,355 )           (3,286 )     (7,800 )
Acquisition integration costs(2)   3,497       2,720       12,695       13,362  
Stock-based compensation(3)   9,342       5,995       34,588       18,670  
Merger and acquisition related expenses(4)   684       1,221       4,392       2,416  
Financing costs(5)         7             1,078  
Acquisition related tax adjustment(6)   (77 )     (915 )     1,293       349  
Tax Receivable Agreement liability adjustment(7)   (671,228 )     6,442       (668,886 )     4,102  
Chief Executive Officer transition costs(8)         2,426       28       2,426  
Restructuring costs(9)   6,567             6,567        
Other(10)   176             1,763       1,814  
Tax impact of adjustments(12)   764,796       (7,259 )     749,848       (14,863 )
Foreign-derived income cash tax benefit(13)         937             4,243  
Net cash tax benefit retained from historical exchanges(14)   879       1,906       1,434       7,456  
Adjusted net income $ 2,247     $ 88,644     $ 6,679     $ 459,442  
               
Diluted weighted average shares of Class A common stock outstanding   251,246       255,321       251,287       255,323  
               
Adjusted net income $ 2,247     $ 88,644     $ 6,679     $ 459,442  
Adjusted fully diluted EPS $ 0.01     $ 0.35     $ 0.03     $ 1.80  
____________________
Explanatory Notes to Reconciliations
(1)   Refers to the change in estimated fair value of contingent consideration related to completed acquisitions.
(2)   Refers to incremental costs incurred to execute and integrate completed acquisitions, and retention payments in connection with these acquisitions.
(3)   Refers to non-cash expense associated with stock-based compensation.
(4)   Refers to diligence, legal, accounting, tax and consulting fees incurred associated with acquisitions that were pursued but not consummated.
(5)   Refers to transaction costs related to the refinancing of Maravai’s long-term debt that are not capitalizable.
(6)   Refers to non-cash expense associated with adjustments to the indemnification asset recorded in connection with the acquisition of MyChem, LLC (“MyChem”), which was completed in January 2022.
(7)   For the year ended December 31, 2023, refers to the adjustment of our Tax Receivable Agreement liability primarily due to remeasuring the non-current portion of the liability to zero as we no longer consider the payments under the agreement to be probable. For the year ended December 31, 2022, refers to the adjustment of the Tax Receivable Agreement liability primarily due to changes in Maravai’s estimated state apportionment and the corresponding change of its estimated state tax rate.
(8)   Refers to legal fees and other costs associated with the Chief Executive Officer (“CEO”) leadership transition that occurred during July 2023.
(9)   Refers to restructuring costs associated with the Cost Realignment Plan, which was implemented in November 2023. Stock-based compensation benefit of $0.1 million related to restructuring is included on the stock-based compensation line item.
(10)   For the year ended December 31, 2023, refers to severance payments, legal settlement amounts, inventory step-up charges in connection with the acquisition of Alphazyme, LLC, certain working capital and other adjustments related to the acquisition of MyChem, and other non-recurring costs. For the year ended December 31, 2022, refers to the loss recognized during the period associated with certain working capital and other adjustments related to the sale of Vector Laboratories, Inc., which was completed in September 2021, and the loss incurred on extinguishment of debt.
(11)   Represents additional corporate income taxes at an assumed effective tax rate of approximately 24% applied to additional net (loss) 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.
(12)   Represents income tax impact of non-GAAP adjustments at an assumed effective tax rate of approximately 24% and the assumed proforma exchange of all outstanding shares of Class B common stock for shares of Class A common stock. For the year ended December 31, 2023, includes tax expense related to recording a valuation allowance on our deferred tax assets as we determined that the negative evidence outweighs the positive evidence and so it is more likely than not that our deferred tax assets will not be utilized.
(13)   Represents income tax benefits at Maravai LifeSciences Holdings, Inc. related to the income tax treatment of income derived from sales to foreign-domiciled customers.
(14)   Represents income 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).

Maravai defines Adjusted EBITDA as net (loss) income before interest, taxes, depreciation and amortization and adjustments to exclude, as applicable: (i) fair value adjustments to acquisition contingent consideration; (ii) incremental costs incurred to execute and integrate completed acquisitions, and associated retention payments; (iii) non-cash expenses related to share-based compensation; (iv) expenses incurred for acquisitions that were pursued but not consummated (including legal, accounting and professional consulting services); (v) transaction costs incurred for debt refinancings; (vi) non-cash expense associated with adjustments to the carrying value of the indemnification asset recorded in connection with completed acquisitions; (vii) non-cash expense incurred on loss on extinguishment of debt; (viii) loss or (income) recognized during the applicable period due to changes in the tax receivable agreement liability; (ix) CEO transition related costs; (x) restructuring costs; (xi) severance payments; (xii) legal settlement amounts; and (xiii) inventory step-up charges in connection with completed acquisitions. Maravai defines Adjusted Net (Loss) Income as tax-effected earnings before the adjustments described above, and the tax effects of those adjustments. Maravai defines Adjusted Diluted EPS as Adjusted Net (Loss) 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 (loss) income, as determined in accordance with GAAP.

Management uses these non-GAAP measures to understand and evaluate Maravai’s core operating performance and trends and to develop short-term and long-term operating plans. Management believes the measures facilitate comparison of Maravai’s operating performance on a consistent basis between periods and, when viewed in combination with its results prepared in accordance with GAAP, helps provide a broader picture of factors and trends affecting Maravai’s 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 Maravai’s results as reported under GAAP. Because of these limitations, they should not be considered as a replacement for net (loss) income, as determined by GAAP, or as a measure of Maravai’s profitability. Management compensates for these limitations by relying primarily on Maravai’s 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 full year of fiscal 2023. Approximately 10 minutes before the call, dial (888) 596-4144 or (646) 968-2525 and reference Maravai LifeSciences, Conference ID 4939675. 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 Maravai’s 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 Maravai’s financial guidance for 2024; the expansion of Maravai’s product portfolio; the progression of the development programs of Maravai’s customers; future business opportunities; the size of Maravai’s serviceable market; Maravai’s expectations for growth and profitability; growth opportunities, including inorganic growth; and future innovations, constitute forward-looking statements and are identified by words like “believe,” “expect,” “see,” “project,” “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 management’s current beliefs, expectations and assumptions regarding the future of Maravai’s 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 management’s control. Maravai’s 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 Maravai’s actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

Any forward-looking statements made in this release are based only on information currently available to management and speak only as of the date on which it is made. Maravai undertakes 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.


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