Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 05, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39725 | |
Entity Registrant Name | Maravai LifeSciences Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-2786970 | |
Entity Address, Address Line One | 10770 Wateridge Circle | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92121 | |
City Area Code | 858 | |
Local Phone Number | 546-0004 | |
Title of 12(b) Security | Class A common stock, $0.01 par value | |
Trading Symbol | MRVI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001823239 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 131,458,704 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 126,239,611 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 547,898 | $ 236,184 |
Accounts receivable, net | 65,939 | 51,018 |
Inventory | 56,246 | 33,301 |
Prepaid expenses and other current assets | 17,395 | 11,095 |
Total current assets | 687,478 | 331,598 |
Property and equipment, net | 108,322 | 101,305 |
Goodwill | 152,766 | 224,275 |
Intangible assets, net | 121,225 | 177,656 |
Deferred tax assets | 820,786 | 431,699 |
Other assets | 4,106 | 4,158 |
Total assets | 1,894,683 | 1,270,691 |
Current liabilities: | ||
Accounts payable | 8,917 | 8,171 |
Accrued expenses and other current liabilities | 31,422 | 38,546 |
Deferred revenue | 66,715 | 78,061 |
Current portion of payable to related parties pursuant to a Tax Receivable Agreement | 1,298 | 0 |
Current portion of long-term debt | 6,000 | 6,000 |
Total current liabilities | 114,352 | 130,778 |
Long-term debt, less current portion | 525,584 | 528,614 |
Deferred tax liabilities | 0 | 8,609 |
Lease facility financing obligation, less current portion | 55,324 | 56,167 |
Payable to related parties pursuant to a Tax Receivable Agreement | 744,254 | 389,546 |
Other long-term liabilities | 1,553 | 2,231 |
Total liabilities | 1,441,067 | 1,115,945 |
Lease commitments | ||
Stockholders' equity: | ||
Additional paid-in capital | 172,611 | 85,125 |
Accumulated other comprehensive loss | 0 | (44) |
Retained earnings | 127,450 | 854 |
Total stockholders' equity attributable to Maravai LifeSciences Holdings, Inc. | 302,637 | 88,511 |
Non-controlling interest | 150,979 | 66,235 |
Total stockholders' equity | 453,616 | 154,746 |
Total liabilities and stockholders' equity | 1,894,683 | 1,270,691 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock | 1,314 | 966 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common stock | $ 1,262 | $ 1,610 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Class A Common Stock | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 131,420 | 96,647 |
Common stock, shares outstanding (in shares) | 131,420 | 96,647 |
Class B Common Stock | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000 | 300,000 |
Common stock, shares issued (in shares) | 126,240 | 160,974 |
Common stock, shares outstanding (in shares) | 126,240 | 160,974 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 204,810 | $ 87,859 | $ 570,796 | $ 185,745 |
Operating expenses: | ||||
Cost of revenue | 32,047 | 19,760 | 99,928 | 56,254 |
Research and development | 1,950 | 1,868 | 6,046 | 7,212 |
Selling, general and administrative | 25,189 | 20,510 | 72,511 | 52,624 |
Gain on sale of business | (11,249) | 0 | (11,249) | 0 |
Gain on sale and leaseback transaction | 0 | 0 | 0 | (19,002) |
Total operating expenses | 47,937 | 42,138 | 167,236 | 97,088 |
Income from operations | 156,873 | 45,721 | 403,560 | 88,657 |
Other income (expense): | ||||
Interest expense | (8,545) | (7,089) | (25,827) | (21,934) |
Change in payable to related parties pursuant to a Tax Receivable Agreement | 3,246 | 0 | 9,132 | 0 |
Other income | 78 | 32 | 78 | 132 |
Income before income taxes | 151,652 | 38,664 | 386,943 | 66,855 |
Income tax expense (benefit) | 18,842 | (359) | 43,937 | 2,511 |
Net income | 132,810 | 39,023 | 343,006 | 64,344 |
Net income attributable to non-controlling interests | 78,536 | 73 | 216,410 | 582 |
Net income attributable to Maravai LifeSciences Holdings, Inc. | $ 54,274 | $ 38,950 | $ 126,596 | $ 63,762 |
Net income per Class A common share/unit attributable to Maravai LifeSciences Holdings, Inc.: | ||||
Basic (in usd per share) | $ 0.46 | $ 0.12 | $ 1.16 | $ 0.21 |
Diluted (in usd per share) | $ 0.45 | $ 0.12 | $ 1.14 | $ 0.21 |
Weighted average number of Class A common shares/units outstanding: | ||||
Basic (in shares) | 118,433 | 253,917 | 109,174 | 253,917 |
Diluted (in shares) | 258,028 | 253,917 | 257,799 | 253,917 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 132,810 | $ 39,023 | $ 343,006 | $ 64,344 |
Other comprehensive income: | ||||
Foreign currency translation adjustments | 39 | 30 | 55 | (31) |
Total other comprehensive income | 132,849 | 39,053 | 343,061 | 64,313 |
Comprehensive income attributable to non-controlling interests | 78,536 | 73 | 216,421 | 582 |
Total comprehensive income attributable to Maravai LifeSciences Holdings, Inc. | $ 54,313 | $ 38,980 | $ 126,640 | $ 63,731 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders'/Member's Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common StockClass A Common Stock | Common StockClass B Common Stock | Additional Paid-in Capital / Contributed Capital | Accumulated Other Comprehensive Loss | Retained Earnings (Accumulated Deficit) | Non-Controlling Interest | Member Units |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Distribution for tax liabilities to non-controlling interest holder | $ (312) | $ (312) | ||||||
Net income | 64,344 | $ 63,762 | $ 582 | |||||
Foreign currency translation adjustments | (31) | $ (31) | ||||||
Beginning balance (in shares) at Dec. 31, 2019 | 253,917 | |||||||
Beginning balance at Dec. 31, 2019 | 144,627 | 183,910 | (133) | (42,381) | 3,231 | $ 0 | ||
Increase (Decrease) in Members' Equity [Roll Forward] | ||||||||
Repurchase of incentive units | (9,140) | |||||||
Unit-based compensation | 2,933 | 1,450 | 1,483 | |||||
Distributions to non-controlling interest holders | (312) | (312) | ||||||
Net income | 64,344 | 63,762 | 582 | |||||
Recognition of repurchase liability for non-controlling interests | (166,427) | (161,131) | (5,296) | |||||
Foreign currency translation adjustment | (31) | (31) | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 253,917 | |||||||
Ending balance at Sep. 30, 2020 | 35,994 | 14,777 | (164) | 21,381 | 0 | $ 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Distribution for tax liabilities to non-controlling interest holder | (122) | (122) | ||||||
Net income | 39,023 | 38,950 | 73 | |||||
Foreign currency translation adjustments | 30 | 30 | ||||||
Beginning balance (in shares) at Jun. 30, 2020 | 253,917 | |||||||
Beginning balance at Jun. 30, 2020 | 170,781 | 184,628 | (194) | (17,569) | 3,916 | $ 0 | ||
Increase (Decrease) in Members' Equity [Roll Forward] | ||||||||
Repurchase of incentive units | (9,140) | (9,140) | ||||||
Unit-based compensation | 1,849 | 542 | 1,307 | |||||
Distributions to non-controlling interest holders | (122) | (122) | ||||||
Net income | 39,023 | 38,950 | 73 | |||||
Recognition of repurchase liability for non-controlling interests | (166,427) | (161,131) | (5,296) | |||||
Foreign currency translation adjustment | 30 | 30 | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 253,917 | |||||||
Ending balance at Sep. 30, 2020 | 35,994 | 14,777 | (164) | 21,381 | 0 | $ 0 | ||
Beginning balance (in shares) at Dec. 31, 2020 | 96,647 | 160,974 | ||||||
Beginning balance at Dec. 31, 2020 | 154,746 | $ 966 | $ 1,610 | 85,125 | (44) | 854 | 66,235 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Effect of exchange of LLC Units (in shares) | 34,734 | (34,734) | ||||||
Effect of exchange of LLC Units | 0 | $ 348 | $ (348) | 30,520 | (30,520) | |||
Recognition of impact of Tax Receivable Agreement due to exchanges of LLC Units | 53,000 | 53,000 | ||||||
Issuance of Class A common stock (in shares) | 39 | |||||||
Issuance of Class A common stock under employee equity plans | 785 | 785 | ||||||
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC | 0 | (420) | 420 | |||||
Stock-based compensation | 8,228 | 3,507 | 4,721 | |||||
Distribution for tax liabilities to non-controlling interest holder | (106,204) | 94 | (106,298) | |||||
Net income | 343,006 | 126,596 | 216,410 | |||||
Foreign currency translation adjustments | 55 | 44 | 11 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 131,420 | 126,240 | ||||||
Ending balance at Sep. 30, 2021 | 453,616 | $ 1,314 | $ 1,262 | 172,611 | 0 | 127,450 | 150,979 | |
Increase (Decrease) in Members' Equity [Roll Forward] | ||||||||
Distributions to non-controlling interest holders | (106,204) | 94 | (106,298) | |||||
Net income | 343,006 | 126,596 | 216,410 | |||||
Foreign currency translation adjustment | 55 | 44 | 11 | |||||
Beginning balance (in shares) at Jun. 30, 2021 | 114,352 | 143,308 | ||||||
Beginning balance at Jun. 30, 2021 | 333,141 | $ 1,143 | $ 1,433 | 118,208 | (39) | 73,176 | 139,220 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Effect of exchange of LLC Units (in shares) | 17,068 | (17,068) | ||||||
Effect of exchange of LLC Units | 0 | $ 171 | $ (171) | 18,669 | (18,669) | |||
Recognition of impact of Tax Receivable Agreement due to exchanges of LLC Units | 34,060 | 34,060 | ||||||
Stock-based compensation | 3,567 | 1,614 | 1,953 | |||||
Distribution for tax liabilities to non-controlling interest holder | (50,001) | 60 | (50,061) | |||||
Net income | 132,810 | 54,274 | 78,536 | |||||
Foreign currency translation adjustments | 39 | 39 | ||||||
Ending balance (in shares) at Sep. 30, 2021 | 131,420 | 126,240 | ||||||
Ending balance at Sep. 30, 2021 | 453,616 | $ 1,314 | $ 1,262 | 172,611 | 0 | 127,450 | 150,979 | |
Increase (Decrease) in Members' Equity [Roll Forward] | ||||||||
Distributions to non-controlling interest holders | (50,001) | $ 60 | (50,061) | |||||
Net income | 132,810 | $ 54,274 | $ 78,536 | |||||
Foreign currency translation adjustment | $ 39 | $ 39 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities: | ||
Net income | $ 343,006 | $ 64,344 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 6,623 | 4,756 |
Amortization of intangible assets | 14,685 | 15,156 |
Amortization of deferred financing costs | 1,995 | 1,296 |
Equity-based compensation expense | 8,228 | 2,933 |
Deferred income taxes | 29,438 | (1,275) |
Gain on sale of business | (11,249) | 0 |
Gain on sale and leaseback transaction | 0 | (19,002) |
Acquired and in-process research and development costs | 0 | 2,881 |
Revaluation of liabilities under Tax Receivable Agreement | (9,132) | 0 |
Other | (875) | 1,341 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (18,851) | (55,420) |
Inventory | (26,263) | (12,384) |
Prepaid expenses and other assets | (7,590) | (971) |
Accounts payable | 1,543 | 130 |
Accrued expenses and other current liabilities | (10,076) | 8,838 |
Other long-term liabilities | 267 | 300 |
Deferred revenue | (11,346) | 59,833 |
Net cash provided by operating activities | 310,403 | 72,756 |
Investing activities: | ||
Cash paid for asset acquisition, net of cash acquired | 0 | (3,024) |
Purchases of property and equipment | (9,188) | (16,559) |
Proceeds from sale of building | 548 | 34,500 |
Proceeds from sale of business, net of cash divested | 119,957 | 0 |
Net cash provided by investing activities | 111,317 | 14,917 |
Financing activities: | ||
Distributions for tax liabilities to non-controlling interests holders | (106,298) | (312) |
Proceeds from borrowings of long-term debt, net of discount | 0 | 15,000 |
Financing costs incurred for long-term debt | 0 | (250) |
Principal repayments of long-term debt | (4,500) | (1,875) |
Payments made on facility financing lease obligation and capital lease | (582) | (23) |
Proceeds from employee stock purchase plan | 1,329 | 0 |
Net cash (used in) provided by financing activities | (110,051) | 12,540 |
Effects of exchange rate changes on cash | 45 | (31) |
Net increase in cash | 311,714 | 100,182 |
Cash, beginning of period | 236,184 | 24,700 |
Cash, end of period | 547,898 | 124,882 |
Supplemental cash flow information: | ||
Cash paid for interest | 23,030 | 19,407 |
Cash paid for income taxes | 16,569 | 3,506 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Property and equipment included in accounts payable and accrued expenses | 826 | 5,163 |
Building and improvements capitalized under lease financing transaction | 4,793 | 0 |
Recognition of liabilities under Tax Receivable Agreement | 365,139 | 0 |
Recognition of deferred tax assets as a result of exchange of LLC Units | 418,140 | 0 |
Deferred financing costs included in accounts payable and accrued expenses | 0 | 2,574 |
Repurchase liability for incentive units | 0 | 9,140 |
Repurchase liability for noncontrolling interests | 0 | 166,427 |
Receivable from lessor funded financing | $ 0 | $ 2,686 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | Organization and Significant Accounting Policies Description of Business Maravai LifeSciences Holdings, Inc. (the “Company”, and together with its consolidated subsidiaries, “Maravai”, “we”, “us”, “our”) was formed as a Delaware corporation in August 2020 for the purpose of facilitating an initial public offering (“IPO”) of its Class A common stock, facilitating certain organizational transactions and to operate the business of Maravai Topco Holdings, LLC (“Topco LLC”) and its consolidated subsidiaries. We are a leading life sciences company providing critical products to enable the development of drug therapies, diagnostics, novel vaccines and support research on human diseases. Our products address the key phases of biopharmaceutical development and include complex nucleic acids for diagnostic and therapeutic applications and antibody-based products to detect impurities during the production of biopharmaceutical products. The Company is headquartered in San Diego, California and has historically operated in three principal businesses: Nucleic Acid Production, Biologics Safety Testing, and Protein Detection. In September 2021, the Company completed the divestiture of its Protein Detection business (see Note 2). Our Nucleic Acid Production business manufactures and sells products used in the fields of gene therapy, vaccines, nucleoside chemistry, oligonucleotide therapy and molecular diagnostics, including reagents used in the chemical synthesis, modification, labelling and purification of deoxyribonucleic acid (“DNA”) and ribonucleic acid (“RNA”). Our core Nucleic Acid Production offerings include messenger ribonucleic acid (“mRNA”), long and short oligonucleotides, our proprietary CleanCap® capping technology and oligonucleotide building blocks. Our Biologics Safety Testing business sells highly specialized analytical products for use in biologic manufacturing process development, including custom product-specific development antibody and assay development services. Our Protein Detection business sold innovative labeling and detection reagents for researchers in immunohistochemistry. Organizational Transactions and Initial Public Offering In November 2020, the Company completed its IPO and sold 69,000,000 shares of Class A common stock at a public offering price of $27.00 per share and received proceeds of $1.8 billion, net of underwriting discounts and commissions, which the Company used to purchase previously-issued and newly-issued LLC units in Topco LLC, to pay Maravai Life Sciences Holdings 2, LLC (“MLSH 2”) as consideration for certain organizational transactions that occurred before the IPO, and to purchase outstanding shares of Class A common stock from MLSH 2. Immediately prior to, and in connection with, the completion of our IPO, the Company completed a series of organizational transactions (“Organizational Transactions”), including: • The amendment and restatement of Topco LLC’s operating agreement (the “New LLC Operating Agreement”) to, among other things, (i) modify Topco LLC’s capital structure by replacing the membership interests held by Topco LLC’s existing owners with a new class of Topco LLC units (the “LLC Units”) and (ii) appoint the Company as the sole managing member of Topco LLC; • Amend and restate the Company’s certificate of incorporation to among other things, authorize the Company to issue two classes of common stock: Class A common stock and Class B common stock; • The issuance of shares of the Company’s Class B common stock to Maravai Life Sciences Holdings, LLC (“MLSH 1”), which was Topco LLC’s pre-IPO owner on a one-to-one basis with the number of LLC Units owned; and • The acquisition, by merger, of two members of Topco LLC (“the Blocker Entities”), for which we issued shares of Class A common stock and paid cash as consideration (“the Blocker Mergers”). The Company is the sole managing member of Topco LLC, which operates and controls TriLink Biotechnologies, LLC, Glen Research, LLC, MockV Solutions, LLC and Cygnus Technologies, LLC (“Cygnus”) and their respective subsidiaries. Prior to the Company’s divestiture of its Protein Detection business in September 2021, Topco LLC also operated and controlled Vector Laboratories, Inc. and its subsidiaries. MLSH 1 is the only other member of Topco LLC. The Organizational Transactions were considered transactions between entities under c ommon control. As a result, the consolidated financial statements for periods prior to the IPO and the Organizational Transactions have been adjusted to combine the previously separate entities for presentation purposes. Exchanges and Secondary Offerings April 2021 Exchange and Secondary Offering In April 2021, MLSH 1 executed an exchange of 17,665,959 LLC Units (paired with the corresponding shares of Class B common stock) in return for 17,665,959 shares of the Company’s Class A common stock. The corresponding shares of Class B common stock were subsequently cancelled and retired. The Company immediately completed a secondary offering (“April 2021 Secondary Offering”) of 20,700,000 shares of its Class A common stock by MLSH 1 and MLSH 2, which included 3,034,041 shares of Class A common stock previously held by MLSH 2, which included the full exercise of the underwriters’ option to purchase up to 2,700,000 additional shares of Class A common stock, at a price of $31.25 per share. The selling stockholders were responsible for the underwriting discounts and commissions of the April 2021 Secondary Offering and received all of the net proceeds of $624.2 million from the sale of shares of Class A common stock. The Company was responsible for the offering costs associated with the April 2021 Secondary Offering of $1.0 million which were recorded within selling, general and administrative in the condensed consolidated statements of income. September 2021 Exchange and Secondary Offering In September 2021, MLSH 1 executed an exchange of 17,068,559 LLC Units (paired with the corresponding shares of Class B common stock) in return for 17,068,559 shares of the Company’s Class A common stock. The corresponding shares of Class B common stock were subsequently cancelled and retired. Shortly after the exchange, the Company completed a secondary offering (“September 2021 Secondary Offering”) of 20,000,000 shares of its Class A common stock by MLSH 1 and MLSH 2, which included 2,931,441 shares of Class A common stock previously held by MLSH 2 at a price of $50.00 per share. The selling stockholders were responsible for the underwriting discounts and commissions of the September 2021 Secondary Offering and received all of the net proceeds of $977.5 million from the sale of shares of Class A common stock. The Company was responsible for the offering costs associated with the September 2021 Secondary Offering of $0.9 million which were recorded within selling, general and administrative in the condensed consolidated statements of income. Basis of Presentation The Company operates and controls all of the business and affairs of Topco LLC, and through Topco LLC and its subsidiaries, conducts its business. Because we manage and operate the business and control the strategic decisions and day-to-day operations of Topco LLC and also have a substantial financial interest in Topco LLC, we consolidate the financial results of Topco LLC, and a portion of our net income is allocated to the non-controlling interests in Topco LLC held by MLSH 1. The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying consolidated financial statements. Unaudited Interim Condensed Consolidated Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to Form 10-Q of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements include all adjustments necessary to fairly state the financial position and the results of our operations and cash flows for interim periods in accordance with GAAP. All such adjustments are of a normal, recurring nature. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or for any future period. The condensed consolidated balance sheet presented as of December 31, 2020, has been derived from the audited consolidated financial statements as of that date. The condensed consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain all information that is included in the annual financial statements and notes thereto of the Company. The condensed consolidated financial statements and notes included in this report should be read in conjunction with the 2020 financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the SEC. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenue and expenses, and related disclosures. These estimates form the basis for judgments the Company makes about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company bases its estimates and judgments on historical experience and on various other assumptions that the Company believes are reasonable under the circumstances. These estimates are based on management’s knowledge about current events and expectations about actions the Company may undertake in the future. Significant estimates include, but are not limited to, revenue recognition, the net realizable value of inventory, expected future cash flows including growth rates, discount rates, terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets, estimated fair values of intangible assets and goodwill, the payable to related parties pursuant to the Tax Receivable Agreement (“TRA”), amortization methods and periods, the fair value of leased buildings and other assumptions associated with lease financing transactions, the estimated fair value of our long-term debt, equity-based compensation, the valuation of incentive units, allowance for doubtful accounts, and accounting for income taxes and assessment of valuation allowances. Actual results could differ materially from those estimates. Significant Accounting Policies A description of the Company’s significant accounting policies is included in the audited financial statements within its Annual Report on Form 10-K for the year ended December 31, 2020. Except as noted below, there have been no material changes in the Company’s significant accounting policies during the three and nine months ended September 30, 2021. Revenue Recognition The Company generates revenue from the sale of products and services and the performance of services in the fields of nucleic acid production, biologics safety testing, and protein detection. Revenue is recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for its arrangements with customers, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The majority of the Company’s contracts include only one performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account for revenue recognition. The Company also recognizes revenue from other contracts that may include a combination of products and services, the provision of solely services, or from license fee arrangements which may be associated with the delivery of product. Where there is a combination of products and services, the Company accounts for the promises as individual performance obligations if they are concluded to be distinct. Performance obligations are considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. As a practical expedient, we do not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below. Revenue for an individual contract is recognized at the related transaction price, which is the amount the Company expects to be entitled to in exchange for transferring the products and/or services. The transaction price for product sales is calculated at the contracted product selling price. The transaction price for a contract with multiple performance obligations is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices for products are determined based on the prices charged to customers, which are directly observable. Standalone selling price of services are mostly based on time and materials. Generally, payments from customers are due when goods and services are transferred. As most contracts contain a single performance obligation, the transaction price is representative of the standalone selling price charged to customers. Revenue is recognized only to the extent that it is probable that a significant reversal of the cumulative amount recognized will not occur in future periods. Variable consideration has not been material to our consolidated financial statements. The Company accepts returns only if the products do not meet customer specifications and historically, the Company’s volume of product returns has not been significant. Further, no warranties are provided for promised goods and services other than assurance type warranties. The Company has elected the practical exemption to not disclose the unfulfilled performance obligations for contracts with an original length of one year or less. The Company had no material unfulfilled performance obligations for contracts with an original length greater than one year for any period presented. Nucleic Acid Production Nucleic Acid Production revenue is generated from the manufacture and sale of highly modified, complex nucleic acids products to support the needs of our of customers’ research, therapeutic and vaccine programs. The primary offering of products include; CleanCap ® , mRNA, and specialized oligonucleotides. Contracts typically consist of a single performance obligation. The Company recognizes revenue from these products in the period in which the performance obligation is satisfied by transferring control to the customer. Revenue for nucleic acid catalog products is recognized at a single point in time, generally upon shipment to the customer. Revenue for contracts for certain custom nucleic acid products, with an enforceable right to payment and a reasonable margin for work performed to date, is recognized over time, based on a cost-to-cost input method over the manufacturing period. Biologics Safety Testing The Company’s Biologics Safety Testing revenue is associated with the sale of bioprocess impurity detection kit products. We also enter into contracts that include custom antibody development, assay development, antibody affinity extraction, and mass spectrometry services. These products and services enable the detection of impurities that occur in the manufacturing of biologic drugs and other therapeutics. The Company recognizes revenue from the sale of bioprocess impurity detection kits in the period in which the performance obligation is satisfied by transferring control to the customer. Custom antibody development contracts consist of a single performance obligation, typically with an enforceable right to payment and a reasonable margin for work performed to date. Revenue is recognized over time based on a cost-to-cost input method over the contract term. Where an enforceable right to payment does not exist, revenue is recognized at a point in time when control is transferred to the customer. Assay development service contracts consist of a single performance obligation, revenue is recognized at a point in time when a successful antigen test and report is provided to the customer. Affinity extraction services, which generally occur over a short period of time, consist of a single performance obligation to perform the extraction service and provide a summary report to the customer. Revenue is recognized either over time or at a point in time depending on contractual payment terms with the customer. Protein Detection Prior to the divestiture of its Protein Detection business in September 2021 (see Note 2), the Company also manufactured and sold protein labeling and detection reagents to customers that were used for basic research and development. The contracts to sell these catalog products consisted of a single performance obligation to deliver the reagent products. Revenue from these contracts was recognized at a point in time, generally upon shipment of the final product to the customer. Sales taxes Sales taxes collected by the Company are not included in the transaction price as revenue as they are ultimately remitted to a governmental authority. Shipping and handling costs Shipping and handling costs, which are charged to customers, are included in revenue and is recognized at the same time that the related product revenue is recognized. Contract costs The Company recognizes the incremental costs of obtaining contracts as an expense when incurred when the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing and general and administrative expenses. The costs to fulfill the contracts are determined to be immaterial and are recognized as an expense when incurred. Contract balances Contract assets are generated when contractual billing schedules differ from revenue recognition timing and the Company records a contract receivable when it has an unconditional right to consideration. Contract assets balances, which are included in prepaid and other current assets, was not material as of December 31, 2020. There were no contract asset balances as of September 30, 2021. Contract liabilities include billings in excess of revenue recognized, such as customer deposits and deferred revenue. Customer deposits, which are included in accrued expenses, are recorded when cash payments are received or due in advance of performance. Deferred revenue is recorded when the Company has unsatisfied performance obligations. Total contract liabilities were $69.9 million and $79.2 million as of September 30, 2021 and December 31, 2020, respectively. Contract liabilities are expected to be recognized into revenue within the next twelve months. Disaggregation of Revenue The following tables summarize the revenue by segment and region for the periods presented (in thousands): Three Months Ended September 30, 2021 Nucleic Acid Production Biologics Safety Testing Protein Detection Total North America $ 73,622 $ 7,203 $ 3,067 $ 83,892 Europe, the Middle East and Africa 103,929 3,811 1,392 109,132 Asia Pacific 5,332 5,441 795 11,568 Latin and Central America 18 171 29 218 Total revenue $ 182,901 $ 16,626 $ 5,283 $ 204,810 Nine Months Ended September 30, 2021 Nucleic Acid Production Biologics Safety Testing Protein Detection Total North America $ 207,469 $ 20,052 $ 11,016 $ 238,537 Europe, the Middle East and Africa 257,873 12,059 4,752 274,684 Asia Pacific 33,977 19,844 3,068 56,889 Latin and Central America 35 528 123 686 Total revenue $ 499,354 $ 52,483 $ 18,959 $ 570,796 Three Months Ended September 30, 2020 Nucleic Acid Production Biologics Safety Testing Protein Detection Total North America $ 36,814 $ 6,035 $ 3,735 $ 46,584 Europe, the Middle East and Africa 27,083 3,830 1,423 32,336 Asia Pacific 3,759 4,204 901 8,864 Latin and Central America — 45 30 75 Total revenue $ 67,656 $ 14,114 $ 6,089 $ 87,859 Nine Months Ended September 30, 2020 Nucleic Acid Production Biologics Safety Testing Protein Detection Total North America $ 82,523 $ 16,217 $ 9,577 $ 108,317 Europe, the Middle East and Africa 32,731 10,974 4,002 47,707 Asia Pacific 13,296 13,356 2,730 29,382 Latin and Central America 19 225 95 339 Total revenue $ 128,569 $ 40,772 $ 16,404 $ 185,745 The following table provides a disaggregation of revenue based on the pattern of revenue recognition for the periods presented (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Revenue recognized at a point in time $ 194,946 $ 86,437 $ 539,661 $ 181,041 Revenue recognized over time 9,864 1,422 31,135 4,704 Total revenue $ 204,810 $ 87,859 $ 570,796 $ 185,745 Non-Controlling Interests Non-controlling interests represent the portion of profit or loss, net assets and comprehensive income of our consolidated subsidiaries that is not allocable to the Company based on our percentage of ownership of such entities. Non-controlling interests consist of the following: • Until November 2020, Topco LLC held a 70% ownership interest in MLSC Holdings, LLC (“MLSC”) through its consolidated subsidiaries with the remaining 30% being recorded as non-controlling interests in our consolidated financial statements . MLSC net income or loss was attributed to the non-controlling interests using an attribution method, similar to the hypothetical liquidation at book value method, based on the distribution provisions of the MLSC Amended and Restated Limited Liability Company Agreement (“MLSC LLC Agreement”). In November 2020, and before the closing of the IPO, Topco LLC repurchased all of the outstanding non-controlling interests in MLSC for $166.4 million . • In November 2020, based on the Organizational Transactions described above, we became the sole managing member of Topco LLC. Until the April 2021 Secondary Offering, we held approximately 38% of the outstanding LLC Units of Topco LLC, and approximately 62% of the outstanding LLC Units of Topco LLC were held by MLSH 1. After the April 2021 Secondary Offering and until the September 2021 Secondary Offering, we held approximately 44% of the outstanding LLC Units of Topco LLC, and approximately 56% of the outstanding LLC Units of Topco LLC were held by MLSH 1. As of September 30, 2021, as a result of the September 2021 Secondary Offering, we hold approximately 51% of the outstanding LLC Units of Topco LLC, and MLSH 1 holds approximately 49% of the outstanding LLC Units of Topco LLC. Therefore, we report non-controlling interests based on LLC Units of Topco LLC held by MLSH 1 on our condensed consolidated balance sheet as of September 30, 2021. Income or loss attributed to the non-controlling interest in Topco LLC is based on the LLC Units outstanding during the period for which the income or loss is generated and is presented on the condensed consolidated statements of income and consolidated statements of comprehensive income. MLSH 1 is entitled to exchange LLC Units, together with an equal number of shares of our Class B common stock (together referred to as “Paired Interests”), for shares of Class A common stock on a one-for-one basis or, at our election, for cash, from a substantially concurrent public offering or private sale (based on the price of our Class A common stock in such public offering or private sale). As such, future exchanges of Paired Interests by MLSH 1 will result in a change in ownership and reduce or increase the amount recorded as non-controlling interests and increase or decrease additional paid-in-capital when Topco LLC has positive or negative net assets, respectively. In April 2021 and September 2021, MLSH 1 executed an exchange of Paired Interests prior to the April 2021 Secondary Offering and September 2021 Secondary Offering, respectively. Distributio ns of $50.1 million and $106.3 million for tax liabilities were made to MLSH 1 during the three and nine months ended September 30, 2021, respectively. Distributions of $0.1 million and $0.3 million for tax liabilities were made to the non-controlling interest holders of MLSC during the three and nine months ended September 30, 2020. Segment Information The Company has historically operated in three reportable segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker (“CODM”), its Chief Executive Officer, allocates resources and assesses performance based upon discrete financial information at the segment level. Substantially all of our long-lived assets are located in the United States. The Company divested its Protein Detection business in September 2021 (see Note 2). The Company has reported the historical results of the Protein Detection business as such discrete financial information evaluated by the CODM for the periods presented included the information for this legacy segment. Net Income per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc. Basic net income per Class A Common share/unit attributable to Maravai LifeSciences Holdings, Inc. is computed by dividing net income attributable to us by the weighted average number of Class A Common shares/units outstanding during the period. The non-controlling interest, for historical periods prior to the IPO, is calculated pursuant to the terms of the MLSC LLC Agreement on a fully-distributed basis, taking into account the various classes of equity of MLSC, including the cumulative yields on MLSC’s preferred units. Diluted net income per Class A Common share/unit is calculated by giving effect to all potential weighted average dilutive LLC incentive units for historical periods prior to the IPO and stock options, restricted stock units, and Topco LLC Units, that together with an equal number of shares of our Class B common stock (together referred to as “Paired Interests”) are convertible into shares of our Class A Common stock, for the periods after the IPO. For historical periods prior to the IPO, the weighted average number of common units outstanding during the period and the potential dilutive common unit equivalents is determined under the two-class method. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share/unit by application of the treasury stock method or if-converted method, as applicable. The Company reported net income attributable to Maravai LifeSciences Holdings, Inc. for the three and nine months ended September 30, 2021 and 2020. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the following estimated useful lives: Assets Useful Lives Buildings 20 - 35 years Building improvements 5 - 15 years Furniture, fixtures, equipment and software 3 - 11 years Leasehold improvements are amortized over the shorter of the related lease term or useful life. Maintenance and repairs are charged to operations when incurred, while betterments or renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in the results of operations. The Company is considered to be an owner lessee of certain buildings (Note 5). The leased buildings are being depreciated over the lease term to a residual value that will approximate the remaining lease financing obligation at the end of the lease. Property and equipment also includes a leased building which is recorded as construction in process during the period of construction at its fair value plus the cost of improvements incurred during the construction period (Note 5). Impairment of Long-Lived and Intangible Assets The Company periodically reviews long-lived assets, including property and equipment and finite-lived intangible assets, to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable. If such facts or circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets is compared to the carrying value the assets to determine whether impairment exists. If the assets are determined to be impaired, the loss is measured based on the difference between the fair value and carrying value of the assets. No impairment loss was recognized for long-lived or finite-lived intangible assets during the three and nine months ended September 30, 2021 and 2020. Fair Value of Financial Instruments The Company defines fair value as the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The Company follows accounting guidance that has a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of the asset or liability as of the measurement date. Instruments with readily available actively quoted prices, or for which fair value can be measured from actively quoted prices in an orderly market, will generally have a higher degree of market price transparency and a lesser degree of judgment used in measuring fair value. The three levels of the hierarchy are defined as follows: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2—Include other inputs that are directly or indirectly observable in the marketplace; and Level 3—Unobservable inputs which are supported by little or no market activity. As of September 30, 2021 and December 31, 2020, the carrying value of current assets and liabilities approximates fair value due to the short maturities of these instruments. The fair values of the Company’s long-term debt approximate carrying value, excluding the effect of unamortized debt discount, as it is based on borrowing rates currently available to the Company for debt with similar terms and maturities (Level 2 inputs). Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable. The Company maintains substantially all of its cash balances at a financial institution that management believes is of high credit-quality and is financially stable. Cash is deposited with major financial institutions in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash is held. The Company provides credit, in the normal course of business, to international and domestic distributors and customers, which are geographically dispersed. The Company attempts to limit its credit risk by performing ongoing credit evaluations of its customers and maintaining adequate allowances for potential credit losses. The following table summarizes revenue from each of our customers who individually accounted for 10% or more of our total revenue or accounts receivable for the periods presented: Revenue Accounts Recei |
Divestiture
Divestiture | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Divestiture On August 5, 2021, the Company entered into a definitive agreement to sell Vector Laboratories, Inc. and its subsidiaries (“Vector”) to Voyager Group Holdings, Inc. (“Voyager”), a third-party unrelated to the Company, for an all cash sale price of $124.0 million, subject to purchase price adjustments. The divestiture was completed on September 2, 2021, and the Company received total considerations of $121.9 million, which included $120.3 million in cash and $1.6 million in receivables expected to be collected based on the finalization of working capital adjustments. The sale price is also subject to adjustment based on the finalization of working capital. As a result of the divestiture, during the three and nine months ended September 30, 2021, the Company recognized a pre-tax gain on sale of $11.2 million, net of transactions costs of $0.9 million, in the condensed consolidated statements of income. Income tax expense of $0.4 million relating to the gain on sale was recognized during the three and nine months ended September 30, 2021 (see Note 9). The Company’s Protein Detection segment was comprised of Vector. The sale of Vector represents a strategic shift as the Company will no longer be in the protein detection business after the sale. However, the sale did not qualify for presentation as discontinued operations since the sale of the Protein Detection segment did not have a major effect on the Company’s operations or financial results. In connection with the divestiture, the Company entered into a Transition Services Agreement (“TSA”) with Voyager to help support its ongoing operations. Under the TSA, the Company will provide certain transition services to Voyager, including information technology, finance and ERP, marketing and commercial, human resources, employee benefits, and other limited services. Depending on the service, the initial period ranges from one month to five months and the extension period ranges from one month to eight months. Income from performing services under the TSA was recorded within other income in the condensed consolidated statements of income and was not significant for the three and nine months ended September 30, 2021. In August 2020, the Company entered into an agreement with an executive of Vector whereby the Company granted the executive incentive units of MLSH 1. In connection with the divestiture, the Company amended the terms of the MLSH 1 incentive units resulting in the recognition of incremental unit-based compensation expense of $2.4 million. This unit-based compensation expense was recorded within selling, general and administrative in the condensed consolidated statements of income for the three and nine months ended September 30, 2021. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company’s goodwill of $152.8 million and $224.3 million as of September 30, 2021 and December 31, 2020, respectively, represents the excess of purchase consideration over the fair value of assets acquired and liabilities assumed. As of September 30, 2021, the Company had three reporting units, two of which are contained in the Nucleic Acid Production segment. As of December 31, 2020, the Company had four reporting units, two of which were contained in the Nucleic Acid Production segment. The Company has not recognized any goodwill impairment in any of the periods presented. The following table summarizes the activity in the Company’s goodwill by segment for the periods presented (in thousands): Nucleic Acid Production Biologics Safety Testing Protein Detection Total Balance as of December 31, 2020 $ 32,838 $ 119,928 $ 71,509 $ 224,275 Divestiture — — (71,509) (71,509) Balance as of September 30, 2021 $ 32,838 $ 119,928 $ — $ 152,766 Goodwill as of September 30, 2021 excluded $71.5 million related to the Company’s divestiture of its Protein Detection segment (see Note 2). Intangible assets are being amortized on a straight-line basis, which reflects the expected pattern in which the economic benefits of the intangible assets are being obtained, over an estimated useful life ranging from 5 to 15 years. The following are components of finite-lived intangible assets and accumulated amortization as of the periods presented: September 30, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Life Weighted Average Remaining Amortization Period (in thousands) (in years) (in years) Trade Names $ 7,120 $ 4,821 $ 2,299 5 - 10 3.2 Patents and Developed Technology 167,648 60,452 107,196 5 - 14 8.8 Customer Relationships 19,953 8,223 11,730 10 - 12 6.7 Total $ 194,721 $ 73,496 $ 121,225 8.4 December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Life Weighted Average Remaining Amortization Period (in thousands) (in years) (in years) Trade Names $ 11,490 $ 5,384 $ 6,106 5 - 15 6.3 Patents and Developed Technology 169,404 52,809 116,595 5 - 14 9.5 Customer Relationships 83,323 28,368 54,955 10 - 14 8.8 Total $ 264,217 $ 86,561 $ 177,656 9.1 The Company recognized $3.1 million of amortization expense from intangible assets directly linked with revenue generating activities within cost of revenue in the consolidated statements of income for the three months ended September 30, 2021 and 2020. The Company recognized $9.4 million and $9.5 million of amortization expense from intangible assets directly linked with revenue generating activities within cost of revenue in the consolidated statements of income for the nine months ended September 30, 2021 and 2020, respectively. Amortization expense for intangible assets that are not directly related to sales generating activities of $1.5 million and $1.9 million was recorded as selling, general and administrative expenses for the three months ended September 30, 2021 and 2020, respectively. Amortization expense for intangible assets that are not directly related to sales generating activities of $5.3 million and $5.7 million was recorded as selling, general and administrative expenses for the nine months ended September 30, 2021 and 2020, respectively. In September 2021, the Company completed its divestiture of the Protein Detection segment (see Note 2). This resulted in the derecognition of $41.7 million in net intangible assets associated with the divested segment. As of September 30, 2021, the estimated future amortization expense for finite-lived intangible assets were as follows (in thousands): 2021 (remaining three months) $ 3,654 2022 14,600 2023 14,417 2024 14,417 2025 14,417 Thereafter 59,720 Total estimated amortization expense $ 121,225 |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Balance Sheet Components | Balance Sheet Components Inventory Inventory consisted of the following as of the periods presented (in thousands): September 30, 2021 December 31, 2020 Raw materials $ 19,344 $ 11,112 Work in process 25,430 18,333 Finished goods 11,472 3,856 Total inventory $ 56,246 $ 33,301 |
Lease Commitments
Lease Commitments | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Commitments | Lease Commitments The Company leases five facilities, including office, laboratory and manufacturing space under long-term non-cancelable operating leases. The leased facilities have initial terms of two Rent expense for the three and nine months ended September 30, 2021 was approximately $0.1 million and $2.1 million, respectively. For the three and nine months ended September 30, 2021, reported rent expense is net of approximately $1.1 million and $1.7 million, respectively, of deferred gain being recognized over the life of the lease associated with the Company’s sale leaseback arrangement for its Burlingame, California facility, of which $0.9 million was accelerated as part of the Company’s divestiture of the Protein Detection segment in September 2021 (see Note 2). Rent expense for the three and nine months ended September 30, 2020, was approximately $0.8 million and $2.3 million, respectively. For the three and nine months ended September 30, 2020, reported rent expense is net of approximately $0.3 million and $1.1 million, respectively, of deferred gain being recognized over the life of the lease associated with the Company’s sale leaseback arrangement for the Burlingame, California facility. In January 2020, the Company completed the sale of land, building and related building improvements specific to its Burlingame facility for approximately $34.5 million in cash. Simultaneously, with the close of the transaction, the Company leased the property for a two-and-a-half-year period, resulting in a total of $3.3 million in new lease obligations through December 31, 2021. The Company’s sale of the building and immediate leaseback of the facility qualified for sale-leaseback accounting. The lease was evaluated and classified as an operating lease. Given the Company was considered to retain more than a minor part but less than substantially all of the use of the property, the present value of the minimum lease payment over the lease term of $3.1 million was deferred and recognized as a reduction of rent expense over the life of the lease. Net of the $3.1 million in deferred gain, the Company recognized a net gain on the sale of the asset of $19.0 million during the first fiscal quarter of 2020. In August 2020, the Company executed a six-month extension for the leased property, including escalating rent payments, with total incremental lease payments associated with the extension of $1.8 million. The unamortized deferred gain at the time of the modification, approximating $2.0 million, was being amortized on a prospective basis over the extended lease term. As of September 30, 2021, the Company no longer leased the Burlingame, California facility. In July 2018, the Company entered into a lease for a new manufacturing facility (the “Wateridge San Diego Facility Lease”). The lease included tenant improvement provisions for construction prior to occupancy. Construction on this new manufacturing facility began in 2018 and the Company evaluated the extent of its financial and operational involvement in the tenant improvements to the Wateridge San Diego Facility Lease to determine whether it was considered the owner of the construction project. The Company concluded that it was deemed to be the owner of the facility for accounting purposes (even though it did not meet the definition for legal purposes) during the construction period, which began in 2018 and was completed in 2019. In 2019, upon completion of the construction, the Company evaluated the lease and concluded that the completed construction project failed to qualify for sale and leaseback accounting and has accounted for the lease as a financing lease transaction. The leased building and related improvements remain on the Company’s balance sheet as of September 30, 2021 and December 31, 2020 and rental payments associated with the Wateridge San Diego Facility Lease have been allocated to operating lease expense for the ground underlying the leased building and principal and interest payments on the lease facility financing obligation. The Company recorded the fair value of the building asset and improvements, which was estimated to be $59.0 million, and the related lease facility financing obligation of $51.2 million. The difference between the gross asset value and the lease facility financing obligation represents the approximate $8.0 million of building improvement costs reimbursed by the Company. In September 2020, the Company amended its Wateridge San Diego Facility lease agreement to provide for additional manufacturing and office space. The amended lease agreement provides for tenant improvements for construction prior to occupancy of $2.7 million, rent concessions, and escalating rent payments over the life of the lease, which now expires in May 2030. The total future minimum lease payments under the amended lease agreement are $57.1 million, with an option to renew subject to certain conditions. As of December 31, 2020, the anticipated tenant improvement allowance was recorded as a component of the lease facility financing obligation, a $2.0 million receivable for lessor-funded financing within prepaid and other current assets, and $0.7 million in construction in progress for costs incurred to date as the Company has earned the right to this portion of the tenant allowance as of December 31, 2020. As of December 31, 2020, the Company had recognized $20.4 million and $1.7 million in construction in progress and accrued expenses, respectively. During the first fiscal quarter of 2021, the Company earned the right to the remaining $2.0 million of the tenant allowance and recognized the amount as a component of the expanded space. Construction associated with the expansion was completed and placed into service during the first fiscal quarter of 2021. As a result, approximately $21.0 million of cost was reclassified from construction in progress into building, leasehold improvements, and equipment. The Company recognizes payments under the lease agreement as a reduction of the lease facility financing obligation using the effective interest method and the ground rent as operating lease expense as reflected in the schedule below. Payments on the Wateridge San Diego Facility Lease obligation for the three and nine months ended September 30, 2021 were approximately $1.2 million and $3.5 million, respectively. For the three and nine months ended September 30, 2021, the Company recognized rent expense associated with the ground lease for the Wateridge San Diego Facility Lease of approximately $0.2 million and $0.6 million, respectively, in the consolidated statements of income. Payments on the Wateridge San Diego Facility Lease obligation for the three and nine months ended September 30, 2020 were approximately $0.6 million and $1.7 million, respectively. For the three and nine months ended September 30, 2020, the Company recognized rent expense associated with the ground lease for the Wateridge San Diego Facility Lease of approximately $0.2 million and $0.6 million, respectively, in the consolidated statements of income. In August 2021, the Company entered into a lease for a new manufacturing facility (the “Flanders San Diego Facility Lease”). The lease included tenant improvement provisions for construction prior to occupancy of up to $11.5 million, rent abatement clauses, and escalating rent payments over the life of the lease, which expires in 2032. The total future minimum lease payments under the lease agreement are $37.2 million, with optional term extensions subject to certain requirements. The Company evaluated the extent of its financial and operational involvement in the tenant improvements to the Flanders San Diego Facility Lease to determine whether it was considered the owner of the construction project. The Company concluded that it was deemed to be the owner of the facility for accounting purposes (even though it did not meet the definition for legal purposes) during the construction period. The facility includes two existing buildings. As of September 30, 2021, construction for tenant improvements associated with the leased buildings has not begun. As of September 30, 2021,the Company had taken possession of one of the two buildings, and thus recognized the fair value of the building of $4.8 million as property and equipment with a related liability within accrued expenses. The fair value of the building was estimated using a market approach that utilized observable sales within the last year for this specific asset (Level 2 inputs). Upon completion of construction, which is expected to occur during the second quarter of 2022, the Company will evaluate the lease under the sale and leaseback accounting guidance of Topic 842 to determine if the arrangement will qualify for sale-lease back accounting. For the three and nine months ended September 30, 2021, there were no material amounts recognized in rent expense in the consolidated statements of income associated with the ground lease for the Flanders San Diego Facility Lease. The Company is also considered to be the accounting owner of its Southport, North Carolina leased facility (the “Southport Facility”). In 2017, the Company amended its initial lease with the former related party landlord to include the lease of additional space as well as an adjustment of the base rent for the existing space. The Company continues to recognize payments under the amended lease agreement as a reduction of the facility financing obligation using the effective interest method and the ground rent as operating lease expense as noted in the schedule below. As a result of the amendment, the Company anticipates the repayment of the financing obligation by September 2024. The fair value of the leased property established at acquisition continues to be depreciated over the building’s estimated useful life of thirty-five years. For the three and nine months ended September 30, 2021 and 2020, payments on these lease obligations and the rent associated with the ground lease for the Southport Facility were not significant. In June 2021, the Company entered into a lease for a new manufacturing facility (the “Leland Facility Lease”) to relocate the Company’s Biologics Safety Testing to a larger facility to support long-term growth. The lease included tenant improvement provisions for construction prior to occupancy of $3.6 million, a free rent period, and escalating rent payments over the life of the lease which expires in 2032. The total future minimum lease payments under the lease agreement are $12.7 million, with an option to extend subject to certain conditions. The Company evaluated the extent of its financial and operational involvement in the tenant improvements to the Leland Facility Lease to determine whether it was considered the owner of the construction project. The Company concluded that it was deemed to be the owner of the facility for accounting purposes (even though it did not meet the definition for legal purposes) during the construction period. Construction of the leased building has not begun as of September 30, 2021. Upon completion of construction, which is expected to occur during the third quarter of 2022, the Company will evaluate the lease under the sale and leaseback accounting guidance of Topic 842 to determine if the arrangement will qualify for sale-lease back accounting. For the three and nine months ended September 30, 2021, there were no material amounts recognized in rent expense in the consolidated statements of income associated with the ground lease for the Leland Facility Lease. As of September 30, 2021, minimum annual payments under the Company’s non-cancelable lease agreements and lease financing obligations were as follows (in thousands): Lease Facility Financing Obligations Operating Leases 2021 (remaining three months) $ 1,070 $ 117 2022 4,648 1,273 2023 5,014 1,336 2024 5,109 1,371 2025 5,071 1,104 Thereafter 24,272 5,286 Total minimum payments 45,184 $ 10,487 Less: amount representing interest (25,249) Present value of future minimum lease payments 19,935 Residual value of lease facility financing obligation 36,563 Less: short-term lease facility financing obligations (1,174) Long-term lease facility financing obligations $ 55,324 Operating leases in the table above include future minimum lease payments for the ground lease for the Southport Facility and Wateridge San Diego Facility. The table excludes future minimum lease payments for the Leland Facility Lease and Flanders San Diego Facility Lease as the fair value of the ground underlying the leased buildings were not deemed to be material. As of September 30, 2021, payments due related to the financing component of the Leland Facility Lease and Flanders San Diego Facility Lease were as follows (in thousands): 2021 (remaining three months) $ — 2022 1,176 2023 4,408 2024 4,535 2025 4,665 Thereafter 35,080 Total minimum payments $ 49,864 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt 2020 Credit Agreements In October 2020, Maravai Intermediate Holdings, LLC (“Intermediate”), a wholly-owned subsidiary of Topco LLC, along with its subsidiaries (the “New Borrowers”), entered into a credit agreement (the “New Credit Agreement”) to refinance existing $400.0 million long-term debt with a new $780.0 million facility. The New Credit Agreement provides for a First Lien Term Loan (the “New First Lien Term Loan”) of $600.0 million, maturing October 2027, and a Revolving Credit Facility (the New Revolving Credit Facility”) for up to $180.0 million in funding. The New Credit Agreement amended and restated the Company’s prior credit agreement as of August 2018 (the “First and Second Lien Credit Agreements”). In November 2020, the Company repaid $50.0 million of principal balance of the New First Lien Term Loan using proceeds from the IPO. The New First Lien Term Loan bears interest at an annual rate equal to the Eurocurrency rate (i.e. the LIBOR rate) plus an applicable rate. The interest rate was 4.75% per annum as of September 30, 2021. The New Credit Agreement also provides for a $20.0 million limit for letters of credit, which remained unused as of September 30, 2021 and December 31, 2020. Borrowings under the New Credit Agreement are unconditionally guaranteed by Topco LLC, together with the existing and future material domestic subsidiaries of Topco LLC (subject to certain exceptions), as specified in the respective guaranty agreements. Borrowings under the New Credit Agreement are also secured by a first-priority lien and security interest in substantially all of the assets (subject to certain exceptions) of existing and future material domestic subsidiaries of Topco LLC that are loan parties. In conjunction with the Company’s divestiture of the Protein Detection segment, the Company transferred, per the existing terms of the New Credit Agreement, the portion of the New Term Loan held by Vector of $118.4 million to Intermediate in its entirety. This amount was not assumed by Voyager as part of the divestiture. Total outstanding debt and loan covenant requirements remained unchanged as a result of the divestiture. The New Credit Agreement contains certain covenants, including, among other things, covenants limiting our ability to incur or prepay certain indebtedness, pay dividends or distributions, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments and make changes in the nature of the business. Additionally, the New Credit Agreement also requires us to maintain a certain net leverage ratio. The Company was in compliance with these covenants as of September 30, 2021. Interest Rate Cap In the first fiscal quarter of 2021, the Company entered into a new interest rate cap agreement to manage a portion of its variable interest rate risk on its outstanding long-term debt. The contract, effective March 31, 2021, entitles the Company to receive from the counterparty at each calendar quarter end the amount, if any, by which a specified defined floating market rate exceeds the cap strike interest rate, applied to the contract’s notional amount of $415.0 million The floating rate of interest is reset at the end of each three month period. The contract expires on March 31, 2023. The interest rate cap agreement has not been designated as a hedging relationship and has been recognized on the condensed consolidated balance sheet at fair value of $0.1 million within non-current assets with changes in fair value recognized in the condensed consolidated statements of income. The Company’s long-term debt consisted of the following as of the periods presented (in thousands): September 30, 2021 December 31, 2020 New First Lien Term Loan $ 545,500 $ 550,000 Unamortized debt issuance costs (13,916) (15,386) Total long-term debt 531,584 534,614 Less: current portion (6,000) (6,000) Total long-term debt, less current portion $ 525,584 $ 528,614 There were no balances outstanding on the Company’s New Revolving Credit Facility as of September 30, 2021 and December 31, 2020. As of September 30, 2021, the aggregate future principal maturities of the Company’s debt obligations for each of the next five years, based on contractual due dates, were as follows (in thousands): 2021 (remaining three months) $ 1,500 2022 6,000 2023 6,000 2024 6,000 2025 6,000 Thereafter 520,000 Total long-term debt $ 545,500 |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based CompensationIn November 2020, in connection with the IPO, the Company’s board of directors adopted the 2020 Omnibus Incentive Plan (the “2020 Plan”). All awards granted under the 2020 Plan are intended to be treated as (i) stock options, including incentive stock options (“ISOs”), (ii) stock appreciation rights (“SARs”), (iii) restricted share awards (“RSAs”), (iv) restricted stock units (“RSUs”), (v) dividend equivalents, or (vi) other stock or cash awards as may be determined by the plan’s administrator from time to time. The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date. Prior to the IPO, the Company’s parent, MLSH 1, granted unit-based awards to certain executives of the Company in the form of non-vested units. Our controlled subsidiary, MLSC, also granted unit-based awards to certain employees (collectively the “Incentive Units”). All awards of Incentive Units were measured based on the fair value of the award on the date of grant. Compensation expense for the Incentive Units is recognized over their requisite service period. The incentive units were subject to a combination of market, service or performance vesting conditions. For Incentive Units subject to performance conditions, the Company evaluated the probability of achieving each performance condition at each reporting date and recognized expense over the requisite service period when it was deemed probable that a performance condition will be met using the accelerated attribution method over the requisite service period. Upon completion of the IPO, all of the Incentive Units subject to a performance and market condition became vested. The following table summarizes the total equity-based compensation expense included in the Company’s consolidated statements of income for the periods presented (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Cost of sales $ 364 $ 4 $ 1,383 $ 11 Research and development 5 574 198 732 Selling, general and administrative (1) 3,198 1,271 6,647 2,190 Total equity-based compensation $ 3,567 $ 1,849 $ 8,228 $ 2,933 ____________________ (1) Amounts for the three and nine months ended September 30, 2021 include $2.4 million of incremental expense for a modification related to the Company’s divestiture of the Protein Detection segment (see Note 2). No stock options were exercised or exercisable during the three and nine months ended September 30, 2021. As of September 30, 2021, the total unrecognized equity-based compensation related to stock options, Incentive Units, and RSUs were $18.4 million, $1.5 million, and $1.4 million, respectively, which is expected to be recognized over a weighted-average period of approximately 3.3, 2.2, and 2.1 years, respectively. |
Net Income Per Class A Common S
Net Income Per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc | Net Income Per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc. Net income per unit for periods prior to our IPO have not been retrospectively adjusted to give effect to the Organizational Transactions described in Note 1 and the 69,000,000 shares of Class A common stock sold in our IPO. Additionally, basic net income per Class A common stock for the three and nine months ended September 30, 2021, has been calculated by dividing net income for the period, adjusted for net income attributable to non-controlling interests, by the weighted average Class A common stock outstanding during the period. Diluted net income per Class A common share gives effect to potentially dilutive securities by application of the treasury stock method or if-converted method, as applicable. Diluted net income per share of Class A common stock attributable to the Company is computed by adjusting the net income and the weighted-average number of shares of Class A common stock outstanding to give effect to potentially diluted securities. Prior to the Organizational Transactions, the members’ equity of MLSC was comprised of Class A and Class B preferred units, unit-based awards granted only to certain employees of its subsidiaries (“MLSC Incentive Units”) and MLSC common units, each with participation rights. The MLSC preferred units were entitled to cumulative dividends of 8.0% compounded annually, up to an additional 4.0%, also compounded annually, to the extent of remaining unallocated earnings. The preferred unitholders of MLSC were required, however, to share a portion of the additional 4.0% in dividends with the holders of MLSC Incentive Units based on a formula defined in the MLSC LLC Agreement. The Company determined that vested MLSC Incentive Units and MLSC Class A and B preferred units were participating securities under the two-class method at the MLSC subsidiary level, however, they do not have a contractual obligation to share in losses, and therefore no undistributed losses have been allocated to them. MLSH 1 Incentive Units are granted by the parent of the Company, and as a result, do not represent potential common units of the Company. Prior to the Organizational Transactions and IPO, basic net income per common unit attributable to our member for the three and nine months ended September 30, 2020 was based on the weighted average number of common units outstanding during the period. Diluted net income per common unit is computed by adjusting the net income and the weighted-average number of common units outstanding to give effect to potentially dilutive securities. The following table presents the computation of basic and diluted net income per common share/unit attributable to the Company for the periods presented (in thousands, except per share and per unit amounts): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Net income per Class A common share/unit: Numerator—basic: Net income $ 132,810 $ 39,023 $ 343,006 $ 64,344 Less: preferred unit dividends attributable to the MLSC non-controlling interests — (11,745) — (14,805) Less: (income) loss attributable to common non-controlling interests (78,536) 3,942 (216,410) 3,993 Net income attributable to Maravai LifeSciences Holdings, Inc.—basic $ 54,274 $ 31,220 $ 126,596 $ 53,532 Numerator—diluted: Net income attributable to Maravai LifeSciences Holdings, Inc.—basic $ 54,274 $ 31,220 $ 126,596 $ 53,532 Net income effect of dilutive securities: Effect of dilutive employee stock purchase plan ("ESPP"), RSUs and options $ 87 $ — $ 102 $ — Effect of the assumed conversion of Class B common stock 60,787 — 166,016 — Net income attributable to Maravai LifeSciences Holdings, Inc.—diluted $ 115,148 $ 31,220 $ 292,714 $ 53,532 Denominator—basic: Weighted average Class A common shares/units outstanding—basic (1) 118,433 253,917 109,174 253,917 Net income per Class A common share/unit—basic $ 0.46 $ 0.12 $ 1.16 $ 0.21 Denominator—diluted: Weighted average Class A common shares/units outstanding—basic (1) 118,433 253,917 109,174 253,917 Weighted average effect of dilutive securities: Effect of dilutive RSUs 41 — 29 — Effect of dilutive ESPP and options 327 — 128 — Effect of the assumed conversion of Class B common stock 139,227 — 148,468 — Weighted average Class A common shares/units outstanding—diluted (1) 258,028 253,917 257,799 253,917 Net income per Class A common share/unit—diluted $ 0.45 $ 0.12 $ 1.14 $ 0.21 ____________________ (1) Amounts for the three and nine months ended September 30, 2021 represent shares of Class A common stock outstanding. Amounts for the three and nine months ended September 30, 2020 represent Topco LLC Units outstanding. Shares of Class B common stock do not share in the earnings or losses of the Company and are therefore not participating securities. As such, a separate presentation of basic and diluted net income per share for Class B common stock under the two-class method has not been presented. The following table presents potentially dilutive securities excluded from the computation of diluted net income per share/unit for the periods presented because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Time-based incentive units — 11,396 — 11,396 Performance-based incentive units — 2,849 — 2,849 Options to purchase Class A common stock 283 — 289 — Shares to be purchased under the ESPP — — 3 — 283 14,245 292 14,245 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are subject to U.S. federal and state income taxes with respect to our allocable share of any taxable income or loss of Topco LLC generated after the IPO, as well as any stand-alone income or loss we generate. Topco LLC is organized as a limited liability company and treated as a partnership for federal tax purposes, with the exception of Maravai Life Sciences, Inc., the parent entity of Vector, and its subsidiaries who are taxpaying entities in the U.S., Canada, and the U.K. Topco LLC generally does not pay income taxes on its taxable income in most jurisdictions. Instead, Topco LLC’s taxable income or loss is passed through to its members, including us. Maravai Life Sciences, Inc. files and pays corporate income taxes for U.S. federal and state income tax purposes and internationally, primarily within the U.K. and Canada. As of September 30, 2021, we closed on the sale of the Protein Detection segment (see Note 2) and converted Maravai Life Sciences, Inc. to a limited liability company which is treated as a disregarded entity for income tax purposes. In March 2021, the President signed the American Rescue Plan Act of 2021 (“ARPA”) into law. ARPA includes several provisions, such as measures that extend and expand the employee retention credit, previously enacted under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), through December 31, 2021. ARPA also contains other provisions that do not have a material impact on our income tax expense and effective tax rate. The following table summarizes the Company’s income tax expense and effective tax rate for the periods presented (in thousands, except percentages): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Income before income taxes $ 151,652 $ 38,664 $ 386,943 $ 66,855 Income tax expense (benefit) $ 18,842 $ (359) $ 43,937 $ 2,511 Effective tax rate 12.4 % (0.9) % 11.4 % 3.8 % The Company’s effective tax rates of 12.4% and 11.4% for the three and nine months ended September 30, 2021, respectively, differed from the U.S. federal statutory rate of 21.0%, primarily due to income associated with the non-controlling interest, nondeductible expense related to the tax receivable agreement, and changes to our deferred tax assets due to changes in the estimates associated with our state tax rate. The provision for income taxes for the three and nine months ended September 30, 2020 relate to the corporate operating companies under Maravai LifeSciences Holdings, Inc. as we did not own units in Topco LLC. The Company’s effective tax rates of (0.9)% and 3.8% for the three and nine months ended September 30, 2020 differed from the U.S. federal statutory rate of 21.0%, primarily due to income associated with the non-controlling interest and a discrete tax charge associated with a building sale, offset with a release of valuation allowance on our excess interest expense carryforward due to the enactment of the CARES Act, which modified the calculation of interest deductions for 2019 and 2020. As a result of the Organizational Transactions and our IPO occurring during the year ended December 31, 2020, we acquired LLC Units and recognized a deferred tax asset for the difference between the financial reporting and tax basis of our investment in Topco LLC which included net deferred tax assets of $445.5 million less a $13.3 million valuation allowance as of December 31, 2020 associated with: (i) $364.4 million related to temporary differences in the book basis as compared to the tax basis of our Company’s investment in Topco LLC and (ii) $81.1 million related to tax benefits from future deductions attributable to payments under the TRA. As a result of the April 2021 Secondary Offering, the Company recognized additional tax basis in our investment in Topco LLC resulting in an increase in deferred tax assets and additional paid-in capital of $128.2 million. The April 2021 Secondary Offering also resulted in an increase to the payable to related parties pursuant to the Tax Receivable Agreement of $137.7 million, which resulted in an increase to the associated deferred tax asset and additional paid-in capital of approximately $28.4 million. As a result of the September 2021 Secondary Offering, the Company recognized additional tax basis in our investment in Topco LLC resulting in an increase in deferred tax assets and additional paid-in capital of $215.4 million. The September 2021 Secondary Offering also resulted in an increase to the payable to related parties pursuant to the Tax Receivable Agreement of $227.4 million, which resulted in an increase to the associated deferred tax asset and additional paid-in capital of approximately $46.0 million. The realizability of the Company’s deferred tax asset related to its investment in Topco LLC depends on the Company receiving allocations of tax deductions for its tax basis in the investment and on the Company generating sufficient taxable income to fully offset such deductions. We believe it is more likely than not that the Company will generate sufficient taxable income in the future to fully realize any deductions allocated to it from Topco LLC associated with the reversal of its tax basis as of September 30, 2021. Tax Distributions to Topco LLC’s Owners Topco LLC is subject to an operating agreement put in place at the date of the Organizational Transactions. The agreement has numerous provisions related to allocations of income and loss, as well as timing and amounts of distributions to its owners. This agreement also includes a provision requiring cash distributions enabling its owners to pay their taxes on income passing through from Topco LLC. These tax distributions are computed based on an assumed income tax rate equal to the sum of (i) the maximum combined marginal federal and state income tax rate applicable to an individual and (ii) the net investment income tax. The assumed income tax rate currently totals 46.7%, which may increase to 54.1% in certain cases where the qualified business income deduction is unavailable. In addition, under the tax rules, Topco LLC is required to allocate taxable income disproportionately to its unit holders. Because tax distributions are determined based on the holder of LLC Units who is allocated the largest amount of taxable income on a per unit basis, but are made pro rata based on ownership, Topco LLC is required to make tax distributions that, in the aggregate, will likely exceed the amount of taxes Topco LLC would have otherwise paid if it were taxed on its taxable income at the assumed income tax rate. Topco LLC is subject to entity level taxation in certain states and certain of its subsidiaries are subject to entity level U.S. and foreign income taxes. As a result, the accompanying consolidated statements of income include income tax expense related to those states and to U.S. and foreign jurisdictions where Topco LLC or any of our subsidiaries are subject to income tax. During the three months ended September 30, 2021, Topco LLC paid tax distributions of $90.0 million to its owners, including $39.9 million to us. During the nine months ended September 30, 2021, Topco LLC paid tax distributions of $186.5 million to its owners, including $80.2 million to us. As of September 30, 2021, no amounts for tax distributions have been accrued as such payments were made during the periods. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions GTCR, LLC and MLSH 1 Prior to the IPO, GTCR, LLC (“GTCR”), MLSH 1’s majority owner, provided subsidiaries of the Company with financial and management consulting services through an advisory services agreement. The advisory services agreement provided that the Company pay a $0.1 million quarterly management fee to GTCR. The advisory services agreement was terminated in connection with the IPO. The Company incurred approximately $0.1 million and $0.4 million in management fees to GTCR for the three and nine months ended September 30, 2020, respectively. The Company also reimbursed GTCR for out-of-pocket expenses incurred while providing the above professional services. The Company incurred approximately $0.2 million in out-of-pocket expenses to GTCR during the nine months ended September 30, 2020. The Company did not incur any out-of-pocket expenses to GTCR during the three and nine months ended September 30, 2021 or during the three months ended September 30, 2020. During the three and nine months ended September 30, 2021, the Company made distributions of $50.1 million and $106.3 million, respectively, for tax liabilities to MLSH 1. Legacy Owners of Cygnus The non-controlling interests in MLSC represent equity interest that was retained by the shareholders of the MLSC entity prior to its acquisition by the Company. The President of Cygnus and his affiliated entity were the owners of the non-controlling interests. In September 2020, Topco LLC and MLSH 1 entered into a Sale and Rollover Agreement with the President of Cygnus and his affiliated entity to purchase certain MLSC Class B preferred units and common units as well as exchange the remaining MLSC Class B preferred units and common units for a variable number of MLSH 1 common units. As a result of this transaction, the President of Cygnus and his affiliated entity no longer held a non-controlling interest in MLSC upon the exchange of MLSH 1 common units for the remaining MLSC Class B preferred and common units which occurred in November 2020. The Company leases the Southport Facility, which through the date of the Organizational Transactions was owned by an entity controlled by a close relative of the President of one of its subsidiaries. The President of this subsidiary also personally financed a loan to this entity, which was used to acquire the property leased by the Company. For the three and nine months ended September 30, 2020, the Company paid less than $0.1 million and approximately $0.2 million, respectively, in lease payments for the lease facility. Payable to Related Parties Pursuant to a Tax Receivable Agreement We are a party to the TRA with MLSH 1 and MLSH 2. The TRA provides for the payment by us to MLSH 1 and MLSH 2, collectively, of 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of the Organizational Transactions, IPO, and any subsequent exchanges of LLC Units. Based on our current projections of taxable income, and before deduction of any specially allocated depreciation and amortization, we anticipate having enough taxable income to utilize most of these tax benefits. As of September 30, 2021, our liability under the TRA is $745.6 million payable to MLSH 1 and MLSH 2, representing approximately 85% of the calculated tax savings we anticipate being able to utilize in future years. This represents increases of $137.7 million and $227.4 million to the liability during the nine months ended September 30, 2021 as a result of the April 2021 Secondary Offering and September 2021 Secondary Offering, respectively. During the nine months ended September 30, 2021, the Company recognized a gain of $9.1 million on TRA liability adjustment reflecting a change in the tax benefit obligation attributable to a change in the expected tax benefit. The remeasurement was primarily due to changes in our estimated state apportionment and the corresponding reduction of our estimated state tax rate. During the three and nine months ended September 30, 2021, no payments were made to MLSH 1 or MLSH 2 pursuant to the TRA and $1.3 million of the liability has been reclassified as a short-term liability. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company’s financial performance is reported in three segments. A description of each segment follows: • Nucleic Acid Production : focuses on the manufacturing and sale of highly modified nucleic acids products to support the needs of customers’ research, therapeutic and vaccine programs. This segment also provides research products for labeling and detecting proteins in cells and tissue samples. • Biologics Safety Testing : focuses on manufacturing and selling biologics safety and impurity tests and assay development services that are utilized by our customers in their biologic drug manufacturing spectrum. • Protein Detection : focused on manufacturing and selling labeling and visual detection reagents to scientific research customers for their tissue-based protein detection and characterization needs. The Company completed the divestiture of its Protein Detection business in September 2021 (see Note 2). The Company has determined that adjusted earnings before interest, tax, depreciation, and amortization (“Adjusted EBITDA”) is the profit or loss measure that the CODM uses to make resource allocation decisions and evaluate segment performance. Adjusted EBITDA assists management in comparing the segment performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the core operations and, therefore, are not included in measuring segment performance. The Company defines Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, certain non-cash items, and other adjustments that we do not consider in our evaluation of ongoing operating performance from period to period. Corporate costs are managed on a standalone basis and not allocated to segments. The following tables include financial information relating to the operating segments for the periods presented (in thousands): Three Months Ended September 30, 2021 Nucleic Acid Production Biologics Safety Testing Protein Detection Corporate Eliminations Total Revenue $ 183,055 $ 16,626 $ 5,283 $ — $ (154) $ 204,810 Adjusted EBITDA $ 150,620 $ 13,556 $ 1,942 $ (10,217) $ 102 $ 156,003 Nine Months Ended September 30, 2021 Nucleic Acid Production Biologics Safety Testing Protein Detection Corporate Eliminations Total Revenue $ 499,962 $ 52,483 $ 18,959 $ — $ (608) $ 570,796 Adjusted EBITDA $ 402,855 $ 42,217 $ 7,511 $ (30,136) $ 209 $ 422,656 Three Months Ended September 30, 2020 Nucleic Acid Production Biologics Safety Testing Protein Detection Corporate Eliminations Total Revenue $ 68,019 $ 14,114 $ 6,089 $ — $ (363) $ 87,859 Adjusted EBITDA $ 46,704 $ 12,000 $ 2,839 $ (3,721) $ (47) $ 57,775 Nine Months Ended September 30, 2020 Nucleic Acid Production Biologics Safety Testing Protein Detection Corporate Eliminations Total Revenue $ 129,645 $ 40,772 $ 16,404 $ — $ (1,076) $ 185,745 Adjusted EBITDA $ 76,130 $ 33,571 $ 6,960 $ (11,597) $ (224) $ 104,840 During the three and nine months ended September 30, 2021, intersegment revenue was $0.2 million and $0.6 million, respectively. During the three and nine months ended September 30, 2020, intersegment revenue was $0.4 million and $1.1 million, respectively. The intersegment sales and the related gross margin on inventory recorded at the end of the period are eliminated for consolidation purposes in the Eliminations column. Internal selling prices for intersegment sales are consistent with the segment’s normal retail price offered to external parties. There was no commission expense recognized for intersegment sales for the three and nine months ended September 30, 2021 and 2020. Intersegment revenue represents intersegment revenue between the Nucleic Acid Production and Protein Detection segments. The Company does not allocate assets to its reportable segments as they are not included in the review performed by the CODM for purposes of assessing segment performance and allocating resources. A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is set forth below for the periods presented (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Net income $ 132,810 $ 39,023 $ 343,006 $ 64,344 Add: Amortization 4,604 5,040 14,685 15,156 Depreciation 2,472 1,631 6,623 4,756 Interest expense 8,545 7,089 25,827 21,934 Income tax expense (benefit) 18,842 (359) 43,937 2,511 EBITDA 167,273 52,424 434,078 108,701 Acquisition integration costs 21 (14) (777) 3,588 Amortization of lease facility financing obligation (1,031) — (2,080) — Acquired in-process research and development costs — — — 2,881 Equity-based compensation 3,567 1,849 8,228 2,933 GTCR management fees — 126 — 555 Gain on sale of business (11,249) — (11,249) — Gain on sale and leaseback transaction — — — (19,002) Merger and acquisition related expenses (income) (366) 124 1,550 218 Financing costs 1,034 3,266 2,038 4,966 Tax receivable agreement liability adjustment (3,246) — (9,132) — Adjusted EBITDA $ 156,003 $ 57,775 $ 422,656 $ 104,840 |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Company operates and controls all of the business and affairs of Topco LLC, and through Topco LLC and its subsidiaries, conducts its business. Because we manage and operate the business and control the strategic decisions and day-to-day operations of Topco LLC and also have a substantial financial interest in Topco LLC, we consolidate the financial results of Topco LLC, and a portion of our net income is allocated to the non-controlling interests in Topco LLC held by MLSH 1. The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying consolidated financial statements. |
Consolidation | Unaudited Interim Condensed Consolidated Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to Form 10-Q of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements include all adjustments necessary to fairly state the financial position and the results of our operations and cash flows for interim periods in accordance with GAAP. All such adjustments are of a normal, recurring nature. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or for any future period. The condensed consolidated balance sheet presented as of December 31, 2020, has been derived from the audited consolidated financial statements as of that date. The condensed consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain all information that is included in the annual financial statements and notes thereto of the Company. The condensed consolidated financial statements and notes included in this report should be read in conjunction with the 2020 financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the SEC. Non-controlling interests represent the portion of profit or loss, net assets and comprehensive income of our consolidated subsidiaries that is not allocable to the Company based on our percentage of ownership of such entities. Non-controlling interests consist of the following: • Until November 2020, Topco LLC held a 70% ownership interest in MLSC Holdings, LLC (“MLSC”) through its consolidated subsidiaries with the remaining 30% being recorded as non-controlling interests in our consolidated financial statements . MLSC net income or loss was attributed to the non-controlling interests using an attribution method, similar to the hypothetical liquidation at book value method, based on the distribution provisions of the MLSC Amended and Restated Limited Liability Company Agreement (“MLSC LLC Agreement”). In November 2020, and before the closing of the IPO, Topco LLC repurchased all of the outstanding non-controlling interests in MLSC for $166.4 million . • In November 2020, based on the Organizational Transactions described above, we became the sole managing member of Topco LLC. Until the April 2021 Secondary Offering, we held approximately 38% of the outstanding LLC Units of Topco LLC, and approximately 62% of the outstanding LLC Units of Topco LLC were held by MLSH 1. After the April 2021 Secondary Offering and until the September 2021 Secondary Offering, we held approximately 44% of the outstanding LLC Units of Topco LLC, and approximately 56% of the outstanding LLC Units of Topco LLC were held by MLSH 1. As of September 30, 2021, as a result of the September 2021 Secondary Offering, we hold approximately 51% of the outstanding LLC Units of Topco LLC, and MLSH 1 holds approximately 49% of the outstanding LLC Units of Topco LLC. Therefore, we report non-controlling interests based on LLC Units of Topco LLC held by MLSH 1 on our condensed consolidated balance sheet as of September 30, 2021. Income or loss attributed to the non-controlling interest in Topco LLC is based on the LLC Units outstanding during the period for which the income or loss is generated and is presented on the condensed consolidated statements of income and consolidated statements of comprehensive income. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenue and expenses, and related disclosures. These estimates form the basis for judgments the Company makes about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company bases its estimates and judgments on historical experience and on various other assumptions that the Company believes are reasonable under the circumstances. These estimates are based on |
Revenue Recognition | Revenue Recognition The Company generates revenue from the sale of products and services and the performance of services in the fields of nucleic acid production, biologics safety testing, and protein detection. Revenue is recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for its arrangements with customers, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The majority of the Company’s contracts include only one performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account for revenue recognition. The Company also recognizes revenue from other contracts that may include a combination of products and services, the provision of solely services, or from license fee arrangements which may be associated with the delivery of product. Where there is a combination of products and services, the Company accounts for the promises as individual performance obligations if they are concluded to be distinct. Performance obligations are considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. As a practical expedient, we do not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below. Revenue for an individual contract is recognized at the related transaction price, which is the amount the Company expects to be entitled to in exchange for transferring the products and/or services. The transaction price for product sales is calculated at the contracted product selling price. The transaction price for a contract with multiple performance obligations is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices for products are determined based on the prices charged to customers, which are directly observable. Standalone selling price of services are mostly based on time and materials. Generally, payments from customers are due when goods and services are transferred. As most contracts contain a single performance obligation, the transaction price is representative of the standalone selling price charged to customers. Revenue is recognized only to the extent that it is probable that a significant reversal of the cumulative amount recognized will not occur in future periods. Variable consideration has not been material to our consolidated financial statements. The Company accepts returns only if the products do not meet customer specifications and historically, the Company’s volume of product returns has not been significant. Further, no warranties are provided for promised goods and services other than assurance type warranties. The Company has elected the practical exemption to not disclose the unfulfilled performance obligations for contracts with an original length of one year or less. The Company had no material unfulfilled performance obligations for contracts with an original length greater than one year for any period presented. Nucleic Acid Production Nucleic Acid Production revenue is generated from the manufacture and sale of highly modified, complex nucleic acids products to support the needs of our of customers’ research, therapeutic and vaccine programs. The primary offering of products include; CleanCap ® , mRNA, and specialized oligonucleotides. Contracts typically consist of a single performance obligation. The Company recognizes revenue from these products in the period in which the performance obligation is satisfied by transferring control to the customer. Revenue for nucleic acid catalog products is recognized at a single point in time, generally upon shipment to the customer. Revenue for contracts for certain custom nucleic acid products, with an enforceable right to payment and a reasonable margin for work performed to date, is recognized over time, based on a cost-to-cost input method over the manufacturing period. Biologics Safety Testing The Company’s Biologics Safety Testing revenue is associated with the sale of bioprocess impurity detection kit products. We also enter into contracts that include custom antibody development, assay development, antibody affinity extraction, and mass spectrometry services. These products and services enable the detection of impurities that occur in the manufacturing of biologic drugs and other therapeutics. The Company recognizes revenue from the sale of bioprocess impurity detection kits in the period in which the performance obligation is satisfied by transferring control to the customer. Custom antibody development contracts consist of a single performance obligation, typically with an enforceable right to payment and a reasonable margin for work performed to date. Revenue is recognized over time based on a cost-to-cost input method over the contract term. Where an enforceable right to payment does not exist, revenue is recognized at a point in time when control is transferred to the customer. Assay development service contracts consist of a single performance obligation, revenue is recognized at a point in time when a successful antigen test and report is provided to the customer. Affinity extraction services, which generally occur over a short period of time, consist of a single performance obligation to perform the extraction service and provide a summary report to the customer. Revenue is recognized either over time or at a point in time depending on contractual payment terms with the customer. Protein Detection Prior to the divestiture of its Protein Detection business in September 2021 (see Note 2), the Company also manufactured and sold protein labeling and detection reagents to customers that were used for basic research and development. The contracts to sell these catalog products consisted of a single performance obligation to deliver the reagent products. Revenue from these contracts was recognized at a point in time, generally upon shipment of the final product to the customer. Sales taxes Sales taxes collected by the Company are not included in the transaction price as revenue as they are ultimately remitted to a governmental authority. Shipping and handling costs Shipping and handling costs, which are charged to customers, are included in revenue and is recognized at the same time that the related product revenue is recognized. Contract costs The Company recognizes the incremental costs of obtaining contracts as an expense when incurred when the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing and general and administrative expenses. The costs to fulfill the contracts are determined to be immaterial and are recognized as an expense when incurred. Contract balances Contract assets are generated when contractual billing schedules differ from revenue recognition timing and the Company records a contract receivable when it has an unconditional right to consideration. Contract assets balances, which are included in prepaid and other current assets, was not material as of December 31, 2020. There were no contract asset balances as of September 30, 2021. Contract liabilities include billings in excess of revenue recognized, such as customer deposits and deferred revenue. Customer deposits, which are included in accrued expenses, are recorded when cash payments are received or due in advance of performance. Deferred revenue is recorded when the Company has unsatisfied performance obligations. Total contract liabilities were $69.9 million and $79.2 million as of September 30, 2021 and December 31, 2020, respectively. Contract liabilities are expected to be recognized into revenue within the next twelve months. |
Segment Information | Segment Information The Company has historically operated in three reportable segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker (“CODM”), its Chief Executive Officer, allocates resources and assesses performance based upon discrete financial information at the segment level. Substantially all of our long-lived assets are located in the United States. The Company divested its Protein Detection business in September 2021 (see Note 2). The Company has reported the historical results of the Protein Detection business as such discrete financial information evaluated by the CODM for the periods presented included the information for this legacy segment. |
Net Income per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc. | Net Income per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc. Basic net income per Class A Common share/unit attributable to Maravai LifeSciences Holdings, Inc. is computed by dividing net income attributable to us by the weighted average number of Class A Common shares/units outstanding during the period. The non-controlling interest, for historical periods prior to the IPO, is calculated pursuant to the terms of the MLSC LLC Agreement on a fully-distributed basis, taking into account the various classes of equity of MLSC, including the cumulative yields on MLSC’s preferred units. Diluted net income per Class A Common share/unit is calculated by giving effect to all potential weighted average dilutive LLC incentive units for historical periods prior to the IPO and stock options, restricted stock units, and Topco LLC Units, that together with an equal number of shares of our Class B common stock (together referred to as “Paired Interests”) are convertible into shares of our Class A Common stock, for the periods after the IPO. For historical periods prior to the IPO, the weighted average number of common units outstanding during the period and the potential dilutive common unit equivalents is determined under the two-class method. The dilutive effect of outstanding awards, if any, is |
Property, Plant and Equipment, Policy | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the following estimated useful lives: Assets Useful Lives Buildings 20 - 35 years Building improvements 5 - 15 years Furniture, fixtures, equipment and software 3 - 11 years Leasehold improvements are amortized over the shorter of the related lease term or useful life. Maintenance and repairs are charged to operations when incurred, while betterments or renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in the results of operations. The Company is considered to be an owner lessee of certain buildings (Note 5). The leased buildings are being depreciated over the lease term to a residual value that will approximate the remaining lease financing obligation at the end of the lease. Property and equipment also includes a leased building which is recorded as construction in process during the period of construction at its fair value plus the cost of improvements incurred during the construction period (Note 5). |
Impairment of Long-Lived and Intangible Assets | Impairment of Long-Lived and Intangible AssetsThe Company periodically reviews long-lived assets, including property and equipment and finite-lived intangible assets, to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable. If such facts or circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets is compared to the carrying value the assets to determine whether impairment exists. If the assets are determined to be impaired, the loss is measured based on the difference between the fair value and carrying value of the assets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company defines fair value as the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The Company follows accounting guidance that has a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of the asset or liability as of the measurement date. Instruments with readily available actively quoted prices, or for which fair value can be measured from actively quoted prices in an orderly market, will generally have a higher degree of market price transparency and a lesser degree of judgment used in measuring fair value. The three levels of the hierarchy are defined as follows: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2—Include other inputs that are directly or indirectly observable in the marketplace; and Level 3—Unobservable inputs which are supported by little or no market activity. As of September 30, 2021 and December 31, 2020, the carrying value of current assets and liabilities approximates fair value due to the short maturities of these instruments. The fair values of the Company’s long-term debt approximate carrying value, excluding the effect of unamortized debt discount, as it is based on borrowing rates currently available to the Company for debt with similar terms and maturities (Level 2 inputs). |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable. The Company maintains substantially all of its cash balances at a financial institution that management believes is of high credit-quality and is financially stable. Cash is deposited with major financial institutions in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash is held. The Company provides credit, in the |
Emerging Growth Company Status and Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. As the aggregate market value of the Company’s voting and non-voting common stock that was held by non-affiliates exceeded $700.0 million as of June 30, 2021, the Company will be classified as a large accelerated filer, and therefore will cease being an emerging growth company, as of December 31, 2021. Recently Adopted Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued, if certain criteria are met. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) , the FASB issued additional clarification related to reference rate reform, permitting entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements, and calculating price alignment interest in connection with reference rate reform activities under way in global financial markets. The standards are effective for all entities upon issuance and we will apply the amendments prospectively through December 31, 2022. There was no impact to the Company’s consolidated financial statements for the nine months ended September 30, 2021 as a result of the adoption of these standards. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”), which supersedes the guidance in ASC 840, Leases . The new standard, as amended by subsequent ASUs on Topic 842 and recent extensions issued by the FASB in response to COVID-19, requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The Company plans to adopt this standard using the modified retrospective approach with a cumulative effect adjustment to retained earnings at the beginning of the period of adoption. The Company will also adopt certain practical expedients provided by Topic 842. As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, Topic 842 has not yet been adopted. However, the Company will lose its “emerging growth company” status on December 31, 2021, and will instead be considered a large accelerated filer. The Company will adopt Topic 842 in the fourth quarter of 2021, with an effective date of January 1, 2021. The Company is currently assessing its inventory of leases but has not yet determined the full effects of Topic 842 on its consolidated financial statements but does expect the adoption of Topic 842 will have a material impact on the Company’s consolidated financial statements and related notes to the recognition of right of use (“ROU”) assets and lease liabilities on the Company’s consolidated balance sheets, but it will not have a material impact on the Company’s consolidated statements of income. The adoption of Topic 842 will also result in enhanced disclosures. In June 2016, the FASB issued ASU 2016-13 , Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which has been subsequently amended (“ASU 2016-13”). ASU 2016-13 revises the measurement of credit losses for most financial instruments measured at amortized cost, including trade receivables, from an incurred loss methodology to an expected loss methodology which results in earlier recognition of credit losses. Under the incurred loss model, a loss is not recognized until it is probable that the loss-causing event has already occurred. The new standard introduces a forward-looking expected credit loss model that requires an estimate of the expected credit losses over the life of the instrument by considering all relevant information including historical experience, current conditions, and reasonable and supportable forecasts that affect collectability. In addition, this standard also modifies the impairment model for available-for-sale debt securities, which are measured at fair value, by eliminating the consideration for the length of time fair value has been less than amortized cost when assessing credit loss for a debt security and provides for reversals of credit losses through income upon credit improvement. As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, ASU 2016-13 has not yet been adopted. However, on June 30,2021, the Company’s aggregate market value of its voting and non-voting common stock that was held by non-affiliates exceeded $700.0 million, and therefore the Company will lose its “emerging growth company” status on December 31, 2021, and will instead be considered a large accelerated filer. The Company will adopt ASU 2016-13 in the fourth quarter of 2021. The Company is currently assessing the impact of adopting this standard on its consolidated financial statements and disclosures, but does not expect that it will have a material impact on its consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). The ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new standard also requires customers to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. This ASU is effective for years beginning after December 15, 2020, and interim period within annual periods beginning after December 15, 2021, with early adoption permitted. The Company is currently assessing its inventory of cloud computing arrangements but has not yet determined the full effects of ASU 2018-15 on its consolidated financial statements. The Company does not expect the adoption of ASU 2018-15 to have a material impact on its consolidated financial statements and disclosures. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to the Related Party Guidance for Variable Interest Entities . ASU 2018-17 changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportional basis, rather than in their entirety. This guidance is effective for fiscal years, beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021, with early adoption permitted. All entities are required to apply the amendments in this ASU retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The Company is currently evaluating the impact of this standard, but does not expect that it will have a material impact on its consolidated financial statements and disclosures. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity’s own equity, and modifies the guidance on diluted earnings per share calculation as a result of these changes. The standard is effective for the Company for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Revenue by Geographic Areas and Segment | The following tables summarize the revenue by segment and region for the periods presented (in thousands): Three Months Ended September 30, 2021 Nucleic Acid Production Biologics Safety Testing Protein Detection Total North America $ 73,622 $ 7,203 $ 3,067 $ 83,892 Europe, the Middle East and Africa 103,929 3,811 1,392 109,132 Asia Pacific 5,332 5,441 795 11,568 Latin and Central America 18 171 29 218 Total revenue $ 182,901 $ 16,626 $ 5,283 $ 204,810 Nine Months Ended September 30, 2021 Nucleic Acid Production Biologics Safety Testing Protein Detection Total North America $ 207,469 $ 20,052 $ 11,016 $ 238,537 Europe, the Middle East and Africa 257,873 12,059 4,752 274,684 Asia Pacific 33,977 19,844 3,068 56,889 Latin and Central America 35 528 123 686 Total revenue $ 499,354 $ 52,483 $ 18,959 $ 570,796 Three Months Ended September 30, 2020 Nucleic Acid Production Biologics Safety Testing Protein Detection Total North America $ 36,814 $ 6,035 $ 3,735 $ 46,584 Europe, the Middle East and Africa 27,083 3,830 1,423 32,336 Asia Pacific 3,759 4,204 901 8,864 Latin and Central America — 45 30 75 Total revenue $ 67,656 $ 14,114 $ 6,089 $ 87,859 Nine Months Ended September 30, 2020 Nucleic Acid Production Biologics Safety Testing Protein Detection Total North America $ 82,523 $ 16,217 $ 9,577 $ 108,317 Europe, the Middle East and Africa 32,731 10,974 4,002 47,707 Asia Pacific 13,296 13,356 2,730 29,382 Latin and Central America 19 225 95 339 Total revenue $ 128,569 $ 40,772 $ 16,404 $ 185,745 |
Disaggregation of Revenue | The following table provides a disaggregation of revenue based on the pattern of revenue recognition for the periods presented (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Revenue recognized at a point in time $ 194,946 $ 86,437 $ 539,661 $ 181,041 Revenue recognized over time 9,864 1,422 31,135 4,704 Total revenue $ 204,810 $ 87,859 $ 570,796 $ 185,745 |
Summary of Property and Equipment | Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the following estimated useful lives: Assets Useful Lives Buildings 20 - 35 years Building improvements 5 - 15 years Furniture, fixtures, equipment and software 3 - 11 years |
Summary of Concentration of Revenue | The following table summarizes revenue from each of our customers who individually accounted for 10% or more of our total revenue or accounts receivable for the periods presented: Revenue Accounts Receivable, net Three Months Ended September 30, Nine Months Ended September 30, September 30, 2021 December 31, 2020 2021 2020 2021 2020 BioNTech SE 26.2 % 21.9 % 32.2 % 10.4 % 36.0 % * Pfizer, Inc. 23.4 % 24.0 % 22.9 % 13.5 % 11.3 % 45.1 % CureVac N.V. 23.0 % * 11.3 % * 18.2 % 12.8 % Sanofi S.A. * * * 10.3 % * * ____________________ * Less than 10% |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill | The following table summarizes the activity in the Company’s goodwill by segment for the periods presented (in thousands): Nucleic Acid Production Biologics Safety Testing Protein Detection Total Balance as of December 31, 2020 $ 32,838 $ 119,928 $ 71,509 $ 224,275 Divestiture — — (71,509) (71,509) Balance as of September 30, 2021 $ 32,838 $ 119,928 $ — $ 152,766 |
Components of Finite-Lived Intangible Assets | The following are components of finite-lived intangible assets and accumulated amortization as of the periods presented: September 30, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Life Weighted Average Remaining Amortization Period (in thousands) (in years) (in years) Trade Names $ 7,120 $ 4,821 $ 2,299 5 - 10 3.2 Patents and Developed Technology 167,648 60,452 107,196 5 - 14 8.8 Customer Relationships 19,953 8,223 11,730 10 - 12 6.7 Total $ 194,721 $ 73,496 $ 121,225 8.4 December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Life Weighted Average Remaining Amortization Period (in thousands) (in years) (in years) Trade Names $ 11,490 $ 5,384 $ 6,106 5 - 15 6.3 Patents and Developed Technology 169,404 52,809 116,595 5 - 14 9.5 Customer Relationships 83,323 28,368 54,955 10 - 14 8.8 Total $ 264,217 $ 86,561 $ 177,656 9.1 |
Schedule of Finite-Lived Intangible Assets Future Amortization Expense | As of September 30, 2021, the estimated future amortization expense for finite-lived intangible assets were as follows (in thousands): 2021 (remaining three months) $ 3,654 2022 14,600 2023 14,417 2024 14,417 2025 14,417 Thereafter 59,720 Total estimated amortization expense $ 121,225 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | Inventory consisted of the following as of the periods presented (in thousands): September 30, 2021 December 31, 2020 Raw materials $ 19,344 $ 11,112 Work in process 25,430 18,333 Finished goods 11,472 3,856 Total inventory $ 56,246 $ 33,301 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments for Capital Leases | As of September 30, 2021, minimum annual payments under the Company’s non-cancelable lease agreements and lease financing obligations were as follows (in thousands): Lease Facility Financing Obligations Operating Leases 2021 (remaining three months) $ 1,070 $ 117 2022 4,648 1,273 2023 5,014 1,336 2024 5,109 1,371 2025 5,071 1,104 Thereafter 24,272 5,286 Total minimum payments 45,184 $ 10,487 Less: amount representing interest (25,249) Present value of future minimum lease payments 19,935 Residual value of lease facility financing obligation 36,563 Less: short-term lease facility financing obligations (1,174) Long-term lease facility financing obligations $ 55,324 As of September 30, 2021, payments due related to the financing component of the Leland Facility Lease and Flanders San Diego Facility Lease were as follows (in thousands): 2021 (remaining three months) $ — 2022 1,176 2023 4,408 2024 4,535 2025 4,665 Thereafter 35,080 Total minimum payments $ 49,864 |
Schedule of Future Minimum Rental Payments for Operating Leases | As of September 30, 2021, minimum annual payments under the Company’s non-cancelable lease agreements and lease financing obligations were as follows (in thousands): Lease Facility Financing Obligations Operating Leases 2021 (remaining three months) $ 1,070 $ 117 2022 4,648 1,273 2023 5,014 1,336 2024 5,109 1,371 2025 5,071 1,104 Thereafter 24,272 5,286 Total minimum payments 45,184 $ 10,487 Less: amount representing interest (25,249) Present value of future minimum lease payments 19,935 Residual value of lease facility financing obligation 36,563 Less: short-term lease facility financing obligations (1,174) Long-term lease facility financing obligations $ 55,324 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | The Company’s long-term debt consisted of the following as of the periods presented (in thousands): September 30, 2021 December 31, 2020 New First Lien Term Loan $ 545,500 $ 550,000 Unamortized debt issuance costs (13,916) (15,386) Total long-term debt 531,584 534,614 Less: current portion (6,000) (6,000) Total long-term debt, less current portion $ 525,584 $ 528,614 |
Schedule of Maturities of Long-Term Debt | As of September 30, 2021, the aggregate future principal maturities of the Company’s debt obligations for each of the next five years, based on contractual due dates, were as follows (in thousands): 2021 (remaining three months) $ 1,500 2022 6,000 2023 6,000 2024 6,000 2025 6,000 Thereafter 520,000 Total long-term debt $ 545,500 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table summarizes the total equity-based compensation expense included in the Company’s consolidated statements of income for the periods presented (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Cost of sales $ 364 $ 4 $ 1,383 $ 11 Research and development 5 574 198 732 Selling, general and administrative (1) 3,198 1,271 6,647 2,190 Total equity-based compensation $ 3,567 $ 1,849 $ 8,228 $ 2,933 ____________________ (1) Amounts for the three and nine months ended September 30, 2021 include $2.4 million of incremental expense for a modification related to the Company’s divestiture of the Protein Detection segment (see Note 2). |
Net Income Per Class A Common_2
Net Income Per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table presents the computation of basic and diluted net income per common share/unit attributable to the Company for the periods presented (in thousands, except per share and per unit amounts): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Net income per Class A common share/unit: Numerator—basic: Net income $ 132,810 $ 39,023 $ 343,006 $ 64,344 Less: preferred unit dividends attributable to the MLSC non-controlling interests — (11,745) — (14,805) Less: (income) loss attributable to common non-controlling interests (78,536) 3,942 (216,410) 3,993 Net income attributable to Maravai LifeSciences Holdings, Inc.—basic $ 54,274 $ 31,220 $ 126,596 $ 53,532 Numerator—diluted: Net income attributable to Maravai LifeSciences Holdings, Inc.—basic $ 54,274 $ 31,220 $ 126,596 $ 53,532 Net income effect of dilutive securities: Effect of dilutive employee stock purchase plan ("ESPP"), RSUs and options $ 87 $ — $ 102 $ — Effect of the assumed conversion of Class B common stock 60,787 — 166,016 — Net income attributable to Maravai LifeSciences Holdings, Inc.—diluted $ 115,148 $ 31,220 $ 292,714 $ 53,532 Denominator—basic: Weighted average Class A common shares/units outstanding—basic (1) 118,433 253,917 109,174 253,917 Net income per Class A common share/unit—basic $ 0.46 $ 0.12 $ 1.16 $ 0.21 Denominator—diluted: Weighted average Class A common shares/units outstanding—basic (1) 118,433 253,917 109,174 253,917 Weighted average effect of dilutive securities: Effect of dilutive RSUs 41 — 29 — Effect of dilutive ESPP and options 327 — 128 — Effect of the assumed conversion of Class B common stock 139,227 — 148,468 — Weighted average Class A common shares/units outstanding—diluted (1) 258,028 253,917 257,799 253,917 Net income per Class A common share/unit—diluted $ 0.45 $ 0.12 $ 1.14 $ 0.21 ____________________ (1) Amounts for the three and nine months ended September 30, 2021 represent shares of Class A common stock outstanding. Amounts for the three and nine months ended September 30, 2020 represent Topco LLC Units outstanding. |
Summary of Dilutive Securities Excluded from Computation of Earnings Per Share | The following table presents potentially dilutive securities excluded from the computation of diluted net income per share/unit for the periods presented because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Time-based incentive units — 11,396 — 11,396 Performance-based incentive units — 2,849 — 2,849 Options to purchase Class A common stock 283 — 289 — Shares to be purchased under the ESPP — — 3 — 283 14,245 292 14,245 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The following table summarizes the Company’s income tax expense and effective tax rate for the periods presented (in thousands, except percentages): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Income before income taxes $ 151,652 $ 38,664 $ 386,943 $ 66,855 Income tax expense (benefit) $ 18,842 $ (359) $ 43,937 $ 2,511 Effective tax rate 12.4 % (0.9) % 11.4 % 3.8 % |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segment Reporting Information | The following tables include financial information relating to the operating segments for the periods presented (in thousands): Three Months Ended September 30, 2021 Nucleic Acid Production Biologics Safety Testing Protein Detection Corporate Eliminations Total Revenue $ 183,055 $ 16,626 $ 5,283 $ — $ (154) $ 204,810 Adjusted EBITDA $ 150,620 $ 13,556 $ 1,942 $ (10,217) $ 102 $ 156,003 Nine Months Ended September 30, 2021 Nucleic Acid Production Biologics Safety Testing Protein Detection Corporate Eliminations Total Revenue $ 499,962 $ 52,483 $ 18,959 $ — $ (608) $ 570,796 Adjusted EBITDA $ 402,855 $ 42,217 $ 7,511 $ (30,136) $ 209 $ 422,656 Three Months Ended September 30, 2020 Nucleic Acid Production Biologics Safety Testing Protein Detection Corporate Eliminations Total Revenue $ 68,019 $ 14,114 $ 6,089 $ — $ (363) $ 87,859 Adjusted EBITDA $ 46,704 $ 12,000 $ 2,839 $ (3,721) $ (47) $ 57,775 Nine Months Ended September 30, 2020 Nucleic Acid Production Biologics Safety Testing Protein Detection Corporate Eliminations Total Revenue $ 129,645 $ 40,772 $ 16,404 $ — $ (1,076) $ 185,745 Adjusted EBITDA $ 76,130 $ 33,571 $ 6,960 $ (11,597) $ (224) $ 104,840 |
Reconciliation of Revenue | A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is set forth below for the periods presented (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Net income $ 132,810 $ 39,023 $ 343,006 $ 64,344 Add: Amortization 4,604 5,040 14,685 15,156 Depreciation 2,472 1,631 6,623 4,756 Interest expense 8,545 7,089 25,827 21,934 Income tax expense (benefit) 18,842 (359) 43,937 2,511 EBITDA 167,273 52,424 434,078 108,701 Acquisition integration costs 21 (14) (777) 3,588 Amortization of lease facility financing obligation (1,031) — (2,080) — Acquired in-process research and development costs — — — 2,881 Equity-based compensation 3,567 1,849 8,228 2,933 GTCR management fees — 126 — 555 Gain on sale of business (11,249) — (11,249) — Gain on sale and leaseback transaction — — — (19,002) Merger and acquisition related expenses (income) (366) 124 1,550 218 Financing costs 1,034 3,266 2,038 4,966 Tax receivable agreement liability adjustment (3,246) — (9,132) — Adjusted EBITDA $ 156,003 $ 57,775 $ 422,656 $ 104,840 |
Organization and Significant _4
Organization and Significant Accounting Policies - Description of Business (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 3 |
Organization and Significant _5
Organization and Significant Accounting Policies - IPO (Details) - IPO $ / shares in Units, $ in Billions | 1 Months Ended |
Nov. 30, 2020USD ($)$ / sharesshares | |
Net income per Class A common share/unit: | |
Issuance of stock (in shares) | shares | 69,000,000 |
Stock issued price (in usd per share) | $ / shares | $ 27 |
Proceeds from issuance of stock | $ | $ 1.8 |
Organization and Significant _6
Organization and Significant Accounting Policies - Exchange and Secondary Offering (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 12, 2021 | Sep. 30, 2021 | Apr. 30, 2021 |
Secondary Offering | |||
Net income per Class A common share/unit: | |||
Conversion of LLC units to common stock (in shares) | 17,068,559 | 17,665,959 | |
Issuance of stock (in shares) | 20,000,000 | 20,700,000 | |
Offering cost payments | $ 0.9 | $ 1 | |
Secondary Offering | MLSH 1 | |||
Net income per Class A common share/unit: | |||
Proceeds from issuance of stock | $ 977.5 | $ 624.2 | |
Over-Allotment Option | |||
Net income per Class A common share/unit: | |||
Issuance of stock (in shares) | 2,700,000 | ||
Stock issued price (in usd per share) | $ 50 | $ 31.25 | |
Secondary Offering By MLSH 2 | |||
Net income per Class A common share/unit: | |||
Issuance of stock (in shares) | 3,034,041 | 2,931,441 |
Organization and Significant _7
Organization and Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Contract assets | $ 0 | |
Contract liabilities | $ 69,900,000 | $ 79,200,000 |
Organization and Significant _8
Organization and Significant Accounting Policies - Geographical Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 204,810 | $ 87,859 | $ 570,796 | $ 185,745 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 83,892 | 46,584 | 238,537 | 108,317 |
Europe, the Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 109,132 | 32,336 | 274,684 | 47,707 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 11,568 | 8,864 | 56,889 | 29,382 |
Latin and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 218 | 75 | 686 | 339 |
Nucleic Acid Production | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 182,901 | 67,656 | 499,354 | 128,569 |
Nucleic Acid Production | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 73,622 | 36,814 | 207,469 | 82,523 |
Nucleic Acid Production | Europe, the Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 103,929 | 27,083 | 257,873 | 32,731 |
Nucleic Acid Production | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5,332 | 3,759 | 33,977 | 13,296 |
Nucleic Acid Production | Latin and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 18 | 0 | 35 | 19 |
Biologics Safety Testing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 16,626 | 14,114 | 52,483 | 40,772 |
Biologics Safety Testing | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 7,203 | 6,035 | 20,052 | 16,217 |
Biologics Safety Testing | Europe, the Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,811 | 3,830 | 12,059 | 10,974 |
Biologics Safety Testing | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5,441 | 4,204 | 19,844 | 13,356 |
Biologics Safety Testing | Latin and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 171 | 45 | 528 | 225 |
Protein Detection | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5,283 | 6,089 | 18,959 | 16,404 |
Protein Detection | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,067 | 3,735 | 11,016 | 9,577 |
Protein Detection | Europe, the Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,392 | 1,423 | 4,752 | 4,002 |
Protein Detection | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 795 | 901 | 3,068 | 2,730 |
Protein Detection | Latin and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 29 | $ 30 | $ 123 | $ 95 |
Organization and Significant _9
Organization and Significant Accounting Policies - Revenue Based on Pattern of Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 204,810 | $ 87,859 | $ 570,796 | $ 185,745 |
Revenue recognized at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 194,946 | 86,437 | 539,661 | 181,041 |
Revenue recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 9,864 | $ 1,422 | $ 31,135 | $ 4,704 |
Organization and Significant_10
Organization and Significant Accounting Policies - Non-Controlling Interests (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Nov. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Apr. 30, 2021 | Oct. 31, 2020 | |
MLSC | |||||||
Noncontrolling Interest [Line Items] | |||||||
Ownership percent by noncontrolling interest | 30.00% | ||||||
Topco LLC | |||||||
Noncontrolling Interest [Line Items] | |||||||
Ownership percent by parent | 51.00% | 51.00% | 44.00% | 38.00% | |||
Topco LLC | Tax Distribution | |||||||
Noncontrolling Interest [Line Items] | |||||||
Tax distributions paid | $ 90 | $ 186.5 | |||||
Topco LLC | MLSC | |||||||
Noncontrolling Interest [Line Items] | |||||||
Ownership percent by parent | 70.00% | ||||||
Purchase of non-controlling interests | $ 166.4 | ||||||
Topco LLC | MLSH 1 | Tax Distribution | |||||||
Noncontrolling Interest [Line Items] | |||||||
Tax distributions paid | $ 50.1 | $ 0.1 | $ 106.3 | $ 0.3 | |||
MLSH 1 | Topco LLC | |||||||
Noncontrolling Interest [Line Items] | |||||||
Ownership percent by noncontrolling interest | 49.00% | 49.00% | 56.00% | 62.00% |
Organization and Significant_11
Organization and Significant Accounting Policies - Segment Information (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Number of operating segments | 3 |
Organization and Significant_12
Organization and Significant Accounting Policies - Property and Equipment (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Minimum | Buildings | |
Property, Plant and Equipment [Line Items] | |
Useful Lives | 20 years |
Minimum | Building improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Lives | 5 years |
Minimum | Furniture, fixtures, equipment and software | |
Property, Plant and Equipment [Line Items] | |
Useful Lives | 3 years |
Maximum | Buildings | |
Property, Plant and Equipment [Line Items] | |
Useful Lives | 35 years |
Maximum | Building improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Lives | 15 years |
Maximum | Furniture, fixtures, equipment and software | |
Property, Plant and Equipment [Line Items] | |
Useful Lives | 11 years |
Organization and Significant_13
Organization and Significant Accounting Policies - Concentration Risk (Details) - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Revenue | BioNTech SE | |||||
Product Information [Line Items] | |||||
Concentration risk | 26.20% | 21.90% | 32.20% | 10.40% | |
Revenue | Pfizer, Inc. | |||||
Product Information [Line Items] | |||||
Concentration risk | 23.40% | 24.00% | 22.90% | 13.50% | |
Revenue | CureVac N.V. | |||||
Product Information [Line Items] | |||||
Concentration risk | 23.00% | 11.30% | |||
Revenue | Sanofi S.A. | |||||
Product Information [Line Items] | |||||
Concentration risk | 10.30% | ||||
Accounts Receivable, net | BioNTech SE | |||||
Product Information [Line Items] | |||||
Concentration risk | 36.00% | ||||
Accounts Receivable, net | Pfizer, Inc. | |||||
Product Information [Line Items] | |||||
Concentration risk | 11.30% | 45.10% | |||
Accounts Receivable, net | CureVac N.V. | |||||
Product Information [Line Items] | |||||
Concentration risk | 18.20% | 12.80% |
Divestiture (Details)
Divestiture (Details) - USD ($) $ in Millions | Sep. 02, 2021 | Aug. 05, 2021 | Sep. 30, 2021 | Sep. 30, 2021 |
Incentive units | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Accelerated expense | $ 2.4 | $ 2.4 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Vector | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from divestiture | $ 124 | |||
Consideration | $ 121.9 | |||
Cash from divestiture | 120.3 | |||
Receivables | $ 1.6 | |||
Pretax gain (loss) | 11.2 | 11.2 | ||
Transaction costs | 0.9 | 0.9 | ||
Income tax related to gain on sale of business | $ 0.4 | $ 0.4 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Vector | Minimum | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Initial services period | 1 month | |||
Extension periods for services | 1 month | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Vector | Maximum | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Initial services period | 5 months | |||
Extension periods for services | 8 months |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)reportingUnit | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)reportingUnit | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 152,766 | $ 152,766 | $ 224,275 | ||
Number of reporting units | reportingUnit | 3 | 4 | |||
Goodwill excluded | $ 71,509 | ||||
Amortization of intangible assets | 14,685 | $ 15,156 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations | Vector | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 41,700 | 41,700 | |||
Cost of sales | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | 3,100 | $ 3,100 | 9,400 | 9,500 | |
Selling, general and administrative | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | 1,500 | $ 1,900 | $ 5,300 | $ 5,700 | |
Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 5 years | ||||
Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 15 years | ||||
Nucleic Acid Production | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 32,838 | $ 32,838 | $ 32,838 | ||
Number of reporting units | reportingUnit | 2 | 2 | |||
Goodwill excluded | $ 0 | ||||
Protein Detection | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 0 | 0 | $ 71,509 | ||
Goodwill excluded | $ 71,509 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Segment's Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2020 | $ 224,275 |
Divestiture | (71,509) |
Balance as of June 30, 2021 | 152,766 |
Nucleic Acid Production | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2020 | 32,838 |
Divestiture | 0 |
Balance as of June 30, 2021 | 32,838 |
Biologics Safety Testing | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2020 | 119,928 |
Divestiture | 0 |
Balance as of June 30, 2021 | 119,928 |
Protein Detection | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2020 | 71,509 |
Divestiture | (71,509) |
Balance as of June 30, 2021 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Components of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 194,721 | $ 264,217 | |
Accumulated Amortization | 73,496 | 86,561 | |
Net Carrying Amount | $ 121,225 | 177,656 | |
Weighted Average Remaining Amortization Period | 9 years 1 month 6 days | 8 years 4 months 24 days | |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 5 years | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 15 years | ||
Trade Names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 7,120 | 11,490 | |
Accumulated Amortization | 4,821 | 5,384 | |
Net Carrying Amount | $ 2,299 | 6,106 | |
Weighted Average Remaining Amortization Period | 6 years 3 months 18 days | 3 years 2 months 12 days | |
Trade Names | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 5 years | 5 years | |
Trade Names | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 15 years | 10 years | |
Patents and Developed Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 167,648 | 169,404 | |
Accumulated Amortization | 60,452 | 52,809 | |
Net Carrying Amount | $ 107,196 | 116,595 | |
Weighted Average Remaining Amortization Period | 9 years 6 months | 8 years 9 months 18 days | |
Patents and Developed Technology | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 5 years | 5 years | |
Patents and Developed Technology | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 14 years | 14 years | |
Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 19,953 | 83,323 | |
Accumulated Amortization | 8,223 | 28,368 | |
Net Carrying Amount | $ 11,730 | $ 54,955 | |
Weighted Average Remaining Amortization Period | 8 years 9 months 18 days | 6 years 8 months 12 days | |
Customer Relationships | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 10 years | 10 years | |
Customer Relationships | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 14 years | 12 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Expected Amortization of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 (remaining three months) | $ 3,654 | |
2022 | 14,600 | |
2023 | 14,417 | |
2024 | 14,417 | |
2025 | 14,417 | |
Thereafter | 59,720 | |
Net Carrying Amount | $ 121,225 | $ 177,656 |
Balance Sheet Components - Inve
Balance Sheet Components - Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 19,344 | $ 11,112 |
Work in process | 25,430 | 18,333 |
Finished goods | 11,472 | 3,856 |
Total inventory | $ 56,246 | $ 33,301 |
Lease Commitments (Details)
Lease Commitments (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2021USD ($)building | Aug. 31, 2020USD ($) | Jan. 31, 2020USD ($) | Sep. 30, 2021USD ($)building | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($)buildinglease | Sep. 30, 2020USD ($) | Aug. 31, 2021USD ($)building | Dec. 31, 2020USD ($) | Jul. 31, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | ||||||||||||
Facilities leased | lease | 5 | |||||||||||
Rent expense, net | $ 100 | $ 800 | $ 2,100 | $ 2,300 | ||||||||
Deferred gain | 0 | 0 | 0 | 19,002 | ||||||||
Sale of facility | $ 34,500 | |||||||||||
Deferred gain | $ 3,100 | |||||||||||
Payments on lease obligations | 582 | 23 | ||||||||||
Total minimum payments | $ 45,184 | 45,184 | 45,184 | |||||||||
Construction in Progress | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Cost reclassified from construction in progress into buildings, leasehold improvements, and equipment | $ (21,000) | |||||||||||
Building, Leasehold Improvements, And Equipment | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Cost reclassified from construction in progress into buildings, leasehold improvements, and equipment | 21,000 | |||||||||||
Burlingame, California | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Initial term | 2 years 6 months | |||||||||||
Deferred gain | $ 900 | 1,100 | 300 | 1,700 | 1,100 | |||||||
Lease obligations due | $ 3,300 | |||||||||||
Deferred gain | $ 3,100 | |||||||||||
Lease extension term | six-month | |||||||||||
Increase in lease obligations | $ 1,800 | |||||||||||
Unamortized deferred gain | $ 2,000 | |||||||||||
San Diego Facility Lease | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Rent expense, net | 200 | 200 | 600 | 600 | ||||||||
Building asset and improvements recorded upon sale-leaseback transaction | $ 59,000 | |||||||||||
Financing lease obligation | 57,100 | 57,100 | $ 37,200 | 51,200 | ||||||||
Reimbursed costs for improvements | $ 8,000 | |||||||||||
Tenant improvements | 2,700 | 2,700 | $ 11,500 | |||||||||
Construction in progress | $ 20,400 | |||||||||||
Accrued expenses | 1,700 | |||||||||||
Tenant improvement amount earned | $ 2,000 | |||||||||||
Payments on lease obligations | $ 1,200 | $ 600 | $ 3,500 | $ 1,700 | ||||||||
Number of buildings leased | building | 2 | 2 | 2 | 2 | ||||||||
Number of buildings took possession of | building | 1 | 1 | 1 | |||||||||
Fair value | $ 4,800 | $ 4,800 | $ 4,800 | |||||||||
San Diego Facility Lease | Prepaid Expenses and Other Current Assets | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Tenant improvement allowance | 2,000 | |||||||||||
San Diego Facility Lease | Construction in Progress | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Tenant improvement allowance | $ 700 | |||||||||||
Southport Facility | Leaseholds and Leasehold Improvements | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Useful Lives | 35 years | |||||||||||
Leland, North Carolina | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Tenant improvement provisions | 3,600 | 3,600 | $ 3,600 | |||||||||
Total minimum payments | $ 12,700 | $ 12,700 | $ 12,700 | |||||||||
Multiple 5 year renewal term | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Facilities leased | lease | 2 | |||||||||||
Renewal term | 5 years | 5 years | 5 years | |||||||||
Three year renewal term | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Renewal term | 3 years | 3 years | 3 years | |||||||||
Five year renewal term | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Renewal term | 5 years | 5 years | 5 years | |||||||||
January 2020 lease agreement | Burlingame, California | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Deferred gain | $ 19,000 | |||||||||||
Minimum | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Initial term | 2 years | 2 years | 2 years | |||||||||
Maximum | ||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||
Initial term | 12 years | 12 years | 12 years |
Lease Commitments - Maturity of
Lease Commitments - Maturity of Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Lease Facility Financing Obligations | ||
2021 (remaining three months) | $ 1,070 | |
2022 | 4,648 | |
2023 | 5,014 | |
2024 | 5,109 | |
2025 | 5,071 | |
Thereafter | 24,272 | |
Total minimum payments | 45,184 | |
Less: amount representing interest | (25,249) | |
Present value of future minimum lease payments | 19,935 | |
Residual value of lease facility financing obligation | 36,563 | |
Less: short-term lease facility financing obligations | (1,174) | |
Long-term lease facility financing obligations | 55,324 | $ 56,167 |
Operating Leases | ||
2021 (remaining three months) | 117 | |
2022 | 1,273 | |
2023 | 1,336 | |
2024 | 1,371 | |
2025 | 1,104 | |
Thereafter | 5,286 | |
Total minimum payments | $ 10,487 |
Lease Commitments - Future Mini
Lease Commitments - Future Minimum Payments (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Lessee, Lease, Description [Line Items] | |
2021 (remaining three months) | $ 1,070 |
2022 | 4,648 |
2023 | 5,014 |
2024 | 5,109 |
2025 | 5,071 |
Thereafter | 24,272 |
Total minimum payments | 45,184 |
Leland, North Carolina & San Diego, California | |
Lessee, Lease, Description [Line Items] | |
2021 (remaining three months) | 0 |
2022 | 1,176 |
2023 | 4,408 |
2024 | 4,535 |
2025 | 4,665 |
Thereafter | 35,080 |
Total minimum payments | $ 49,864 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | 1 Months Ended | |||||
Nov. 30, 2020 | Sep. 30, 2021 | Aug. 05, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Oct. 31, 2020 | |
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 531,584,000 | $ 534,614,000 | $ 400,000,000 | |||
Repayments of lines of credit | $ 50,000,000 | |||||
Interest Rate Cap | ||||||
Debt Instrument [Line Items] | ||||||
Derivative, notional amount | $ 415,000,000 | |||||
Derivative asset, noncurrent | $ 100,000 | |||||
New Credit Agreement | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 780,000,000 | |||||
New Credit Agreement | Secured Debt | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 600,000,000 | |||||
Debt interest rate | 4.75% | |||||
New Credit Agreement | Secured Debt | Line of Credit | Intermediate | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 118,400,000 | |||||
New Credit Agreement | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding line of credit | $ 0 | $ 0 | ||||
New Credit Agreement | Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 180,000,000 | |||||
New Credit Agreement | Letter of Credit | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Oct. 31, 2020 |
Debt Disclosure [Abstract] | |||
New First Lien Term Loan | $ 545,500 | $ 550,000 | |
Unamortized debt issuance costs | (13,916) | (15,386) | |
Total long-term debt | 531,584 | 534,614 | $ 400,000 |
Less: current portion | (6,000) | (6,000) | |
Long-term debt, less current portion | $ 525,584 | $ 528,614 |
Long-Term Debt - Maturities of
Long-Term Debt - Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2021 (remaining three months) | $ 1,500 | |
2022 | 6,000 | |
2023 | 6,000 | |
2024 | 6,000 | |
2025 | 6,000 | |
Thereafter | 520,000 | |
Long-term debt, gross | $ 545,500 | $ 550,000 |
Equity-Based Compensation - Sto
Equity-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total equity-based compensation | $ 3,567 | $ 1,849 | $ 8,228 | $ 2,933 |
Incentive units | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Accelerated expense | 2,400 | 2,400 | ||
Cost of sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total equity-based compensation | 364 | 4 | 1,383 | 11 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total equity-based compensation | 5 | 574 | 198 | 732 |
Selling, general and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total equity-based compensation | $ 3,198 | $ 1,271 | $ 6,647 | $ 2,190 |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021USD ($)shares | Sep. 30, 2021USD ($)shares | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Options exercised in period (in shares) | shares | 0 | 0 |
Options exercisable (in shares) | shares | 0 | 0 |
Unrecognized share-based compensation cost related to unvested stock option awards | $ 18.4 | $ 18.4 |
Incentive units | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Unrecognized share-based compensation cost related to unvested incentive units and restricted stock units | 1.5 | $ 1.5 |
Expected period for recognition | 2 years 2 months 12 days | |
Effect of dilutive RSUs | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Unrecognized share-based compensation cost related to unvested incentive units and restricted stock units | $ 1.4 | $ 1.4 |
Expected period for recognition | 2 years 1 month 6 days | |
Options to purchase Class A common stock | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Expected period for recognition | 3 years 3 months 18 days |
Net Income Per Class A Common_3
Net Income Per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc (Details) - shares | 1 Months Ended | 9 Months Ended |
Nov. 30, 2020 | Sep. 30, 2021 | |
Net income per Class A common share/unit: | ||
Preferred units annual cumulative dividend | 8.00% | |
Preferred units additional annual dividend | 4.00% | |
IPO | ||
Net income per Class A common share/unit: | ||
Issuance of stock (in shares) | 69,000,000 |
Net Income Per Class A Common_4
Net Income Per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc - Summary of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator—basic: | ||||
Net income | $ 132,810 | $ 39,023 | $ 343,006 | $ 64,344 |
Less: preferred unit dividends attributable to the MLSC non-controlling interests | 0 | (11,745) | 0 | (14,805) |
Less: (income) loss attributable to common non-controlling interests | (78,536) | 3,942 | (216,410) | 3,993 |
Net income attributable to Maravai LifeSciences Holdings, Inc.—basic | 54,274 | 31,220 | 126,596 | 53,532 |
Numerator—diluted: | ||||
Net income attributable to Maravai LifeSciences Holdings, Inc.—basic | 54,274 | 31,220 | 126,596 | 53,532 |
Net income effect of dilutive securities: | ||||
Effect of dilutive employee stock purchase plan ("ESPP"), RSUs and options | 87 | 0 | 102 | 0 |
Effect of the assumed conversion of Class B common stock | 60,787 | 0 | 166,016 | 0 |
Net income attributable to Maravai LifeSciences Holdings, Inc.—diluted | $ 115,148 | $ 31,220 | $ 292,714 | $ 53,532 |
Denominator—basic: | ||||
Weighted average Class A common shares/units outstanding—basic (in shares) | 118,433 | 253,917 | 109,174 | 253,917 |
Net income per Class A common share/unit—basic (in usd per share) | $ 0.46 | $ 0.12 | $ 1.16 | $ 0.21 |
Denominator—diluted: | ||||
Weighted average Class A common shares/units outstanding—basic (in shares) | 118,433 | 253,917 | 109,174 | 253,917 |
Weighted average effect of dilutive securities: | ||||
Effect of the assumed conversion of Class B common stock (in shares) | 139,227 | 0 | 148,468 | 0 |
Weighted average Class A common shares/units outstanding—diluted (in shares) | 258,028 | 253,917 | 257,799 | 253,917 |
Net income per Class A common share/unit - diluted (in usd per share) | $ 0.45 | $ 0.12 | $ 1.14 | $ 0.21 |
Effect of dilutive RSUs | ||||
Weighted average effect of dilutive securities: | ||||
Effect of dilutive restricted stock units (in shares) | 41 | 0 | 29 | 0 |
Effect of dilutive ESPP and options | ||||
Weighted average effect of dilutive securities: | ||||
Effect of dilutive restricted stock units (in shares) | 327 | 0 | 128 | 0 |
Net Income Per Class A Common_5
Net Income Per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc - Summary of Dilutive Securities Excluded (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of net income per share (in shares) | 283 | 14,245 | 292 | 14,245 |
Time-based incentive units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of net income per share (in shares) | 0 | 11,396 | 0 | 11,396 |
Performance-based incentive units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of net income per share (in shares) | 0 | 2,849 | 0 | 2,849 |
Options to purchase Class A common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of net income per share (in shares) | 283 | 0 | 289 | 0 |
Shares to be purchased under the ESPP | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of net income per share (in shares) | 0 | 0 | 3 | 0 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 151,652 | $ 38,664 | $ 386,943 | $ 66,855 |
Income tax expense (benefit) | $ 18,842 | $ (359) | $ 43,937 | $ 2,511 |
Effective tax rate | 12.40% | (0.90%) | 11.40% | 3.80% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Apr. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Tax Examination [Line Items] | |||||||
Effective tax rate | 12.40% | (0.90%) | 11.40% | 3.80% | |||
Assumed income tax rate | 46.70% | ||||||
Assumed income tax rate when business income deduction is unavailable | 54.10% | ||||||
Tax distribution payable | $ 0 | $ 0 | $ 0 | ||||
Topco LLC | |||||||
Income Tax Examination [Line Items] | |||||||
Deferred tax assets | $ 445,500,000 | ||||||
Deferred tax assets, valuation allowance | 13,300,000 | ||||||
Temporary book basis difference | 364,400,000 | ||||||
Future tax benefit deductions | $ 81,100,000 | ||||||
Increase in deferred tax assets | 215,400,000 | $ 128,200,000 | |||||
Increase in liability under TRA | 137,700,000 | ||||||
Increase in associated deferred tax asset related to liability increase | 46,000,000 | $ 28,400,000 | |||||
Topco LLC | Affiliated Entity | |||||||
Income Tax Examination [Line Items] | |||||||
Increase in liability under TRA | $ 227,400,000 | ||||||
Topco LLC | Tax Distribution | |||||||
Income Tax Examination [Line Items] | |||||||
Tax distributions paid | 90,000,000 | 186,500,000 | |||||
Topco LLC | Maravai LifeSciences Holdings, Inc | Tax Distribution | |||||||
Income Tax Examination [Line Items] | |||||||
Tax distributions paid | $ 39,900,000 | $ 80,200,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||||||
Distribution | $ 50,001,000 | $ 122,000 | $ 106,204,000 | $ 312,000 | |||
Percentage of tax benefits paid | 85.00% | ||||||
Liability payable to related party | $ 745,600,000 | 745,600,000 | $ 745,600,000 | ||||
Gain on tax receivable agreement | 3,246,000 | 0 | 9,132,000 | 0 | |||
Current portion of payable to related parties pursuant to a Tax Receivable Agreement | 1,298,000 | 1,298,000 | 1,298,000 | $ 0 | |||
Non-Controlling Interest | |||||||
Related Party Transaction [Line Items] | |||||||
Distribution | 50,061,000 | 106,298,000 | |||||
Affiliated Entity | MLSH1 and MLSH 2 | |||||||
Related Party Transaction [Line Items] | |||||||
Increase in liability under TRA | $ 227,400,000 | $ 137,700,000 | |||||
Advisory Services Agreement, Quarterly Management Fee | Affiliated Entity | GTCR | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transaction amounts | 100,000 | ||||||
Advisory Services Agreement, Management Fees | Affiliated Entity | GTCR | |||||||
Related Party Transaction [Line Items] | |||||||
Related party costs | 100,000 | 400,000 | |||||
Advisory Services Agreement, Out of Pocket Expense | Affiliated Entity | GTCR | |||||||
Related Party Transaction [Line Items] | |||||||
Related party costs | $ 0 | 0 | 0 | 200,000 | |||
Lease Payments | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Related party costs | $ 100,000 | $ 200,000 | |||||
Tax Receivable Agreement, Payments | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transaction amounts | $ 0 |
Segments - Narrative (Details)
Segments - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Number of reportable segments | segment | 3 | |||
Revenue | $ (204,810,000) | $ (87,859,000) | $ (570,796,000) | $ (185,745,000) |
Eliminations | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 154,000 | 363,000 | 608,000 | 1,076,000 |
Commission expense | $ 0 | $ 0 | $ 0 | $ 0 |
Segments - Reconciliation of Re
Segments - Reconciliation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 204,810 | $ 87,859 | $ 570,796 | $ 185,745 |
Adjusted EBITDA | 156,003 | 57,775 | 422,656 | 104,840 |
Nucleic Acid Production | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 182,901 | 67,656 | 499,354 | 128,569 |
Biologics Safety Testing | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 16,626 | 14,114 | 52,483 | 40,772 |
Protein Detection | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 5,283 | 6,089 | 18,959 | 16,404 |
Operating Segments | Nucleic Acid Production | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 183,055 | 68,019 | 499,962 | 129,645 |
Adjusted EBITDA | 150,620 | 46,704 | 402,855 | 76,130 |
Operating Segments | Biologics Safety Testing | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 16,626 | 14,114 | 52,483 | 40,772 |
Adjusted EBITDA | 13,556 | 12,000 | 42,217 | 33,571 |
Operating Segments | Protein Detection | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 5,283 | 6,089 | 18,959 | 16,404 |
Adjusted EBITDA | 1,942 | 2,839 | 7,511 | 6,960 |
Corporate | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Adjusted EBITDA | (10,217) | (3,721) | (30,136) | (11,597) |
Eliminations | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | (154) | (363) | (608) | (1,076) |
Adjusted EBITDA | $ 102 | $ (47) | $ 209 | $ (224) |
Segments - Reconciliation of Ad
Segments - Reconciliation of Adjusted EBITDA to Net Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting [Abstract] | ||||
Net income | $ 132,810 | $ 39,023 | $ 343,006 | $ 64,344 |
Amortization | 4,604 | 5,040 | 14,685 | 15,156 |
Depreciation | 2,472 | 1,631 | 6,623 | 4,756 |
Interest expense | 8,545 | 7,089 | 25,827 | 21,934 |
Income tax expense (benefit) | 18,842 | (359) | 43,937 | 2,511 |
EBITDA | 167,273 | 52,424 | 434,078 | 108,701 |
Acquisition integration costs | 21 | (14) | (777) | 3,588 |
Amortization of lease facility financing obligation | (1,031) | 0 | (2,080) | 0 |
Acquired and in-process research and development costs | 0 | 0 | 0 | 2,881 |
Equity-based compensation | 3,567 | 1,849 | 8,228 | 2,933 |
GTCR management fees | 0 | 126 | 0 | 555 |
Gain on sale of business | (11,249) | 0 | (11,249) | 0 |
Gain on sale and leaseback transaction | 0 | 0 | 0 | (19,002) |
Merger and acquisition related expenses (income) | (366) | 124 | 1,550 | 218 |
Financing costs | 1,034 | 3,266 | 2,038 | 4,966 |
Tax receivable agreement liability adjustment | (3,246) | 0 | (9,132) | 0 |
Adjusted EBITDA | $ 156,003 | $ 57,775 | $ 422,656 | $ 104,840 |