Harvard Bioscience Announces Second Quarter 2020 Financial Results | Harvard Bioscience, Inc.

Accelerated cost reduction, cash conservation actions drive increased operating income, reduced net debt

  • Operating Income up sequentially and year-over-year on both GAAP and adjusted basis
  • Cost reduction programs offset expected declines in Academic markets
  • Net Debt reduced by $2.2 million in Q2

HOLLISTON, Mass., Aug. 05, 2020 (GLOBE NEWSWIRE) — Harvard Bioscience, Inc. (Nasdaq: HBIO) (the “Company”) today announced financial results for the three and six months ended June 30, 2020.

Jim Green, Chairman and CEO said, “Anticipating academic labs around the world would likely experience pandemic-related shutdowns similar to what we saw in China, we took immediate and decisive cost actions. These actions, combined with planned in-progress restructuring programs, reduced overall cost of operations to deliver sequential and year-over-year adjusted operating income growth.”

Green concluded, “The continued growth from CRO/pharma customers, reopening of academic labs and our lower cost of operation, are expected to drive solid operating margins throughout the rest of 2020. All told, we expect adjusted operating margins for the second half of 2020 to be in line with our original targets set in September 2019.”

Quarterly Financial Results Summary      
  Q2’20 Q1’20 Q2’19
       
Revenue $23.3 million $23.8 million $29.6 million
       
Operating Income (Loss) (GAAP) $0.6 million ($3.3) million $0.2 million
Adjusted Operating Income / Margin $4.1 million / 17.7% $0.5 million / 2.0% $3.4 million / 11.5%
       
Diluted EPS (GAAP) ($0.04) ($0.12) ($0.01)
Adjusted Diluted EPS $0.05 ($0.01) $0.04
       
Net Debt* $42.1 million $44.3 million $51.3 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, and diluted earnings per share. 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# 4458189.

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, and adjusted diluted earnings per 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 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, gains or losses from divestitures, 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 adjusted operating income, and adjusted net income (loss), adjusted earnings (loss) per diluted share 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 clinical research organizations. With operations in North America and Europe, 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 Form 10-K for the year ended December 31, 2019, and in our Quarterly Report on and subsequent Form 10-Q for the fiscal quarter ended March 31, 2020 and Form 8-K 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.

More:  Harvard Bioscience Announces Fourth Quarter 2019 Financial Results | Harvard Bioscience, Inc.

For investor inquiries, please contact Michael A. Rossi, Chief Financial Officer at (508) 893-8999.

 


HARVARD BIOSCIENCE, INC.
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
          
   Three Months Ended
   June 30, 2020  March 31, 2020  June 30, 2019
          
Revenues$23,308  $23,771  $29,584 
Cost of revenues 9,452   10,789   13,629 
 Gross profit 13,856   12,982   15,955 
          
Operating expenses:        
 Sales and marketing expenses 4,279   5,579   5,770 
 General and administrative expenses 5,670   6,759   4,809 
 Research and development expenses 1,897   2,490   2,771 
 Amortization of intangible assets 1,454   1,427   1,436 
 Impairment charges       941 
Total operating expenses 13,300   16,255   15,727 
          
Operating income (loss) 556   (3,273)  228 
          
Other expense:        
 Interest expense, net (1,233)  (1,299)  (1,376)
 Other income (expense), net (191)  111   16 
Other expense, net (1,424)  (1,188)  (1,360)
          
Loss before income taxes (868)  (4,461)  (1,132)
Income tax provision (benefit) 713   55   (885)
Net loss$(1,581) $(4,516) $(247)
          
Loss per common share:        
 Basic loss per share$(0.04) $(0.12) $(0.01)
          
 Diluted loss per share$(0.04) $(0.12) $(0.01)
          
Weighted average common shares:        
 Basic 38,468   38,329   37,736 
          
 Diluted 38,468   38,329   37,736 
             

HARVARD BIOSCIENCE, INC.
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
       
  Six Months Ended
   June 30, 2020  June 30, 2019
       
Revenues$47,079  $57,786 
Cost of revenues 20,241   25,677 
 Gross profit 26,838   32,109 
       
Operating expenses:     
 Sales and marketing expenses 9,858   12,076 
 General and administrative expenses 12,429   10,612 
 Research and development expenses 4,387   5,506 
 Amortization of intangible assets 2,881   2,866 
 Impairment charges    941 
Total operating expenses 29,555   32,001 
       
Operating (loss) income (2,717)  108 
       
Other expense:     
 Interest expense, net (2,532)  (2,781)
 Other income (expense), net (80)  (253)
Other expense, net (2,612)  (3,034)
       
Loss before income taxes (5,329)  (2,926)
Income tax provision (benefit) 768   (309)
Net loss$(6,097) $(2,617)
       
Loss per common share:     
 Basic loss per share$(0.16) $(0.07)
       
 Diluted loss per share$(0.16) $(0.07)
       
Weighted average common shares:     
 Basic 38,389   37,683 
       
 Diluted 38,389   37,683 
         

HARVARD BIOSCIENCE, INC.
Condensed Consolidated Balance Sheet Information
(unaudited, in thousands)
       
  June 30, 2020  December 31, 2019 
       
Assets      
  Cash and cash equivalents$2,629 $8,335 
  Accounts receivables 14,710  20,704 
  Inventories 23,181  22,061 
  Other current assets 3,582  2,472 
  Total current assets 44,102  53,572 
  Property, plant and equipment 4,222  4,776 
  Goodwill and other intangibles 92,453  95,786 
  Other assets 9,908  10,736 
  Total assets$150,685 $164,870 
       
Liabilities and Stockholders’ Equity      
  Current portion, long-term debt$2,807 $6,900 
  Other current liabilities 19,856  18,412 
  Total current liabilities 22,663  25,312 
  Long-term debt 40,921  46,917 
  Other long-term liabilities 11,033  10,947 
  Stockholders’ equity 76,068  81,694 
  Total liabilities and stockholders’ equity$150,685 $164,870 
       
More:  Harvard Bioscience Announces First Quarter 2020 Financial Results | Harvard Bioscience, Inc.

HARVARD BIOSCIENCE, INC.
Condensed Consolidated Cash Flow Information
(unaudited, in thousands)
       
   Six Months Ended
   June 30, 2020   June 30, 2019 
       
Cash flows from operating activities:      
Net loss $(6,097) $(2,617)
Changes in operating assets and liabilities  5,296   (1,267)
Other adjustments to operating cash flows  6,045   6,551 
Net cash provided by operating activities  5,244   2,667 
       
Cash flows from investing activities:      
Additions to property, plant and equipment  (524)  (423)
Dispositions     1,020 
Other investing activities     (9)
Net cash (used in) provided by investing activities  (524)  588 
       
Cash flows from financing activities:      
Proceeds from issuance of debt  6,115   2,300 
Repayments of debt  (16,411)  (8,503)
Other financing activities  (75)  (334)
Net cash used in financing activities  (10,371)  (6,537)
       
Effect of exchange rate changes on cash  (55)  43 
Decrease in cash and cash equivalents  (5,706)  (3,239)
Cash and cash equivalents at the beginning of period  8,335   8,173 
Cash and cash equivalents at the end of period $2,629  $4,934 
         

HARVARD BIOSCIENCE, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
(in thousands, except per share data)
        
 Three Months Ended
  June 30, 2020   March 31, 2020    June 30, 2019 
        
        
GAAP operating income (loss)$556  $(3,273)  $228 
Stock-based compensation expense 769   793   615 
Severance, restructuring and acquisition costs 1,287   1,471   138 
Acquired intangible assets amortization and impairments 1,455   1,427   2,378 
Non-cash expense – acquisition accounting 53   57   57 
Adjusted operating income$4,120  $475  $3,416 
        
        
GAAP operating margin 2.4%   -13.8%   0.8% 
        
Adjusted operating margin 17.7%   2.0%   11.5% 
        
GAAP net loss$(1,581)  $(4,516)  $(247) 
Stock-based compensation expense 769   793   615 
Severance, restructuring and acquisition costs 1,287   1,471   138 
Acquired intangible assets amortization and impairments 1,455   1,427   2,378 
Non-cash expense – acquisition accounting 53   57   57 
Income taxes (A) 103   287   (1,352) 
Adjusted net income (loss) $2,086  $(481)  $1,589 
        
        
GAAP loss per common share$(0.04)  $(0.12)  $(0.01) 
Adjusted items after tax per share assuming dilution 0.09   0.11   0.05 
Adjusted diluted earnings (loss) per common share$0.05  $(0.01)  $0.04 
        
        
(A) Income taxes includes the tax effect of the adjustments to GAAP results.

HARVARD BIOSCIENCE, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
(in thousands, except per share data)
      
 Six Months Ended
  June 30, 2020   June 30, 2019 
      
GAAP operating (loss) income$(2,717)  $108 
Stock-based compensation expense 1,562   1,202 
Severance, restructuring and acquisition costs 2,758   632 
Acquired intangible assets amortization and impairments 2,882   3,808 
Non-cash expense – acquisition accounting 109   178 
Adjusted operating income$4,594  $5,928 
      
GAAP operating margin -5.8%   0.2% 
      
Adjusted operating margin 9.8%   10.3% 
      
GAAP net loss$(6,097)  $(2,617) 
Stock-based compensation expense 1,562   1,202 
Severance, restructuring and acquisition costs 2,758   632 
Acquired intangible assets amortization and impairments 2,882   3,808 
Non-cash expense – acquisition accounting 109   176 
Income taxes (A) 391   (953) 
Adjusted net income$1,605  $2,248 
      
GAAP loss per common share$(0.16)  $(0.07) 
Adjusted items after tax per share assuming dilution 0.20   0.13 
Adjusted diluted earnings per common share$0.04  $0.06 
      
(A) Income taxes includes the tax effect of the adjustments to GAAP results.


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