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Harvard Bioscience Announces Fourth Quarter 2021 Financial Results

Last Updated on March 8, 2022 by GlobeNewsWire

Revenue up 7% year-over-year as sales momentum continues, despite global supply chain headwindsGross margin improves to 59% in Q4 driven by strengthening product mix, improved operating leverage

HOLLISTON, Mass., March 08, 2022 (GLOBE NEWSWIRE) — Harvard Bioscience, Inc. (Nasdaq: HBIO) (the “Company”) today announced financial results for the period ended December 31, 2021.

Jim Green, Chairman and CEO said, “The positive trends we reported through the first three quarters of 2021 have carried through with our strong top line performance in Q4. Demand for our pre-clinical products continued to very strong, with revenue up 6% over prior year quarter, and 18% for the full year. Our CMT products also experienced meaningful growth, up 9% over prior year quarter as academic lab sales continue to recover. Operating income for Q4 was modestly lower than last year due primarily to higher material, freight and labor costs associated with ongoing global supply disruptions as well as higher variable compensation given strong performance versus our goals in 2021. Gross margin increased to 59% in Q4 on improved product mix.”

Mr. Green concluded, “With our sales momentum and a solid backlog, we expect reported revenue growth of 10-to-13% compared to 2021. This growth is net of trimming of lower value-add products. Our pre-clinical and CMT product families are both expected to deliver double digit growth in 2022. With sales efforts focused on higher value products and channels, new products launched in 2021 and improvements in internal operations, we expect to improve gross margin by over a percentage point and to deliver adjusted operating margins in the range of 15-to-16%. These anticipated profit improvements include incremental investments in sales coverage expansion and higher R&D in 2022 to underpin sustained double-digit growth over the long run.”

Quarterly Financial Results SummaryQ4’21 Q4’20 Revenues$33.1 million $31.0 million Operating Income (GAAP)$1.7 million $2.8 million Adjusted Operating Income$5.3 million $5.8 million Operating Margin (GAAP) 5.1 % 8.9 % Adjusted Operating Margin 16.0 % 18.7 % Diluted Income (Loss) Per Share (GAAP)$0.02 $(0.02) Diluted Adjusted Earnings Per Share$0.08 $0.08 Net Debt*$41.6 million $41.1 million

* Debt outstanding less cash and cash equivalents

For more details on Q4 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# 1749525.

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. Any non-GAAP financial statement information included herein are 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 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 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, 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 Year Ended December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Revenues$33,055 $30,984 $118,904 $102,100 Cost of revenues 13,495 13,276 51,252 44,059 Gross profit 19,560 17,708 67,652 58,041 Operating expenses: Sales and marketing expenses 7,343 5,470 24,642 19,916 General and administrative expenses 6,115 5,681 24,305 23,509 Research and development expenses 2,951 2,349 10,799 8,685 Amortization of intangible assets 1,452 1,452 5,840 5,710 Total operating expenses 17,861 14,952 65,586 57,820 Operating income 1,699 2,756 2,066 221 Other (expense) income: Interest expense (379) (1,094) (1,540) (4,831) Debt extinguishment and related costs – (1,876) – (1,876) Other expense, net (189) (334) (666) (806) Total other expense (568) (3,304) (2,206) (7,513) Income (loss) before income taxes 1,131 (548) (140) (7,292) Income tax expense 170 67 148 518 Net income (loss)$961 $(615) $(288) $(7,810) Earnings (Loss) per common share: Basic earnings (loss) per common share$0.02 $(0.02) $(0.01) $(0.20) Diluted earnings (loss) per common share$0.02 $(0.02) $(0.01) $(0.20) Weighted-average common shares: Basic 40,840 39,021 40,343 38,640 Diluted 43,372 39,021 40,343 38,640 Exhibit 2 HARVARD BIOSCIENCE, INC. Condensed Consolidated Balance Sheets (unaudited, in thousands) December 31, 2021 December 31, 2020 Assets Cash and cash equivalents$7,821 $8,317 Accounts receivables 21,834 17,766 Inventories 27,587 22,262 Other current assets 4,341 3,355 Total current assets 61,583 51,700 Property, plant and equipment 3,415 3,960 Goodwill and other intangibles 85,074 91,741 Other long-term assets 12,272 8,853 Total assets$162,344 $156,254 Liabilities and Stockholders’ Equity Current portion, long-term debt$3,235 $1,721 Other current liabilities 22,081 19,332 Total current liabilities 25,316 21,053 Long-term debt 45,095 46,286 Other long-term liabilities 8,532 12,234 Stockholders’ equity 83,401 76,681 Total liabilities and stockholders’ equity$162,344 $156,254 Exhibit 3 HARVARD BIOSCIENCE, INC. Condensed Consolidated Statements of Cash Flows (unaudited, in thousands) Year Ended December 31, 2021 December 31, 2020 Cash flows from operating activities: Net loss$(288) $(7,810) Adjustments to operating cash flows 11,740 13,035 Changes in operating assets and liabilities (10,190) 4,106 Net cash provided by operating activities 1,262 9,331 Cash flows from investing activities: Additions to property, plant and equipment (1,195) (1,152) Additions to intangible assets (150) (250) Net cash used in investing activities (1,345) (1,402) Cash flows from financing activities: Proceeds from borrowings 4,250 61,315 Repayments of debt (4,200) (66,912) Payments of debt issuance costs (102) (1,298) Debt extinguishment cost – (599) Proceeds from exercise of stock options 3,314 669 Taxes related to net share settlemenrt of equity awards (3,514) (1,142) Net cash used in financing activities (252) (7,967) Effect of exchange rate changes on cash (161) 20 Decrease in cash and cash equivalents (496) (18) Cash and cash equivalents at the beginning of period 8,317 8,335 Cash and cash equivalents at the end of period$7,821 $8,317 Exhibit 4 HARVARD BIOSCIENCE, INC. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) Three Months Ended December 31, 2021 (in thousands, except per share data) Stock-Based Acquired Assets Restructuring,Income Statement of OperationsGAAP CompensationAmortization Transformation Taxes ADJUSTED Revenues$33,055 – – – – $33,055 Cost of revenues 13,495 (35) (12) (80) – 13,368 Gross profit 19,560 35 12 80 – 19,687 Gross Margin 59.2% 59.6% Operating expenses: Sales and marketing expenses 7,343 (134) (2) (277) – 6,930 General and administrative expenses 6,115 (823) (16) (648) – 4,628 Research and development expenses 2,951 (41) (10) (49) – 2,851 Amortization of intangible assets 1,452 – (1,452) – – – Total operating expenses 17,861 (998) (1,480) (974) – 14,409 Operating Expenses – % of Revenues 54.0% 43.6% Operating income 1,699 1,033 1,492 1,054 – 5,278 Operating Margin 5.1% 16.0% Other (expense) income: Interest expense (379) – – – – (379) Other expense, net (189) – – – – (189) Total other expense (568) – – – – (568) Income before income taxes 1,131 1,033 1,492 1,054 – 4,710 Income tax expense 170 – – – 1,022 1,192 Net income$961 $1,033 $1,492 $1,054 $(1,022) $3,518 Earnings per common share: Basic earnings per common share$0.02 $0.09 Diluted earnings per common share$0.02 $0.08 Weighted-average common shares: Basic 40,840 40,840 Diluted 43,372 43,372 Exhibit 4.1 HARVARD BIOSCIENCE, INC. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) Three Months Ended December 31, 2020 (in thousands, except per share data) Stock-Based Acquired Assets Restructuring,Income Statement of OperationsGAAP CompensationAmortization Transformation Taxes ADJUSTED Revenues$30,984 – – – – $30,984 Cost of revenues 13,276 (22) (19) (59) – 13,176 Gross profit 17,708 22 19 59 – 17,808 Gross Margin 57.2% 57.5% Operating expenses: Sales and marketing expenses 5,470 (57) (2) (15) – 5,396 General and administrative expenses 5,681 (873) (18) (478) – 4,312 Research and development expenses 2,349 (54) (12) 20 – 2,303 Amortization of intangible assets 1,452 – (1,452) – – – Total operating expenses 14,952 (984) (1,484) (473) – 12,011 Operating Expenses – % of Revenues 48.3% 38.8% Operating income 2,756 1,006 1,503 532 – 5,797 Operating Margin 8.9% 18.7% Other (expense) income: Interest expense (1,094) – – – – (1,094) Debt extinguishment and related costs (1,876) – – 1,876 – – Other expense, net (334) – – – – (334) Total other expense (3,304) – – 1,876 – (1,428) (Loss) income before income taxes (548) 1,006 1,503 2,408 – 4,369 Income tax (benefit) expense 67 – – – 1,034 1,101 Net (loss) income$(615) $1,006 $1,503 $2,408 $(1,034) $3,268 (Loss) Earnings per common share: Basic (loss) earnings per common share$(0.02) $0.08 Diluted (loss) earnings per common share$(0.02) $0.08 Weighted-average common shares: Basic 39,021 39,021 Diluted 39,021 40,810 Exhibit 4.2 HARVARD BIOSCIENCE, INC. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) Year Ended December 31, 2021 (in thousands, except per share data) Stock-Based Acquired Assets Restructuring,Income Statement of OperationsGAAP CompensationAmortization Transformation Taxes ADJUSTED Revenues$118,904 – – – – $118,904 Cost of revenues 51,252 (118) (63) (327) – 50,744 Gross profit 67,652 118 63 327 – 68,160 Gross Margin 56.9% 57.3% Operating expenses: Sales and marketing expenses 24,642 (507) (8) (652) – 23,475 General and administrative expenses 24,305 (3,416) (65) (3,028) – 17,796 Research and development expenses 10,799 (128) (42) (455) – 10,174 Amortization of intangible assets 5,840 – (5,840) – – – Total operating expenses 65,586 (4,051) (5,955) (4,135) – 51,445 Operating Expenses – % of Revenues 55.2% 43.3% Operating income 2,066 4,169 6,018 4,462 – 16,715 Operating Margin 1.7% 14.1% Other (expense) income: Interest expense (1,540) – – – – (1,540) Other expense, net (666) – – – – (666) Total other expense (2,206) – – – – (2,206) (Loss) income before income taxes (140) 4,169 6,018 4,462 – 14,509 Income tax (benefit) expense 148 – – – 3,387 3,535 Net (loss) income$(288) $4,169 $6,018 $4,462 $(3,387) $10,974 Earnings (Loss) per common share: Basic earnings (loss) per common share$(0.01) $0.27 Diluted earnings (loss) per common share$(0.01) $0.25 Weighted-average common shares: Basic 40,343 40,343 Diluted 40,343 43,153 Exhibit 4.3 HARVARD BIOSCIENCE, INC. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) Year Ended December 31, 2020 (in thousands, except per share data) Stock-Based Acquired Assets Restructuring,Income Statement of OperationsGAAP CompensationAmortization Transformation Taxes ADJUSTED Revenues$102,100 – – – – $102,100 Cost of revenues 44,059 (65) (78) (80) – 43,836 Gross profit 58,041 65 78 80 – 58,264 Gross Margin 56.8% 57.1% Operating expenses: Sales and marketing expenses 19,916 (263) (8) (140) – 19,505 General and administrative expenses 23,509 (3,121) (68) (3,957) – 16,363 Research and development expenses 8,685 (198) (56) 11 – 8,442 Amortization of intangible assets 5,710 – (5,710) – – – Total operating expenses 57,820 (3,582) (5,842) (4,086) – 44,310 Operating Expenses – % of Revenues 56.6% 43.4% Operating income 221 3,647 5,920 4,166 – 13,954 Operating Margin 0.2% 13.7% Other (expense) income: Interest expense (4,831) – – – – (4,831) Debt extinguishment and related costs (1,876) – – 1,876 – – Other expense, net (806) – – – – (806) Total other expense (7,513) – – 1,876 – (5,637) (Loss) income before income taxes (7,292) 3,647 5,920 6,042 – 8,317 Income tax expense 518 – – – 1,469 1,987 Net (loss) income$(7,810) $3,647 $5,920 $6,042 $(1,469) $6,330 Earnings (Loss) per common share: Basic earnings (loss) per common share$(0.20) $0.16 Diluted earnings (loss) per common share$(0.20) $0.16 Weighted-average common shares: Basic 38,640 38,640 Diluted 38,640 39,985 Exhibit 5 HARVARD BIOSCIENCE, INC. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) (in thousands) Three Months Ended Year Ended December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Operating income$1,699 $2,756 $2,066 $221 Stock-based compensation expense 1,033 1,006 4,169 3,647 Acquired asset amortization 1,492 1,503 6,018 5,920 Restructuring and transformation costs 1,054 532 4,462 4,166 Adjusted operating income 5,278 5,797 16,715 13,954 Depreciation expense 470 469 1,781 1,922 Adjusted EBITDA$5,748 $6,266 $18,496 $15,876




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