Harvard Bioscience Announces Second Quarter 2020 Financial Results

Nachrichtenquelle: globenewswire
05.08.2020, 13:00  |  110   |   |   

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.

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   0       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  
             



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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