Operational Improvements Produce Increases in Operating Income and Margins
50% Increase in Non-GAAP EPS
Increases Financial Guidance for 2014 to Reflect Acquisitions
-Conference Call To Be Held at 11:00 AM ET Today-
HOLLISTON, Mass., Oct. 30, 2014 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq:HBIO), a global developer, manufacturer and marketer of a broad range of solutions to advance life science, today reported financial highlights for the three and nine months ended September 30, 2014. Among the financial highlights of the quarter were improvements in operating income, operating margins, income from continuing operations and net income.
Jeffrey A. Duchemin, President and Chief Executive Officer of Harvard Bioscience, said, “Third quarter results were notable in many different respects. We grew non-GAAP income from continuing operations and earnings per diluted share by 46% and 50%, respectively, revenues increased 1.2%, we reduced operating expenses and significantly improved our operating margins, which increased by more than 300 basis points to 11.5% on a non-GAAP basis. Bookings remained strong this quarter at $25.7 million, on par with last year’s third quarter, and backlog of $6.2 million at the end of the quarter increased 40% over last year’s third quarter of $4.4 million. The business strategy we put into place just about a year ago when we realigned our operations, created organizational efficiencies and concentrated on growth businesses is working.
“In addition to our financial results, the third quarter was also important as we identified and subsequently closed two acquisitions on October 1, 2014 that helped secure our leadership in the electrophysiology market: Multi Channel Systems MCS GmbH, a German company, and Triangle BioSystems, Inc., a Delaware corporation based in North Carolina. These two businesses leverage and strengthen our global sales, marketing and distribution network and build upon our growth platform.
“As we complete our first 12 months as a pure-play company, we are a much stronger, focused organization, with a talented and driven team in place, capitalizing on our operational efficiencies and a strong balance sheet that enable us to compete in the global markets,” Mr. Duchemin concluded.
Third Quarter Reported Results
Revenues for the three months ended September 30, 2014 were $25.4 million, an increase of approximately $0.3 million, or 1.2% compared to revenues of $25.1 million for the three months ended September 30, 2013. The increase in revenues was the result of currency translation, due to a weaker U.S. dollar compared to the British pound sterling. Excluding currency translation, revenues were flat quarter over quarter.
Income from continuing operations, as measured under U.S. generally accepted accounting principles (“GAAP”), was $0.6 million, or $0.02 per diluted share, for the three months ended September 30, 2014 compared to a loss of $48,000, or $0.00 per diluted share, for the same quarter in 2013. Overall, the favorable year-to-year quarterly GAAP earnings comparison was due primarily to transaction costs incurred during the three months ended September 30, 2013, as well as lower general and administrative expenses quarter over quarter.
Income from continuing operations, on a non-GAAP basis, increased 46% to $1.9 million for the third quarter 2014, and increased 50% to $0.06 per diluted share, compared to $1.3 million, or $0.04 per diluted share, for the three months ended September 30, 2013. For a reconciliation between the GAAP and non-GAAP income from continuing operations, refer to Exhibit 5 and 6 below. Overall, the favorable year-to-year quarterly non-GAAP earnings comparison was due primarily to lower operating expenses.
Year-to-Date Reported Results
Revenues for the nine months ended September 30, 2014 were $78.3 million, an increase of approximately $1.0 million, or 1.3% compared to revenues of $77.3 million for the nine months ended September 30, 2013. Overall, currency translation had a 2.0% positive impact.
Income from continuing operations, as measured under GAAP, was $2.4 million, or $0.07 per diluted share, for the nine months ended September 30, 2014 compared to $1.0 million, or $0.03 per diluted share, for the same period in 2013. Overall, the favorable year-to-year GAAP earnings comparison was due primarily to transaction costs incurred during the nine months ended September 30, 2013, partially offset by higher research and development expenses.
Income from continuing operations, on a non-GAAP basis, was $5.5 million, or $0.17 per diluted share, for the nine months ended September 30, 2014 compared to $5.4 million, or $0.17 per diluted share, for the same period in 2013. For a reconciliation between the GAAP and non-GAAP income from continuing operations, refer to Exhibit 5 and 6 below. The favorable year-to-year non-GAAP earnings comparison was due primarily to lower operating expenses, partially offset by higher interest expense.
Financial Guidance
The Company is increasing its financial guidance from February 27, 2014 to reflect its acquisitions of Multi Channel Systems MCS and Triangle BioSystems. The Company now expects revenues to be approximately $107-$108 million, or an approximately 2% to 3% increase compared to 2013’s revenues. The Company expects to report full-year 2014 non-GAAP diluted earnings per share of $0.26 to $0.27, an approximately 20% to 22% increase compared with 2013’s non-GAAP diluted earnings per share. This translates to GAAP diluted earnings per share of approximately $0.14 to $0.15. The Company may incur charges, realize gains or experience other events in 2014 that could cause actual results to vary from this guidance. Refer to Exhibit 7 below for a reconciliation between the GAAP and non-GAAP diluted earnings per share guidance.
Conference Call Details
As previously announced, management will host a conference call to discuss third quarter 2014 results and business highlights, operations and outlook, which will be simultaneously webcast and can be accessed through the Harvard Bioscience website. The conference call will begin at 11:00 a.m. ET today, October 30, 2014. To listen to the conference call, log on to our website at www.harvardbioscience.com and click on the Earnings Call icon. If you are unable to listen to the live webcast, the call will be accessible in the investor relations section of our website until November 6, 2014. The live conference call is also accessible by dialing toll-free 877-303-7611, or international: 970-315-0445, and referencing the pass code of “19184017".
This earnings release, as well as any material financial and other statistical information presented on the call which is not included in this earnings release, is available on the Company’s website by clicking on the Press Releases icon. If you are unable to listen to the live conference call, please note that the call, this press release and any related financial or statistical information will be archived on our website under the Press Releases icon or Earnings Call icon, as appropriate.
Use of Non-GAAP Financial Information
In this press release, we have included non-GAAP financial information including adjusted operating income, adjusted income from continuing operations and adjusted earnings from continuing operations per diluted share. 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 of income 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 initiatives, transaction costs, severance and restructuring 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 non-GAAP adjusted operating income, non-GAAP adjusted income from continuing operations and non-GAAP adjusted earnings from continuing operations per diluted share for the three and nine months ended September 30, 2014 and 2013 and changes in total revenues compared to the same periods of the prior year 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.
About Harvard Bioscience
Harvard Bioscience is a global developer, manufacturer and marketer of a broad range of solutions to advance life science. Our products are sold to thousands of researchers in over 100 countries through our global sales organization, catalogs, websites, and through distributors including GE Healthcare, Thermo Fisher Scientific Inc., VWR and other specialized distributors. We have sales and manufacturing operations in the United States, the United Kingdom, Germany, Sweden, Spain, France and Canada. For more information, please visit our website at www.harvardbioscience.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the federal securities laws. 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, the impact of acquisitions, or potential acquisitions, the outlook for the life sciences industry, 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.
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