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Harvard Bioscience Announces Third Quarter 2021 Financial Results

Nov 03,2021

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

  • Revenue up 23% year-over-year as sales momentum continues
  • Pre-clinical product revenue up 28%
  • Cellular and Molecular Technologies (CMT) product revenue up 19%

HOLLISTON, Mass., Nov. 03, 2021 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq: HBIO) (the “Company”) today announced financial results for the period ended September 30, 2021.

Jim Green, Chairman and CEO said, “The positive trends we reported in the first half of 2021 have carried through with our strong top line performance in Q3. Demand for our pre-clinical products was very strong, with revenue up 28% over prior year, and also up significantly over pre-Covid levels. Our CMT products also experienced meaningful growth, up 19% over prior year as academic lab sales continue to recover. Operating income was adversely impacted by increased material, freight and labor costs associated with ongoing global supply disruptions.”  

Mr. Green concluded, “We expect revenue growth of 15% to 17% for 2021 compared to 2020 based on sales momentum, up from prior expectations of 12% to 15%. 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 SummaryQ3'21Q3'20 
        
Revenues $29.7 million $24.0 million 
        
Operating Income (GAAP) $0.5 million $0.2 million 
Adjusted Operating Income $3.9 million $3.6 million 
Operating Margin (GAAP)  1.8 %  0.8 % 
Adjusted Operating Margin  13.3 %  14.8 % 
        
Loss Per Share (GAAP) $(0.00)  $(0.03)  
Adjusted Diluted Earnings Per Share $0.06   $0.04   
        
Net Debt* $40.9 million $41.6 million 
        
* Debt outstanding less cash and cash equivalents
 

For more details on Q3 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# 8391005.

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. 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 Nine Months Ended 
    September 30, 2021  September 30, 2020  September 30, 2021  September 30, 2020 
               
 Revenues$29,663  $24,037  $85,849  $71,116  
 Cost of revenues 13,355   10,542   37,757   30,783  
  Gross profit 16,308   13,495   48,092   40,333  
               
 Operating expenses:            
  Sales and marketing expenses 6,183   4,588   17,299   14,446  
  General and administrative expenses5,458   5,399   18,190   17,828  
  Research and development expenses2,660   1,949   7,848   6,336  
  Amortization of intangible assets 1,459   1,377   4,388   4,258  
 Total operating expenses 15,760   13,313   47,725   42,868  
               
 Operating income 548   182   367   (2,535) 
               
 Other (expense) income:            
  Interest expense (373)  (1,205)  (1,161)  (3,737) 
  Other expense, net (130)  (392)  (477)  (472) 
 Total other expense (503)  (1,597)  (1,638)  (4,209) 
               
 Income (loss) before income taxes 45   (1,415)  (1,271)  (6,744) 
 Income tax expense (benefit) 215   (317)  (22)  451  
 Net loss$(170) $(1,098) $(1,249) $(7,195) 
               
 Loss per common share:            
  Basic and diluted$(0.00) $(0.03) $(0.03) $(0.19) 
               
 Weighted-average common shares:            
  Basic and diluted 40,754   38,920   40,202   38,540  
               
               



        
      Exhibit 2 
HARVARD BIOSCIENCE, INC.
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
        
   September 30, 2021  December 31, 2020 
 Assets      
 Cash and cash equivalents$5,548 $8,317 
 Accounts receivables 18,340  17,766 
 Inventories 25,978  22,262 
 Other current assets 5,820  3,355 
 Total current assets 55,686  51,700 
 Property, plant and equipment 3,453  3,960 
 Goodwill and other intangibles 86,928  91,741 
 Other long-term assets 7,805  8,853 
 Total assets$153,872 $156,254 
        
 Liabilities and Stockholders' Equity      
 Current portion, long-term debt$2,470 $1,721 
 Other current liabilities 21,036  19,332 
 Total current liabilities 23,506  21,053 
 Long-term debt 42,740  46,286 
 Other long-term liabilities 10,739  12,234 
 Stockholders’ equity 76,887  76,681 
 Total liabilities and stockholders’ equity$153,872 $156,254 
        
        


        
      Exhibit 3 
HARVARD BIOSCIENCE, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
        
  Nine Months Ended 
  September 30, 2021
 September 30, 2020
 
 Cash flows from operating activities:      
 Net loss$(1,249) $(7,195) 
 Adjustments to operating cash flows 8,547   8,676  
 Changes in operating assets and liabilities (6,153)  5,360  
 Net cash provided by operating activities 1,145   6,841  
        
 Cash flows from investing activities:      
 Additions to property, plant and equipment (837)  (1,088) 
 Addition to intangible assets (150)  -  
 Net cash used in investing activities (987)  (1,088) 
        
 Cash flows from financing activities:      
 Proceeds from borrowings 2,500   9,615  
 Repayments of debt (5,500)  (20,251) 
 Payments of debt issuance costs (102)  -  
 Proceeds from exercise of stock options 2,909   194  
 Taxes related to net share settlemenrt of equity awards (2,653)  (882) 
 Net cash used in financing activities (2,846)  (11,324) 
        
 Effect of exchange rate changes on cash (81)  42  
 Decrease in cash and cash equivalents (2,769)  (5,529) 
 Cash and cash equivalents at the beginning of period 8,317   8,335  
 Cash and cash equivalents at the end of period$5,548  $2,806  
        
        



              
           Exhibit 4 
HARVARD BIOSCIENCE, INC. 
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
Three Months Ended September 30, 2021 
(in thousands, except per share data) 
              
    Stock-Based  Acquired Assets Restructuring,
 Income   
Statement of OperationsGAAP Compensation
 Amortization Transformation Taxes ADJUSTED 
              
Revenues$29,663   -   -   -   -  $29,663  
Cost of revenues 13,355   (32)  (15)  (94)  -   13,214  
Gross profit 16,308   32   15   94   -   16,449  
              
Gross Margin  55.0%          55.5% 
                          
Operating expenses:                        
Sales and marketing expenses 6,183   (149)  (2)  (261)  -   5,771  
General and administrative expenses 5,458   (790)  (16)  (426)  -   4,226  
Research and development expenses 2,660   (33)  (10)  (113)  -   2,504  
Amortization of intangible assets 1,459   -   (1,459)  -   -   -  
Total operating expenses 15,760   (972)  (1,487)  (800)  -   12,501  
              
Operating Expenses - % of Revenue 53.1%          42.1% 
              
Operating income 548   1,004   1,502   894   -   3,948  
              
Operating Margin 1.8%          13.3% 
              
Other (expense) income:            
Interest expense (373)  -   -   -   -   (373) 
Other expense, net (130)  -   -   -   -   (130) 
Total other expense (503)  -   -   -   -   (503) 
              
Income before income taxes 45   1,004   1,502   894   -   3,445  
Income tax expense 215   -   -   -   580   795  
Net (loss) income$(170) $1,004  $1,502  $894  $(580) $2,650  
              
(Loss) income per share$(0.00)         $0.06  
              
Diluted weighted average common shares  40,754           43,500  
              
              


              
           Exhibit 4.1 
HARVARD BIOSCIENCE, INC. 
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
Three Months Ended September 30, 2020 
(in thousands, except per share data) 
              
    Stock-Based  Acquired Assets Restructuring,
 Income   
Statement of OperationsGAAP Compensation
 Amortization Transformation Taxes ADJUSTED 
              
Revenues$24,037   -   -   -   -  $24,037  
Cost of revenues 10,542   (18)  (19)  (19)  -   10,486  
Gross profit 13,495   18   19   19   -   13,551  
              
Gross Margin  56.1%          56.4% 
              
Operating expenses:            
Sales and marketing expenses 4,588   (91)  (2)  (15)  -   4,480  
General and administrative expenses 5,399   (908)  (18)  (834)  -   3,639  
Research and development expenses 1,949   (62)  (13)  (9)  -   1,865  
Amortization of intangible assets 1,377   -   (1,377)  -   -   -  
Total operating expenses 13,313   (1,061)  (1,410)  (858)  -   9,984  
              
Operating Expenses - % of Revenue 55.4%          41.5% 
              
Operating income 182   1,079   1,429   877   -   3,567  
              
Operating Margin 0.8%          14.8% 
              
Other (expense) income:            
Interest expense (1,205)  -   -   -   -   (1,205) 
Other expense, net (392)  -   -   -   -   (392) 
Total other expense (1,597)  -   -   -   -   (1,597) 
              
(Loss) income before income taxes (1,415)  1,079   1,429   877   -   1,970  
Income tax (benefit) expense (317)  -   -   -   823   506  
Net (loss) income$(1,098) $1,079  $1,429  $877  $(823) $1,464  
              
(Loss) income per share$(0.03)         $0.04  
              
Diluted weighted average common shares  38,920           40,307  
              
              


             
          Exhibit 4.2 
HARVARD BIOSCIENCE, INC. 
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
Nine Months Ended September 30, 2021 
(in thousands, except per share data) 
             
   Stock-Based
 Acquired Assets Restructuring,
 Income   
Statement of OperationsGAAP Compensation
 Amortization Transformation Taxes ADJUSTED 
             
Revenues$85,849   -   -   -   -  $85,849  
Cost of revenues 37,757   (83)  (51)  (247)  -   37,376  
Gross profit 48,092   83   51   247   -   48,473  
             
Gross Margin 56.0%          56.5% 
             
Operating expenses:            
Sales and marketing expenses 17,299   (373)  (6)  (375)  -   16,545  
General and administrative expenses 18,190   (2,593)  (49)  (2,380)  -   13,168  
Research and development expenses 7,848   (87)  (32)  (408)  -   7,321  
Amortization of intangible assets 4,388   -   (4,388)  -   -   -  
Total operating expenses 47,725   (3,053)  (4,475)  (3,163)  -   37,034  
             
Operating Expenses - % of Revenue 55.6%          43.1% 
             
Operating (loss) income 367   3,136   4,526   3,410   -   11,439  
             
Operating Margin 0.4%          13.3% 
             
Other (expense) income:            
Interest expense (1,161)  -   -   -   -   (1,161) 
Other expense, net (477)  -   -   -   -   (477) 
Total other expense (1,638)  -   -   -   -   (1,638) 
             
(Loss) income before income taxes (1,271)  3,136   4,526   3,410   -   9,801  
Income tax (benefit) expense (22)  -   -   -   2,365   2,343  
Net (loss) income$(1,249) $3,136  $4,526  $3,410  $(2,365) $7,458  
             
(Loss) income per share$(0.03)         $0.17  
             
Diluted weighted average common shares 40,202           43,113  
             
             


             
          Exhibit 4.3 
HARVARD BIOSCIENCE, INC. 
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
Nine Months Ended September 30, 2020 
(in thousands, except per share data) 
             
   Stock-Based  Acquired Assets Restructuring,
 Income   
Statement of OperationsGAAP Compensation
 Amortization
 Transformation Taxes ADJUSTED 
             
Revenues$71,116   -   -   -   -  $71,116  
Cost of revenues 30,783   (43)  (59)  (21)  -   30,660  
Gross profit 40,333   43   59   21   -   40,456  
             
Gross Margin 56.7%          56.9% 
             
Operating expenses:            
Sales and marketing expenses 14,446   (205)  (6)  (125)  -   14,110  
General and administrative expenses 17,828   (2,248)  (52)  (3,480)  -   12,048  
Research and development expenses 6,336   (145)  (44)  (7)  -   6,140  
Amortization of intangible assets 4,258   -   (4,258)  -   -   -  
Total operating expenses 42,868   (2,598)  (4,360)  (3,612)  -   32,298  
             
Operating Expenses - % of Revenue 60.3%          45.4% 
             
Operating (loss) income (2,535)  2,641   4,419   3,633   -   8,158  
             
Operating Margin -3.6%          11.5% 
             
Other (expense) income:            
Interest expense (3,737)  -   -   -   -   (3,737) 
Other expense, net (472)  -   -   -   -   (472) 
Total other expense (4,209)  -   -   -   -   (4,209) 
             
(Loss) income before income taxes (6,744)  2,641   4,419   3,633   -   3,949  
Income tax expense 451   -   -   -   435   886  
Net (loss) income$(7,195) $2,641  $4,419  $3,633  $(435) $3,063  
             
(Loss) income per share$(0.19)         $0.08  
             
Diluted weighted average common shares 38,540           39,824  
             
             


               
            Exhibit 5  
HARVARD BIOSCIENCE, INC. 
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
(in thousands) 
  Three Months Ended Nine Months Ended  
  September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
  
 Operating income$548 $182 $367 $(2,535)  
 Amortization of intangible assets 1,459  1,377  4,388  4,258   
 Depreciation expense 420  471  1,311  1,453   
 Stock-based compensation expense 1,004  1,079  3,136  2,641   
 Restructuring and transformation costs 893  877  3,408  3,635   
 Adjusted EBITDA$4,324 $3,986 $12,610 $9,452