Harvard Bioscience Announces Fourth Quarter 2022 Financial Results

Harvard Bioscience, Inc.

HOLLISTON, Mass., March 09, 2023 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq: HBIO) (the “Company”) today announced financial results for the fourth quarter and year ended December 31, 2022.

Our fourth quarter revenues were $28.4 million, down 14% versus the comparable prior year period, including a negative currency impact of $1.0 million. During the quarter ended December 31, 2022, our cellular and molecular product revenues were roughly flat after adjusting for currency impacts. Pre-clinical revenue was down from prior year, with demand showing signs of recovery as ordering activity increased late in the quarter.

Jim Green, Chairman and CEO, concluded, “Looking to the future, I am excited about our pivot from cost optimization to profitable growth. We completed our previously announced portfolio optimization and related cost actions in Q4. We expect that our recently launched products and anticipated new growth in consumables and services will support 2023 reported revenue growth in the low-to-mid single digits. We expect improving gross margin and significant expansion of adjusted EBITDA margins in 2023. With anticipated improvements in margin and working capital, we plan to pay down debt and reduce our leverage ratio closer to 2 times by year end.”

	Quarterly Financial Results Summary		Q4'22						Q4'21
	Revenues		$	28.4		M			$	33.1	M
	Operating (Loss) Income (GAAP)		$	(0.5	)	M			$	1.7	M
	Adjusted Operating Income		$	3.4		M			$	5.3	M
	Operating Margin (GAAP)			(1.6	)	%				5.1	%
	Adjusted Operating Margin			11.9		%				16.0	%
	Net (Loss) Income (GAAP)			(1.7	)	M				1.0	M
	Diluted (Loss) Earnings Per Share (GAAP)		$	(0.04	)				$	0.02
	Diluted Adjusted Earnings Per Share		$	0.04					$	0.08
	Adjusted EBITDA		$	3.7		M			$	5.7	M
	Net Debt*		$	43.2		M			$	41.6	M
	* Debt outstanding less cash and cash equivalents

For more details on performance for the three and twelve months ended December 31, 2022, a presentation that will be referenced during the webcast referenced below will be posted to our Investor Relations website shortly before the webcast begins.

This press release includes certain financial information presented on an adjusted, or non-GAAP, basis. For additional information on the Non-GAAP financial measures included in this press release, please see “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

Webcast and Conference Call Details

Harvard Bioscience will be hosting a conference call and webcast today at 8:00 a.m. Eastern Time.

Covering analysts who want to join the call and ask a question must register here. Once registered, you will receive the dial-in numbers and a unique PIN number.

Participants who want to join the audio-only webcast should go to our events and presentations on the investor website here.

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 EBITDA, 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 resulting from items that we do not believe are representative of the underlying operations of the business. Items excluded include stock-based compensation, amortization of intangibles related to acquisitions, litigation settlement, restructuring and other costs, and income taxes. They also exclude the tax impact of the reconciling items. Management believes that this non-GAAP financial information is important in comparing current results with prior period results and is useful to investors and financial analysts in assessing the Company’s operating performance. Non-GAAP historical financial statement information included herein is 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, Inc. is a leading developer, manufacturer and seller of technologies, products and services that enable fundamental advances in life science applications, including research, pharmaceutical and therapy discovery, bio-production and preclinical testing for pharmaceutical and therapy 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.

Investor Inquiries:

Harvard Bioscience, Inc.
Investor Relations
(508) 893-3120

HARVARD BIOSCIENCE, INC.
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
									Three Months Ended							Year Ended
									December 31, 2022				December 31, 2021				December 31, 2022				December 31, 2021
	Revenues							$	28,427			$	33,055			$	113,335			$	118,904
	Cost of revenues								12,594				13,495				52,516				51,252
		Gross profit							15,833				19,560				60,819				67,652
	Operating expenses:
		Sales and marketing expenses							5,948				7,343				25,041				24,642
		General and administrative expenses							5,863				6,115				24,493				24,305
		Research and development expenses							2,849				2,951				12,329				10,799
		Amortization of intangible assets							1,630				1,452				6,122				5,840
		Settlement of litigation, net							-				-				(233	)			-
	Total operating expenses								16,290				17,861				67,752				65,586
	Operating (loss) income								(457	)			1,699				(6,933	)			2,066
	Interest and other expense, net								(435	)			(568	)			(2,246	)			(2,206	)
	(Loss) income before income taxes								(892	)			1,131				(9,179	)			(140	)
	Income tax expense								774				170				337				148
	Net (loss) income							$	(1,666	)		$	961			$	(9,516	)		$	(288	)
	(Loss) income per common share:
		Basic and diluted						$	(0.04	)		$	0.02			$	(0.23	)		$	(0.01	)
	Weighted-average common shares:
		Basic							42,102				40,840				41,413				40,343
		Diluted							42,102				43,372				41,413				40,343

HARVARD BIOSCIENCE, INC.
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
		December 31,
		2022			2021
	Assets
	Cash and cash equivalents	$	4,508		$	7,821
	Accounts receivables		16,705			21,834
	Inventories		26,439			27,587
	Other current assets		3,472			4,341
	Total current assets		51,124			61,583
	Property, plant and equipment		3,366			3,415
	Goodwill and other intangibles		77,274			85,074
	Other long-term assets		13,596			12,272
	Total assets	$	145,360		$	162,344
	Liabilities and Stockholders' Equity
	Current portion, long-term debt	$	3,811		$	3,235
	Other current liabilities		19,438			22,081
	Total current liabilities		23,249			25,316
	Long-term debt, net		43,013			45,095
	Other long-term liabilities		6,878			8,532
	Stockholders’ equity		72,220			83,401
	Total liabilities and stockholders’ equity	$	145,360		$	162,344

HARVARD BIOSCIENCE, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
		Year Ended
		2022				2021
	Cash flows from operating activities:
	Net loss	$	(9,516	)		$	(288	)
	Adjustments to operating cash flows		7,952				11,740
	Changes in operating assets and liabilities		2,716				(10,190	)
	Net cash provided by operating activities		1,152				1,262
	Cash flows from investing activities:
	Additions to property, plant and equipment		(1,590	)			(1,195	)
	Additions to intangible assets		-				(150	)
	Net cash used in investing activities		(1,590	)			(1,345	)
	Cash flows from financing activities:
	Borrowing from revolving line of credit		7,800				4,250
	Repayment of revolving line of credit		(6,400	)			(2,200	)
	Repayment of term debt		(3,186	)			(2,000	)
	Payments of debt issuance costs		-				(102	)
	Proceeds from exercise of employee stock options and stock purchases		577				3,314
	Taxes related to net share settlement of equity awards		(1,628	)			(3,514	)
	Net cash used in financing activities		(2,837	)			(252	)
	Effect of exchange rate changes on cash		(38	)			(161	)
	Decrease in cash and cash equivalents		(3,313	)			(496	)
	Cash and cash equivalents at the beginning of period		7,821				8,317
	Cash and cash equivalents at the end of period	$	4,508			$	7,821

	HARVARD BIOSCIENCE, INC.
	Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
	(in thousands, except per share data)
								Three Months Ended										Year Ended
								December 31, 2022				December 31, 2021						December 31, 2022				December 31, 2021
	GAAP operating (loss) income							$	(457	)		$	1,699					$	(6,933	)		$	2,066
		Stock-based compensation							1,010				1,033						4,411				4,169
		Acquired asset amortization							1,648				1,492						6,236				6,018
		Settlement, restructuring, & other							1,168				1,054						5,783				4,462
	Adjusted operating income							$	3,369			$	5,278					$	9,497			$	16,715
	Operating margin								-1.6	%			5.1	%					-6.1	%			1.7	%
	Adjusted operating margin								11.9	%			16.0	%					8.4	%			14.1	%
	GAAP net (loss) income							$	(1,666	)		$	961					$	(9,516	)		$	(288	)
		Stock-based compensation							1,010				1,033						4,411				4,169
		Acquired asset amortization							1,648				1,492						6,236				6,018
		Settlement, restructuring, & other							1,068				1,054						5,603				4,462
		Income taxes							(281	)			(1,022	)					(1,689	)			(3,387	)
	Adjusted net income								1,779				3,518						5,045				10,974
		Depreciation							314				432						1,338				1,603
		Interest and other expense, net							536				568						2,426				2,206
		Adjusted income taxes (1)							1,054				1,191						2,026				3,534
	Adjusted EBITDA							$	3,683			$	5,709					$	10,835			$	18,317
	Adjusted EBITDA margin								13.0	%			17.3	%					9.6	%			15.4	%
	Diluted (loss) income per share (GAAP)							$	(0.04	)		$	0.02					$	(0.23	)		$	(0.01	)
	Diluted adjusted earnings per share							$	0.04			$	0.08					$	0.12			$	0.25
	Weighted-average common shares:
		Diluted GAAP							42,102				43,372						41,413				40,343
		Diluted Adjusted							42,740				43,372						42,682				43,153
		(1) Adjusted income taxes includes the tax effect of adjusting for the reconciling items using the tax rates in the jurisdictions in which the reconciling items arise.