Harvard Bioscience Announces Second Quarter 2021 Financial Results

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

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August 5, 2021 – 4:00 AM PDT

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