• Harvard Bioscience Announces Second Quarter 2022 Financial Results

    Source: Nasdaq GlobeNewswire / 03 Aug 2022 22:48:02   America/New_York

    HOLLISTON, Mass., Aug. 03, 2022 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq: HBIO) (the “Company”) today announced financial results for the second quarter ended June 30, 2022.

    Jim Green, Chairman and CEO, said, "Our second quarter revenues were essentially flat compared to the prior year quarter as growth in our cellular/molecular product revenues were offset by reductions in pre-clinical revenues and an unfavorable foreign currency impact. Adjusted operating income for Q2 was lower than prior year due primarily to incremental investments in R&D and increased marketing expenses. Gross margin improved to 58% from 57%. On a GAAP basis, operating income for Q2 includes a $4.9 million benefit recorded associated with resolution of litigation related to a former subsidiary. Cash payments by the company associated with the settlement of the litigation were completed in Q2.”

    Green continued, “Subsequent to Q2, we completed identification of non-strategic products to discontinue, with shipments for affected products expected to cease in the next few quarters. This portfolio optimization and other cost actions taken is expected to result in a reduction of approximately 5% of the global workforce. We expect these changes to support our strategic long-term growth targets, and to underpin our targets for gross margin and operating margin expansion.”

    Green concluded, “Looking at the full year 2022, considering significant currency impacts, volatility in Europe and continued Covid related impacts in China, we are taking a more conservative view on revenue and expect 1-to-5% reported revenue growth and adjusted operating margin for the year of 13-to-14%.”

    Quarterly Financial Results Summary Q2'22 Q2'21 
            
    Revenues $29.2 million $29.2 million 
            
    Operating Income (GAAP) $4.0 million $0.1 million 
    Adjusted Operating Income $3.1 million $4.3 million 
    Operating Margin (GAAP)  13.7 %  0.2 % 
    Adjusted Operating Margin  10.5 %  14.6 % 
            
    Diluted Income (Loss) Per Share (GAAP) $0.06   $(0.01)  
    Diluted Adjusted Earnings Per Share $0.05   $0.06   
            
    Net Debt* $45.2 million $38.2 million 
            
    * Debt outstanding less cash and cash equivalents     
            

    For more details on performance for the three and six months ended June 30,2022, a slide presentation that will be referenced during the webcast referenced below 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. 

    Participants 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 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, 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.

    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, 2022  June 30, 2021  June 30, 2022  June 30, 2021  
                      
      Revenues$29,208  $29,197  $57,986  $56,186   
      Cost of revenues 12,571   12,844   25,172   24,402   
       Gross profit 16,637   16,353   32,814   31,784   
                      
      Operating expenses:             
       Sales and marketing expenses 6,587   5,730   13,274   11,116   
       General and administrative expenses 5,981   6,399   12,306   12,732   
       Research and development expenses 3,497   2,701   6,717   5,188   
       Amortization of intangible assets 1,454   1,465   2,920   2,929   
       Settlement of litigation, net (4,880)  -   311   -   
      Total operating expenses 12,639   16,295   35,528   31,965   
                      
      Operating income (loss) 3,998   58   (2,714)  (181)  
                      
      Other (expense) income:             
       Interest expense (515)  (377)  (899)  (788)  
       Other (expense) income, net (62)  (313)  16   (347)  
      Total other expense (577)  (690)  (883)  (1,135)  
                      
      Income (loss) before income taxes 3,421   (632)  (3,597)  (1,316)  
      Income tax expense (benefit) 986   (222)  848   (237)  
      Net income (loss)$2,435  $(410) $(4,445) $(1,079)  
                      
      Income (loss) per common share:             
       Basic$0.06  $(0.01) $(0.11) $(0.03)  
       Diluted $0.06  $(0.01) $(0.11) $(0.03)  
      Weighted-average common shares:             
       Basic 41,304   40,152   41,256   39,960   
       Diluted  42,561   40,152   41,256   39,960   
                      



           Exhibit 2  
     HARVARD BIOSCIENCE, INC. 
     Condensed Consolidated Balance Sheets 
     (unaudited, in thousands) 
              
        June 30, 2022  December 31, 2021  
      Assets       
      Cash and cash equivalents$4,259 $7,821  
      Accounts receivables 17,847  21,834  
      Inventories 29,336  27,587  
      Other current assets 5,056  4,341  
      Total current assets 56,498  61,583  
      Property, plant and equipment 3,394  3,415  
      Goodwill and other intangibles 80,451  85,074  
      Other long-term assets 14,930  12,272  
      Total assets$155,273 $162,344  
              
      Liabilities and Stockholders' Equity       
      Current portion, long-term debt$2,720 $3,235  
      Other current liabilities 20,634  22,081  
      Total current liabilities 23,354  25,316  
      Long-term debt, net 45,764  45,095  
      Other long-term liabilities 8,651  8,532  
      Stockholders’ equity 77,504  83,401  
      Total liabilities and stockholders’ equity$155,273 $162,344  
              



           Exhibit 3  
     HARVARD BIOSCIENCE, INC. 
     Condensed Consolidated Statements of Cash Flows 
     (unaudited, in thousands)  
              
       Six Months Ended  
        June 30, 2022  June 30, 2021  
      Cash flows from operating activities:       
      Net loss$(4,445) $(1,079)  
      Adjustments to operating cash flows 3,220   5,789   
      Changes in operating assets and liabilities (951)  (2,905)  
      Net cash (used in) provided by operating activities (2,176)  1,805   
              
      Cash flows from investing activities:       
      Additions to property, plant and equipment (913)  (357)  
      Additions to intangible assets -   (150)  
      Net cash used in investing activities (913)  (507)  
              
      Cash flows from financing activities:       
      Borrowing from revolving line of credit 5,300   -   
      Repayment of revolving line of credit (3,600)  (4,000)  
      Repayment of term debt (1,686)  (1,000)  
      Payments of debt issuance costs -   (102)  
      Proceeds from exercise of stock options and stock purchases 282   2,759   
      Taxes related to net share settlement of equity awards (780)  (990)  
      Net cash used in financing activities (484)  (3,333)  
              
      Effect of exchange rate changes on cash 11   (45)  
      Decrease in cash and cash equivalents (3,562)  (2,080)  
      Cash and cash equivalents at the beginning of period 7,821   8,317   
      Cash and cash equivalents at the end of period$4,259  $6,237   
              



                Exhibit 4 
     HARVARD BIOSCIENCE, INC. 
     Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
     Three Months Ended June 30, 2022 
     (in thousands, except per share data) 
       
             Settlement,     
         Stock-Based  Acquired Assets Restructuring, Income   
      Statement of OperationsGAAP Compensation
     Amortization Transformation Taxes ADJUSTED 
                   
      Revenues$29,208   -   -   -   -  $29,208  
      Cost of revenues 12,571   (52)  (9)  (82)  -   12,428  
      Gross profit 16,637   52   9   82   -   16,780  
                   
      Gross Margin 57.0%          57.5% 
                   
      Operating expenses:            
      Sales and marketing expenses 6,587   (192)  (1)  (255)  -   6,139  
      General and administrative expenses 5,981   (923)  (15)  (825)  -   4,218  
      Research and development expenses 3,497   (72)  (9)  (50)  -   3,366  
      Amortization of intangible assets 1,454   -   (1,454)  -   -   -  
      Settlement of litigation, net (4,880)  -   -   4,880   -   -  
      Total operating expenses 12,639   (1,187)  (1,479)  3,750   -   13,723  
                   
      Operating Expenses - % of Revenues 43.3%          47.0% 
                   
      Operating income (loss) 3,998   1,239   1,488   (3,668)  -   3,057  
                   
      Operating Margin 13.7%          10.5% 
                   
      Other expense:            
      Interest expense (515)  -   -   -   -   (515) 
      Other expense, net (62)  -   -   -   -   (62) 
      Total other expense (577)  -   -   -   -   (577) 
                   
      Income before income taxes 3,421   1,239   1,488   (3,668)  -   2,480  
      Income tax expense (benefit) 986   -   -   -   (517)  469  
      Net income (loss)$2,435  $1,239  $1,488  $(3,668) $517  $2,011  
                   
      Income per share$0.06          $0.05  
                   
      Diluted weighted average common shares 41,304           42,561  
                   



                Exhibit 4.1 
     HARVARD BIOSCIENCE, INC. 
     Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
     Three Months Ended June 30, 2021 
     (in thousands, except per share data) 
                   
         Stock-Based  Acquired Assets Restructuring, Income   
      Statement of OperationsGAAP Compensation Amortization 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 Revenues 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 4.2 
     HARVARD BIOSCIENCE, INC. 
     Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
     Six Months Ended June 30, 2022 
     (in thousands, except per share data) 
       
             Settlement,     
         Stock-Based  Acquired Assets Restructuring,
     Income   
      Statement of OperationsGAAP Compensation
     Amortization Transformation Taxes ADJUSTED 
                   
      Revenues$57,986   -   -   -   -  $57,986  
      Cost of revenues 25,172   (88)  (20)  (157)  -   24,907  
      Gross profit 32,814   88   20   157   -   33,079  
                   
      Gross Margin 56.6%          57.0% 
                   
      Operating expenses:            
      Sales and marketing expenses 13,274   (346)  (3)  (370)  -   12,555  
      General and administrative expenses 12,306   (1,714)  (30)  (1,919)  -   8,643  
      Research and development expenses 6,717   (114)  (19)  (127)  -   6,457  
      Amortization of intangible assets 2,920   -   (2,920)  -   -   -  
      Settlement of litigation, net 311   -   -   (311)  -   -  
      Total operating expenses 35,528   (2,174)  (2,972)  (2,727)  -   27,655  
                   
      Operating Expenses - % of Revenues 61.3%          47.7% 
                  
      Operating (loss) income (2,714)  2,262   2,992   2,884   -   5,424  
                   
      Operating Margin -4.7%          9.4% 
                  
      Other (expense) income:            
      Interest expense (899)  -   -   -   -   (899) 
      Other income, net 16   -   -   -   -   16  
      Total other expense (883)  -   -   -   -   (883) 
                  
      (Loss) income before income taxes (3,597)  2,262   2,992   2,884   -   4,541  
      Income tax expense 848   -   -   -   165   1,013  
      Net (loss) income$(4,445) $2,262  $2,992  $2,884  $(165) $3,528  
                   
      (Loss) income per share$(0.11)         $0.08  
                   
      Diluted weighted average common shares 41,256           42,696  
                   



                Exhibit 4.3
     
     HARVARD BIOSCIENCE, INC. 
     Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) 
     Six Months Ended June 30, 2021 
     (in thousands, except per share data) 
       
         Stock-Based  Acquired Assets Restructuring,
     Income     
      Statement of OperationsGAAP Compensation
     Amortization 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 Revenues 56.9%          43.7% 
                     
      Operating 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 5  
     HARVARD BIOSCIENCE, INC.
     
     Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
     
     (in thousands)
     
       
       Three Months Ended Six Months Ended  
        June 30, 2022  June 30, 2021  June 30, 2022  June 30, 2021  
      Operating income$3,998  $58 $(2,714) $(181)  
      Stock-based compensation expense 1,239   1,164  2,262   2,132   
      Acquired asset amortization 1,488   1,511  2,992   3,024   
      Settlements, restructuring and transformation costs (3,668)  1,530  2,884   2,515   
      Adjusted operating income 3,057   4,263  5,424   7,490   
      Depreciation expense 376   446  758   891   
      Adjusted EBITDA$3,433  $4,709 $6,182  $8,381   
                    



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