Harvard Bioscience Announces First Quarter 2022 Financial Results

Rhea-AI Summary

Harvard Bioscience reported a 7% year-over-year revenue increase for Q1 2022, reaching $28.8 million, despite COVID-19 lockdowns in China affecting operations. Strong North American sales and demand for pre-clinical and cellular/molecular products were key drivers. However, the company faced an operating loss of $6.7 million, influenced by higher material costs and a $5 million legal accrual. Adjusted operating income fell to $2.4 million, with adjusted margins down to 8.2%. Looking ahead, the company expects annual revenue growth of 8% to 13%, alongside improving gross margins.

Positive

• 7% revenue growth year-over-year to $28.8 million.
• Strong demand in North America, with pre-clinical and CMT products up 7% and 10%, respectively.
• Expecting annual revenue growth of 8% to 13% compared to 2021.

Negative

• Operating loss increased to $6.7 million from a loss of $0.2 million.
• Adjusted operating income fell to $2.4 million from $3.2 million.
• Adjusted operating margin decreased to 8.2% from 12.0%.

•

Revenue up 7% year-over-year despite volatility in China related to COVID-19 and global supply chain headwinds

HOLLISTON, Mass., May 04, 2022 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq: HBIO) (the “Company”) today announced financial results for the first quarter ended March 31, 2022.

Jim Green, Chairman and CEO, said, “Our revenue was up 7% on strength from North American sales despite the impact of lockdowns in China. Demand for our pre-clinical and cellular/molecular (CMT) products continued to be strong, up 7% and 10%, respectively. Adjusted operating income for Q1 was lower than prior year due primarily to higher material, freight and labor costs associated with ongoing global supply disruptions. We also funded growth investments in R&D and marketing. On a GAAP basis, we recorded an operating loss that included an accrual of $5 million of legal fees and other costs to resolve litigation connected to activities of a former subsidiary. Gross margin was stable at 57% as improved pricing and product mix was offset by higher COGS.”

Mr. Green concluded, “Sales momentum in North America and improving sales in Europe, combined with a strong backlog underpins our growth outlook. We expect a strong second half recovery in China, though volatility from short term order delays that started in Q1 could take longer to recover. Given the volatility in China, we are adjusting our annual revenue growth guidance to 8% to 13% compared to 2021. This growth remains net of trimming lower value-add products. With sales efforts focused on higher value products and channels, new products launched in 2021 and improvements in internal operations, we expect to improve gross margin by over a percentage point and to deliver adjusted operating margins in the range of 14% to 16%. These anticipated profit improvements include planned expense reductions in the year. However, we will continue incremental investments in R&D to sustain double-digit growth over the long run.” 

Quarterly Financial Results Summary		Q1'22					Q1'21
Revenues		$	28.8		million		$	27.0		million
Operating Loss (GAAP)		$	(6.7	)	million		$	(0.2	)	million
Adjusted Operating Income		$	2.4		million		$	3.2		million
Operating Margin (GAAP)			(23.3	)	%			(0.9	)	%
Adjusted Operating Margin			8.2		%			12.0		%
Diluted Loss Per Share (GAAP)		$	(0.17	)			$	(0.02	)
Diluted Adjusted Earnings Per Share		$	0.04				$	0.05
Net Debt*		$	44.6		million		$	39.1		million
* Debt outstanding less cash and cash equivalents

For more details on Q1 2022 performance, 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. 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# 6757353.

The conference call will be simultaneously webcast and can be accessed through the Harvard Bioscience website. To listen to the webcast, log on: 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 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
										March 31, 2022				March 31, 2021
		Revenues							$	28,778			$	26,989
		Cost of revenues								12,601				11,558
			Gross profit							16,177				15,431
		Operating expenses:
			Sales and marketing expenses							6,687				5,386
			General and administrative expenses							6,325				6,333
			Research and development expenses							3,220				2,487
			Amortization of intangible assets							1,466				1,464
			Settlement of litigation							5,191				-
		Total operating expenses								22,889				15,670
		Operating loss								(6,712	)			(239	)
		Other (expense) income:
			Interest expense							(384	)			(411	)
			Other income (expense), net							78				(34	)
		Total other expense								(306	)			(445	)
		Loss before income taxes								(7,018	)			(684	)
		Income tax benefit								(138	)			(15	)
		Net loss							$	(6,880	)		$	(669	)
		Loss per common share:
			Basic and diluted						$	(0.17	)		$	(0.02	)
		Weighted-average common shares:
			Basic and diluted							41,219				39,787

							Exhibit 2
	HARVARD BIOSCIENCE, INC.
	Condensed Consolidated Balance Sheets
	(unaudited, in thousands)
				March 31, 2022			December 31, 2021
		Assets
		Cash and cash equivalents	$	5,433		$	7,821
		Accounts receivables		20,274			21,834
		Inventories		28,711			27,587
		Other current assets		5,030			4,341
		Total current assets		59,448			61,583
		Property, plant and equipment		3,499			3,415
		Goodwill and other intangibles		83,234			85,074
		Other long-term assets		11,863			12,272
		Total assets	$	158,044		$	162,344
		Liabilities and Stockholders' Equity
		Current portion, long-term debt	$	2,720		$	3,235
		Other current liabilities		24,506			22,081
		Total current liabilities		27,226			25,316
		Long-term debt, net		46,244			45,095
		Other long-term liabilities		8,199			8,532
		Stockholders’ equity		76,375			83,401
		Total liabilities and stockholders’ equity	$	158,044		$	162,344

								Exhibit 3
	HARVARD BIOSCIENCE, INC.
	Condensed Consolidated Statements of Cash Flows
	(unaudited, in thousands)
			Year Ended
				March 31, 2022				March 31, 2021
		Cash flows from operating activities:
		Net loss	$	(6,880	)		$	(669	)
		Adjustments to operating cash flows		2,818				2,894
		Changes in operating assets and liabilities		2,076				(1,188	)
		Net cash (used in) provided by operating activities		(1,986	)			1,037
		Cash flows from investing activities:
		Additions to property, plant and equipment		(471	)			(151	)
		Additions to intangible assets		-				(150	)
		Net cash used in investing activities		(471	)			(301	)
		Cash flows from financing activities:
		Borrowing from revolving line of credit		1,500				-
		Repayment of revolving line of credit		-				(4,000	)
		Repayment of term debt		(936	)			(500	)
		Payments of debt issuance costs		-				(101	)
		Proceeds from exercise of stock options		31				1,924
		Taxes related to net share settlement of equity awards		(501	)			(464	)
		Net cash provided by (used in) financing activities		94				(3,141	)
		Effect of exchange rate changes on cash		(25	)			(97	)
		Decrease in cash and cash equivalents		(2,388	)			(2,502	)
		Cash and cash equivalents at the beginning of period		7,821				8,317
		Cash and cash equivalents at the end of period	$	5,433			$	5,815

																											Exhibit 4
	HARVARD BIOSCIENCE, INC.
	Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
	Three Months Ended March 31, 2022
	(in thousands, except per share data)
																				Settlement,
												Stock-Based				Acquired Assets				Restructuring,				Income
	Statement of Operations							GAAP				Compensation				Amortization				Transformation				Taxes				ADJUSTED
	Revenues							$	28,778				-				-				-				-			$	28,778
	Cost of revenues								12,601				(36	)			(11	)			(75	)			-				12,479
		Gross profit							16,177				36				11				75				-				16,299
	Gross Margin								56.2	%																			56.6	%
	Operating expenses:
		Sales and marketing expenses							6,687				(154	)			(2	)			(115	)			-				6,416
		General and administrative expenses							6,325				(791	)			(16	)			(1,092	)			-				4,426
		Research and development expenses							3,220				(42	)			(10	)			(77	)			-				3,091
		Amortization of intangible assets							1,466				-				(1,466	)			-				-				-
		Settlement of litigation							5,191				-				-				(5,191	)			-				-
	Total operating expenses								22,889				(987	)			(1,494	)			(6,475	)			-				13,933
	Operating Expenses - % of Revenues								79.5	%																			48.4	%
	Operating (loss) income								(6,712	)			1,023				1,505				6,550				-				2,366
	Operating Margin								-23.3	%																			8.2	%
	Other (expense) income:
		Interest expense							(384	)			-				-				-				-				(384	)
		Other income, net							78				-				-				-				-				78
	Total other expense								(306	)			-				-				-				-				(306	)
	(Loss) income before income taxes								(7,018	)			1,023				1,505				6,550				-				2,060
	Income tax (benefit) expense								(138	)			-				-				-				682				544
	Net (loss) income							$	(6,880	)		$	1,023			$	1,505			$	6,550			$	(682	)		$	1,516
		(Loss) income per share						$	(0.17	)																		$	0.04
		Diluted weighted average common shares							41,219																				42,977

																											Exhibit 4.1
	HARVARD BIOSCIENCE, INC.
	Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
	Three Months Ended March 31, 2021
	(in thousands, except per share data)
												Stock-Based				Acquired Assets				Restructuring,				Income
	Statement of Operations							GAAP				Compensation				Amortization				Transformation				Taxes				ADJUSTED
	Revenues							$	26,989				-				-				-				-			$	26,989
	Cost of revenues								11,558				(20	)			(19	)			(53	)			-				11,466
		Gross profit							15,431				20				19				53				-				15,523
	Gross Margin								57.2	%																			57.5	%
	Operating expenses:
		Sales and marketing expenses							5,386				(92	)			(2	)			(41	)			-				5,251
		General and administrative expenses							6,333				(834	)			(17	)			(846	)			-				4,636
		Research and development expenses							2,487				(22	)			(11	)			(45	)			-				2,409
		Amortization of intangible assets							1,464				-				(1,464	)			-				-				-
	Total operating expenses								15,670				(948	)			(1,494	)			(932	)			-				12,296
	Operating Expenses - % of Revenues								58.1	%																			45.6	%
	Operating (loss) income								(239	)			968				1,513				985				-				3,227
	Operating Margin								-0.9	%																			12.0	%
	Other expense:
		Interest expense							(411	)			-				-				-				-				(411	)
		Other expense, net							(34	)			-				-				-				-				(34	)
	Total other expense								(445	)			-				-				-				-				(445	)
	(Loss) income before income taxes								(684	)			968				1,513				985				-				2,782
	Income tax (benefit) expense								(15	)			-				-				-				744				729
	Net (loss) income							$	(669	)		$	968			$	1,513			$	985			$	(744	)		$	2,053
		(Loss) income per share						$	(0.02	)																		$	0.05
		Diluted weighted average common shares							39,787																				42,109

								Exhibit 5
	HARVARD BIOSCIENCE, INC.
	Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
	(in thousands)
			Three Months Ended
				March 31, 2022				March 31, 2021
		Operating income	$	(6,712	)		$	(239	)
		Stock-based compensation expense		1,023				968
		Acquired asset amortization		1,505				1,513
		Settlements, restructuring and transformation costs		6,550				985
		Adjusted operating income		2,366				3,227
		Depreciation expense		382				445
		Adjusted EBITDA	$	2,748			$	3,672

 

 

 

FAQ

What were Harvard Bioscience's Q1 2022 revenues?

Harvard Bioscience reported revenues of $28.8 million for Q1 2022.

What were the key drivers of revenue growth for HBIO in Q1 2022?

Key drivers included strong North American sales and demand for pre-clinical and cellular/molecular products.

What is the adjusted operating income for Harvard Bioscience in Q1 2022?

The adjusted operating income for Q1 2022 was $2.4 million.

How did Harvard Bioscience's operating loss change in Q1 2022?

The operating loss increased to $6.7 million in Q1 2022 from $0.2 million in Q1 2021.

What is the expected annual revenue growth guidance for HBIO?

Harvard Bioscience expects annual revenue growth of 8% to 13% compared to 2021.