Segments

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segments

Segments

The Company’s financial performance is reported in three segments. A description of each segment follows:

•Nucleic Acid Production: focuses on the manufacturing and sale of highly modified nucleic acids products to support the needs of customers’ research, therapeutic and vaccine programs. This segment also provides research products for labeling and detecting proteins in cells and tissue samples.

•Biologics Safety Testing: focuses on manufacturing and selling biologics safety and impurity tests and assay development services that are utilized by our customers in their biologic drug manufacturing spectrum.

•Protein Detection: focused on manufacturing and selling labeling and visual detection reagents to scientific research customers for their tissue-based protein detection and characterization needs. The Company completed the divestiture of its Protein Detection business in September 2021.

The Company has determined that adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”) is the profit or loss measure that the CODM uses to make resource allocation decisions and evaluate segment performance. Adjusted EBITDA assists management in comparing the segment performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the core operations and, therefore, are not included in measuring segment performance. The Company defines Adjusted EBITDA as net income

before interest, taxes, depreciation and amortization, certain non-cash items and other adjustments that we do not consider in our evaluation of ongoing operating performance from period to period. Corporate costs are managed on a standalone basis and not allocated to segments.

The following tables include financial information relating to the operating segments for the periods presented (in thousands):

	Three Months Ended March 31, 2022
	Nucleic Acid Production		Biologics Safety Testing		Corporate		Eliminations		Total
Revenue	$	223,650	$	20,643	$	—	$	—	$	244,293
Adjusted EBITDA	$	182,799	$	16,532	$	(12,339)	$	—	$	186,992

	Three Months Ended March 31, 2021
	Nucleic Acid Production		Biologics Safety Testing		Protein Detection		Corporate		Eliminations		Total
Revenue	$	124,169	$	17,649	$	6,630	$	—	$	(237)	$	148,211
Adjusted EBITDA (as adjusted)*	$	95,032	$	14,287	$	1,959	$	(10,336)	$	(46)	$	100,896

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*As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 for a summary of the adjustments.

During the three months ended March 31, 2021, intersegment revenue was $0.2 million. The intersegment sales and the related gross margin on inventory recorded at the end of the period are eliminated for consolidation purposes in the Eliminations column. Internal selling prices for intersegment sales are consistent with the segment’s normal retail price offered to external parties. There was no commission expense recognized for intersegment sales for the three months ended March 31, 2021. Intersegment revenue represents intersegment revenue between the Nucleic Acid Production and Protein Detection segments. There was no inter-segment activity for the three months ended March 31, 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.

A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is set forth below for the periods presented (in thousands):

	Three Months Ended March 31,
	2022		2021 (as adjusted)*
Net income	$	146,860	$	75,465
Add:
Amortization	5,527		5,041
Depreciation	1,855		1,256
Interest expense	2,664		7,904
Income tax expense	19,981		13,709
EBITDA	176,887		103,375
Acquisition integration costs	4,779		4
Equity-based compensation	3,627		2,278
Merger and acquisition related expenses	1,188		919
Financing costs	1,037		206
Tax receivable agreement liability adjustment	(2,340)		(5,886)
Other	1,814		—
Adjusted EBITDA	$	186,992	$	100,896

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*As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 for a summary of the adjustments.