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Harvard Bioscience Announces Second Quarter 2021 Financial Results

Aug 05,2021

Strong double digit revenue growth, solid margin performance despite global supply chain disruptions

  • Revenue up 25% year-over-year as sales momentum continues
  • Cellular and Molecular (CMT) product revenue up 22%
  • Pre-clinical product revenue up 20%
  • Operating margins impacted by higher global supply chain costs

HOLLISTON, Mass., Aug. 05, 2021 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq: HBIO) (the “Company”) today announced financial results for the three and six months ended June 30, 2021.

Jim Green, Chairman and CEO said, “Demand for our pre-clinical products remains very strong, with revenue up 20% over prior year, and also up significantly over pre-Covid levels. Our CMT products also experienced meaningful growth, up 22% over prior year as academic lab sales continue to recover.   Operating income on a GAAP and adjusted basis was negatively impacted by increased material, freight and labor efficiency costs associated with ongoing global supply disruptions. However, adjusted operating margins continue to exceed pre-COVID margin levels.”  

Green concluded, “Expanding demand from CRO/pharma combined with continuing academic lab recovery and a strong backlog supports our improving revenue outlook in spite of global supply disruptions; we now expect revenue growth of 12% to 15% for fiscal 2021 compared to 2020. Although supply disruptions are forcing extra costs in the short term, we still expect adjusted operating margin expansion to the mid-teens for the year.”

               
Quarterly Financial Results Summary Q2'21 Q2'20  
               
Revenue   $ 29.2   million   $ 23.3   million  
               
               
Operating Income (GAAP)   $ 0.1   million   $ 0.6   million  
Adjusted Operating Income   $ 4.3   million   $ 4.1   million  
Operating Margin (GAAP)     0.2   %     2.4   %  
Adjusted Operating Margin     14.6   %     17.7   %  
               
               
Loss Per Share (GAAP)   $ (0.01 )     $ (0.04 )    
Adjusted Diluted Earnings Per Share   $ 0.06       $ 0.05      
               
               
Net Debt*   $ 38.2   million   $ 42.1   million  
               
* Debt outstanding less cash and cash equivalents          
               

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# 6293853.

The conference call will be simultaneously webcast and can be accessed through the Harvard Bioscience website. A slide presentation that will be referenced during the webcast will be posted to our Investor Relations website shortly before the webcast begins. 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. Tabular reconciliations of our adjusted operating income, adjusted net income (loss), adjusted earnings (loss) per diluted share, and adjusted EBITDA 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 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   Six Months Ended  
                    June 30, 2021     June 30, 2020     June 30, 2021     June 30, 2020  
                                         
    Revenues $ 29,197     $ 23,308     $ 56,186     $ 47,079    
    Cost of revenues   12,844       9,452       24,402       20,241    
      Gross profit   16,353       13,856       31,784       26,838    
                                         
    Operating expenses:                        
      Sales and marketing expenses   5,730       4,279       11,116       9,858    
      General and administrative expenses 6,399       5,670       12,732       12,429    
      Research and development expenses 2,701       1,897       5,188       4,387    
      Amortization of intangible assets   1,465       1,454       2,929       2,881    
    Total operating expenses   16,295       13,300       31,965       29,555    
                                         
    Operating income   58       556       (181 )     (2,717 )  
                                         
    Other expense:                        
      Interest expense   (377 )     (1,233 )     (788 )     (2,532 )  
      Other expense, net   (313 )     (191 )     (347 )     (80 )  
    Total other expense   (690 )     (1,424 )     (1,135 )     (2,612 )  
                                         
    Loss before income taxes   (632 )     (868 )     (1,316 )     (5,329 )  
    Income tax expense   (222 )     713       (237 )     768    
    Net loss $ (410 )   $ (1,581 )   $ (1,079 )   $ (6,097 )  
                                         
    Loss per common share:                        
      Basic and diluted $ (0.01 )   $ (0.04 )   $ (0.03 )   $ (0.16 )  
                                         
    Weighted-average common shares:                        
      Basic and diluted   40,152       38,468       39,960       38,389    
                                         
                                         

 

                 
              Exhibit 2  
  HARVARD BIOSCIENCE, INC.
  Condensed Consolidated Balance Sheets
  (unaudited, in thousands)
                 
        June 30, 2021     December 31, 2020
    Assets            
    Cash and cash equivalents $ 6,237   $ 8,317  
    Accounts receivables   17,391     17,766  
    Inventories   24,709     22,262  
    Other current assets   5,220     3,355  
    Total current assets   53,557     51,700  
    Property, plant and equipment   3,429     3,960  
    Goodwill and other intangibles   88,934     91,741  
    Other long-term assets   8,051     8,853  
    Total assets $ 153,971   $ 156,254  
                 
    Liabilities and Stockholders' Equity            
    Current portion, long-term debt $ 2,220   $ 1,721  
    Other current liabilities   21,048     19,332  
    Total current liabilities   23,268     21,053  
    Long-term debt   40,921     46,286  
    Other long-term liabilities   11,081     12,234  
    Stockholders’ equity   78,701     76,681  
    Total liabilities and stockholders’ equity $ 153,971   $ 156,254  
                 
                 

 

                 
              Exhibit 3  
  HARVARD BIOSCIENCE, INC.
  Condensed Consolidated Statements of Cash Flows
  (unaudited, in thousands)
                 
      Six Months Ended  
        June 30, 2021     June 30, 2020  
    Cash flows from operating activities:            
    Net loss $ (1,079 )   $ (6,097 )  
    Adjustments to operating cash flows   5,789       6,045    
    Changes in operating assets and liabilities   (2,905 )     5,296    
    Net cash provided by operating activities   1,805       5,244    
                 
    Cash flows from investing activities:            
    Additions to property, plant and equipment   (357 )     (524 )  
    Addition to intangible assets   (150 )     -    
    Net cash used in investing activities   (507 )     (524 )  
                 
    Cash flows from financing activities:            
    Proceeds from borrowings   -       6,115    
    Repayments of debt   (5,000 )     (16,411 )  
    Payments of debt issuance costs   (102 )     -    
    Proceeds from exercise of stock options   2,759       187    
    Taxes related to net share settlemenrt of equity awards   (990 )     (262 )  
    Net cash used in financing activities   (3,333 )     (10,371 )  
                 
    Effect of exchange rate changes on cash   (45 )     (55 )  
    Decrease in cash and cash equivalents   (2,080 )     (5,706 )  
    Cash and cash equivalents at the beginning of period   8,317       8,335    
    Cash and cash equivalents at the end of period $ 6,237     $ 2,629    
                 
                 

 

                                   
                                Exhibit 4
HARVARD BIOSCIENCE, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
Three Months Ended June 30, 2021
(in thousands, except per share data)
                                   
                      Acquired Assets   Severance,        
                  Stock-Based   Amortization   Restructuring, Income    
Statement of Operations GAAP   Compensation & Impairments   Transformation   Taxes   ADJUSTED
                                   
Revenues $ 29,197       -       -       -       -     $ 29,197  
Cost of revenues   12,844       (31 )     (17 )     (100 )     -       12,696  
  Gross profit   16,353       31       17       100       -       16,501  
                                   
Gross Margin       56.0 %                     56.5 %
                                   
Operating expenses:                      
  Sales and marketing expenses   5,730       (131 )     (2 )     (73 )     -       5,524  
  General and administrative expenses   6,399       (969 )     (16 )     (1,108 )     -       4,306  
  Research and development expenses   2,701       (33 )     (11 )     (249 )     -       2,408  
  Amortization of intangible assets   1,465       -       (1,465 )     -       -       -  
Total operating expenses   16,295       (1,133 )     (1,494 )     (1,430 )     -       12,238  
                                   
Operating Expenses - % of Revenue   55.8 %                     41.9 %
                                   
Operating income   58       1,164       1,511       1,530       -       4,263  
                                   
Operating Margin   0.2 %                     14.6 %
                                   
Other expense:                      
  Interest expense   (377 )     -       -       -       -       (377 )
  Other expense, net   (313 )     -       -       -       -       (313 )
Total other expense   (690 )     -       -       -       -       (690 )
                                   
(Loss) income before income taxes   (632 )     1,164       1,511       1,530       -       3,573  
Income tax (benefit) expense   (222 )     -       -       -       1,040       818  
Net (loss) income $ (410 )   $ 1,164     $ 1,511     $ 1,530     $ (1,040 )   $ 2,755  
                                   
(Loss) income per share $ (0.01 )                   $ 0.06  
                                   
Diluted weighted average common shares         40,152                       43,425  
                                   
                                   

 

                                   
                                Exhibit 4.1
HARVARD BIOSCIENCE, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
Three Months Ended June 30, 2020
(in thousands, except per share data)
                                   
                      Acquired Assets   Severance,        
                  Stock-Based   Amortization   Restructuring, Income    
Statement of Operations GAAP   Compensation & Impairments   Transformation   Taxes   ADJUSTED
                                   
Revenues $ 23,308       -       -       -       -     $ 23,308  
Cost of revenues   9,452       (14 )     (20 )     (43 )     -       9,375  
  Gross profit   13,856       14       20       43       -       13,933  
                                   
Gross Margin       59.4 %                     59.8 %
                                   
Operating expenses:                      
  Sales and marketing expenses   4,279       (62 )     (2 )     16       -       4,231  
  General and administrative expenses   5,670       (645 )     (18 )     (1,260 )     -       3,747  
  Research and development expenses   1,897       (48 )     (14 )     -       -       1,835  
  Amortization of intangible assets   1,454       -       (1,454 )     -       -       -  
Total operating expenses   13,300       (755 )     (1,488 )     (1,244 )     -       9,813  
                                   
Operating Expenses - % of Revenue   57.1 %                     42.1 %
                                   
Operating income   556       769       1,508       1,287       -       4,120  
                                   
Operating Margin   2.4 %                     17.7 %
                                   
Other expense:                      
  Interest expense   (1,233 )     -       -       -       -       (1,233 )
  Other expense, net   (191 )     -       -       -       -       (191 )
Total other expense   (1,424 )     -       -       -       -       (1,424 )
                                   
(Loss) income before income taxes   (868 )     769       1,508       1,287       -       2,696  
Income tax (benefit) expense   713       -       -       -       (103 )     610  
Net (loss) income $ (1,581 )   $ 769     $ 1,508     $ 1,287     $ 103     $ 2,086  
                                   
(Loss) income per share $ (0.04 )                   $ 0.05  
                                   
Diluted weighted average common shares         38,468                       39,593  
                                   
                                   

 

                                     
                                Exhibit 4.2  
HARVARD BIOSCIENCE, INC.  
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)  
Six Months Ended June 30, 2021  
(in thousands, except per share data)  
                                     
                      Acquired Assets   Severance,          
                  Stock-Based   Amortization   Restructuring, Income      
Statement of Operations GAAP   Compensation & Impairments   Transformation   Taxes   ADJUSTED  
                                     
Revenues $ 56,186       -       -       -       -     $ 56,186    
Cost of revenues   24,402       (51 )     (36 )     (153 )     -       24,162    
  Gross profit   31,784       51       36       153       -       32,024    
                                     
Gross Margin       56.6 %                     57.0 %  
                                     
Operating expenses:                        
  Sales and marketing expenses   11,116       (224 )     (4 )     (114 )     -       10,774    
  General and administrative expenses   12,732       (1,803 )     (33 )     (1,954 )     -       8,942    
  Research and development expenses   5,188       (54 )     (22 )     (294 )     -       4,818    
  Amortization of intangible assets   2,929       -       (2,929 )     -       -       -    
Total operating expenses   31,965       (2,081 )     (2,988 )     (2,362 )     -       24,534    
                                     
Operating Expenses - % of Revenue   56.9 %                     43.7 %  
                         
Operating (loss) income   (181 )     2,132       3,024       2,515       -       7,490    
                                     
Operating Margin   -0.3 %                     13.3 %  
                         
Other expense:                        
  Interest expense   (788 )     -       -       -       -       (788 )  
  Other expense, net   (347 )     -       -       -       -       (347 )  
Total other expense   (1,135 )     -       -       -       -       (1,135 )  
                         
(Loss) income before income taxes   (1,316 )     2,132       3,024       2,515       -       6,355    
Income tax (benefit) expense   (237 )     -       -       -       1,784       1,547    
Net (loss) income $ (1,079 )   $ 2,132     $ 3,024     $ 2,515     $ (1,784 )   $ 4,808    
                                     
(Loss) income per share $ (0.03 )                   $ 0.11    
                                     
Diluted weighted average common shares   39,960                       42,954    
                                     
                                     

 

                                     
                                Exhibit 4.3  
HARVARD BIOSCIENCE, INC.  
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)  
Six Months Ended June 30, 2020  
(in thousands, except per share data)  
                                     
                      Acquired Assets   Severance,          
                  Stock-Based   Amortization   Restructuring, Income      
Statement of Operations GAAP   Compensation & Impairments   Transformation   Taxes   ADJUSTED  
                                     
Revenues $ 47,079       -       -       -       -     $ 47,079    
Cost of revenues   20,241       (24 )     (40 )     (2 )     -       20,175    
  Gross profit   26,838       24       40       2       -       26,904    
                                     
Gross Margin       57.0 %                     57.1 %  
                                     
Operating expenses:                        
  Sales and marketing expenses   9,858       (113 )     (4 )     (110 )     -       9,631    
  General and administrative expenses   12,429       (1,341 )     (35 )     (2,646 )     -       8,407    
  Research and development expenses   4,387       (84 )     (31 )     -       -       4,272    
  Amortization of intangible assets   2,881       -       (2,881 )     -       -       -    
Total operating expenses   29,555       (1,538 )     (2,951 )     (2,756 )     -       22,310    
                                     
Operating Expenses - % of Revenue   62.8 %                     47.4 %  
                         
Operating (loss) income   (2,717 )     1,562       2,991       2,758       -       4,594    
                                     
Operating Margin   -5.8 %                     9.8 %  
                         
Other expense:                        
  Interest expense   (2,532 )     -       -       -       -       (2,532 )  
  Other expense, net   (80 )     -       -       -       -       (80 )  
Total other expense   (2,612 )     -       -       -       -       (2,612 )  
                         
(Loss) income before income taxes   (5,329 )     1,562       2,991       2,758       -       1,982    
Income tax (benefit) expense   768       -       -       -       (391 )     377    
Net (loss) income $ (6,097 )   $ 1,562     $ 2,991     $ 2,758     $ 391     $ 1,605    
                                     
(Loss) income per share $ (0.16 )                   $ 0.04    
                                     
Diluted weighted average common shares   38,389                       39,461    
                                     
                                     

 

                               
                          Exhibit 5    
  HARVARD BIOSCIENCE, INC.  
  Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)  
  (in thousands)  
      Three Months Ended   Six Months Ended    
        June 30, 2021     June 30, 2020     June 30, 2021     June 30, 2020    
    Net loss $ (410 )   $ (1,581 )   $ (1,079 )   $ (6,097 )    
    Amortization of intangible assets   1,465       1,454       2,929       2,881      
    Depreciation expense   446       498       891       982      
    Interest expense   377       1,233       788       2,532      
    Income taxes   (222 )     713       (237 )     768      
    Stock-based compensation expense   1,164       769       2,132       1,562      
    Severance, restructuring and transformation costs   1,530       1,287       2,515       2,758      
    Adjusted EBITDA $ 4,350     $ 4,373     $ 7,939     $ 5,386