Harvard Bioscience Announces Third Quarter 2021 Financial Results

Harvard Bioscience, Inc. announced financial results for the period ended September 30, 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 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


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