• Harvard Bioscience Announces Fourth Quarter 2020 Financial Results

    Source: Nasdaq GlobeNewswire / 10 Mar 2021 07:00:01   America/New_York

    • Revenue returns to pre-Covid19 levels on strong CRO/pharma sales
    • Operating margin increased year-over-year on GAAP and an adjusted basis
    • New debt facility significantly reduces annual interest expense

    HOLLISTON, Mass., March 10, 2021 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq: HBIO) (the “Company”) today announced financial results for the three months and year ended December 31, 2020.

    Jim Green, Chairman and CEO said, “Our fourth quarter demonstrated the benefits of our sales effectiveness focus as we delivered revenue at pre-Covid levels, or $31.0 million. Our preclinical product revenue increased 19% over Q4 2019. In addition, we are very pleased to have successfully refinanced our credit facility which is expected to save approximately $3M annually in cash interest based upon current debt levels and provides numerous other enhancements compared to the former facility.”

    Green concluded, “With strong CRO/Pharma growth and recovering academic lab sales, we expect revenue to grow 8 to 12% compared to 2020. In addition, exciting new products along with removal of lower value offerings is expected to improve our profit mix, delivering adjusted operating margins in the mid-to-upper teens in 2021. We believe the strong 2020 ending and our focus on growth and new exciting products puts 2021 on plan to creating the growth oriented profitable platform we envisioned.”

     

             
     Quarterly Financial Results Summary Q4'20 Q3'20 Q4'19 
             
     Revenue $31.0 million $24.0 million $31.0 million 
             
     Operating Income (GAAP) $2.8 million $0.2 million $1.6 million 
     Adjusted Operating Income $5.8 million $3.6 million $5.6 million 
     Operating Margin (GAAP) 8.9% 0.8% 5.3% 
     Adjusted Operating Margin 18.7% 14.8% 18.1% 
             
     Diluted (Loss) Earnings Per Share (GAAP) ($0.02) ($0.03) $0.01 
     Adjusted Diluted Earnings Per Share $0.08 $0.04 $0.08 
             
     Net Debt* $41.1 million $41.6 million $46.7 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# 4375572.

    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, 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), and 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 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, 2019, and in our Quarterly Reports on Form 10-Q issued in 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  
               December 31, 2020  September 30, 2020  December 31, 2019  
                        
       Revenues$30,984  $24,037  $30,972   
       Cost of revenues 13,276   10,542   13,738   
        Gross profit 17,708   13,495   17,234   
                        
       Operating expenses:          
        Sales and marketing expenses 5,470   4,588   5,894   
        General and administrative expenses 5,681   5,399   5,545   
        Research and development expenses 2,349   1,949   2,645   
        Amortization of intangible assets 1,452   1,377   1,457   
        Impairment charges -   -   59   
       Total operating expenses 14,952   13,313   15,600   
                        
       Operating income 2,756   182   1,634   
                        
       Other expense:          
        Interest expense (1,094)  (1,205)  (1,281)  
        Debt extinguishment and related costs (1,876)  -   -   
        Other expense, net (334)  (392)  (255)  
       Total other expense (3,304)  (1,597)  (1,536)  
                        
       (Loss) income before income taxes (548)  (1,415)  98   
       Income tax expense (benefit) 67   (317)  (452)  
       Net (loss) income$(615) $(1,098) $550   
                        
       (Loss) earnings per common share:          
        Basic$(0.02) $(0.03) $0.01   
        Diluted$(0.02) $(0.03) $0.01   
                        
       Weighted average common shares:          
        Basic 39,021   38,920   38,068   
        Diluted 39,021   38,920   39,070   
                        
            
                        
                        



                     
                   Exhibit 1.1 
        HARVARD BIOSCIENCE, INC. 
        Consolidated Statements of Operations 
        (unaudited, in thousands, except per share data) 
                     
               Year Ended December 31, 
                2020   2019  
                     
        Revenues$102,100  $116,176  
        Cost of revenues 44,059   51,854  
         Gross profit 58,041   64,322  
                     
        Operating expenses:      
         Sales and marketing expenses 19,916   23,264  
         General and administrative expenses 23,509   22,760  
         Research and development expenses 8,685   10,715  
         Amortization of intangible assets 5,710   5,746  
         Impairment charges -   1,460  
        Total operating expenses 57,820   63,945  
                     
        Operating income 221   377  
                     
        Other expense:      
         Interest expense (4,831)  (5,410) 
         Debt extinguishment and related costs (1,876)  -  
         Other expense, net (806)  (469) 
        Total other expense (7,513)  (5,879) 
                     
        Loss before income taxes (7,292)  (5,502) 
        Income tax expense (benefit) 518   (815) 
        Net loss$(7,810) $(4,687) 
                     
        Loss per common share:      
         Basic and diluted$(0.20) $(0.12) 
                     
        Weighted average common shares:      
         Basic and diluted 38,640   37,814  
                     
                
                     



                 
            Exhibit 2    
      HARVARD BIOSCIENCE, INC.   
      Condensed Consolidated Balance Sheets   
      (unaudited, in thousands)   
                 
         December 31, 2020  December 31, 2019   
       Assets         
         Cash and cash equivalents$8,317 $8,335    
         Accounts receivables 17,766  20,704    
         Inventories 22,262  22,061    
         Other current assets 3,355  2,472    
                 Total current assets 51,700  53,572    
         Property, plant and equipment 3,960  4,776    
         Goodwill and other intangibles 91,741  95,786    
         Other long-term assets 8,853  10,736    
            Total assets$156,254 $164,870    
                 
       Liabilities and Stockholders' Equity         
         Current portion, long-term debt$1,721 $6,900    
         Other current liabilities 19,332  18,412    
                 Total current liabilities 21,053  25,312    
         Long-term debt 46,286  46,917    
         Other long-term liabilities 12,234  10,947    
         Stockholders’ equity 76,681  81,694    
            Total liabilities and stockholders’ equity$156,254 $164,870    
                 
                 



               
            Exhibit 3  
      HARVARD BIOSCIENCE, INC. 
      Condensed Consolidated Statements of Cash Flows 
      (unaudited, in thousands)  
               
         Year Ended December 31,  
         2020   2019   
       Cash flows from operating activities:       
       Net loss$(7,810) $(4,687)  
       Adjustments to operating cash flows 13,035   12,690   
       Changes in operating assets and liabilities 4,106   42   
       Net cash provided by operating activities 9,331   8,045   
               
       Cash flows from investing activities:       
       Additions to property, plant and equipment (1,152)  (1,216)  
       Disposition of business -   1,002   
       Other investing activities (250)  (15)  
       Net cash used in investing activities (1,402)  (229)  
               
       Cash flows from financing activities:       
       Proceeds from borrowings 61,315   4,300   
       Repayments of debt (66,912)  (11,703)  
       Payments of debt extinguishment and issuance costs (1,897)  -   
       Other financing activities (473)  (221)  
       Net cash used in financing activities (7,967)  (7,624)  
               
       Effect of exchange rate changes on cash 20   (30)  
       (Decrease) increase in cash and cash equivalents (18)  162   
       Cash and cash equivalents at the beginning of year 8,335   8,173   
       Cash and cash equivalents at the end of year$8,317  $8,335   
               
               
               
               



                  
                  
              Exhibit 4   
     HARVARD BIOSCIENCE, INC.  
     Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)  
     (in thousands, except per share data)  
                  
       Three Months Ended    
        December 31,   September 30,  December 31,    
        2020   2020   2019    
                  
      GAAP operating income$2,756  $182  $1,634    
      Stock-based compensation expense 1,006   1,079   841    
      Severance, restructuring and transformation costs 532   876   1,551    
      Acquired assets amortization and impairments 1,503   1,428   1,575    
      Adjusted operating income$5,797  $3,565  $5,601    
                  
      GAAP operating margin 8.9%  0.8%  5.3%   
                  
      Adjusted operating margin 18.7%  14.8%  18.1%   
                  
      GAAP net (loss) income$(615) $(1,098) $550    
      Stock-based compensation expense 1,006   1,079   841    
      Severance, restructuring and transformation costs 532   876   1,551    
      Debt extinguishment and related costs 1,876   -   -    
      Acquired assets amortization and impairments 1,503   1,428   1,575    
      Income taxes (A) (1,034)  (823)  (1,472)   
      Adjusted net income$3,268  $1,462  $3,045    
                  
      GAAP (loss) earnings per diluted share$(0.02) $(0.03) $0.01    
      Adjusted items after tax per share assuming dilution 0.10   0.07   0.07    
      Adjusted earnings per diluted share$0.08  $0.04  $0.08    
                  
      Weighted average diluted common shares:           
      GAAP 39,021   38,920   38,068    
      Adjusted 40,810   40,307   39,070    
                  
      (A)    Income taxes includes the tax effect of the adjustments to GAAP results.   
                  



                  
           Exhibit 4.1      
     HARVARD BIOSCIENCE, INC.    
     Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)    
     (in thousands, except per share data)    
                  
            
       Year Ended December 31,    
        2020  2019      
                  
      GAAP operating (loss) income$221 $377      
      Stock-based compensation expense 3,647  3,030      
      Severance, restructuring and transformation costs 4,166  3,943      
      Acquired assets amortization and impairments 5,920  7,503      
      Adjusted operating income$13,954 $14,853      
                  
      GAAP operating margin  0.2%  0.3%      
                  
      Adjusted operating margin  13.7%  12.8%      
                  
      GAAP net loss$(7,810) $(4,687)      
      Stock-based compensation expense 3,647  3,030      
      Severance, restructuring and transformation costs 4,166  3,943      
      Debt extinguishment and related costs 1,876  -      
      Acquired assets amortization and impairments 5,920  7,503      
      Income taxes (A) (1,469)  (2,766)      
      Adjusted net income$6,330 $7,023      
                  
      GAAP loss per diluted share $(0.20) $(0.12)      
      Adjusted items after tax per share assuming dilution 0.36  0.30      
      Adjusted earnings per diluted share$0.16 $0.18      
                  
      Weighted average diluted common shares:           
      GAAP 38,640  37,814      
      Adjusted 39,985  38,373      
                  
      (A)    Income taxes includes the tax effect of the adjustments to GAAP results.      
             
                  



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