Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 01, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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, $0.01 par value | |
Trading Symbol | MRVI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001823239 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 131,923,561 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 119,094,026 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 580,176 | $ 632,138 |
Accounts receivable, net | 48,987 | 138,624 |
Inventory | 47,402 | 43,152 |
Prepaid expenses and other current assets | 22,515 | 25,798 |
Government funding receivable | 232 | 8,190 |
Total current assets | 699,312 | 847,902 |
Property and equipment, net | 141,619 | 52,694 |
Goodwill | 326,459 | 283,668 |
Intangible assets, net | 234,726 | 216,663 |
Deferred tax assets | 769,586 | 765,799 |
Other assets | 92,735 | 115,589 |
Total assets | 2,264,437 | 2,282,315 |
Current liabilities: | ||
Accrued expenses and other current liabilities | 50,344 | 53,371 |
Deferred revenue | 2,459 | 3,088 |
Current portion of long-term debt | 5,440 | 5,440 |
Current portion of finance lease liabilities | 560 | 0 |
Total current liabilities | 74,919 | 110,144 |
Long-term debt, less current portion | 520,336 | 521,997 |
Finance lease liabilities, less current portion | 32,236 | 0 |
Deferred tax liabilities | 8,512 | 0 |
Other long-term liabilities | 62,862 | 68,975 |
Total liabilities | 1,366,799 | 1,377,072 |
Stockholders’ equity: | ||
Additional paid-in capital | 119,903 | 137,898 |
Retained earnings | 398,158 | 404,766 |
Total stockholders’ equity attributable to Maravai LifeSciences Holdings, Inc. | 520,571 | 545,218 |
Non-controlling interest | 377,067 | 360,025 |
Total stockholders’ equity | 897,638 | 905,243 |
Total liabilities and stockholders’ equity | 2,264,437 | 2,282,315 |
Nonrelated Party | ||
Current liabilities: | ||
Accounts payable | 6,658 | 5,991 |
Related Party | ||
Current liabilities: | ||
Accounts payable | 9,458 | 42,254 |
Payable to related parties pursuant to the Tax Receivable Agreement, less current portion | 667,934 | 675,956 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 1,319 | 1,317 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 1,191 | $ 1,237 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
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) | 131,901 | 131,692 |
Common stock, shares outstanding (in shares) | 131,901 | 131,692 |
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) | 119,094 | 123,669 |
Common stock, shares outstanding (in shares) | 119,094 | 123,669 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 68,914 | $ 242,732 | $ 147,939 | $ 487,025 |
Operating expenses: | ||||
Cost of revenue | 43,273 | 37,496 | 76,949 | 77,528 |
Selling, general and administrative | 35,377 | 28,061 | 74,048 | 61,261 |
Research and development | 4,194 | 4,274 | 8,339 | 7,969 |
Change in estimated fair value of contingent consideration | (2,316) | (7,800) | (2,316) | (7,800) |
Total operating expenses | 80,528 | 62,031 | 157,020 | 138,958 |
(Loss) income from operations | (11,614) | 180,701 | (9,081) | 348,067 |
Other income (expense): | ||||
Interest expense | (7,022) | (4,434) | (18,855) | (7,098) |
Interest income | 6,791 | 0 | 12,836 | 0 |
Loss on extinguishment of debt | 0 | 0 | 0 | (208) |
Change in payable to related parties pursuant to the Tax Receivable Agreement | 101 | 0 | (1,335) | 2,340 |
Other expense | (1,620) | (1,275) | (1,452) | (1,268) |
(Loss) income before income taxes | (13,364) | 174,992 | (17,887) | 341,833 |
Income tax (benefit) expense | (1,421) | 18,271 | (4,596) | 38,252 |
Net (loss) income | (11,943) | 156,721 | (13,291) | 303,581 |
Net (loss) income attributable to non-controlling interests | (5,402) | 85,481 | (6,683) | 165,479 |
Net (loss) income attributable to Maravai LifeSciences Holdings, Inc. | $ (6,541) | $ 71,240 | $ (6,608) | $ 138,102 |
Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.: | ||||
Basic (in usd per share) | $ (0.05) | $ 0.54 | $ (0.05) | $ 1.05 |
Diluted (in usd per share) | $ (0.05) | $ 0.53 | $ (0.05) | $ 1.03 |
Weighted average number of Class A common shares outstanding: | ||||
Basic (in shares) | 131,864 | 131,524 | 131,802 | 131,506 |
Diluted (in shares) | 131,864 | 255,361 | 131,802 | 255,324 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (11,943) | $ 156,721 | $ (13,291) | $ 303,581 |
Comprehensive (loss) income attributable to non-controlling interests | (5,402) | 85,481 | (6,683) | 165,479 |
Total comprehensive (loss) income attributable to Maravai LifeSciences Holdings, Inc. | $ (6,541) | $ 71,240 | $ (6,608) | $ 138,102 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Non-Controlling Interest |
Beginning balance (in shares) at Dec. 31, 2021 | 131,488 | 123,669 | ||||||
Beginning balance at Dec. 31, 2021 | $ 545,361 | $ 1,315 | $ 1,237 | $ 128,386 | $ 184,561 | $ 229,862 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes (in shares) | 51 | |||||||
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes | 1,148 | 1,148 | ||||||
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC | 0 | (494) | 494 | |||||
Stock-based compensation | 7,935 | 4,089 | 3,846 | |||||
Distribution for tax liabilities to non-controlling interest holder | (82,542) | (65) | (82,477) | |||||
Impact of change to deferred tax asset associated with cash contribution to Topco LLC | (1,691) | (1,691) | ||||||
Net (loss) income | 303,581 | 138,102 | 165,479 | |||||
Ending balance (in shares) at Jun. 30, 2022 | 131,539 | 123,669 | ||||||
Ending balance at Jun. 30, 2022 | 773,792 | $ 1,315 | $ 1,237 | 131,373 | 322,663 | 317,204 | ||
Beginning balance (in shares) at Mar. 31, 2022 | 131,490 | 123,669 | ||||||
Beginning balance at Mar. 31, 2022 | 654,302 | $ 1,315 | $ 1,237 | 128,584 | 251,423 | 271,743 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes (in shares) | 49 | |||||||
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes | 1,114 | 1,114 | ||||||
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC | 0 | (480) | 480 | |||||
Stock-based compensation | 4,308 | 2,220 | 2,088 | |||||
Distribution for tax liabilities to non-controlling interest holder | (42,653) | (65) | (42,588) | |||||
Net (loss) income | 156,721 | 71,240 | 85,481 | |||||
Ending balance (in shares) at Jun. 30, 2022 | 131,539 | 123,669 | ||||||
Ending balance at Jun. 30, 2022 | 773,792 | $ 1,315 | $ 1,237 | 131,373 | 322,663 | 317,204 | ||
Beginning balance (in shares) at Dec. 31, 2022 | 131,692 | 123,669 | 131,692 | 123,669 | ||||
Beginning balance at Dec. 31, 2022 | 905,243 | $ 1,317 | $ 1,237 | 137,898 | 404,766 | 360,025 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Effects of Structuring Transactions (in shares) | (4,575) | |||||||
Effects of Structuring Transactions | (2) | $ (46) | (26,348) | 26,392 | ||||
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes (in shares) | 209 | |||||||
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes | 36 | $ 2 | 34 | |||||
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC | 0 | 315 | (315) | |||||
Stock-based compensation | 15,259 | 8,004 | 7,255 | |||||
Distribution for tax liabilities to non-controlling interest holder | (9,607) | (9,607) | ||||||
Net (loss) income | (13,291) | (6,608) | (6,683) | |||||
Ending balance (in shares) at Jun. 30, 2023 | 131,901 | 119,094 | 131,901 | 119,094 | ||||
Ending balance at Jun. 30, 2023 | 897,638 | $ 1,319 | $ 1,191 | 119,903 | 398,158 | 377,067 | ||
Beginning balance (in shares) at Mar. 31, 2023 | 131,789 | 119,094 | ||||||
Beginning balance at Mar. 31, 2023 | 900,638 | $ 1,318 | $ 1,191 | 114,309 | 404,699 | 379,121 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes (in shares) | 112 | |||||||
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes | 976 | $ 1 | 530 | 445 | ||||
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC | 0 | 193 | (193) | |||||
Stock-based compensation | 9,272 | 4,871 | 4,401 | |||||
Distribution for tax liabilities to non-controlling interest holder | (1,305) | (1,305) | ||||||
Net (loss) income | (11,943) | (6,541) | (5,402) | |||||
Ending balance (in shares) at Jun. 30, 2023 | 131,901 | 119,094 | 131,901 | 119,094 | ||||
Ending balance at Jun. 30, 2023 | $ 897,638 | $ 1,319 | $ 1,191 | $ 119,903 | $ 398,158 | $ 377,067 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Operating activities: | |||||
Net loss | $ (11,943) | $ 156,721 | $ (13,291) | $ 303,581 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||
Depreciation | 2,815 | 1,892 | 4,895 | 3,747 | |
Amortization of intangible assets | 13,617 | 11,779 | |||
Amortization of operating lease right-of-use assets | 4,193 | 2,639 | |||
Amortization of deferred financing costs | 1,448 | 1,410 | |||
Stock-based compensation expense | 15,259 | 7,935 | |||
Loss on extinguishment of debt | 0 | 0 | 0 | 208 | |
Deferred income taxes | (4,276) | 26,073 | |||
Change in estimated fair value of contingent consideration | (2,316) | (7,800) | (2,316) | (7,800) | $ (7,800) |
Revaluation of liabilities under the Tax Receivable Agreement | (101) | 0 | 1,335 | (2,340) | |
Other | (3,489) | (1,283) | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | 89,968 | (2,332) | |||
Inventory | 4,328 | (7,502) | |||
Prepaid expenses and other assets | (1,718) | (10,052) | |||
Accounts payable | 1,639 | 6,310 | |||
Accrued expenses and other current liabilities | 6,582 | (1,773) | |||
Deferred revenue | (652) | (4,776) | |||
Other long-term liabilities | (13,254) | 759 | |||
Net cash provided by operating activities | 104,268 | 326,583 | |||
Investing activities: | |||||
Cash paid for acquisition of a business, net of cash acquired | (69,622) | (238,836) | |||
Purchases of property and equipment | (32,927) | (4,409) | |||
Proceeds from government assistance allocated to property and equipment | 8,662 | 0 | |||
Net cash used in investing activities | (93,887) | (243,245) | |||
Financing activities: | |||||
Distributions for tax liabilities to non-controlling interest holders | (9,607) | (82,477) | |||
Proceeds from borrowings of long-term debt | 0 | 8,455 | |||
Principal repayments of long-term debt | (2,720) | (11,175) | |||
Payments of finance lease liabilities | (66) | 0 | (66) | 0 | |
Proceeds from derivative instruments | 1,890 | 0 | |||
Payment of acquisition consideration holdback | (9,706) | 0 | |||
Proceeds from issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes | 19 | 1,263 | |||
Net cash used in financing activities | (62,343) | (83,934) | |||
Net (decrease) increase in cash including cash classified within current assets held for sale | (51,962) | (596) | |||
Cash and cash equivalents, beginning of period | 632,138 | 551,272 | 551,272 | ||
Cash and cash equivalents, end of period | 580,176 | 550,676 | 580,176 | 550,676 | $ 632,138 |
Supplemental cash flow information: | |||||
Cash paid for interest | 20,608 | 6,132 | |||
Cash (refunded) paid for income taxes, net | (72) | 13,856 | |||
Supplemental disclosures of non-cash activities: | |||||
Property and equipment included in accounts payable and accrued expenses | 2,763 | 2,145 | |||
Accrued receivable for capital expenditures to be reimbursed under a government contract | 232 | 0 | |||
Right-of-use assets obtained in exchange for new finance lease liabilities | 15,795 | 0 | 32,862 | 0 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 0 | $ 0 | 3,931 | 773 | |
Fair value of contingent consideration liability recorded in connection with acquisition of a business | 5,289 | 7,800 | |||
Accrued consideration payable for MyChem acquisition | 0 | 10,000 | |||
MLSH 1 | |||||
Financing activities: | |||||
Payments pursuant to the Tax Receivable Agreement | (35,661) | 0 | |||
MLSH 2 | |||||
Financing activities: | |||||
Payments pursuant to the Tax Receivable Agreement | $ (6,492) | $ 0 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
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”, and “our”) provides critical products to enable the development of drugs, therapeutics, diagnostics and vaccines and to 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 two principal businesses: Nucleic Acid Production and Biologics Safety Testing. 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. Organization and Organizational Transactions We were incorporated as a Delaware corporation in August 2020 for the purpose of facilitating an initial public offering (“IPO”). Immediately prior to the IPO, we effected a series of organizational transactions (the “Organizational Transactions”), which, together with the IPO, were completed in November 2020, that resulted in the Company operating, controlling all of the business affairs and becoming the ultimate parent company of Maravai Topco Holdings, LLC (“Topco LLC”) and its consolidated subsidiaries. Maravai Life Sciences Holdings, LLC (“MLSH 1”), which is controlled by investment entities affiliated with GTCR, is the only other member of Topco LLC. The Company is the sole managing member of Topco LLC, which operates and controls TriLink Biotechnologies, LLC (“TriLink”), Glen Research, LLC, MockV Solutions, LLC, Cygnus Technologies, LLC (“Cygnus”) and Alphazyme, LLC (“Alphazyme”) and their respective subsidiaries. In connection with the Company’s acquisition of Alphazyme (see Note 2), the Company undertook a series of structuring transactions (the “Structuring Transactions”), including: • On January 18, 2023, the Company acquired all of the outstanding membership interests in Alphazyme (see Note 2). • On January 19, 2023, the Company entered into a contribution agreement (the “Contribution Agreement”) with Alphazyme Holdings, Inc. (“Alphazyme Holdings”), a wholly-owned subsidiary of the Company, pursuant to which the Company contributed all such membership interests in Alphazyme (the “Alphazyme Membership Interest”) to Alphazyme Holdings. • On January 22, 2023, Alphazyme Holdings entered into a contribution and exchange Agreement (the “Contribution and Exchange Agreement”) with Topco LLC, pursuant to which it contributed all of the Alphazyme Membership Interests to TopCo LLC in exchange for 5,059,134 newly-issued LLC Units of Topco LLC at a price per unit of $13.87, which was equal to the 50-day volume-weighted average price of the Company’s Class A common stock as calculated on January 18, 2023 (the “Contribution and Exchange”). • Immediately following the Contribution and Exchange, the Company entered into a forfeiture agreement (the “Forfeiture Agreement”) with Alphazyme Holdings, TopCo LLC and MLSH 1, a related party, pursuant to which each of the Company (together with Alphazyme Holdings) and MLSH 1 agreed to forfeit 5,059,134 and 4,871,970 LLC Units, respectively, representing 3.7% of the Company’s (together with Alphazyme Holdings) and MLSH 1’s respective LLC Units of Topco LLC, and an equal number of shares of the Company’s Class B common stock, par value $0.01 per share, were forfeited by MLSH 1, in each case for no consideration. These were considered transactions between entities under common control. As a result, the consolidated financial statements for periods prior to the these transactions have been adjusted to combine the previously separate entities for presentation purposes. 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 (loss) 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 six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any future period. The condensed consolidated balance sheet presented as of December 31, 2022 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 consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 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, the measurement of right-of-use assets and lease liabilities and related incremental borrowing rate, the payable to related parties pursuant to the Tax Receivable Agreement (as defined in Note 11), the realizability of our net deferred tax assets, and valuation of goodwill and intangible assets acquired in business combinations. Actual results could differ materially from those estimates. Significant Accounting Policies A description of the Company’s significant accounting policies is included in Note 1 of the Notes to the Consolidated Financial Statements included in its 2022 Form 10-K. There have been no material changes in the Company’s significant accounting policies during the three and six months ended June 30, 2023. Revenue Recognition The Company generates revenue primarily from the sale of products and, to a much lesser extent, services in the fields of nucleic acid production and biologics safety testing. 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. 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 customers’ research, therapeutic and vaccine programs. The primary offering of products includes CleanCap®, mRNA and specialized oligonucleotides. Contracts typically consist of a single performance obligation. We also sell nucleic acid products for labeling and detecting proteins in cells and tissue samples research. 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. Payments received from customers in advance of manufacturing their products is recorded as deferred revenue until the products are delivered. 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 and antibody affinity extraction 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. The Company elected the practical expedient 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. 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. 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. 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 The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Accordingly, revenue for shipping and handling 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. There were no contract asset balances as of June 30, 2023 and December 31, 2022. 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 $5.6 million and $4.8 million as of June 30, 2023 and December 31, 2022, respectively. Contract liabilities are expected to be recognized as 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 June 30, 2023 Nucleic Acid Production Biologics Safety Testing Total North America $ 27,653 $ 6,677 $ 34,330 Europe, the Middle East and Africa 13,221 3,928 17,149 Asia Pacific 12,343 4,977 17,320 Latin and Central America 48 67 115 Total revenue $ 53,265 $ 15,649 $ 68,914 Six Months Ended June 30, 2023 Nucleic Acid Production Biologics Safety Testing Total North America $ 61,068 $ 13,770 $ 74,838 Europe, the Middle East and Africa 17,642 8,499 26,141 Asia Pacific 35,894 10,798 46,692 Latin and Central America 112 156 268 Total revenue $ 114,716 $ 33,223 $ 147,939 Three Months Ended June 30, 2022 Nucleic Acid Production Biologics Safety Testing Total North America $ 82,015 $ 7,172 $ 89,187 Europe, the Middle East and Africa 113,461 4,578 118,039 Asia Pacific 29,737 5,605 35,342 Latin and Central America 35 129 164 Total revenue $ 225,248 $ 17,484 $ 242,732 Six Months Ended June 30, 2022 Nucleic Acid Production Biologics Safety Testing Total North America $ 161,433 $ 14,691 $ 176,124 Europe, the Middle East and Africa 244,811 9,275 254,086 Asia Pacific 42,604 13,933 56,537 Latin and Central America 50 228 278 Total revenue $ 448,898 $ 38,127 $ 487,025 Total revenue is attributed to geographic regions based on the bill-to location of the transaction. For all periods presented, the majority of our revenue was recognized at a point in time. Non-Controlling Interests Non-controlling interests represent the portion of profit or loss, net assets and comprehensive (loss) income of our consolidated subsidiaries that is not allocable to the Company based on our percentage of ownership of such entities. In November 2020, following the completion of the Organizational Transactions, we became the sole managing member of Topco LLC. As of June 30, 2023, we held approximately 52.6% of the outstanding LLC Units of Topco LLC, and MLSH 1 held approximately 47.4% of the outstanding LLC Units of Topco LLC. Therefore, we report non-controlling interests based on the percentage of LLC Units of Topco LLC held by MLSH 1 on the condensed consolidated balance sheet as of June 30, 2023. 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 operations and condensed consolidated statements of comprehensive (loss) income. MLSH 1 is entitled to exchange its LLC Units of Topco LLC, 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. For the six months ended June 30, 2023 and 2022, MLSH 1 did not exchange any Paired Interests. Distributions of $1.3 million and $9.6 million for tax liabilities were made to MLSH 1 during the three and six months ended June 30, 2023, respectively. Distributions of $42.6 million and $82.5 million for tax liabilities were made to MLSH 1 during the three and six months ended June 30, 2022, respectively. Segment Information The Company operates in two reportable segments. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The CODM allocates resources and assesses performance based upon discrete financial information at the segment level. All of our long-lived assets are located in the United States. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The carrying value of these cash equivalents approximates fair value. Cash and cash equivalents consist of deposits held at financial institutions and money market mutual funds. Accounts Receivable and Allowance for Credit Losses Accounts receivable primarily consist of amounts due from customers for product sales and services. The Company’s expected credit losses are developed using an estimated loss rate method that considers historical collection experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The estimated loss rates are applied to trade receivables with similar risk characteristics such as the length of time the balance has been outstanding, liquidity and financial position of the customer, and the geographic location of the customer. In certain instances, the Company may identify individual accounts receivable assets that do not share risk characteristics with other accounts receivable, in which case the Company records its expected credit losses on an individual asset basis. As of June 30, 2023 and December 31, 2022, the allowance for credit losses was approximately $2.0 million and $2.2 million, respectively. Write-offs of accounts receivable were not significant during the three and six months ended June 30, 2023. There were $0.5 million of recoveries during the six months ended June 30, 2023. There were no recoveries during the three months ended June 30, 2023. Write-offs of accounts receivable and recoveries were not significant during the three and six months ended June 30, 2022. Net (Loss) Income per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc. Basic net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc. is computed by dividing net (loss) income attributable to us by the weighted average number of Class A common shares outstanding during the period. Diluted net (loss) income per Class A common share is calculated by giving effect to all potential weighted average dilutive stock options, restricted stock units, and Topco LLC Units, that together with an equal number of shares of our Class B common stock, are convertible into shares of our Class A common stock. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable. The Company reported net (loss) income attributable to Maravai LifeSciences Holdings, Inc. for the three and six months ended June 30, 2023 and 2022. Government Assistance The consideration awarded to the Company by the U.S. Department of Defense is outside the scope of the contracts with customers, income tax, funded research and development, and contribution guidance. This is because the awarding entity is not considered to be a customer, the receipt of the funding is not predicated on the Company’s income tax position, there are no refund provisions, and the entity is not receiving reciprocal value for their support provided to the Company. The Company’s elected policy is to recognize such assistance as a reduction to the carrying amount of the assets associated with the award when it is reasonably assured that the funding will be received as evidenced through the existence of an arrangement, amounts eligible for reimbursement are determinable and have been incurred or paid, the applicable conditions under the arrangement have been met, and collectability of amounts due is reasonably assured. 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 June 30, 2023 and December 31, 2022, the carrying value of the Company’s current assets and liabilities approximated fair value due to the short maturities of these instruments. The fair values of the Company’s long-term debt approximated 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). Acquisitions The Company evaluates mergers, acquisitions and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or an acquisition of assets. The Company first identifies the acquiring entity by determining if the target is a legal entity or a group of assets or liabilities. If control over a legal entity is being evaluated, the Company also evaluates if the target is a variable interest or voting interest entity. For acquisitions of voting interest entities, the Company applies a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen test is met, the transaction is accounted for as an acquisition of assets. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. The Company accounts for its business combinations using the acquisition method of accounting which requires that the assets acquired and liabilities assumed of acquired businesses be recorded at their respective fair values at the date of acquisition. The purchase price, which includes the fair value of consideration transferred, is attributed to the fair value of the assets acquired and liabilities assumed. The purchase price may also include contingent consideration. The Company assesses whether such contingent consideration is subject to liability classification and fair value measurement or meets the definition of a derivative. Contingent consideration liabilities are recognized at their estimated fair value on the acquisition date. Contingent consideration arrangements that are determined to be compensatory in nature are recognized as post combination expense in our condensed consolidated statements of operations ratably over the implied service period beginning in the period it becomes probable such amounts will become payable. The excess of the purchase price of the acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed twelve months from the acquisition date. The results of acquired businesses are included in the Company’s consolidated financial statements from the date of acquisition. Transaction costs directly attributable to acquired businesses are expensed as incurred. Determining the fair value of intangible assets acquired, defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants, requires management to use significant judgment, including the selection of valuation methodologies, assumptions about future net cash flows, and discount rates. Each of these factors can significantly affect the value attributed to the identifiable intangible asset acquired in a business combination. Contingent Consideration Contingent consideration represents additional consideration that may be transferred to former owners of an acquired entity in the future if certain future events occur or conditions are met. Contingent consideration resulting from the acquisition of a business is recorded at fair value on the acquisition date. Such contingent consideration is re-measured to its estimated fair value at each reporting date with the change in fair value recognized within operating expenses in the Company’s condensed consolidated statements of operations. Subsequent changes in the fair value of the contingent consideration are classified as an adjustment to cash flows from operating activities in the condensed consolidated statements of cash flows because the change in fair value is an input in determining net (loss) income. Cash paid in settlement of contingent consideration liabilities are classified as cash flows from financing activities up to the acquisition date fair value with any excess classified as cash flows from operating activities. Changes in the fair value of contingent consideration liabilities associated with the acquisition of a business can result from updates to assumptions such as the expected timing or probability of achieving customer-related performance targets, specified sales milestones, changes in projected revenue or changes in discount rates. Judgment is used in determining those assumptions as of the acquisition date and for each subsequent reporting period. Therefore, any changes in the fair value will impact the Company’s results of operations in such reporting period, thereby resulting in potential variability in the Company’s operating results until such contingencies are resolved. 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 Receivable, net Three Months Ended June 30, Six Months Ended June 30, June 30, 2023 December 31, 2022 2023 2022 2023 2022 Nacalai USA, Inc. 11.9 % * 16.5 % * 16.3 % 20.3 % |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Alphazyme, LLC On January 18, 2023, the Company completed the acquisition of Alphazyme, LLC (“Alphazyme”), a privately-held original equipment manufacturer (“OEM”) provider of custom, scalable, molecular biology enzymes to customers in the genetic analysis and nucleic acid synthesis markets. The acquisition will expand the Company’s internal enzyme product portfolio and increase the Company’s differentiated mRNA manufacturing services and product offerings. Alphazyme’s ability to manufacture custom enzymes allows the Company to expand into near adjacent markets and raise our enzyme vertical. The Company acquired Alphazyme for a total purchase consideration of $75.3 million, subject to customary post-closing adjustments, including a working capital settlement. The total cash consideration was paid using existing cash on hand. The transaction was accounted for as an acquisition of a business as Alphazyme consisted of inputs and processes applied to those inputs that had the ability to contribute to the creation of outputs. For the six months ended June 30, 2023, the Company incurred $4.1 million in transaction costs associated with the acquisition of Alphazyme, which were recorded within selling, general and administrative expenses in the condensed consolidated statements of operations. The Company did not incur any such transaction costs during the three months ended June 30, 2023. The acquisition date fair value of consideration transferred to acquire Alphazyme consisted of the following (in thousands): Cash paid (1) $ 70,037 Fair value of contingent consideration 5,289 Total consideration transferred $ 75,326 ____________________ (1) Represents cash consideration paid at closing of $70.1 million, net of a purchase price adjustment received in June 2023 of $0.1 million. Pursuant to the Securities Purchase Agreement (the “Alphazyme SPA”) between the Company and sellers of Alphazyme, additional payments to the sellers of Alphazyme are dependent upon meeting or exceeding defined revenue targets during fiscal years 2023 through 2025 (the “Alphazyme Performance Payments”). The Alphazyme SPA provides for a total maximum Alphazyme Performance Payments of $75.0 million. The Alphazyme Performance Payments were recorded as contingent consideration and was included as part of the purchase consideration. The Company estimated the fair value of the Alphazyme Performance Payments contingent consideration based on a Monte-Carlo simulation model which utilized an income approach. The estimated fair value was based on Alphazyme revenue projections, expected payout term, volatility and risk adjusted discount rates which are Level 3 inputs (see Note 4). The Alphazyme SPA also provides that the Company will pay certain employees of Alphazyme an additional amount totaling $9.3 million (the “Alphazyme Retention Payments”) as of various dates but primarily through December 31, 2025 as long as these individuals continue to be employed by the Company. The Company considers the payment of the Alphazyme Retention Payments as probable and is recognizing compensation expense related to these payments in the post-acquisition period ratably over the service period of approximately three years. For the three and six months ended June 30, 2023, the Company recorded $0.6 million and $1.1 million, respectively, of compensation expense related to the Alphazyme Retention Payments within selling, general and administrative expenses in the condensed consolidated statements of operations. Compensation expense related to the Alphazyme Retention Payments recorded within cost of revenue and research and development expenses were not material. The estimated fair values and the allocation of total purchase consideration are preliminary, based upon information available at the time of closing as the Company continues to evaluate underlying inputs and assumptions. Accordingly, these provisional values may be subject to adjustments during the measurement period, based upon new information obtained about facts and circumstances that existed at the time of closing. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): Cash $ 288 Inventory 7,246 Other current assets 660 Intangible assets, net 31,680 Other assets 5,043 Total identifiable assets acquired 44,917 Current liabilities (482) Other long-term liabilities (11,900) Total liabilities assumed (12,382) Net identifiable assets acquired 32,535 Goodwill 42,791 Net assets acquired $ 75,326 The acquisition was accounted for under the acquisition method of accounting, and therefore, the total purchase price was allocated to the identifiable tangible and intangible assets acquired and the liabilities assumed based on their respective fair values as of the acquisition date. Purchase consideration in excess of the amounts recognized for the net assets acquired was recognized as goodwill. Goodwill is primarily attributable to expanded synergies expected from the acquisition associated with a vertical supply integration. All of the goodwill acquired in connection with the acquisition of Alphazyme was allocated to the Company’s Nucleic Acid Production segment. None of the goodwill recognized is expected to be deductible for income tax purposes. Upon closing of the acquisition, approximately $1.5 million was placed into escrow to cover potential working capital adjustments and approximately $3.0 million was placed into escrow to secure certain representations and warranties pursuant to the terms of the Alphazyme SPA. These amounts are included in the total purchase consideration of $75.3 million. The $1.5 million was released from escrow during the three months ended June 30, 2023, of which the Company received $0.1 million related to net working capital adjustments. Because the remaining $3.0 million held in escrow is not controlled by the Company, this amount is not included in the accompanying condensed consolidated balance sheet as of June 30, 2023. The following table summarizes the estimated fair values of Alphazyme’s identifiable intangible assets as of the date of acquisition and their estimated useful lives: Estimated Fair Value Estimated Useful Life Trade names $ 220 5 Developed technology 31,000 12 Customer relationships 460 12 Total $ 31,680 The trade name and customer relationship intangible assets are related to Alphazyme’s name, customer loyalty and customer relationships. The developed technology intangible asset is related to its unique manufacturing process optimization capability to both scale production and achieve quality standards. The fair value of these intangible assets was based on Alphazyme’s projected revenues and was estimated using an income approach, specifically the relief from royalty method for trade names, the multi-period excess earnings method for developed technology, and the distributor method for customer relationships. Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. The estimated fair value was developed by discounting future net cash flows to their present value at market-based rates of return utilizing Level 3 inputs. The useful lives for these intangible assets were determined based upon the remaining period for which the assets were expected to contribute directly or indirectly to future cash flows. Key quantitative assumptions used in the determination of fair value of the developed technology intangible included revenue growth rates ranging from 3.0% to 55.0%, a discount rate of 17.8% and an assumed technical obsolescent curve of 5.0%. The carrying value of the remaining assets acquired or liabilities assumed was estimated to equal their fair values based on their short-term nature. These estimates were based on the assumption that the Company believes to be reasonable; however, actual results may differ from these estimates. MyChem, LLC On January 27, 2022, the Company completed the acquisition of MyChem, LLC (“MyChem”), a privately-held San Diego, California-based provider of ultra-pure nucleotides to customers in the diagnostics, pharma, genomics and research markets. The acquisition will vertically integrate the Company’s supply chain and expand its product offerings for inputs used in the development of therapeutics and vaccines. The Company acquired MyChem for a total purchase consideration of $257.9 million, which is inclusive of net working capital adjustments. The total cash consideration was paid using existing cash on hand. The transaction was accounted for as an acquisition of a business as MyChem consisted of inputs and processes applied to those inputs that had the ability to contribute to the creation of outputs. For the three and six months ended June 30, 2022, the Company incurred $0.4 million and $3.4 million, respectively, in transaction costs associated with the acquisition of MyChem, which were recorded within selling, general and administrative expenses in the condensed consolidated statements of operations. The acquisition date fair value of consideration transferred to acquire MyChem consisted of the following (in thousands): Cash paid (1) $ 240,145 Consideration payable 10,000 Fair value of contingent consideration 7,800 Total consideration transferred $ 257,945 ____________________ (1) Represents cash consideration paid at closing of $240.0 million and a purchase price adjustment paid in November 2022 of $0.1 million. Pursuant to the Securities Purchase Agreement (the “MyChem SPA”) between the Company and sellers of MyChem, additional payments to the sellers of MyChem were dependent upon meeting or exceeding defined revenue targets during fiscal 2022 (the “MyChem Performance Payment”). The MyChem SPA provides for a total maximum MyChem Performance Payment of $40.0 million. The MyChem Performance Payment was recorded as contingent consideration and was included as part of the purchase consideration. The Company estimated the fair value of the MyChem Performance Payment contingent consideration based on a Monte-Carlo simulation model which utilized an income approach. The estimated fair value was based on MyChem revenue projections, expected payout term, volatility and risk adjusted discount rates which are Level 3 inputs (see Note 4). The performance period applicable to the MyChem Performance Payment ended as of December 31, 2022 and it was determined that none of the defined revenue thresholds were achieved. Consequently, no payment was made to the sellers of MyChem. The MyChem SPA also provides that the Company will pay to the sellers of MyChem an additional $20.0 million (the “MyChem Retention Payment”) as of the second anniversary of the closing of the acquisition date as long as two senior employees who are also the sellers of MyChem continue to be employed by TriLink. The Company considers the payment of the MyChem Retention Payment as probable and is recognizing compensation expense related to this payment in the post-acquisition period ratably over the expected service period of two years. For the three and six months ended June 30, 2023, the Company recorded $1.2 million and $1.8 million, respectively, of compensation expense related to the MyChem Retention Payment within cost of revenue in the condensed consolidated statements of operations. For the three and six months ended June 30, 2023, the Company recorded $1.3 million and $2.5 million, respectively, of compensation expense related to the MyChem Retention Payment within research and development expenses in the condensed consolidated statements of operations. For the three and six months ended June 30, 2022, the Company recorded $2.5 million and $4.3 million, respectively, of compensation expense related to the MyChem Retention Payment within research and development expenses in the condensed consolidated statements of operations. The MyChem SPA further provides that the Company will pay to the sellers of MyChem an additional amount of up to $10.0 million subject to the completion of certain calculations associated with acquired inventory. During the first quarter of 2023, but subsequent to the end of the measurement period, these calculations were completed and a payment of $9.7 million was made by the Company to the sellers. The remaining $0.3 million was recorded as non-cash gain within current year operations. The following table summarizes the final allocation of the purchase price based upon the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): Cash $ 1,176 Current assets 2,741 Intangible assets, net 123,360 Other assets 8,585 Total identifiable assets acquired 135,862 Current liabilities (420) Other long-term liabilities (8,399) Total liabilities assumed (8,819) Net identifiable assets acquired 127,043 Goodwill 130,902 Net assets acquired $ 257,945 We recorded the preliminary purchase price allocation in the first quarter of 2022. During the fourth quarter of 2022, we recorded measurement period adjustments resulting in an increase to goodwill of $0.1 million and a decrease to other assets and current liabilities of $0.7 million. The acquisition was accounted for under the acquisition method of accounting, and therefore, the total purchase price was allocated to the identifiable tangible and intangible assets acquired and the liabilities assumed based on their respective fair values as of the acquisition date. Purchase consideration in excess of the amounts recognized for the net assets acquired was recognized as goodwill. Goodwill is primarily attributable to expanded synergies expected from the acquisition associated with a vertical supply integration. There were no tax impacts associated with the acquisition due to the pass-through income tax treatment of MyChem. All of the goodwill acquired in connection with the acquisition of MyChem was allocated to the Company’s Nucleic Acid Production segment and is deductible to Topco LLC for income tax purposes. Upon closing of the acquisition, approximately $1.0 million was placed into escrow to cover potential working capital adjustments and approximately $12.5 million was placed into escrow to secure certain representations and warranties pursuant to the terms of the MyChem SPA. These amounts are included in the total purchase consideration of $257.9 million. The Company released the $1.0 million in escrow and paid out an additional $0.1 million related to net working capital adjustments during the fourth quarter of 2022. During the first quarter of 2023, but subsequent to the end of the measurement period, $12.4 million of the amounts in escrow to secure certain representations and warranties was released to the sellers and the remaining $0.1 million was released to the Company for indemnification of pre-closing liabilities, which was recorded within current year operations. The following table summarizes the estimated fair values of MyChem’s identifiable intangible assets as of the date of acquisition and their estimated useful lives: Estimated Fair Value Estimated Useful Life Trade names $ 460 3 Developed technology 121,000 12 Customer relationships 1,900 12 Total $ 123,360 The trade name and customer relationship intangible assets are related to MyChem’s name, customer loyalty and customer relationships. The developed technology intangible asset is related to processes and techniques for synthesizing and developing ultra-pure nucleotides. The fair value of these intangible assets was based on MyChem’s projected revenues and was estimated using an income approach, specifically the multi-period excess earnings method. Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. The estimated fair value was developed by discounting future net cash flows to their present value at market-based rates of return utilizing Level 3 inputs. The useful lives for these intangible assets were determined based upon the remaining period for which the assets were expected to contribute directly or indirectly to future cash flows. Key quantitative assumptions used in the determination of fair value of the developed technology intangible included revenue growth rates ranging from 3.0% to 30.6%, a discount rate of 16.5% and an assumed technical obsolescent curve range of 5.0% to 7.5%. Pursuant to the terms of the MyChem SPA, the Company recognized an indemnification asset of $8.0 million within other assets, which represented the seller’s obligation to reimburse pre-acquisition income tax liabilities assumed in the acquisition and was recorded within other long-term liabilities. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company’s goodwill of $326.5 million and $283.7 million as of June 30, 2023 and December 31, 2022, respectively, represents the excess of purchase consideration over the fair value of assets acquired and liabilities assumed. As of June 30, 2023, the Company had four reporting units, three of which are contained in the Nucleic Acid Production segment. During the six months ended June 30, 2023, the Company recorded goodwill of $42.8 million in connection with the acquisition of Alphazyme that was completed in January 2023 (see Note 2). As of December 31, 2022, the Company had three 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 period presented (in thousands): Nucleic Acid Production Biologics Safety Testing Total Balance as of December 31, 2022 $ 163,740 $ 119,928 $ 283,668 Acquisition 42,791 — 42,791 Balance as of June 30, 2023 $ 206,531 $ 119,928 $ 326,459 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 3 to 14 years. The following are components of finite-lived intangible assets and accumulated amortization as of the periods presented (in thousands): June 30, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Life Weighted Average Remaining Amortization Period (in thousands) (in years) (in years) Trade names $ 7,800 $ 6,059 $ 1,741 3 - 10 3.2 Patents and developed technology 319,649 97,367 222,282 10 - 14 9.4 Customer relationships 22,313 11,610 10,703 10 - 12 6.3 Total $ 349,762 $ 115,036 $ 234,726 9.2 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Life Weighted Average Remaining Amortization Period (in thousands) (in years) (in years) Trade names $ 7,580 $ 5,746 $ 1,834 3 - 10 3.5 Patents and developed technology 288,649 85,058 203,591 10 - 14 9.5 Customer relationships 21,853 10,615 11,238 10 - 12 6.5 Total $ 318,082 $ 101,419 $ 216,663 9.3 During the first quarter of 2023, the Company recorded intangible assets of $31.7 million in connection with the acquisition of Alphazyme that was completed in January 2023 (see Note 2). The Company recognized $6.2 million and $12.3 million of amortization expense from intangible assets directly linked with revenue-generating activities within cost of revenue in the condensed consolidated statements of operations for the three and six months ended June 30, 2023, respectively. The Company recognized $5.6 million and $10.3 million of amortization expense from intangible assets directly linked with revenue generating activities within cost of revenue in the condensed consolidated statements of operations for the three and six months ended June 30, 2022, respectively. Amortization expense for intangible assets that are not directly related to sales-generating activities of $0.7 million and $1.3 million was recorded as selling, general and administrative expenses for the three and six months ended June 30, 2023, respectively. Amortization expense for intangible assets that are not directly related to sales generating activities of $0.7 million and $1.5 million was recorded as selling, general and administrative expenses for the three and six months ended June 30, 2022, respectively. As of June 30, 2023, the estimated future amortization expense for finite-lived intangible assets were as follows (in thousands): 2023 (remaining six months) $ 13,739 2024 27,478 2025 27,335 2026 27,098 2027 26,082 Thereafter 112,994 Total estimated amortization expense $ 234,726 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables summarize the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy as of the periods presented (in thousands): Fair Value Measurements as of June 30, 2023 Level 1 Level 2 Level 3 Total Assets Money market mutual funds $ 326,407 $ — $ — $ 326,407 Interest rate cap — 13,981 — 13,981 Total assets $ 326,407 $ 13,981 $ — $ 340,388 Liabilities Current portion of contingent consideration $ — $ — $ 257 $ 257 Contingent consideration, non-current — — 2,716 2,716 Total liabilities $ — $ — $ 2,973 $ 2,973 Fair Value Measurements as of December 31, 2022 Level 1 Level 2 Level 3 Total Assets Interest rate cap $ — $ 11,362 $ — $ 11,362 Contingent Consideration In connection with the acquisition of Alphazyme (see Note 2), the Company is required to make contingent payments to the sellers of up to $75.0 million, subject to achieving certain revenue thresholds. The preliminary fair value of the liability for the contingent payments recognized upon the acquisition as part of the purchase accounting opening balance sheet totaled $5.3 million. The preliminary fair value of the contingent consideration was determined using a Monte-Carlo simulation-based model discounted to present value. Assumptions used in this calculation are expected revenue, a discount rate of 17.8% and various probability factors. The ultimate settlement of the contingent consideration could deviate from current estimates based on the actual results of these financial measures. The contingent consideration has three performance payments spanning over three years beginning 2024. This liability is considered to be a Level 3 financial liability that is remeasured each reporting period. Changes in fair value of contingent consideration are recognized as a gain or loss and recorded within change in estimated fair value of contingent consideration in the condensed consolidated statements of operations. During the three months ended June 30, 2023, the Company recorded a $2.3 million decrease in the estimated fair value of contingent consideration. This was due to a change in estimate associated with Alphazyme revenue projections reaching thresholds that would trigger a contingent payment per the Alphazyme SPA. In connection with the acquisition of MyChem (see Note 2), the Company is required to make contingent payments to the sellers of up to $40.0 million, subject to achieving certain revenue thresholds. The preliminary fair value of the liability for the contingent payments recognized upon the acquisition as part of the purchase accounting opening balance sheet totaled $7.8 million. The preliminary fair value of the contingent consideration was determined using a Monte-Carlo simulation-based model discounted to present value. Assumptions used in this calculation are expected revenue, a discount rate of 16.9% and various probability factors. The ultimate settlement of the contingent consideration could deviate from current estimates based on the actual results of these financial measures. The contingent consideration projected year of payment is 2023. This liability is considered to be a Level 3 financial liability that is remeasured each reporting period. Changes in fair value of contingent consideration are recognized as a gain or loss and recorded within change in estimated fair value of contingent consideration in the condensed consolidated statements of operations. During the second quarter of 2022, the Company recorded a $7.8 million decrease in the estimated fair value of contingent consideration. This was due to a change in the estimate associated with MyChem revenue projections reaching thresholds that would trigger a contingent payment per the MyChem SPA. The contingent consideration expired as of December 31, 2022 and the revenue thresholds were not achieved. The following table provides a reconciliation of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period presented (in thousands): Contingent Consideration Balance as of December 31, 2021 $ — Contingent consideration related to the acquisition of MyChem 7,800 Change in estimated fair value of contingent consideration (7,800) Balance as of December 31, 2022 — Contingent consideration related to the acquisition of Alphazyme 5,289 Change in estimated fair value of contingent consideration (2,316) Balance as of June 30, 2023 $ 2,973 |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Balance Sheet Components | Balance Sheet Components Inventory Inventory consisted of the following as of the periods presented (in thousands): June 30, 2023 December 31, 2022 Raw materials $ 25,622 $ 13,486 Work-in-process 14,495 21,950 Finished goods 7,285 7,716 Total inventory $ 47,402 $ 43,152 |
Government Assistance
Government Assistance | 6 Months Ended |
Jun. 30, 2023 | |
Government Assistance [Abstract] | |
Government Assistance | Government Assistance Cooperative Agreement In May 2022, TriLink entered into a cooperative agreement (the “Cooperative Agreement”) with the U.S. Department of Defense, as represented by the Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense on behalf of the Biomedical Advanced Research and Development Authority (“BARDA”), within the U.S. Department of Health and Human Services, to advance the development of domestic manufacturing capabilities and to expand TriLink’s domestic production capacity in its San Diego manufacturing campus (the “Flanders San Diego Facility”) for products critical to the development and manufacture of mRNA vaccines and therapeutics. The Flanders San Diego Facility consists of two buildings (“Flanders I” and “Flanders II”). Pursuant to certain requirements, BARDA awarded TriLink an amount equal to $38.8 million or 50% of the construction and validation costs budgeted for the Flanders San Diego Facility. The contract period of performance is May 2022 through December 2023, which is the effective date of the Cooperative Agreement through the anticipated date of completion of construction and validation of manufacturing capacity. Amounts reimbursed are subject to audit and may be recaptured by the U.S. Department of Defense in certain circumstances. The Cooperative Agreement requires the Company to provide the U.S. Government with conditional priority access and certain preferred pricing obligations for a 10-year period from the completion of the construction project for the production of a medical countermeasure (or a component thereof) that the Company manufactures in the Flanders San Diego Facility during a declared public health emergency. During the three and six months ended June 30, 2023, the Company has received $0.6 million and $8.7 million, respectively, of reimbursements under the Cooperative Agreement, with equal offsets recorded to right-of-use assets associated with Flanders I within property and equipment on the condensed consolidated balance sheet. During the three and six months ended June 30, 2022, the Company had not yet received any reimbursements under the Cooperative Agreement. As of June 30, 2023, the Company has recorded a receivable of $0.2 million, with an equal offset to property and equipment. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases All of the Company's facilities, including office, laboratory and manufacturing space, are occupied under long-term non-cancelable lease arrangements with various expiration dates through 2038, some of which include options to extend up to 20 years. The Company does not have any leases that include residual value guarantees. In January 2023, the Company assumed Alphazyme’s existing facility lease in Jupiter, Florida, in connection with the acquisition of Alphazyme (see Note 2). The lease term began in January 2023 and will end in January 2032. The lease is for 10 years with the option to extend for one additional 5-year period. In February 2023, the Company entered into an agreement to expand the existing Alphazyme facility lease for additional space. The lease term will run concurrently with and as part of the initial lease term. In March 2023 and June 2023, the Company’s leases for Flanders I and Flanders II, respectively, commenced. The Company entered into the lease agreement in August 2021. The leases are for eleven years with the option to extend for one additional 5-year period. The Company is reasonably certain to execute the renewal option and has, therefore, recognized this as part of its ROU assets and lease liabilities. The lease includes tenant improvement provisions, rent abatement clauses, and escalating rent payments over the life of the lease. The following table presents supplemental balance sheet information related to the Company's leases as of the periods presented (in thousands): Line Item in the Condensed Consolidated Balance Sheets June 30, 2023 December 31, 2022 Right-of-use assets Finance leases Property and equipment, net $ 80,570 $ — Operating leases Other assets 65,014 63,896 Total right-of-use assets $ 145,584 $ 63,896 Current lease liabilities Finance leases Current portion of finance lease liabilities $ 560 $ — Operating leases Accrued expenses and other current liabilities 6,918 6,269 Total current lease liabilities $ 7,478 $ 6,269 Non-current lease liabilities Finance leases Finance lease liabilities, less current portion $ 32,236 $ — Operating leases Other long-term liabilities 51,779 51,556 Total non-current lease liabilities $ 84,015 $ 51,556 The components of the net lease costs for the Company’s leases reflected in the Company's condensed consolidated statements of operations were as follows for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Finance lease costs: Depreciation of leased assets $ 573 $ — $ 573 $ — Interest on lease liabilities 331 — 331 — Total finance lease costs 904 — 904 — Operating lease costs 3,120 1,892 6,178 3,766 Variable lease costs 912 543 1,897 1,068 Total lease costs $ 4,936 $ 2,435 $ 8,979 $ 4,834 The weighted average remaining lease term and weighted average discount rate related to the Company's ROU assets and lease liabilities for its leases were as follows as of the periods presented: June 30, 2023 December 31, 2022 Weighted average remaining lease term (in years): Finance leases 14.7 * Operating leases 7.6 7.9 Weighted average discount rate: Finance leases 8.4 % * Operating leases 6.6 % 6.5 % ____________________ * The Company did not have any finance leases as of December 31, 2022. Supplemental information concerning the cash flow impact arising from the Company's leases recorded in the Company's condensed consolidated statements of cash flows is detailed in the following table for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cash paid for amounts included in lease liabilities: Financing cash flows used for finance leases $ 66 $ — $ 66 $ — Operating cash flows used for finance leases 331 — 331 — Operating cash flows used for operating leases 2,617 1,521 5,040 3,019 Non-cash transactions: Right-of-use assets obtained in exchange for new finance lease liabilities $ 15,795 $ — $ 32,862 $ — Right-of-use assets obtained in exchange for new operating lease liabilities — — 3,931 773 As of June 30, 2023, the Company expects that its future minimum lease payments will become due and payable as follows (in thousands): Finance Leases Operating Leases Total 2023 (remaining six months) $ 1,631 $ 5,268 $ 6,899 2024 3,327 10,774 14,101 2025 3,427 10,952 14,379 2026 3,530 10,042 13,572 2027 3,636 8,564 12,200 Thereafter 44,102 34,125 78,227 Total minimum lease payments 59,653 79,725 139,378 Less: interest (26,857) (21,028) (47,885) Total lease liabilities $ 32,796 $ 58,697 $ 91,493 |
Leases | Leases All of the Company's facilities, including office, laboratory and manufacturing space, are occupied under long-term non-cancelable lease arrangements with various expiration dates through 2038, some of which include options to extend up to 20 years. The Company does not have any leases that include residual value guarantees. In January 2023, the Company assumed Alphazyme’s existing facility lease in Jupiter, Florida, in connection with the acquisition of Alphazyme (see Note 2). The lease term began in January 2023 and will end in January 2032. The lease is for 10 years with the option to extend for one additional 5-year period. In February 2023, the Company entered into an agreement to expand the existing Alphazyme facility lease for additional space. The lease term will run concurrently with and as part of the initial lease term. In March 2023 and June 2023, the Company’s leases for Flanders I and Flanders II, respectively, commenced. The Company entered into the lease agreement in August 2021. The leases are for eleven years with the option to extend for one additional 5-year period. The Company is reasonably certain to execute the renewal option and has, therefore, recognized this as part of its ROU assets and lease liabilities. The lease includes tenant improvement provisions, rent abatement clauses, and escalating rent payments over the life of the lease. The following table presents supplemental balance sheet information related to the Company's leases as of the periods presented (in thousands): Line Item in the Condensed Consolidated Balance Sheets June 30, 2023 December 31, 2022 Right-of-use assets Finance leases Property and equipment, net $ 80,570 $ — Operating leases Other assets 65,014 63,896 Total right-of-use assets $ 145,584 $ 63,896 Current lease liabilities Finance leases Current portion of finance lease liabilities $ 560 $ — Operating leases Accrued expenses and other current liabilities 6,918 6,269 Total current lease liabilities $ 7,478 $ 6,269 Non-current lease liabilities Finance leases Finance lease liabilities, less current portion $ 32,236 $ — Operating leases Other long-term liabilities 51,779 51,556 Total non-current lease liabilities $ 84,015 $ 51,556 The components of the net lease costs for the Company’s leases reflected in the Company's condensed consolidated statements of operations were as follows for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Finance lease costs: Depreciation of leased assets $ 573 $ — $ 573 $ — Interest on lease liabilities 331 — 331 — Total finance lease costs 904 — 904 — Operating lease costs 3,120 1,892 6,178 3,766 Variable lease costs 912 543 1,897 1,068 Total lease costs $ 4,936 $ 2,435 $ 8,979 $ 4,834 The weighted average remaining lease term and weighted average discount rate related to the Company's ROU assets and lease liabilities for its leases were as follows as of the periods presented: June 30, 2023 December 31, 2022 Weighted average remaining lease term (in years): Finance leases 14.7 * Operating leases 7.6 7.9 Weighted average discount rate: Finance leases 8.4 % * Operating leases 6.6 % 6.5 % ____________________ * The Company did not have any finance leases as of December 31, 2022. Supplemental information concerning the cash flow impact arising from the Company's leases recorded in the Company's condensed consolidated statements of cash flows is detailed in the following table for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cash paid for amounts included in lease liabilities: Financing cash flows used for finance leases $ 66 $ — $ 66 $ — Operating cash flows used for finance leases 331 — 331 — Operating cash flows used for operating leases 2,617 1,521 5,040 3,019 Non-cash transactions: Right-of-use assets obtained in exchange for new finance lease liabilities $ 15,795 $ — $ 32,862 $ — Right-of-use assets obtained in exchange for new operating lease liabilities — — 3,931 773 As of June 30, 2023, the Company expects that its future minimum lease payments will become due and payable as follows (in thousands): Finance Leases Operating Leases Total 2023 (remaining six months) $ 1,631 $ 5,268 $ 6,899 2024 3,327 10,774 14,101 2025 3,427 10,952 14,379 2026 3,530 10,042 13,572 2027 3,636 8,564 12,200 Thereafter 44,102 34,125 78,227 Total minimum lease payments 59,653 79,725 139,378 Less: interest (26,857) (21,028) (47,885) Total lease liabilities $ 32,796 $ 58,697 $ 91,493 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Credit Agreement In October 2020, Maravai Intermediate Holdings, LLC (“Intermediate”), a wholly-owned subsidiary of Topco LLC, along with certain of its subsidiaries (together with Intermediate, the “Borrowers”), entered into a credit agreement (as amended, the “Credit Agreement”), which provides for a term loan facility and a revolving credit facility. In January 2022, the Company entered into an amendment (the “Amendment”) to refinance the term loan and to address the planned phase out of London Interbank Offered Rate (“LIBOR”), which was replaced with a Term Secured Overnight Financing Rate (“SOFR”) based rate. The Credit Agreement provides for a $600.0 million term loan facility, maturing October 2027 (the “Tranche B Term Loan”), and a $180.0 million revolving credit facility (the “Revolving Credit Facility”). As of June 30, 2023, the interest rate on the Tranche B Term Loan was 8.03% per annum. The Credit Agreement also provides for a $20.0 million limit for letters of credit, which remained unused as of June 30, 2023. Borrowings under the 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 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. The accounting related to entering into the Amendment was evaluated on a creditor-by-creditor basis to determine whether each transaction should be accounted for as a modification or extinguishment. Certain creditors under the First Lien Term Loan did not participate in this refinancing transaction, were repaid their principal and interest of $8.5 million and ceased being creditors of the Company and the repayment of their related outstanding debt balances has been accounted for as an extinguishment of debt. Proceeds of borrowings from new lenders of $8.5 million were accounted for as a new debt financing. The Company recorded a loss on extinguishment of debt of $0.2 million in the accompanying condensed consolidated statements of operations during the first quarter of 2022. For the remainder of the creditors, this transaction was accounted for as a modification because the change in present value of cash flows between the two term loans before and after the transaction was less than 10% on a creditor-by-creditor basis. As part of the refinancing, the Company incurred $0.9 million of various costs, of which an insignificant amount was related to an original issuance discount, and were all capitalized in the accompanying balance sheet within long-term debt and are subject to amortization over the term of the refinanced debt as an adjustment to interest expense using the effective interest method. We also incurred $0.3 million of financing-related fees related to the Revolving Credit Facility. As of June 30, 2023, unamortized debt issuance costs totaled $1.8 million and are recorded as assets within other assets on the accompanying condensed consolidated balance sheet as there is no balance outstanding related to the Revolving Credit Facility. Commencing with the fiscal year ended December 31, 2021, and each fiscal year thereafter, the Credit Agreement requires that we make mandatory prepayments on the Tranche B Term Loan principal upon certain excess cash flow, subject to certain step-downs based on the Company’s first lien net leverage ratio. The mandatory prepayment shall be reduced to 25% or 0% of the calculated excess cash flow if the Company’s first lien net leverage ratio was equal to or less than 4.75:1.00 or 4.25:1.00, respectively, however, no prepayment shall be required to the extent excess cash flow calculated for the respective period is equal to or less than $10.0 million. As of June 30, 2023, the Company’s first lien net leverage ratio was less than 4.25:1.00. Thus, a mandatory prepayment on the Tranche B Term Loan out of our excess cash flow was not required. The 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 to the nature of the business. Additionally, the Credit Agreement also requires us to maintain a certain net leverage ratio. The Company was in compliance with these covenants as of June 30, 2023. Interest Rate Cap In the first quarter of 2021, the Company entered into an interest rate cap agreement to manage a portion of its variable interest rate risk on its outstanding long-term debt. The contract, which was 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 was set to expire on March 31, 2023. In May 2022, the Company amended the interest rate cap agreement, effective June 30, 2022, to increase the contract’s notional amount to $500.0 million and to extend the maturity date to January 19, 2025. Additionally, the floating rate option changed from a LIBOR-based rate to a SOFR-based rate. Other provisions remained unchanged as a result of the amendment. Premiums paid to amend the interest rate cap agreement were immaterial. 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 $14.0 million within other assets with changes in fair value recognized within interest expense in the condensed consolidated statements of operations. The Company’s long-term debt consisted of the following as of the periods presented (in thousands): June 30, 2023 December 31, 2022 Tranche B Term Loan $ 535,840 $ 538,560 Unamortized debt issuance costs (10,064) (11,123) Total long-term debt 525,776 527,437 Less: current portion (5,440) (5,440) Total long-term debt, less current portion $ 520,336 $ 521,997 There were no balances outstanding on the Company’s Revolving Credit Facility as of June 30, 2023 and December 31, 2022. As of June 30, 2023, 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): 2023 (remaining six months) $ 2,720 2024 5,440 2025 5,440 2026 5,440 2027 516,800 Total long-term debt $ 535,840 |
Net (Loss) Income Per Class A C
Net (Loss) Income Per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc. | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net (Loss) Income Per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc. | Net (Loss) Income Per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc. Basic net (loss) income per Class A common share has been calculated by dividing net (loss) income for the period, adjusted for net (loss) income attributable to non-controlling interests, by the weighted average number of Class A common shares outstanding during the period. Diluted net (loss) 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 (loss) income per Class A common share attributable to the Company is computed by adjusting the net (loss) income and the weighted average number of Class A common shares outstanding to give effect to potentially diluted securities. In computing the diluted net loss per share for the three and six months ended June 30, 2023, potentially dilutive Class A common shares were excluded from the diluted loss per share calculation because of their anti-dilutive effect. The following table presents the computation of basic and diluted net (loss) income per Class A common share attributable to the Company for the periods presented (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net (loss) income $ (11,943) $ 156,721 $ (13,291) $ 303,581 Less: loss (income) attributable to common non-controlling interests 5,402 (85,481) 6,683 (165,479) Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.—basic (6,541) 71,240 (6,608) 138,102 Net (loss) income effect of dilutive securities: Effect of dilutive employee stock purchase plan (“ESPP”), restricted stock units (“RSUs”) and stock options — 43 — 74 Effect of the assumed conversion of Class B common stock — 65,256 — 126,327 Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.—diluted $ (6,541) $ 136,539 $ (6,608) $ 264,503 Denominator: Weighted average Class A common shares outstanding—basic 131,864 131,524 131,802 131,506 Weighted average effect of dilutive securities: Effect of dilutive ESPP, RSUs and stock options — 168 — 149 Effect of the assumed conversion of Class B common stock — 123,669 — 123,669 Weighted average Class A common shares outstanding—diluted 131,864 255,361 131,802 255,324 Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.: Basic $ (0.05) $ 0.54 $ (0.05) $ 1.05 Diluted $ (0.05) $ 0.53 $ (0.05) $ 1.03 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 (loss) 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 (loss) income per share for the periods presented because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 RSUs 3,355 — 3,151 — Stock options 4,542 2,063 4,542 2,064 Shares estimated to be purchased under the ESPP 10 55 9 52 Shares of Class B common stock 119,094 — 119,094 — Total 127,001 2,118 126,796 2,116 Shares underlying contingently issuable awards that have not met the necessary conditions as of the end of a reporting period are not included in the calculation of diluted net (loss) income per share of Class A common stock attributable to the Company for that period. The Company had contingently issuable PSUs outstanding that did not meet the market and performance conditions as of June 30, 2023 and, therefore, were excluded from the calculation of diluted net (loss) income per share of Class A common stock attributable to the Company. The maximum number of potentially dilutive Class A common shares that could be issued upon vesting for such awards was insignificant as of June 30, 2023. These amounts were also excluded from the potentially dilutive securities in the table above. The Company had no contingently issuable PSUs outstanding as of June 30, 2022. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
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, 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 and 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. The following table summarizes the Company’s income tax (benefit) expense and effective tax rate for the periods presented (in thousands, except percentages): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (Loss) income before income taxes $ (13,364) $ 174,992 $ (17,887) $ 341,833 Income tax (benefit) expense $ (1,421) $ 18,271 $ (4,596) $ 38,252 Effective tax rate 10.6 % 10.4 % 25.7 % 11.2 % The Company’s effective tax rates of 10.6% and 25.7% for the three and six months ended June 30, 2023, respectively, differed from the U.S. federal statutory rate of 21.0%, primarily due to (loss) income associated with the non-controlling interest, state tax expense, and the release of a previous uncertain tax position due to statute expiration. The Company’s effective tax rates of 10.4% and 11.2% for the three and six months ended June 30, 2022, respectively, differed from the U.S. federal statutory rate of 21.0%, primarily due to income associated with the non-controlling interest. 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 (“LLC Operating Agreement”). The LLC Operating 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 condensed consolidated statements of operations 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 June 30, 2023, Topco LLC paid tax distributions of $2.8 million to its owners, including $1.5 million to us. During the six months ended June 30, 2023 Topco LLC paid tax distributions of $20.3 million to its owners, including $10.7 million to us. During the three months ended June 30, 2022, Topco LLC paid tax distributions of $88.2 million to its owners, including $45.5 million to us. During the six months ended June 30, 2022, Topco LLC paid tax distributions of $170.5 million to its owners, including $87.9 million to us. As of June 30, 2023, no amounts for tax distributions had been accrued as such payments were made during the period. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions MLSH 1’s majority owner is GTCR, LLC (“GTCR”). The Company’s Executive Chairman of the Board, Chief Financial Officer (“CFO”) and General Counsel are executives of MLSH 1 and MLSH 2. Payable to Related Parties Pursuant to the Tax Receivable Agreement We are a party to a Tax Receivable Agreement (“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 certain 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 purchases or exchanges of LLC Units of Topco LLC. 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 June 30, 2023, our liability under the TRA is $677.4 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. During the three and six months ended June 30, 2023, the Company recognized a gain of $0.1 million and a loss of $1.3 million, respectively, 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 change of our estimated state tax rate. We made payments of $42.6 million to MLSH 1 and MLSH 2 pursuant to the TRA during the three and six months ended June 30, 2023, of which $0.4 million was related to interest. No payments were made during the three and six months ended June 30, 2022. Contribution, Exchange and Forfeiture Agreement with MLSH 1 In January 2023, the Company undertook Structuring Transactions and executed Contribution, Contribution and Exchange, and Forfeiture Agreements with MLSH 1 (see Note 1). Topco LLC Operating Agreement MLSH 1 is party to the LLC Operating Agreement put in place at the date of the Organizational Transactions. This agreement includes a provision requiring cash distributions enabling its owners to pay their taxes on income passing through from Topco LLC. During the three and six months ended June 30, 2023, the Company made distributions of $1.3 million and $9.6 million, respectively, for tax liabilities to MLSH 1 under this agreement. During the three and six months ended June 30, 2022, the Company made distributions of $42.6 million and $82.5 million, respectively, for tax liabilities to MLSH 1 under this agreement. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company’s financial performance is reported in two 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. 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 (loss) 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, net of eliminations, are managed on a standalone basis and are not allocated to segments. The following schedule includes revenue and adjusted EBITDA for each of the Company’s reportable operating segments (in thousands). Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue: Nucleic Acid Production $ 53,265 $ 225,255 $ 114,716 $ 448,905 Biologics Safety Testing 15,651 17,484 33,225 38,127 Total reportable segments’ revenue 68,916 242,739 147,941 487,032 Intersegment eliminations (2) (7) (2) (7) Total $ 68,914 $ 242,732 $ 147,939 $ 487,025 Segment adjusted EBITDA: Nucleic Acid Production $ 14,192 $ 186,291 $ 42,065 $ 369,090 Biologics Safety Testing 10,315 14,102 24,061 30,634 Total reportable segments’ adjusted EBITDA 24,507 200,393 66,126 399,724 Reconciliation of total reportable segments’ adjusted EBITDA to (loss) income before income taxes Amortization (6,852) (6,252) (13,617) (11,779) Depreciation (2,815) (1,892) (4,895) (3,747) Interest expense (7,022) (4,434) (18,855) (7,098) Interest income 6,791 — 12,836 — Corporate costs, net of eliminations (15,430) (11,914) (33,251) (24,253) Other adjustments: Acquisition contingent consideration 2,316 7,800 2,316 7,800 Acquisition integration costs (3,466) (3,103) (5,930) (7,882) Stock-based compensation (9,272) (4,308) (15,259) (7,935) Merger and acquisition related expenses (371) (7) (3,662) (1,195) Financing costs — (27) — (1,064) Acquisition related tax adjustment (1,620) (1,264) (1,447) (1,264) Tax Receivable Agreement liability adjustment 101 — (1,335) 2,340 Other (231) — (914) (1,814) (Loss) income before income taxes (13,364) 174,992 (17,887) 341,833 Income tax benefit (expense) 1,421 (18,271) 4,596 (38,252) Net (loss) income $ (11,943) $ 156,721 $ (13,291) $ 303,581 During the three and six months ended June 30, 2023 and 2022, intersegment revenue was immaterial between the Nucleic Acid Production and Biologics Safety Testing segments. Any intersegment sales and the related gross margin on inventory recorded at the end of the period are eliminated for consolidation purposes. 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 six months ended June 30, 2023 and 2022. 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. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) Attributable to Parent | $ (6,541) | $ 71,240 | $ (6,608) | $ 138,102 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
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 (loss) 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 and Non-Controlling Interests | 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 six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any future period. The condensed consolidated balance sheet presented as of December 31, 2022 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 consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”) filed with the SEC. Non-Controlling Interests Non-controlling interests represent the portion of profit or loss, net assets and comprehensive (loss) income of our consolidated subsidiaries that is not allocable to the Company based on our percentage of ownership of such entities. In November 2020, following the completion of the Organizational Transactions, we became the sole managing member of Topco LLC. As of June 30, 2023, we held approximately 52.6% of the outstanding LLC Units of Topco LLC, and MLSH 1 held approximately 47.4% of the outstanding LLC Units of Topco LLC. Therefore, we report non-controlling interests based on the percentage of LLC Units of Topco LLC held by MLSH 1 on the condensed consolidated balance sheet as of June 30, 2023. 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 operations and condensed consolidated statements of comprehensive (loss) 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 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, the measurement of right-of-use assets and lease liabilities and related incremental borrowing rate, the payable to related parties pursuant to the Tax Receivable Agreement (as defined in Note 11), the realizability of our net deferred tax assets, and valuation of goodwill and intangible assets acquired in business combinations. Actual results could differ materially from those estimates. |
Revenue Recognition | Revenue Recognition The Company generates revenue primarily from the sale of products and, to a much lesser extent, services in the fields of nucleic acid production and biologics safety testing. 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. 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 customers’ research, therapeutic and vaccine programs. The primary offering of products includes CleanCap®, mRNA and specialized oligonucleotides. Contracts typically consist of a single performance obligation. We also sell nucleic acid products for labeling and detecting proteins in cells and tissue samples research. 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. Payments received from customers in advance of manufacturing their products is recorded as deferred revenue until the products are delivered. 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 and antibody affinity extraction 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. The Company elected the practical expedient 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. 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. 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. 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 The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Accordingly, revenue for shipping and handling 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. There were no contract asset balances as of June 30, 2023 and December 31, 2022. |
Segment Information | Segment Information The Company operates in two reportable segments. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The CODM allocates resources and assesses performance based upon discrete financial information at the segment level. All of our long-lived assets are located in the United States. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The carrying value of these cash equivalents approximates fair value. Cash and cash equivalents consist of deposits held at financial institutions and money market mutual funds. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable primarily consist of amounts due from customers for product sales and services. The Company’s expected credit losses are developed using an estimated loss rate method that considers historical collection experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The estimated loss rates are applied to trade receivables with similar risk characteristics such as the length of time the balance has been outstanding, liquidity and financial position of the customer, and the geographic location of the customer. In certain instances, the Company may identify individual accounts receivable assets that do not share risk characteristics with other accounts receivable, in which case the Company records its expected credit losses on an individual asset basis. |
Net (Loss) Income per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc. | Net (Loss) Income per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc. Basic net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc. is computed by dividing net (loss) income attributable to us by the weighted average number of Class A common shares outstanding during the period. Diluted net (loss) income per Class A common share is calculated by giving effect to all potential weighted average dilutive stock options, restricted stock units, and Topco LLC Units, that together with an equal number of shares of our Class B common stock, are convertible into shares of our Class A common stock. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable. The Company reported net (loss) income attributable to Maravai LifeSciences Holdings, Inc. for the three and six months ended June 30, 2023 and 2022. |
Government Assistance | Government Assistance The consideration awarded to the Company by the U.S. Department of Defense is outside the scope of the contracts with customers, income tax, funded research and development, and contribution guidance. This is because the awarding entity is not considered to be a customer, the receipt of the funding is not predicated on the Company’s income tax position, there are no refund provisions, and the entity is not receiving reciprocal value for their support provided to the Company. The Company’s elected policy is to recognize such assistance as a reduction to the carrying amount of the assets associated with the award when it is reasonably assured that the funding will be received as evidenced through the existence of an arrangement, amounts eligible for reimbursement are determinable and have been incurred or paid, the applicable conditions under the arrangement have been met, and collectability of amounts due is reasonably assured. |
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 June 30, 2023 and December 31, 2022, the carrying value of the Company’s current assets and liabilities approximated fair value due to the short maturities of these instruments. The fair values of the Company’s long-term debt approximated 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). |
Acquisitions and Contingent Consideration | Acquisitions The Company evaluates mergers, acquisitions and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or an acquisition of assets. The Company first identifies the acquiring entity by determining if the target is a legal entity or a group of assets or liabilities. If control over a legal entity is being evaluated, the Company also evaluates if the target is a variable interest or voting interest entity. For acquisitions of voting interest entities, the Company applies a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen test is met, the transaction is accounted for as an acquisition of assets. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. The Company accounts for its business combinations using the acquisition method of accounting which requires that the assets acquired and liabilities assumed of acquired businesses be recorded at their respective fair values at the date of acquisition. The purchase price, which includes the fair value of consideration transferred, is attributed to the fair value of the assets acquired and liabilities assumed. The purchase price may also include contingent consideration. The Company assesses whether such contingent consideration is subject to liability classification and fair value measurement or meets the definition of a derivative. Contingent consideration liabilities are recognized at their estimated fair value on the acquisition date. Contingent consideration arrangements that are determined to be compensatory in nature are recognized as post combination expense in our condensed consolidated statements of operations ratably over the implied service period beginning in the period it becomes probable such amounts will become payable. The excess of the purchase price of the acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed twelve months from the acquisition date. The results of acquired businesses are included in the Company’s consolidated financial statements from the date of acquisition. Transaction costs directly attributable to acquired businesses are expensed as incurred. Determining the fair value of intangible assets acquired, defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants, requires management to use significant judgment, including the selection of valuation methodologies, assumptions about future net cash flows, and discount rates. Each of these factors can significantly affect the value attributed to the identifiable intangible asset acquired in a business combination. Contingent Consideration Contingent consideration represents additional consideration that may be transferred to former owners of an acquired entity in the future if certain future events occur or conditions are met. Contingent consideration resulting from the acquisition of a business is recorded at fair value on the acquisition date. Such contingent consideration is re-measured to its estimated fair value at each reporting date with the change in fair value recognized within operating expenses in the Company’s condensed consolidated statements of operations. Subsequent changes in the fair value of the contingent consideration are classified as an adjustment to cash flows from operating activities in the condensed consolidated statements of cash flows because the change in fair value is an input in determining net (loss) income. Cash paid in settlement of contingent consideration liabilities are classified as cash flows from financing activities up to the acquisition date fair value with any excess classified as cash flows from operating activities. Changes in the fair value of contingent consideration liabilities associated with the acquisition of a business can result from updates to assumptions such as the expected timing or probability of achieving customer-related performance targets, specified sales milestones, changes in projected revenue or changes in discount rates. Judgment is used in determining those assumptions as of the acquisition date and for each subsequent reporting period. Therefore, any changes in the fair value will impact the Company’s results of operations in such reporting period, thereby resulting in potential variability in the Company’s operating results until such contingencies are resolved. |
Concentration of Credit Risk | Concentration of Credit RiskFinancial 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. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 Nucleic Acid Production Biologics Safety Testing Total North America $ 27,653 $ 6,677 $ 34,330 Europe, the Middle East and Africa 13,221 3,928 17,149 Asia Pacific 12,343 4,977 17,320 Latin and Central America 48 67 115 Total revenue $ 53,265 $ 15,649 $ 68,914 Six Months Ended June 30, 2023 Nucleic Acid Production Biologics Safety Testing Total North America $ 61,068 $ 13,770 $ 74,838 Europe, the Middle East and Africa 17,642 8,499 26,141 Asia Pacific 35,894 10,798 46,692 Latin and Central America 112 156 268 Total revenue $ 114,716 $ 33,223 $ 147,939 Three Months Ended June 30, 2022 Nucleic Acid Production Biologics Safety Testing Total North America $ 82,015 $ 7,172 $ 89,187 Europe, the Middle East and Africa 113,461 4,578 118,039 Asia Pacific 29,737 5,605 35,342 Latin and Central America 35 129 164 Total revenue $ 225,248 $ 17,484 $ 242,732 Six Months Ended June 30, 2022 Nucleic Acid Production Biologics Safety Testing Total North America $ 161,433 $ 14,691 $ 176,124 Europe, the Middle East and Africa 244,811 9,275 254,086 Asia Pacific 42,604 13,933 56,537 Latin and Central America 50 228 278 Total revenue $ 448,898 $ 38,127 $ 487,025 |
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 June 30, Six Months Ended June 30, June 30, 2023 December 31, 2022 2023 2022 2023 2022 Nacalai USA, Inc. 11.9 % * 16.5 % * 16.3 % 20.3 % GSK plc 11.2 % * * * 15.7 % * Merck & Co., Inc. * * * * 10.6 % * BioNTech SE * 32.7 % * 36.7 % * 12.0 % Pfizer Inc. * 32.1 % * 30.9 % * 19.2 % CureVac N.V. * * * * * 15.7 % ____________________ * Less than 10% |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The acquisition date fair value of consideration transferred to acquire Alphazyme consisted of the following (in thousands): Cash paid (1) $ 70,037 Fair value of contingent consideration 5,289 Total consideration transferred $ 75,326 ____________________ (1) Represents cash consideration paid at closing of $70.1 million, net of a purchase price adjustment received in June 2023 of $0.1 million. Cash $ 288 Inventory 7,246 Other current assets 660 Intangible assets, net 31,680 Other assets 5,043 Total identifiable assets acquired 44,917 Current liabilities (482) Other long-term liabilities (11,900) Total liabilities assumed (12,382) Net identifiable assets acquired 32,535 Goodwill 42,791 Net assets acquired $ 75,326 The acquisition date fair value of consideration transferred to acquire MyChem consisted of the following (in thousands): Cash paid (1) $ 240,145 Consideration payable 10,000 Fair value of contingent consideration 7,800 Total consideration transferred $ 257,945 ____________________ (1) Represents cash consideration paid at closing of $240.0 million and a purchase price adjustment paid in November 2022 of $0.1 million. The following table summarizes the final allocation of the purchase price based upon the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): Cash $ 1,176 Current assets 2,741 Intangible assets, net 123,360 Other assets 8,585 Total identifiable assets acquired 135,862 Current liabilities (420) Other long-term liabilities (8,399) Total liabilities assumed (8,819) Net identifiable assets acquired 127,043 Goodwill 130,902 Net assets acquired $ 257,945 |
Summary of Intangible Assets Acquired | The following table summarizes the estimated fair values of Alphazyme’s identifiable intangible assets as of the date of acquisition and their estimated useful lives: Estimated Fair Value Estimated Useful Life Trade names $ 220 5 Developed technology 31,000 12 Customer relationships 460 12 Total $ 31,680 The following table summarizes the estimated fair values of MyChem’s identifiable intangible assets as of the date of acquisition and their estimated useful lives: Estimated Fair Value Estimated Useful Life Trade names $ 460 3 Developed technology 121,000 12 Customer relationships 1,900 12 Total $ 123,360 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill | The following table summarizes the activity in the Company’s goodwill by segment for the period presented (in thousands): Nucleic Acid Production Biologics Safety Testing Total Balance as of December 31, 2022 $ 163,740 $ 119,928 $ 283,668 Acquisition 42,791 — 42,791 Balance as of June 30, 2023 $ 206,531 $ 119,928 $ 326,459 |
Summary of Components of Finite-Lived Intangible Assets | The following are components of finite-lived intangible assets and accumulated amortization as of the periods presented (in thousands): June 30, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Life Weighted Average Remaining Amortization Period (in thousands) (in years) (in years) Trade names $ 7,800 $ 6,059 $ 1,741 3 - 10 3.2 Patents and developed technology 319,649 97,367 222,282 10 - 14 9.4 Customer relationships 22,313 11,610 10,703 10 - 12 6.3 Total $ 349,762 $ 115,036 $ 234,726 9.2 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Life Weighted Average Remaining Amortization Period (in thousands) (in years) (in years) Trade names $ 7,580 $ 5,746 $ 1,834 3 - 10 3.5 Patents and developed technology 288,649 85,058 203,591 10 - 14 9.5 Customer relationships 21,853 10,615 11,238 10 - 12 6.5 Total $ 318,082 $ 101,419 $ 216,663 9.3 |
Summary of Estimated Future Amortization Expense For Finite-lived Intangible Assets | As of June 30, 2023, the estimated future amortization expense for finite-lived intangible assets were as follows (in thousands): 2023 (remaining six months) $ 13,739 2024 27,478 2025 27,335 2026 27,098 2027 26,082 Thereafter 112,994 Total estimated amortization expense $ 234,726 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets Measured on Recurring Basis | The following tables summarize the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy as of the periods presented (in thousands): Fair Value Measurements as of June 30, 2023 Level 1 Level 2 Level 3 Total Assets Money market mutual funds $ 326,407 $ — $ — $ 326,407 Interest rate cap — 13,981 — 13,981 Total assets $ 326,407 $ 13,981 $ — $ 340,388 Liabilities Current portion of contingent consideration $ — $ — $ 257 $ 257 Contingent consideration, non-current — — 2,716 2,716 Total liabilities $ — $ — $ 2,973 $ 2,973 Fair Value Measurements as of December 31, 2022 Level 1 Level 2 Level 3 Total Assets Interest rate cap $ — $ 11,362 $ — $ 11,362 |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The following table provides a reconciliation of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period presented (in thousands): Contingent Consideration Balance as of December 31, 2021 $ — Contingent consideration related to the acquisition of MyChem 7,800 Change in estimated fair value of contingent consideration (7,800) Balance as of December 31, 2022 — Contingent consideration related to the acquisition of Alphazyme 5,289 Change in estimated fair value of contingent consideration (2,316) Balance as of June 30, 2023 $ 2,973 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | Inventory consisted of the following as of the periods presented (in thousands): June 30, 2023 December 31, 2022 Raw materials $ 25,622 $ 13,486 Work-in-process 14,495 21,950 Finished goods 7,285 7,716 Total inventory $ 47,402 $ 43,152 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Summary of Leases Assets and Liabilities | The following table presents supplemental balance sheet information related to the Company's leases as of the periods presented (in thousands): Line Item in the Condensed Consolidated Balance Sheets June 30, 2023 December 31, 2022 Right-of-use assets Finance leases Property and equipment, net $ 80,570 $ — Operating leases Other assets 65,014 63,896 Total right-of-use assets $ 145,584 $ 63,896 Current lease liabilities Finance leases Current portion of finance lease liabilities $ 560 $ — Operating leases Accrued expenses and other current liabilities 6,918 6,269 Total current lease liabilities $ 7,478 $ 6,269 Non-current lease liabilities Finance leases Finance lease liabilities, less current portion $ 32,236 $ — Operating leases Other long-term liabilities 51,779 51,556 Total non-current lease liabilities $ 84,015 $ 51,556 |
Summary of Lease Cost | The components of the net lease costs for the Company’s leases reflected in the Company's condensed consolidated statements of operations were as follows for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Finance lease costs: Depreciation of leased assets $ 573 $ — $ 573 $ — Interest on lease liabilities 331 — 331 — Total finance lease costs 904 — 904 — Operating lease costs 3,120 1,892 6,178 3,766 Variable lease costs 912 543 1,897 1,068 Total lease costs $ 4,936 $ 2,435 $ 8,979 $ 4,834 The weighted average remaining lease term and weighted average discount rate related to the Company's ROU assets and lease liabilities for its leases were as follows as of the periods presented: June 30, 2023 December 31, 2022 Weighted average remaining lease term (in years): Finance leases 14.7 * Operating leases 7.6 7.9 Weighted average discount rate: Finance leases 8.4 % * Operating leases 6.6 % 6.5 % ____________________ * The Company did not have any finance leases as of December 31, 2022. Supplemental information concerning the cash flow impact arising from the Company's leases recorded in the Company's condensed consolidated statements of cash flows is detailed in the following table for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cash paid for amounts included in lease liabilities: Financing cash flows used for finance leases $ 66 $ — $ 66 $ — Operating cash flows used for finance leases 331 — 331 — Operating cash flows used for operating leases 2,617 1,521 5,040 3,019 Non-cash transactions: Right-of-use assets obtained in exchange for new finance lease liabilities $ 15,795 $ — $ 32,862 $ — Right-of-use assets obtained in exchange for new operating lease liabilities — — 3,931 773 |
Summary of Future Operating Lease Payments | As of June 30, 2023, the Company expects that its future minimum lease payments will become due and payable as follows (in thousands): Finance Leases Operating Leases Total 2023 (remaining six months) $ 1,631 $ 5,268 $ 6,899 2024 3,327 10,774 14,101 2025 3,427 10,952 14,379 2026 3,530 10,042 13,572 2027 3,636 8,564 12,200 Thereafter 44,102 34,125 78,227 Total minimum lease payments 59,653 79,725 139,378 Less: interest (26,857) (21,028) (47,885) Total lease liabilities $ 32,796 $ 58,697 $ 91,493 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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): June 30, 2023 December 31, 2022 Tranche B Term Loan $ 535,840 $ 538,560 Unamortized debt issuance costs (10,064) (11,123) Total long-term debt 525,776 527,437 Less: current portion (5,440) (5,440) Total long-term debt, less current portion $ 520,336 $ 521,997 |
Schedule of Maturities of Long-Term Debt | As of June 30, 2023, 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): 2023 (remaining six months) $ 2,720 2024 5,440 2025 5,440 2026 5,440 2027 516,800 Total long-term debt $ 535,840 |
Net (Loss) Income Per Class A_2
Net (Loss) Income Per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc. (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net (Loss) Income Per Share | The following table presents the computation of basic and diluted net (loss) income per Class A common share attributable to the Company for the periods presented (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net (loss) income $ (11,943) $ 156,721 $ (13,291) $ 303,581 Less: loss (income) attributable to common non-controlling interests 5,402 (85,481) 6,683 (165,479) Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.—basic (6,541) 71,240 (6,608) 138,102 Net (loss) income effect of dilutive securities: Effect of dilutive employee stock purchase plan (“ESPP”), restricted stock units (“RSUs”) and stock options — 43 — 74 Effect of the assumed conversion of Class B common stock — 65,256 — 126,327 Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.—diluted $ (6,541) $ 136,539 $ (6,608) $ 264,503 Denominator: Weighted average Class A common shares outstanding—basic 131,864 131,524 131,802 131,506 Weighted average effect of dilutive securities: Effect of dilutive ESPP, RSUs and stock options — 168 — 149 Effect of the assumed conversion of Class B common stock — 123,669 — 123,669 Weighted average Class A common shares outstanding—diluted 131,864 255,361 131,802 255,324 Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.: Basic $ (0.05) $ 0.54 $ (0.05) $ 1.05 Diluted $ (0.05) $ 0.53 $ (0.05) $ 1.03 |
Summary of Dilutive Securities Excluded from Computation of (Loss) Income Per Share | The following table presents potentially dilutive securities excluded from the computation of diluted net (loss) income per share for the periods presented because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 RSUs 3,355 — 3,151 — Stock options 4,542 2,063 4,542 2,064 Shares estimated to be purchased under the ESPP 10 55 9 52 Shares of Class B common stock 119,094 — 119,094 — Total 127,001 2,118 126,796 2,116 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The following table summarizes the Company’s income tax (benefit) expense and effective tax rate for the periods presented (in thousands, except percentages): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (Loss) income before income taxes $ (13,364) $ 174,992 $ (17,887) $ 341,833 Income tax (benefit) expense $ (1,421) $ 18,271 $ (4,596) $ 38,252 Effective tax rate 10.6 % 10.4 % 25.7 % 11.2 % |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Summary of Segment Reporting Information | The following schedule includes revenue and adjusted EBITDA for each of the Company’s reportable operating segments (in thousands). Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue: Nucleic Acid Production $ 53,265 $ 225,255 $ 114,716 $ 448,905 Biologics Safety Testing 15,651 17,484 33,225 38,127 Total reportable segments’ revenue 68,916 242,739 147,941 487,032 Intersegment eliminations (2) (7) (2) (7) Total $ 68,914 $ 242,732 $ 147,939 $ 487,025 Segment adjusted EBITDA: Nucleic Acid Production $ 14,192 $ 186,291 $ 42,065 $ 369,090 Biologics Safety Testing 10,315 14,102 24,061 30,634 Total reportable segments’ adjusted EBITDA 24,507 200,393 66,126 399,724 Reconciliation of total reportable segments’ adjusted EBITDA to (loss) income before income taxes Amortization (6,852) (6,252) (13,617) (11,779) Depreciation (2,815) (1,892) (4,895) (3,747) Interest expense (7,022) (4,434) (18,855) (7,098) Interest income 6,791 — 12,836 — Corporate costs, net of eliminations (15,430) (11,914) (33,251) (24,253) Other adjustments: Acquisition contingent consideration 2,316 7,800 2,316 7,800 Acquisition integration costs (3,466) (3,103) (5,930) (7,882) Stock-based compensation (9,272) (4,308) (15,259) (7,935) Merger and acquisition related expenses (371) (7) (3,662) (1,195) Financing costs — (27) — (1,064) Acquisition related tax adjustment (1,620) (1,264) (1,447) (1,264) Tax Receivable Agreement liability adjustment 101 — (1,335) 2,340 Other (231) — (914) (1,814) (Loss) income before income taxes (13,364) 174,992 (17,887) 341,833 Income tax benefit (expense) 1,421 (18,271) 4,596 (38,252) Net (loss) income $ (11,943) $ 156,721 $ (13,291) $ 303,581 |
Reconciliation of Revenue | The following schedule includes revenue and adjusted EBITDA for each of the Company’s reportable operating segments (in thousands). Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue: Nucleic Acid Production $ 53,265 $ 225,255 $ 114,716 $ 448,905 Biologics Safety Testing 15,651 17,484 33,225 38,127 Total reportable segments’ revenue 68,916 242,739 147,941 487,032 Intersegment eliminations (2) (7) (2) (7) Total $ 68,914 $ 242,732 $ 147,939 $ 487,025 Segment adjusted EBITDA: Nucleic Acid Production $ 14,192 $ 186,291 $ 42,065 $ 369,090 Biologics Safety Testing 10,315 14,102 24,061 30,634 Total reportable segments’ adjusted EBITDA 24,507 200,393 66,126 399,724 Reconciliation of total reportable segments’ adjusted EBITDA to (loss) income before income taxes Amortization (6,852) (6,252) (13,617) (11,779) Depreciation (2,815) (1,892) (4,895) (3,747) Interest expense (7,022) (4,434) (18,855) (7,098) Interest income 6,791 — 12,836 — Corporate costs, net of eliminations (15,430) (11,914) (33,251) (24,253) Other adjustments: Acquisition contingent consideration 2,316 7,800 2,316 7,800 Acquisition integration costs (3,466) (3,103) (5,930) (7,882) Stock-based compensation (9,272) (4,308) (15,259) (7,935) Merger and acquisition related expenses (371) (7) (3,662) (1,195) Financing costs — (27) — (1,064) Acquisition related tax adjustment (1,620) (1,264) (1,447) (1,264) Tax Receivable Agreement liability adjustment 101 — (1,335) 2,340 Other (231) — (914) (1,814) (Loss) income before income taxes (13,364) 174,992 (17,887) 341,833 Income tax benefit (expense) 1,421 (18,271) 4,596 (38,252) Net (loss) income $ (11,943) $ 156,721 $ (13,291) $ 303,581 |
Organization and Significant _4
Organization and Significant Accounting Policies - Description of Business (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 2 |
Organization and Significant _5
Organization and Significant Accounting Policies - Organization and Organizational Transactions (Details) - $ / shares | Jan. 22, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | |||
Period used for weighted average price | 50 days | ||
Common unit forfeiture percentage | 3.70% | ||
Class B Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Alphazyme Holdings, Inc | |||
Class of Stock [Line Items] | |||
Common units acquired (in shares) | 5,059,134 | ||
Newly issued shares repurchased (in usd per share) | $ 13.87 | ||
Maravai LifeSciences Holdings, Inc. and Alphazyme Holdings, Inc. | |||
Class of Stock [Line Items] | |||
Common units forfeited (in shares) | 5,059,134 | ||
MLSH 1 | |||
Class of Stock [Line Items] | |||
Common units forfeited (in shares) | 4,871,970 |
Organization and Significant _6
Organization and Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Contract assets | $ 0 | $ 0 |
Contract liabilities | $ 5,600,000 | $ 4,800,000 |
Organization and Significant _7
Organization and Significant Accounting Policies - Geographical Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 68,914 | $ 242,732 | $ 147,939 | $ 487,025 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 34,330 | 89,187 | 74,838 | 176,124 |
Europe, the Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 17,149 | 118,039 | 26,141 | 254,086 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 17,320 | 35,342 | 46,692 | 56,537 |
Latin and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 115 | 164 | 268 | 278 |
Nucleic Acid Production | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 53,265 | 225,248 | 114,716 | 448,898 |
Nucleic Acid Production | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 27,653 | 82,015 | 61,068 | 161,433 |
Nucleic Acid Production | Europe, the Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 13,221 | 113,461 | 17,642 | 244,811 |
Nucleic Acid Production | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 12,343 | 29,737 | 35,894 | 42,604 |
Nucleic Acid Production | Latin and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 48 | 35 | 112 | 50 |
Biologics Safety Testing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 15,649 | 17,484 | 33,223 | 38,127 |
Biologics Safety Testing | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,677 | 7,172 | 13,770 | 14,691 |
Biologics Safety Testing | Europe, the Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,928 | 4,578 | 8,499 | 9,275 |
Biologics Safety Testing | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 4,977 | 5,605 | 10,798 | 13,933 |
Biologics Safety Testing | Latin and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 67 | $ 129 | $ 156 | $ 228 |
Organization and Significant _8
Organization and Significant Accounting Policies - Non-Controlling Interests (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Noncontrolling Interest [Line Items] | ||||
Stock conversion ratio | 1 | |||
Topco LLC | Tax Distribution | ||||
Noncontrolling Interest [Line Items] | ||||
Tax distributions paid | $ 2.8 | $ 88.2 | $ 20.3 | $ 170.5 |
Topco LLC | Tax Distribution | MLSH 1 | ||||
Noncontrolling Interest [Line Items] | ||||
Tax distributions paid | $ 1.3 | $ 42.6 | $ 9.6 | $ 82.5 |
Topco LLC | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership percent by parent | 52.60% | 52.60% | ||
Topco LLC | MLSH 1 | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership percent by noncontrolling interest | 47.40% | 47.40% |
Organization and Significant _9
Organization and Significant Accounting Policies - Segment Information (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Organization and Significant_10
Organization and Significant Accounting Policies - Accounts Receivable and Allowance for Credit Losses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Allowance for credit loss | $ 2,000,000 | $ 2,000,000 | $ 2,200,000 | ||
Recovery | $ 0 | $ 0 | $ 500,000 | $ 0 |
Organization and Significant_11
Organization and Significant Accounting Policies - Concentration Risk (Details) - Customer Concentration Risk | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Revenue | Nacalai USA, Inc. | |||||
Product Information [Line Items] | |||||
Concentration risk | 11.90% | 16.50% | |||
Revenue | GSK plc | |||||
Product Information [Line Items] | |||||
Concentration risk | 11.20% | ||||
Revenue | BioNTech SE | |||||
Product Information [Line Items] | |||||
Concentration risk | 32.70% | 36.70% | |||
Revenue | Pfizer Inc. | |||||
Product Information [Line Items] | |||||
Concentration risk | 32.10% | 30.90% | |||
Accounts Receivable, net | Nacalai USA, Inc. | |||||
Product Information [Line Items] | |||||
Concentration risk | 16.30% | 20.30% | |||
Accounts Receivable, net | GSK plc | |||||
Product Information [Line Items] | |||||
Concentration risk | 15.70% | ||||
Accounts Receivable, net | Merck & Co., Inc. | |||||
Product Information [Line Items] | |||||
Concentration risk | 10.60% | ||||
Accounts Receivable, net | BioNTech SE | |||||
Product Information [Line Items] | |||||
Concentration risk | 12% | ||||
Accounts Receivable, net | Pfizer Inc. | |||||
Product Information [Line Items] | |||||
Concentration risk | 19.20% | ||||
Accounts Receivable, net | CureVac N.V. | |||||
Product Information [Line Items] | |||||
Concentration risk | 15.70% |
Acquisitions - Alphazyme Narrat
Acquisitions - Alphazyme Narrative (Details) | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |||||
Jan. 18, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |||||||||
Transaction costs | $ 371,000 | $ 7,000 | $ 3,662,000 | $ 1,195,000 | |||||
Fair value of contingent consideration liability recorded in connection with acquisition of a business | $ 2,973,000 | 2,973,000 | $ 2,973,000 | 2,973,000 | $ 0 | $ 0 | |||
SPA, Retention Payment | |||||||||
Business Acquisition [Line Items] | |||||||||
Fair value of contingent consideration liability recorded in connection with acquisition of a business | $ 9,300,000 | ||||||||
Alphazyme | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | 75,300,000 | $ 75,326,000 | |||||||
Transaction costs | 0 | 4,100,000 | |||||||
Goodwill expected to be deductible for income tax | $ 0 | ||||||||
Purchase price adjustment received | $ 100,000 | ||||||||
Alphazyme | Discount Rate | Discounted Cash Flow | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets, measurement input | 0.178 | ||||||||
Alphazyme | Obsolescent Curve | Discounted Cash Flow | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets, measurement input | 0.050 | ||||||||
Alphazyme | Minimum | Revenue Growth Rate | Discounted Cash Flow | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets, measurement input | 0.030 | ||||||||
Alphazyme | Maximum | Revenue Growth Rate | Discounted Cash Flow | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets, measurement input | 0.550 | ||||||||
Alphazyme | Potential Working Capital Adjustments | |||||||||
Business Acquisition [Line Items] | |||||||||
Escrow deposit | $ 1,500,000 | ||||||||
Escrow deposit released | 1,500,000 | ||||||||
Alphazyme | Secure Representations and Warranties | |||||||||
Business Acquisition [Line Items] | |||||||||
Escrow deposit | $ 3,000,000 | ||||||||
Alphazyme | MyChem Legacy Owners | |||||||||
Business Acquisition [Line Items] | |||||||||
Service period | 3 years | ||||||||
Alphazyme | SPA, Maximum Performance Payment | |||||||||
Business Acquisition [Line Items] | |||||||||
Fair value of contingent consideration liability recorded in connection with acquisition of a business | $ 75,000,000 | ||||||||
Alphazyme | SPA, Retention Payment | MyChem Legacy Owners | Research and Development Expense | |||||||||
Business Acquisition [Line Items] | |||||||||
Compensation expense | $ 600,000 | $ 1,100,000 |
Acquisitions - Summary of Consi
Acquisitions - Summary of Consideration Transferred (Details) - USD ($) $ in Thousands | 1 Months Ended | 5 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | |||
Jan. 18, 2023 | Jan. 27, 2022 | Jun. 30, 2023 | Nov. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | Nov. 30, 2022 | Dec. 31, 2022 | |
Alphazyme | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash paid | $ 70,100 | $ 70,037 | ||||||
Fair value of contingent consideration | 5,300 | 5,289 | $ 5,289 | |||||
Total consideration transferred | $ 75,300 | $ 75,326 | ||||||
Purchase price adjustment received | $ 100 | |||||||
MyChem | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash paid | $ 240,000 | $ 100 | $ 240,145 | |||||
Consideration payable | 10,000 | |||||||
Fair value of contingent consideration | 7,800 | 7,800 | $ 7,800 | |||||
Total consideration transferred | $ 257,900 | $ 257,945 |
Acquisitions - Summary of Asset
Acquisitions - Summary of Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jan. 18, 2023 | Dec. 31, 2022 | Jan. 27, 2022 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 326,459 | $ 283,668 | ||
Alphazyme | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 288 | |||
Inventory | 7,246 | |||
Other current assets | 660 | |||
Intangible assets, net | 31,680 | |||
Other assets | 5,043 | |||
Total identifiable assets acquired | 44,917 | |||
Current liabilities | (482) | |||
Other long-term liabilities | (11,900) | |||
Total liabilities assumed | (12,382) | |||
Net identifiable assets acquired | 32,535 | |||
Goodwill | 42,791 | |||
Net assets acquired | $ 75,326 | |||
MyChem | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 1,176 | |||
Other current assets | 2,741 | |||
Intangible assets, net | 123,360 | |||
Other assets | 8,585 | |||
Total identifiable assets acquired | 135,862 | |||
Current liabilities | (420) | |||
Other long-term liabilities | (8,399) | |||
Total liabilities assumed | (8,819) | |||
Net identifiable assets acquired | 127,043 | |||
Goodwill | 130,902 | |||
Net assets acquired | $ 257,945 |
Acquisitions - Summary of Intan
Acquisitions - Summary of Intangible Assets Acquired (Details) - USD ($) $ in Thousands | Jan. 18, 2023 | Jan. 27, 2022 |
Alphazyme | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | $ 31,680 | |
Alphazyme | Trade names | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | $ 220 | |
Estimated Useful Life (in years) | 5 years | |
Alphazyme | Developed technology | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | $ 31,000 | |
Estimated Useful Life (in years) | 12 years | |
Alphazyme | Customer relationships | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | $ 460 | |
Estimated Useful Life (in years) | 12 years | |
MyChem | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | $ 123,360 | |
MyChem | Trade names | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | $ 460 | |
Estimated Useful Life (in years) | 3 years | |
MyChem | Developed technology | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | $ 121,000 | |
Estimated Useful Life (in years) | 12 years | |
MyChem | Customer relationships | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | $ 1,900 | |
Estimated Useful Life (in years) | 12 years |
Acquisitions - MyChem Narrative
Acquisitions - MyChem Narrative (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | 10 Months Ended | |||||||
Jan. 28, 2023 USD ($) | Jan. 27, 2022 USD ($) | Nov. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Nov. 30, 2022 USD ($) | Jan. 18, 2023 USD ($) | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |||||||||||||
Transaction costs | $ 371 | $ 7 | $ 3,662 | $ 1,195 | |||||||||
Fair value of contingent consideration liability recorded in connection with acquisition of a business | 2,973 | $ 0 | $ 2,973 | 2,973 | $ 0 | ||||||||
SPA, Retention Payment | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of contingent consideration liability recorded in connection with acquisition of a business | $ 9,300 | ||||||||||||
MyChem | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Consideration transferred | $ 257,900 | $ 257,945 | |||||||||||
Transaction costs | 400 | 3,400 | |||||||||||
Cash paid | 240,000 | $ 100 | $ 240,145 | ||||||||||
Goodwill purchase adjustment | 100 | ||||||||||||
Decrease in other assets | 700 | ||||||||||||
Decrease in current liabilities | 700 | ||||||||||||
Indemnification asset amount | $ 8,000 | ||||||||||||
MyChem | Discount Rate | Discounted Cash Flow | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Intangible assets, measurement input | 0.165 | ||||||||||||
MyChem | Minimum | Revenue Growth Rate | Discounted Cash Flow | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Intangible assets, measurement input | 0.030 | ||||||||||||
MyChem | Minimum | Obsolescent Curve | Discounted Cash Flow | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Intangible assets, measurement input | 0.050 | ||||||||||||
MyChem | Maximum | Revenue Growth Rate | Discounted Cash Flow | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Intangible assets, measurement input | 0.306 | ||||||||||||
MyChem | Maximum | Obsolescent Curve | Discounted Cash Flow | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Intangible assets, measurement input | 0.075 | ||||||||||||
MyChem | Potential Working Capital Adjustments | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Escrow deposit | $ 1,000 | ||||||||||||
Additional escrow deposit payments | $ 100 | ||||||||||||
MyChem | Secure Representations and Warranties | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Escrow deposit | $ 12,500 | ||||||||||||
Release of escrow deposit | $ 12,400 | ||||||||||||
MyChem | Indemnification of Pre-Closing Liabilities | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Release of escrow deposit | 100 | ||||||||||||
MyChem | MyChem Legacy Owners | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Service period | 2 years | ||||||||||||
MyChem | SPA, Maximum Performance Payment | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of contingent consideration liability recorded in connection with acquisition of a business | $ 40,000 | ||||||||||||
MyChem | SPA, Retention Payment | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of contingent consideration liability recorded in connection with acquisition of a business | 20,000 | ||||||||||||
MyChem | SPA, Retention Payment | MyChem Legacy Owners | Cost of Revenue | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Compensation expense | 1,200 | 1,800 | |||||||||||
MyChem | SPA, Retention Payment | MyChem Legacy Owners | Research and Development Expense | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Compensation expense | $ 1,300 | $ 2,500 | $ 2,500 | $ 4,300 | |||||||||
MyChem | SPA, Completion of Acquired Inventory | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of contingent consideration liability recorded in connection with acquisition of a business | $ 10,000 | ||||||||||||
Cash paid | $ 9,700 | $ 300 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) reporting_unit | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) reporting_unit | Mar. 31, 2023 USD ($) | Jan. 18, 2023 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 326,459 | $ 326,459 | $ 283,668 | ||||
Number of reporting units | reporting_unit | 4 | 3 | |||||
Acquisition | $ 42,791 | ||||||
Amortization of intangible assets | 13,617 | $ 11,779 | |||||
Alphazyme | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 42,791 | ||||||
Acquisition | 42,800 | ||||||
Intangible assets, net | $ 31,700 | ||||||
Cost of Revenue | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Amortization of intangible assets | 6,200 | $ 5,600 | 12,300 | 10,300 | |||
Selling, General and Administrative Expenses | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Amortization of intangible assets | $ 700 | $ 700 | $ 1,300 | $ 1,500 | |||
Minimum | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Estimated useful life | 3 years | 3 years | |||||
Maximum | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Estimated useful life | 14 years | 14 years | |||||
Nucleic Acid Production | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 206,531 | $ 206,531 | $ 163,740 | ||||
Number of reporting units | reporting_unit | 3 | 2 | |||||
Acquisition | $ 42,791 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Segment's Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 283,668 |
Acquisition | 42,791 |
Ending balance | 326,459 |
Nucleic Acid Production | |
Goodwill [Roll Forward] | |
Beginning balance | 163,740 |
Acquisition | 42,791 |
Ending balance | 206,531 |
Biologics Safety Testing | |
Goodwill [Roll Forward] | |
Beginning balance | 119,928 |
Acquisition | 0 |
Ending balance | $ 119,928 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Components of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 349,762 | $ 318,082 |
Accumulated Amortization | 115,036 | 101,419 |
Net Carrying Amount | $ 234,726 | $ 216,663 |
Weighted Average Remaining Amortization Period | 9 years 2 months 12 days | 9 years 3 months 18 days |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 14 years | |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 7,800 | $ 7,580 |
Accumulated Amortization | 6,059 | 5,746 |
Net Carrying Amount | $ 1,741 | $ 1,834 |
Weighted Average Remaining Amortization Period | 3 years 2 months 12 days | 3 years 6 months |
Trade names | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years | 3 years |
Trade names | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | 10 years |
Patents and developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 319,649 | $ 288,649 |
Accumulated Amortization | 97,367 | 85,058 |
Net Carrying Amount | $ 222,282 | $ 203,591 |
Weighted Average Remaining Amortization Period | 9 years 4 months 24 days | 9 years 6 months |
Patents and developed technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | 10 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 | $ 22,313 | $ 21,853 |
Accumulated Amortization | 11,610 | 10,615 |
Net Carrying Amount | $ 10,703 | $ 11,238 |
Weighted Average Remaining Amortization Period | 6 years 3 months 18 days | 6 years 6 months |
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 | 12 years | 12 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Expected Amortization of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (remaining six months) | $ 13,739 | |
2024 | 27,478 | |
2025 | 27,335 | |
2026 | 27,098 | |
2027 | 26,082 | |
Thereafter | 112,994 | |
Net Carrying Amount | $ 234,726 | $ 216,663 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Recurring Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | |||
Derivative Asset | $ 340,388 | ||
Liabilities | |||
Total liabilities | 2,973 | $ 0 | $ 0 |
Fair Value, Recurring | |||
Liabilities | |||
Current portion of contingent consideration | 257 | ||
Contingent consideration, non-current | 2,716 | ||
Total liabilities | 2,973 | ||
Fair Value, Recurring | Money market mutual funds | |||
Assets | |||
Derivative Asset | 326,407 | ||
Fair Value, Recurring | Interest rate cap | |||
Assets | |||
Derivative Asset | 13,981 | 11,362 | |
Fair Value, Recurring | Level 1 | |||
Assets | |||
Derivative Asset | 326,407 | ||
Liabilities | |||
Current portion of contingent consideration | 0 | ||
Contingent consideration, non-current | 0 | ||
Total liabilities | 0 | ||
Fair Value, Recurring | Level 1 | Money market mutual funds | |||
Assets | |||
Derivative Asset | 326,407 | ||
Fair Value, Recurring | Level 1 | Interest rate cap | |||
Assets | |||
Derivative Asset | 0 | 0 | |
Fair Value, Recurring | Level 2 | |||
Assets | |||
Derivative Asset | 13,981 | ||
Liabilities | |||
Current portion of contingent consideration | 0 | ||
Contingent consideration, non-current | 0 | ||
Total liabilities | 0 | ||
Fair Value, Recurring | Level 2 | Money market mutual funds | |||
Assets | |||
Derivative Asset | 0 | ||
Fair Value, Recurring | Level 2 | Interest rate cap | |||
Assets | |||
Derivative Asset | 13,981 | 11,362 | |
Fair Value, Recurring | Level 3 | |||
Assets | |||
Derivative Asset | 0 | ||
Liabilities | |||
Current portion of contingent consideration | 257 | ||
Contingent consideration, non-current | 2,716 | ||
Total liabilities | 2,973 | ||
Fair Value, Recurring | Level 3 | Money market mutual funds | |||
Assets | |||
Derivative Asset | 0 | ||
Fair Value, Recurring | Level 3 | Interest rate cap | |||
Assets | |||
Derivative Asset | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 3 Months Ended | 5 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | |||||
Jan. 18, 2023 USD ($) payment | Jan. 27, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Nov. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Contingent consideration | $ 2,973 | $ 2,973 | $ 2,973 | $ 0 | $ 0 | |||||
Decrease in estimated fair value of contingent consideration | 2,316 | $ 7,800 | 2,316 | $ 7,800 | 7,800 | |||||
Alphazyme | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Fair value of contingent consideration | $ 5,300 | $ 5,289 | $ 5,289 | |||||||
Number of payments | payment | 3 | |||||||||
Payment period | 3 years | |||||||||
Decrease in estimated fair value of contingent consideration | $ 2,300 | |||||||||
Alphazyme | Discount Rate | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Contingent consideration liability, measurement input | 0.178 | |||||||||
Alphazyme | SPA, Maximum Performance Payment | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Contingent consideration | $ 75,000 | |||||||||
MyChem | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Fair value of contingent consideration | $ 7,800 | $ 7,800 | $ 7,800 | |||||||
Decrease in estimated fair value of contingent consideration | $ 7,800 | |||||||||
MyChem | Discount Rate | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Contingent consideration liability, measurement input | 0.169 | |||||||||
MyChem | SPA, Maximum Performance Payment | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Contingent consideration | $ 40,000 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | ||||
Jan. 18, 2023 | Jan. 27, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Nov. 30, 2022 | Dec. 31, 2022 | |
Business Combination, Contingent Consideration, Liability [Roll Forward] | |||||||||
Beginning balance | $ 0 | $ 0 | $ 0 | ||||||
Change in estimated fair value of contingent consideration | $ (2,316) | $ (7,800) | (2,316) | $ (7,800) | (7,800) | ||||
Ending balance | 2,973 | $ 2,973 | 2,973 | 0 | |||||
MyChem | |||||||||
Business Combination, Contingent Consideration, Liability [Roll Forward] | |||||||||
Contingent consideration related to the acquisition | $ 7,800 | $ 7,800 | $ 7,800 | ||||||
Change in estimated fair value of contingent consideration | $ (7,800) | ||||||||
Alphazyme | |||||||||
Business Combination, Contingent Consideration, Liability [Roll Forward] | |||||||||
Contingent consideration related to the acquisition | $ 5,300 | $ 5,289 | $ 5,289 | ||||||
Change in estimated fair value of contingent consideration | $ (2,300) |
Balance Sheet Components - Inve
Balance Sheet Components - Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 25,622 | $ 13,486 |
Work-in-process | 14,495 | 21,950 |
Finished goods | 7,285 | 7,716 |
Total inventory | $ 47,402 | $ 43,152 |
Government Assistance (Details)
Government Assistance (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended |
May 31, 2022 USD ($) building | Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
San Diego Facility Lease | |||
Gain Contingencies [Line Items] | |||
Number of buildings | building | 2 | ||
Cooperative Agreement | |||
Gain Contingencies [Line Items] | |||
Expectation of reimbursement amount from government | $ 38.8 | ||
Percentage of reimbursable costs | 50% | ||
Priority access period | 10 years | ||
Government assistance received | $ 0.6 | $ 8.7 | |
Government contract receivable | $ 0.2 | $ 0.2 |
Leases - Narrative (Details)
Leases - Narrative (Details) - extension_option | Jun. 30, 2023 | Mar. 31, 2023 | Jan. 31, 2023 |
Jupiter, Florida | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 5 years | ||
Initial term | 10 years | ||
Number of extension options | 1 | ||
Flanders I | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 5 years | ||
Initial term | 11 years | ||
Number of extension options | 1 | ||
Flanders II | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 5 years | ||
Initial term | 11 years | ||
Number of extension options | 1 | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 20 years |
Leases - Summary of Leases on B
Leases - Summary of Leases on Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Finance leases | $ 80,570 | $ 0 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Operating leases | $ 65,014 | $ 63,896 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Total right-of-use assets | $ 145,584 | $ 63,896 |
Finance leases | 560 | 0 |
Operating leases | $ 6,918 | $ 6,269 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Total current lease liabilities | $ 7,478 | $ 6,269 |
Finance leases | 32,236 | 0 |
Operating leases | $ 51,779 | $ 51,556 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities |
Total non-current lease liabilities | $ 84,015 | $ 51,556 |
Leases - Lease Components (Deta
Leases - Lease Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Leases [Abstract] | |||||
Depreciation of leased assets | $ 573 | $ 0 | $ 573 | $ 0 | |
Interest on lease liabilities | 331 | 0 | 331 | 0 | |
Total finance lease costs | 904 | 0 | 904 | 0 | |
Operating lease costs | 3,120 | 1,892 | 6,178 | 3,766 | |
Variable lease costs | 912 | 543 | 1,897 | 1,068 | |
Total lease costs | $ 4,936 | 2,435 | $ 8,979 | 4,834 | |
Weighted average remaining lease term (in years): | |||||
Finance leases | 14 years 8 months 12 days | 14 years 8 months 12 days | |||
Operating leases | 7 years 7 months 6 days | 7 years 7 months 6 days | 7 years 10 months 24 days | ||
Weighted average discount rate: | |||||
Finance leases | 8.40% | 8.40% | |||
Operating leases | 6.60% | 6.60% | 6.50% | ||
Cash paid for amounts included in lease liabilities: | |||||
Financing cash flows used for finance leases | $ 66 | 0 | $ 66 | 0 | |
Operating cash flows used for finance leases | 331 | 0 | 331 | 0 | |
Operating cash flows used for operating leases | 2,617 | 1,521 | 5,040 | 3,019 | |
Non-cash transactions: | |||||
Right-of-use assets obtained in exchange for new finance lease liabilities | 15,795 | 0 | 32,862 | 0 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 0 | $ 0 | $ 3,931 | $ 773 |
Leases - Minimum Lease Payments
Leases - Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Finance Leases | |
2023 (remaining six months) | $ 1,631 |
2024 | 3,327 |
2025 | 3,427 |
2026 | 3,530 |
2027 | 3,636 |
Thereafter | 44,102 |
Total minimum lease payments | 59,653 |
Less: interest | (26,857) |
Total lease liabilities | 32,796 |
Operating Leases | |
2023 (remaining six months) | 5,268 |
2024 | 10,774 |
2025 | 10,952 |
2026 | 10,042 |
2027 | 8,564 |
Thereafter | 34,125 |
Total minimum lease payments | 79,725 |
Less: interest | (21,028) |
Total lease liabilities | 58,697 |
Total | |
2023 (remaining six months) | 6,899 |
2024 | 14,101 |
2025 | 14,379 |
2026 | 13,572 |
2027 | 12,200 |
Thereafter | 78,227 |
Total minimum lease payments | 139,378 |
Less: interest | (47,885) |
Total lease liabilities | $ 91,493 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Jan. 31, 2022 USD ($) loan | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | May 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | Oct. 31, 2020 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Long-term debt | $ 525,776,000 | $ 525,776,000 | $ 527,437,000 | |||||||
Loss on long-term debt refinancing | 0 | $ 0 | 0 | $ 208,000 | ||||||
Debt issuance costs | 1,800,000 | 1,800,000 | ||||||||
Interest rate cap | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Derivative, notional amount | $ 500,000,000 | $ 415,000,000 | ||||||||
Derivative asset, noncurrent | $ 14,000,000 | $ 14,000,000 | ||||||||
New Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from debt | $ 8,500,000 | |||||||||
Loss on long-term debt refinancing | $ 200,000 | |||||||||
Number of term loans | loan | 2 | |||||||||
New Credit Agreement | Secured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of debt | $ 8,500,000 | |||||||||
New Credit Agreement | Line of Credit | Secured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 600,000,000 | |||||||||
Debt interest rate | 8.03% | 8.03% | ||||||||
Debt issuance costs | 900,000 | |||||||||
Leverage ratio covenant | 4.25 | 4.25 | ||||||||
Excess cash threshold amount | $ 10,000,000 | $ 10,000,000 | ||||||||
New Credit Agreement | Line of Credit | Secured Debt | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Excess cash ratio percentage | 0% | 0% | ||||||||
New Credit Agreement | Line of Credit | Secured Debt | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Excess cash ratio percentage | 25% | 25% | ||||||||
Leverage ratio covenant | 4.75 | 4.75 | ||||||||
New Credit Agreement | Line of Credit | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 180,000,000 | |||||||||
Debt issuance costs | $ 300,000 | $ 300,000 | ||||||||
Outstanding line of credit | $ 0 | $ 0 | $ 0 | |||||||
New Credit Agreement | Line of Credit | Letter 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 | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 535,840 | |
Unamortized debt issuance costs | (10,064) | $ (11,123) |
Total long-term debt | 525,776 | 527,437 |
Less: current portion | (5,440) | (5,440) |
Total long-term debt, less current portion | 520,336 | 521,997 |
Secured Debt | New Credit Agreement | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 535,840 | $ 538,560 |
Long-Term Debt - Maturities of
Long-Term Debt - Maturities of Long-Term Debt (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2023 (remaining six months) | $ 2,720 |
2024 | 5,440 |
2025 | 5,440 |
2026 | 5,440 |
2027 | 516,800 |
Total long-term debt | $ 535,840 |
Net (Loss) Income Per Class A_3
Net (Loss) Income Per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc. - Summary of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||
Net (loss) income | $ (11,943) | $ 156,721 | $ (13,291) | $ 303,581 |
Less: loss (income) attributable to common non-controlling interests | 5,402 | (85,481) | 6,683 | (165,479) |
Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.—basic | (6,541) | 71,240 | (6,608) | 138,102 |
Net (loss) income effect of dilutive securities: | ||||
Effect of dilutive employee stock purchase plan (“ESPP”), restricted stock units (“RSUs”) and stock options | 0 | 43 | 0 | 74 |
Effect of the assumed conversion of Class B common stock | 0 | 65,256 | 0 | 126,327 |
Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.—diluted | $ (6,541) | $ 136,539 | $ (6,608) | $ 264,503 |
Denominator: | ||||
Weighted average Class A common shares outstanding—basic (in shares) | 131,864 | 131,524 | 131,802 | 131,506 |
Weighted average effect of dilutive securities: | ||||
Effect of dilutive ESPP, RSUs and options (in shares) | 0 | 168 | 0 | 149 |
Effect of the assumed conversion of Class B common stock (in shares) | 0 | 123,669 | 0 | 123,669 |
Weighted average Class A common shares outstanding—diluted (in shares) | 131,864 | 255,361 | 131,802 | 255,324 |
Net (loss) income per Class A common share—basic (in usd per share) | $ (0.05) | $ 0.54 | $ (0.05) | $ 1.05 |
Net (loss) income per Class A common share - diluted (in usd per share) | $ (0.05) | $ 0.53 | $ (0.05) | $ 1.03 |
Net (Loss) Income Per Class A_4
Net (Loss) Income Per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc. - Summary of Dilutive Securities Excluded (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of net income per share (in shares) | 127,001 | 2,118 | 126,796 | 2,116 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of net income per share (in shares) | 3,355 | 0 | 3,151 | 0 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of net income per share (in shares) | 4,542 | 2,063 | 4,542 | 2,064 |
Shares estimated 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) | 10 | 55 | 9 | 52 |
Shares of Class B 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) | 119,094 | 0 | 119,094 | 0 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
(Loss) income before income taxes | $ (13,364) | $ 174,992 | $ (17,887) | $ 341,833 |
Income tax (benefit) expense | $ (1,421) | $ 18,271 | $ (4,596) | $ 38,252 |
Effective tax rate | 10.60% | 10.40% | 25.70% | 11.20% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Examination [Line Items] | ||||
Effective tax rate | 10.60% | 10.40% | 25.70% | 11.20% |
Assumed income tax rate | 46.70% | |||
Assumed income tax rate when business income deduction is unavailable | 54.10% | |||
Tax distribution payable | $ 0 | $ 0 | ||
Topco LLC | Tax Distribution | ||||
Income Tax Examination [Line Items] | ||||
Tax distributions paid | 2,800,000 | $ 88,200,000 | 20,300,000 | $ 170,500,000 |
Topco LLC | Maravai LifeSciences Holdings, Inc | Tax Distribution | ||||
Income Tax Examination [Line Items] | ||||
Tax distributions paid | $ 1,500,000 | $ 45,500,000 | $ 10,700,000 | $ 87,900,000 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||||
Percentage of tax benefits paid | 85% | ||||
Gain (loss) on tax receivable agreement | $ 101,000 | $ 0 | $ (1,335,000) | $ 2,340,000 | |
Distribution | 1,305,000 | 42,653,000 | 9,607,000 | 82,542,000 | |
Non-Controlling Interest | |||||
Related Party Transaction [Line Items] | |||||
Distribution | 1,305,000 | 42,588,000 | 9,607,000 | 82,477,000 | |
Related Party | |||||
Related Party Transaction [Line Items] | |||||
Liability payable | 667,934,000 | 667,934,000 | $ 675,956,000 | ||
Related Party | Tax Receivable Agreement, Payments | MLSH1 and MLSH 2 | |||||
Related Party Transaction [Line Items] | |||||
Liability payable | 677,400,000 | 677,400,000 | |||
Related party transaction amounts | 42,600,000 | $ 0 | 42,600,000 | $ 0 | |
Related Party | Tax Receivable Agreement Interest Payments | MLSH1 and MLSH 2 | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction amounts | $ 400,000 | $ 400,000 |
Segments - Narrative (Details)
Segments - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Intersegment eliminations | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Commission expense | $ | $ 0 | $ 0 | $ 0 | $ 0 |
Segments - Reconciliation of Re
Segments - Reconciliation of Revenue and Adjusted EBITDA to Net Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenue | $ 68,914 | $ 242,732 | $ 147,939 | $ 487,025 | |
Amortization | (6,852) | (6,252) | (13,617) | (11,779) | |
Depreciation | (2,815) | (1,892) | (4,895) | (3,747) | |
Interest expense | (7,022) | (4,434) | (18,855) | (7,098) | |
Interest income | 6,791 | 0 | 12,836 | 0 | |
Corporate costs, net of eliminations | (15,430) | (11,914) | (33,251) | (24,253) | |
Other adjustments: | |||||
Fair value of contingent consideration liability recorded in connection with acquisition of a business | 2,316 | 7,800 | 2,316 | 7,800 | $ 7,800 |
Acquisition integration costs | (3,466) | (3,103) | (5,930) | (7,882) | |
Stock-based compensation | (9,272) | (4,308) | (15,259) | (7,935) | |
Merger and acquisition related expenses | (371) | (7) | (3,662) | (1,195) | |
Financing costs | 0 | (27) | 0 | (1,064) | |
Acquisition related tax adjustment | (1,620) | (1,264) | (1,447) | (1,264) | |
Tax Receivable Agreement liability adjustment | 101 | 0 | (1,335) | 2,340 | |
Other | (231) | 0 | (914) | (1,814) | |
(Loss) income before income taxes | (13,364) | 174,992 | (17,887) | 341,833 | |
Income tax (benefit) expense | 1,421 | (18,271) | 4,596 | (38,252) | |
Net (loss) income | (11,943) | 156,721 | (13,291) | 303,581 | |
Nucleic Acid Production | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenue | 53,265 | 225,248 | 114,716 | 448,898 | |
Biologics Safety Testing | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenue | 15,649 | 17,484 | 33,223 | 38,127 | |
Operating Segments | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenue | 68,916 | 242,739 | 147,941 | 487,032 | |
Segment adjusted EBITDA | 24,507 | 200,393 | 66,126 | 399,724 | |
Operating Segments | Nucleic Acid Production | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenue | 53,265 | 225,255 | 114,716 | 448,905 | |
Segment adjusted EBITDA | 14,192 | 186,291 | 42,065 | 369,090 | |
Operating Segments | Biologics Safety Testing | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenue | 15,651 | 17,484 | 33,225 | 38,127 | |
Segment adjusted EBITDA | 10,315 | 14,102 | 24,061 | 30,634 | |
Intersegment eliminations | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenue | $ (2) | $ (7) | $ (2) | $ (7) |