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Harvard Bioscience Announces Fourth Quarter 2021 Financial Results

Mar 08,2022
  • Revenue up 7% year-over-year as sales momentum continues, despite global supply chain headwinds
  • Gross margin improves to 59% in Q4 driven by strengthening product mix, improved operating leverage

HOLLISTON, Mass., March 08, 2022 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq: HBIO) (the “Company”) today announced financial results for the period ended December 31, 2021.

Jim Green, Chairman and CEO said, “The positive trends we reported through the first three quarters of 2021 have carried through with our strong top line performance in Q4. Demand for our pre-clinical products continued to very strong, with revenue up 6% over prior year quarter, and 18% for the full year. Our CMT products also experienced meaningful growth, up 9% over prior year quarter as academic lab sales continue to recover. Operating income for Q4 was modestly lower than last year due primarily to higher material, freight and labor costs associated with ongoing global supply disruptions as well as higher variable compensation given strong performance versus our goals in 2021. Gross margin increased to 59% in Q4 on improved product mix.”

Mr. Green concluded, “With our sales momentum and a solid backlog, we expect reported revenue growth of 10-to-13% compared to 2021. This growth is net of trimming of lower value-add products. Our pre-clinical and CMT product families are both expected to deliver double digit growth in 2022. With sales efforts focused on higher value products and channels, new products launched in 2021 and improvements in internal operations, we expect to improve gross margin by over a percentage point and to deliver adjusted operating margins in the range of 15-to-16%. These anticipated profit improvements include incremental investments in sales coverage expansion and higher R&D in 2022 to underpin sustained double-digit growth over the long run.”

Quarterly Financial Results SummaryQ4'21 Q4'20 
           
Revenues$33.1 million $31.0  million 
           
Operating Income (GAAP)$1.7 million $2.8  million 
Adjusted Operating Income$5.3 million $5.8  million 
Operating Margin (GAAP) 5.1 %  8.9  % 
Adjusted Operating Margin 16.0 %  18.7  % 
           
Diluted Income (Loss) Per Share (GAAP)$0.02   $(0.02)   
Diluted Adjusted Earnings Per Share$0.08   $0.08    
           
Net Debt*$41.6 million $41.1  million 

* Debt outstanding less cash and cash equivalents

For more details on Q4 performance, a slide presentation that will be referenced during the webcast will be posted to our Investor Relations website shortly before the webcast begins.

Please refer to the exhibits below for a reconciliation of certain non-GAAP to GAAP financial measures, including operating income, net income and loss, diluted earnings per share and adjusted EBITDA. Please see “Use of Non-GAAP Financial Information” for additional information regarding our use of such adjusted financial information.

Webcast and Conference Call Details

Harvard Bioscience will be hosting a conference call and webcast today at 8:00 a.m. Eastern Time. You can access the live conference call by dialing the following phone numbers: toll-free 1 (877) 303-7611 or international 1 (970) 315-0445 and referencing the conference ID# 1749525.

The conference call will be simultaneously webcast and can be accessed through the Harvard Bioscience website. To listen to the webcast, log on to the webcast at: http://investor.harvardbioscience.com/ and click on the Earnings Call icon.

Use of Non-GAAP Financial Information

In this press release, we have included non-GAAP financial information including adjusted operating income, adjusted net income, adjusted diluted earnings per share, and adjusted EBITDA. We believe that this non-GAAP financial information provides investors with an enhanced understanding of the underlying operations of the business. For the periods presented, these non-GAAP financial measures have excluded certain expenses and income primarily resulting from purchase accounting or events that we do not believe are related to the underlying operations of the business such as amortization of intangibles related to acquisitions, costs related to acquisition, disposition and integration initiatives, impairment charges, severance, restructuring and other business transformation expenses, and stock-based compensation expense. They also exclude the tax impact of the reconciling items. This non-GAAP financial information approximates information used by our management to internally evaluate the operating results of the Company. Any non-GAAP financial statement information included herein are accompanied by a reconciliation to the nearest corresponding GAAP measure which are included as exhibits below in this press release.

The non-GAAP financial information provided in this press release should be considered in addition to, not as a substitute for, the financial information provided and presented in accordance with GAAP and may be different than other companies’ non-GAAP financial information.

 About Harvard Bioscience

Harvard Bioscience is a leading developer, manufacturer and seller of technologies, products and services that enable fundamental research, discovery, and pre-clinical testing for drug development. Our customers range from renowned academic institutions and government laboratories, to the world’s leading pharmaceutical, biotechnology and contract research organizations. With operations in North America, Europe, and China, we sell through a combination of direct and distribution channels to customers around the world.

For more information, please visit our website at www.harvardbioscience.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. You can identify these statements by our use of such words as "will," "guidance," "objectives," "optimistic," "potential," "future," "expects," "plans," "estimates," "continue," "drive," "strategy," "potential," "potentially," "growth," "long-term," "projects," "projected," "intends," "believes," "goals," "sees," "seek," "develop" "possible" "new," "emerging," "opportunity," "pursue" and similar expressions that do not relate to historical matters. Forward-looking statements in this press release or that may be made during our conference call may include, but are not limited to, statements or inferences about the Company's or management's beliefs or expectations, the Company's anticipated future revenues and earnings, the strength of the Company's market position and business model, industry outlook, the impact of the COVID-19 pandemic and related supply chain disruptions on the Company’s business, the Company's business strategy, the positioning of the Company for growth, the market demand and opportunity for the Company's current products, or products it is developing or intends to develop, and the Company's plans, objectives and intentions that are not historical facts. These statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Investors should note that many factors, as more fully described under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, and in our other filings with the Securities and Exchange Commission and as otherwise enumerated herein or therein may cause the Company's actual results to differ materially from those in the forward-looking statements. The forward-looking statements in this press release are qualified by these risk factors. The Company's results may also be affected by factors of which the Company is not currently aware. The Company may not update these forward-looking statements, even though its situation may change in the future, unless it has obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.

For investor inquiries, please contact Michael A. Rossi, Chief Financial Officer at (508) 893-8999.


                       
                    Exhibit 1  
  HARVARD BIOSCIENCE, INC. 
  Consolidated Statements of Operations 
  (unaudited, in thousands, except per share data) 
                       
           Three Months Ended Year Ended  
           December 31, 2021  December 31, 2020  December 31, 2021  December 31, 2020  
                       
   Revenues$33,055  $30,984  $118,904  $102,100   
   Cost of revenues 13,495   13,276   51,252   44,059   
    Gross profit 19,560   17,708   67,652   58,041   
                       
   Operating expenses:             
    Sales and marketing expenses 7,343   5,470   24,642   19,916   
    General and administrative expenses 6,115   5,681   24,305   23,509   
    Research and development expenses 2,951   2,349   10,799   8,685   
    Amortization of intangible assets 1,452   1,452   5,840   5,710   
   Total operating expenses 17,861   14,952   65,586   57,820   
                       
   Operating income 1,699   2,756   2,066   221   
                       
   Other (expense) income:             
    Interest expense (379)  (1,094)  (1,540)  (4,831)  
    Debt extinguishment and related costs -   (1,876)  -   (1,876)  
    Other expense, net (189)  (334)  (666)  (806)  
   Total other expense (568)  (3,304)  (2,206)  (7,513)  
                       
   Income (loss) before income taxes 1,131   (548)  (140)  (7,292)  
   Income tax expense 170   67   148   518   
   Net income (loss)$961  $(615) $(288) $(7,810)  
                       
   Earnings (Loss) per common share:             
    Basic earnings (loss) per common share$0.02  $(0.02) $(0.01) $(0.20)  
    Diluted earnings (loss) per common share$0.02  $(0.02) $(0.01) $(0.20)  
                       
   Weighted-average common shares:             
    Basic 40,840   39,021   40,343   38,640   
    Diluted 43,372   39,021   40,343   38,640   
                       



           
        Exhibit 2  
  HARVARD BIOSCIENCE, INC. 
  Condensed Consolidated Balance Sheets 
  (unaudited, in thousands) 
           
     December 31, 2021  December 31, 2020  
   Assets       
   Cash and cash equivalents$7,821 $8,317  
   Accounts receivables 21,834  17,766  
   Inventories 27,587  22,262  
   Other current assets 4,341  3,355  
   Total current assets 61,583  51,700  
   Property, plant and equipment 3,415  3,960  
   Goodwill and other intangibles 85,074  91,741  
   Other long-term assets 12,272  8,853  
   Total assets$162,344 $156,254  
           
   Liabilities and Stockholders' Equity       
   Current portion, long-term debt$3,235 $1,721  
   Other current liabilities 22,081  19,332  
   Total current liabilities 25,316  21,053  
   Long-term debt 45,095  46,286  
   Other long-term liabilities 8,532  12,234  
   Stockholders’ equity 83,401  76,681  
   Total liabilities and stockholders’ equity$162,344 $156,254  
           
           



          
        Exhibit 3 
  HARVARD BIOSCIENCE, INC.
  Condensed Consolidated Statements of Cash Flows
  (unaudited, in thousands)
          
    Year Ended 
     December 31, 2021  December 31, 2020 
   Cash flows from operating activities:      
   Net loss$(288) $(7,810) 
   Adjustments to operating cash flows 11,740   13,035  
   Changes in operating assets and liabilities (10,190)  4,106  
   Net cash provided by operating activities 1,262   9,331  
          
   Cash flows from investing activities:      
   Additions to property, plant and equipment (1,195)  (1,152) 
   Additions to intangible assets (150)  (250) 
   Net cash used in investing activities (1,345)  (1,402) 
          
   Cash flows from financing activities:      
   Proceeds from borrowings 4,250   61,315  
   Repayments of debt (4,200)  (66,912) 
   Payments of debt issuance costs (102)  (1,298) 
   Debt extinguishment cost -   (599) 
   Proceeds from exercise of stock options 3,314   669  
   Taxes related to net share settlemenrt of equity awards (3,514)  (1,142) 
   Net cash used in financing activities (252)  (7,967) 
          
   Effect of exchange rate changes on cash (161)  20  
   Decrease in cash and cash equivalents (496)  (18) 
   Cash and cash equivalents at the beginning of period 8,317   8,335  
   Cash and cash equivalents at the end of period$7,821  $8,317  
          
          



                    
                 Exhibit 4 
 HARVARD BIOSCIENCE, INC. 
 Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
 Three Months Ended December 31, 2021 
 (in thousands, except per share data) 
                    
          Stock-Based  Acquired Assets Restructuring,Income   
 Statement of OperationsGAAP CompensationAmortization Transformation Taxes ADJUSTED 
                    
 Revenues$33,055   -   -   -   -  $33,055  
 Cost of revenues 13,495   (35)  (12)  (80)  -   13,368  
  Gross profit 19,560   35   12   80   -   19,687  
                    
 Gross Margin   59.2%          59.6% 
                    
 Operating expenses:            
  Sales and marketing expenses 7,343   (134)  (2)  (277)  -   6,930  
  General and administrative expenses 6,115   (823)  (16)  (648)  -   4,628  
  Research and development expenses 2,951   (41)  (10)  (49)  -   2,851  
  Amortization of intangible assets 1,452   -   (1,452)  -   -   -  
 Total operating expenses 17,861   (998)  (1,480)  (974)  -   14,409  
                    
 Operating Expenses - % of Revenues 54.0%          43.6% 
                    
 Operating income 1,699   1,033   1,492   1,054   -   5,278  
                    
 Operating Margin 5.1%          16.0% 
                    
 Other (expense) income:            
  Interest expense (379)  -   -   -   -   (379) 
  Other expense, net (189)  -   -   -   -   (189) 
 Total other expense (568)  -   -   -   -   (568) 
                    
 Income before income taxes 1,131   1,033   1,492   1,054   -   4,710  
 Income tax expense 170   -   -   -   1,022   1,192  
 Net income$961  $1,033  $1,492  $1,054  $(1,022) $3,518  
                    
 Earnings per common share:            
  Basic earnings per common share$0.02          $0.09  
  Diluted earnings per common share$0.02          $0.08  
                    
 Weighted-average common shares:            
  Basic      40,840           40,840  
  Diluted 43,372           43,372  
                    
                    



                    
                 Exhibit 4.1 
 HARVARD BIOSCIENCE, INC. 
 Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
 Three Months Ended December 31, 2020 
 (in thousands, except per share data) 
                    
          Stock-Based  Acquired Assets Restructuring,Income   
 Statement of OperationsGAAP CompensationAmortization Transformation Taxes ADJUSTED 
                    
 Revenues$30,984   -   -   -   -  $30,984  
 Cost of revenues 13,276   (22)  (19)  (59)  -   13,176  
  Gross profit 17,708   22   19   59   -   17,808  
                    
 Gross Margin   57.2%          57.5% 
                    
 Operating expenses:            
  Sales and marketing expenses 5,470   (57)  (2)  (15)  -   5,396  
  General and administrative expenses 5,681   (873)  (18)  (478)  -   4,312  
  Research and development expenses 2,349   (54)  (12)  20   -   2,303  
  Amortization of intangible assets 1,452   -   (1,452)  -   -   -  
 Total operating expenses 14,952   (984)  (1,484)  (473)  -   12,011  
                    
 Operating Expenses - % of Revenues 48.3%          38.8% 
                    
 Operating income 2,756   1,006   1,503   532   -   5,797  
                    
 Operating Margin 8.9%          18.7% 
                    
 Other (expense) income:            
  Interest expense (1,094)  -   -   -   -   (1,094) 
  Debt extinguishment and related costs (1,876)  -   -   1,876   -   -  
  Other expense, net (334)  -   -   -   -   (334) 
 Total other expense (3,304)  -   -   1,876   -   (1,428) 
                    
 (Loss) income before income taxes (548)  1,006   1,503   2,408   -   4,369  
 Income tax (benefit) expense 67   -   -   -   1,034   1,101  
 Net (loss) income$(615) $1,006  $1,503  $2,408  $(1,034) $3,268  
                    
 (Loss) Earnings per common share:            
  Basic (loss) earnings per common share$(0.02)         $0.08  
  Diluted (loss) earnings per common share$(0.02)         $0.08  
                    
 Weighted-average common shares:            
  Basic      39,021           39,021  
  Diluted 39,021           40,810  
                    



                    
                 Exhibit 4.2 
 HARVARD BIOSCIENCE, INC. 
 Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
 Year Ended December 31, 2021 
 (in thousands, except per share data) 
                    
          Stock-Based  Acquired Assets Restructuring,Income   
 Statement of OperationsGAAP CompensationAmortization Transformation Taxes ADJUSTED 
                    
 Revenues$118,904   -   -   -   -  $118,904  
 Cost of revenues 51,252   (118)  (63)  (327)  -   50,744  
  Gross profit 67,652   118   63   327   -   68,160  
                    
 Gross Margin 56.9%          57.3% 
                    
 Operating expenses:            
  Sales and marketing expenses 24,642   (507)  (8)  (652)  -   23,475  
  General and administrative expenses 24,305   (3,416)  (65)  (3,028)  -   17,796  
  Research and development expenses 10,799   (128)  (42)  (455)  -   10,174  
  Amortization of intangible assets 5,840   -   (5,840)  -   -   -  
 Total operating expenses 65,586   (4,051)  (5,955)  (4,135)  -   51,445  
                    
 Operating Expenses - % of Revenues 55.2%          43.3% 
              
 Operating income 2,066   4,169   6,018   4,462   -   16,715  
                    
 Operating Margin 1.7%          14.1% 
              
 Other (expense) income:            
  Interest expense (1,540)  -   -   -   -   (1,540) 
  Other expense, net (666)  -   -   -   -   (666) 
 Total other expense (2,206)  -   -   -   -   (2,206) 
              
 (Loss) income before income taxes (140)  4,169   6,018   4,462   -   14,509  
 Income tax (benefit) expense 148   -   -   -   3,387   3,535  
 Net (loss) income$(288) $4,169  $6,018  $4,462  $(3,387) $10,974  
                    
 Earnings (Loss) per common share:            
  Basic earnings (loss) per common share$(0.01)         $0.27  
  Diluted earnings (loss) per common share$(0.01)         $0.25  
                    
 Weighted-average common shares:            
  Basic      40,343           40,343  
  Diluted 40,343           43,153  
                    
                    



                    
                 Exhibit 4.3 
 HARVARD BIOSCIENCE, INC. 
 Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
 Year Ended December 31, 2020 
 (in thousands, except per share data) 
                    
          Stock-Based  Acquired Assets Restructuring,Income   
 Statement of OperationsGAAP CompensationAmortization Transformation Taxes ADJUSTED 
                    
 Revenues$102,100   -   -   -   -  $102,100  
 Cost of revenues 44,059   (65)  (78)  (80)  -   43,836  
  Gross profit 58,041   65   78   80   -   58,264  
                    
 Gross Margin   56.8%          57.1% 
                    
 Operating expenses:            
  Sales and marketing expenses 19,916   (263)  (8)  (140)  -   19,505  
  General and administrative expenses 23,509   (3,121)  (68)  (3,957)  -   16,363  
  Research and development expenses 8,685   (198)  (56)  11   -   8,442  
  Amortization of intangible assets 5,710   -   (5,710)  -   -   -  
 Total operating expenses 57,820   (3,582)  (5,842)  (4,086)  -   44,310  
                    
 Operating Expenses - % of Revenues 56.6%          43.4% 
              
 Operating income 221   3,647   5,920   4,166   -   13,954  
                    
 Operating Margin 0.2%          13.7% 
              
 Other (expense) income:            
  Interest expense (4,831)  -   -   -   -   (4,831) 
  Debt extinguishment and related costs (1,876)  -   -   1,876   -   -  
  Other expense, net (806)  -   -   -   -   (806) 
 Total other expense (7,513)  -   -   1,876   -   (5,637) 
              
 (Loss) income before income taxes (7,292)  3,647   5,920   6,042   -   8,317  
 Income tax expense 518   -   -   -   1,469   1,987  
 Net (loss) income$(7,810) $3,647  $5,920  $6,042  $(1,469) $6,330  
                    
 Earnings (Loss) per common share:            
  Basic earnings (loss) per common share$(0.20)         $0.16  
  Diluted earnings (loss) per common share$(0.20)         $0.16  
                    
 Weighted-average common shares:            
  Basic      38,640           38,640  
  Diluted 38,640           39,985  
                    



                 
              Exhibit 5  
  HARVARD BIOSCIENCE, INC. 
  Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
  (in thousands) 
    Three Months Ended Year Ended  
     December 31, 2021  December 31, 2020  December 31, 2021  December 31, 2020  
   Operating income$1,699 $2,756 $2,066 $221  
   Stock-based compensation expense 1,033  1,006  4,169  3,647  
   Acquired asset amortization 1,492  1,503  6,018  5,920  
   Restructuring and transformation costs 1,054  532  4,462  4,166  
   Adjusted operating income 5,278  5,797  16,715  13,954  
   Depreciation expense 470  469  1,781  1,922  
   Adjusted EBITDA$5,748 $6,266 $18,496 $15,876