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Investor Relations

Press Release

Harvard Bioscience Announces Fourth Quarter 2022 Financial Results

March 9, 2023

HOLLISTON, Mass., March 09, 2023 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq: HBIO) (the “Company”) today announced financial results for the fourth quarter and year ended December 31, 2022.

Our fourth quarter revenues were $28.4 million, down 14% versus the comparable prior year period, including a negative currency impact of $1.0 million. During the quarter ended December 31, 2022, our cellular and molecular product revenues were roughly flat after adjusting for currency impacts. Pre-clinical revenue was down from prior year, with demand showing signs of recovery as ordering activity increased late in the quarter.     

Jim Green, Chairman and CEO, concluded, “Looking to the future, I am excited about our pivot from cost optimization to profitable growth. We completed our previously announced portfolio optimization and related cost actions in Q4. We expect that our recently launched products and anticipated new growth in consumables and services will support 2023 reported revenue growth in the low-to-mid single digits. We expect improving gross margin and significant expansion of adjusted EBITDA margins in 2023. With anticipated improvements in margin and working capital, we plan to pay down debt and reduce our leverage ratio closer to 2 times by year end.”

 Quarterly Financial Results SummaryQ4'22 Q4'21
 Revenues $28.4 M $33.1M
 Operating (Loss) Income (GAAP) $(0.5)M $1.7M
 Adjusted Operating Income $3.4 M $5.3M
 Operating Margin (GAAP)  (1.6)%  5.1%
 Adjusted Operating Margin  11.9 %  16.0%
 Net (Loss) Income (GAAP)  (1.7)M  1.0M
 Diluted (Loss) Earnings Per Share (GAAP) $(0.04)  $0.02 
 Diluted Adjusted Earnings Per Share $0.04   $0.08 
 Adjusted EBITDA $3.7 M $5.7M
 Net Debt* $43.2 M $41.6M
 * Debt outstanding less cash and cash equivalents     

For more details on performance for the three and twelve months ended December 31, 2022, a presentation that will be referenced during the webcast referenced below will be posted to our Investor Relations website shortly before the webcast begins.

This press release includes certain financial information presented on an adjusted, or non-GAAP, basis. For additional information on the Non-GAAP financial measures included in this press release, please see “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

Webcast and Conference Call Details

Harvard Bioscience will be hosting a conference call and webcast today at 8:00 a.m. Eastern Time. 

Covering analysts who want to join the call and ask a question must register here. Once registered, you will receive the dial-in numbers and a unique PIN number

Participants who want to join the audio-only webcast should go to our events and presentations on the investor website here

Use of Non-GAAP Financial Information

In this press release, we have included non-GAAP financial information including adjusted operating income, adjusted operating margin, adjusted net income, adjusted EBITDA, and adjusted diluted earnings per share. 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 resulting from items that we do not believe are representative of the underlying operations of the business. Items excluded include stock-based compensation, amortization of intangibles related to acquisitions, litigation settlement, restructuring and other costs, and income taxes. They also exclude the tax impact of the reconciling items. Management believes that this non-GAAP financial information is important in comparing current results with prior period results and is useful to investors and financial analysts in assessing the Company’s operating performance. Non-GAAP historical financial statement information included herein is 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, Inc. is a leading developer, manufacturer and seller of technologies, products and services that enable fundamental advances in life science applications, including research, pharmaceutical and therapy discovery, bio-production and preclinical testing for pharmaceutical and therapy 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, 2021 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.

Investor Inquiries:

Harvard Bioscience, Inc.
Investor Relations
(508) 893-3120

Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
    Three Months Ended Year Ended 
    December 31, 2022  December 31, 2021  December 31, 2022  December 31, 2021 
 Revenues$28,427  $33,055  $113,335  $118,904  
 Cost of revenues 12,594   13,495   52,516   51,252  
  Gross profit 15,833   19,560   60,819   67,652  
 Operating expenses:            
  Sales and marketing expenses 5,948   7,343   25,041   24,642  
  General and administrative expenses 5,863   6,115   24,493   24,305  
  Research and development expenses 2,849   2,951   12,329   10,799  
  Amortization of intangible assets 1,630   1,452   6,122   5,840  
  Settlement of litigation, net -   -   (233)  -  
 Total operating expenses 16,290   17,861   67,752   65,586  
 Operating (loss) income (457)  1,699   (6,933)  2,066  
 Interest and other expense, net (435)  (568)  (2,246)  (2,206) 
 (Loss) income before income taxes (892)  1,131   (9,179)  (140) 
 Income tax expense 774   170   337   148  
 Net (loss) income$(1,666) $961  $(9,516) $(288) 
 (Loss) income per common share:            
  Basic and diluted$(0.04) $0.02  $(0.23) $(0.01) 
 Weighted-average common shares:            
  Basic 42,102   40,840   41,413   40,343  
  Diluted 42,102   43,372   41,413   40,343  

Condensed Consolidated Balance Sheets
(unaudited, in thousands)
  December 31, 
  2022 2021 
 Cash and cash equivalents$4,508 $7,821 
 Accounts receivables 16,705  21,834 
 Inventories 26,439  27,587 
 Other current assets 3,472  4,341 
 Total current assets 51,124  61,583 
 Property, plant and equipment 3,366  3,415 
 Goodwill and other intangibles 77,274  85,074 
 Other long-term assets 13,596  12,272 
 Total assets$145,360 $162,344 
 Liabilities and Stockholders' Equity      
 Current portion, long-term debt$3,811 $3,235 
 Other current liabilities 19,438  22,081 
 Total current liabilities 23,249  25,316 
 Long-term debt, net 43,013  45,095 
 Other long-term liabilities 6,878  8,532 
 Stockholders’ equity 72,220  83,401 
 Total liabilities and stockholders’ equity$145,360 $162,344 

Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
  Year Ended 
 Cash flows from operating activities:      
 Net loss$(9,516) $(288) 
 Adjustments to operating cash flows 7,952   11,740  
 Changes in operating assets and liabilities 2,716   (10,190) 
 Net cash provided by operating activities 1,152   1,262  
 Cash flows from investing activities:      
 Additions to property, plant and equipment (1,590)  (1,195) 
 Additions to intangible assets -   (150) 
 Net cash used in investing activities (1,590)  (1,345) 
 Cash flows from financing activities:      
 Borrowing from revolving line of credit 7,800   4,250  
 Repayment of revolving line of credit (6,400)  (2,200) 
 Repayment of term debt (3,186)  (2,000) 
 Payments of debt issuance costs -   (102) 
 Proceeds from exercise of employee stock options and stock purchases 577   3,314  
 Taxes related to net share settlement of equity awards (1,628)  (3,514) 
 Net cash used in financing activities (2,837)  (252) 
 Effect of exchange rate changes on cash (38)  (161) 
 Decrease in cash and cash equivalents (3,313)  (496) 
 Cash and cash equivalents at the beginning of period 7,821   8,317  
 Cash and cash equivalents at the end of period$4,508  $7,821  

 Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
 (in thousands, except per share data)
   Three Months Ended   Year Ended 
   December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
 GAAP operating (loss) income$(457) $1,699    $(6,933) $2,066  
  Stock-based compensation 1,010   1,033     4,411   4,169  
  Acquired asset amortization 1,648   1,492     6,236   6,018  
  Settlement, restructuring, & other 1,168   1,054     5,783   4,462  
 Adjusted operating income$3,369  $5,278    $9,497  $16,715  
 Operating margin  -1.6%  5.1%    -6.1%  1.7% 
 Adjusted operating margin 11.9%  16.0%    8.4%  14.1% 
 GAAP net (loss) income$(1,666) $961    $(9,516) $(288) 
  Stock-based compensation 1,010   1,033     4,411   4,169  
  Acquired asset amortization 1,648   1,492     6,236   6,018  
  Settlement, restructuring, & other 1,068   1,054     5,603   4,462  
  Income taxes  (281)  (1,022)    (1,689)  (3,387) 
 Adjusted net income 1,779   3,518     5,045   10,974  
  Depreciation  314   432     1,338   1,603  
  Interest and other expense, net 536   568     2,426   2,206  
  Adjusted income taxes (1) 1,054   1,191     2,026   3,534  
 Adjusted EBITDA $3,683  $5,709    $10,835  $18,317  
 Adjusted EBITDA margin 13.0%  17.3%    9.6%  15.4% 
 Diluted (loss) income per share (GAAP) $(0.04) $0.02    $(0.23) $(0.01) 
 Diluted adjusted earnings per share$0.04  $0.08    $0.12  $0.25  
 Weighted-average common shares:          
  Diluted GAAP  42,102   43,372     41,413   40,343  
  Diluted Adjusted 42,740   43,372     42,682   43,153  
  (1) Adjusted income taxes includes the tax effect of adjusting for the reconciling items using the tax rates in the jurisdictions in which the reconciling items arise.