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Harvard Bioscience Announces Third Quarter 2021 Financial Results

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·13 min read
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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 Summary

Q3'21

Q3'20

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 expenses

5,458

5,399

18,190

17,828

Research and development expenses

2,660

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 Operations

GAAP

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 Operations

GAAP

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 Operations

GAAP

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 Operations

GAAP

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