Maravai LifeSciences(MRVI) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported Q3 2024 revenues of $65 million, slightly below expectations, with total adjusted EBITDA of$13 million and an adjusted fully diluted EPS loss of $0.02 [7][40] - A GAAP noncash goodwill impairment charge of$154 million was taken, leading to a net loss of $176 million for the quarter [41][42] - Adjusted EBITDA margin was 20$37.5 million and an adjusted EBITDA margin of 18% [43] Business Segment Data and Key Metrics Changes - The Nucleic Acid Production (NAP) segment generated $50 million in revenue, accounting for 77$15 million and a segment margin of 31% [47] - The Biologics Safety Testing (BST) segment had revenues of $15 million, contributing 23$11 million and a margin of 72% [48] Market Data and Key Metrics Changes - The global biologics market remains soft, impacting the BST segment, while the NAP segment faced muted demand in research and discovery products [8][40] - Revenue from China in the BST segment increased nearly 30% from Q2 2024, but still did not reach historical levels [54] Company Strategy and Development Direction - The company plans to acquire the DNA and RNA businesses of Officinae Bio to enhance its mRNA offerings and improve customer experience through AI and machine learning [28][30] - The focus remains on innovation, with 21 new products introduced in the NAP segment year-to-date, and partnerships with top-tier academic institutions to drive long-term value [19][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a frustrating year in terms of financial performance, citing global macro pressures affecting buying decisions and a challenging NAP market [49][51] - The company lowered its revenue guidance for 2024 to between $255 million and$265 million, reflecting a $15 million reduction from previous expectations [53] Other Important Information - The company ended Q3 with$578 million in cash and a net cash position of nearly $50 million, with gross debt at$529 million [44] - The acquisition of Officinae Bio is expected to close in early 2025, with no immediate impact on 2024 financial results [59] Q&A Session Summary Question: How much of the firm commitment is now left by Q4? - Approximately $14 million is expected to ship in Q4 related to fulfilling original expectations [63] Question: How much of the sequential decline in NAP is due to project push versus a weaker market? - The project push accounts for a couple of million dollars, with the remainder attributed to market conditions [64] Question: Can you discuss swing factors for Q4 related to the NAP business? - There is variability in orders, with no large drop-in orders seen this year, impacting revenue recognition [68] Question: What are the expectations for margin expansion next year? - Margin expansion will largely depend on revenue growth, with a significant portion of costs being fixed [73] Question: Is there any revenue associated with the acquisition for 2025? - The acquisition is primarily a software acquisition, with low single-digit millions in revenue expected from Officinae [65] Question: What is the outlook for the bioprocessing market? - The bioprocessing market is experiencing flat to mid- to high single-digit declines, impacting early-phase project starts [82]