Harvard Bioscience Announces Second Quarter 2021 Financial Results

Rhea-AI Summary

Harvard Bioscience, Inc. (Nasdaq: HBIO) reported a 25% year-over-year revenue growth for Q2 2021, reaching $29.2 million, driven by strong demand in pre-clinical and Cellular and Molecular (CMT) products, which grew by 20% and 22%, respectively. Despite higher global supply chain costs affecting operating margins, adjusted operating margins remained robust at 14.6%. Looking ahead, the company anticipates a 12% to 15% revenue growth for the fiscal year. Operating income was impacted, showing a loss per share of $(0.01), with adjusted diluted EPS at $0.06.

Positive

• 25% year-over-year revenue growth to $29.2 million.
• CMT product revenue increased 22% year-over-year.
• Pre-clinical product revenue rose 20% compared to last year.
• Adjusted operating margin at 14.6%, exceeding pre-COVID levels.
• Revenue growth forecast of 12% to 15% for fiscal 2021.

Negative

• Operating income decreased to $0.1 million from $0.6 million year-over-year.
• GAAP operating margin dropped to 0.2% from 2.4% year-over-year.
• Loss per share of $(0.01) compared to $(0.04) a year ago.

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

FAQ

What were the Q2 2021 revenue results for HBIO?

Harvard Bioscience reported Q2 2021 revenue of $29.2 million, up 25% from $23.3 million in Q2 2020.

How did global supply chain issues impact HBIO's margins?

Global supply chain disruptions negatively impacted operating margins, with GAAP operating margin falling to 0.2%.

What is the adjusted diluted earnings per share for HBIO in Q2 2021?

HBIO reported an adjusted diluted earnings per share of $0.06 for Q2 2021.

What is HBIO's revenue growth outlook for the fiscal year 2021?

HBIO expects revenue growth of 12% to 15% for fiscal 2021 compared to 2020.