Harvard Bioscience Announces Fourth Quarter 2020 Financial Results - Harvard Bioscience (NASDAQ:HBIO)

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. 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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