Harvard Bioscience Announces Third Quarter 2021 Financial Results

Rhea-AI Summary

Harvard Bioscience reported a 23% year-over-year revenue growth for Q3 2021, reaching $29.7 million, with pre-clinical product revenue up 28% and Cellular and Molecular Technologies (CMT) product revenue up 19%. Operating income showed a slight increase from $0.2 million to $0.5 million. Despite ongoing global supply chain disruptions impacting costs, adjusted operating margin remained solid at 13.3%. The company expects revenue growth of 15% to 17% for the year, up from previous estimates of 12% to 15%.

Positive

• 23% revenue growth year-over-year for Q3 2021.
• Pre-clinical product revenue increased by 28%.
• CMT product revenue grew by 19%.
• Adjusted operating margin at 13.3%.
• Revenue growth expectation raised to 15%-17% for 2021.

Negative

• Operating income impacted by increased material, freight, and labor costs.
• Adjusted operating margin decreased from 14.8% to 13.3%.

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

FAQ

What were Harvard Bioscience's revenue figures for Q3 2021?

Harvard Bioscience reported revenues of $29.7 million for Q3 2021, a 23% increase year-over-year.

How much did pre-clinical product revenue grow in Q3 2021?

Pre-clinical product revenue grew by 28% in Q3 2021 compared to the previous year.

What is the adjusted operating margin for Harvard Bioscience in Q3 2021?

The adjusted operating margin for Q3 2021 was 13.3%.

What is the revenue growth expectation for Harvard Bioscience for 2021?

Harvard Bioscience expects revenue growth of 15% to 17% for 2021.

Did Harvard Bioscience experience any supply chain issues in Q3 2021?

Yes, Harvard Bioscience faced increased costs due to global supply chain disruptions.