GlobeNewswire Inc | Aug 5, 2021 07:00AM EDT

August 05, 2021

Strong double digit revenue growth, solid margin performance despite global supply chain disruptions

-- Revenue up 25% year-over-year as sales momentum continues -- Cellular and Molecular (CMT) product revenue up 22% -- Pre-clinical product revenue up 20% -- Operating margins impacted by higher global supply chain costs

HOLLISTON, Mass., Aug. 05, 2021 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq: HBIO) (the Company) today announced financial results for the three and six months ended June 30, 2021.

Jim Green, Chairman and CEO said, Demand for our pre-clinical products remains very strong, with revenue up 20% over prior year, and also up significantly over pre-Covid levels. Our CMT products also experienced meaningful growth, up 22% over prior year as academic lab sales continue to recover. Operating income on a GAAP and adjusted basis was negatively impacted by increased material, freight and labor efficiency costs associated with ongoing global supply disruptions. However, adjusted operating margins continue to exceed pre-COVID margin levels.

Green concluded, Expanding demand from CRO/pharma combined with continuing academic lab recovery and a strong backlog supports our improving revenue outlook in spite of global supply disruptions; we now expect revenue growth of 12% to 15% for fiscal 2021 compared to 2020. Although supply disruptions are forcing extra costs in the short term, we still expect adjusted operating margin expansion to the mid-teens for the year.

Quarterly Financial Results Q2'21 Q2'20 Summary Revenue $ 29.2 million $ 23.3 million Operating Income (GAAP) $ 0.1 million $ 0.6 million Adjusted Operating Income $ 4.3 million $ 4.1 million Operating Margin (GAAP) 0.2 % 2.4 % Adjusted Operating Margin 14.6 % 17.7 % Loss Per Share (GAAP) $ (0.01 ) $ (0.04 ) Adjusted Diluted Earnings Per $ 0.06 $ 0.05 Share Net Debt* $ 38.2 million $ 42.1 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, 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# 6293853.

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, 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. Tabular reconciliations of our adjusted operating income, adjusted net income (loss), adjusted earnings (loss) per diluted share, and adjusted EBITDA 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 worlds 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 atwww.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 Companys 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 Six Months Ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020 Revenues $ 29,197 $ 23,308 $ 56,186 $ 47,079 Cost of revenues 12,844 9,452 24,402 20,241 Gross profit 16,353 13,856 31,784 26,838 Operating expenses: Sales and marketing 5,730 4,279 11,116 9,858 expenses General and administrative 6,399 5,670 12,732 12,429 expenses Research and 2,701 1,897 5,188 4,387 development expenses Amortization of 1,465 1,454 2,929 2,881 intangible assets Total operating 16,295 13,300 31,965 29,555 expenses Operating income 58 556 (181 ) (2,717 ) Other expense: Interest expense (377 ) (1,233 ) (788 ) (2,532 ) Other expense, (313 ) (191 ) (347 ) (80 ) net Total other expense (690 ) (1,424 ) (1,135 ) (2,612 ) Loss before income (632 ) (868 ) (1,316 ) (5,329 ) taxes Income tax expense (222 ) 713 (237 ) 768 Net loss $ (410 ) $ (1,581 ) $ (1,079 ) $ (6,097 ) Loss per common share: Basic and diluted $ (0.01 ) $ (0.04 ) $ (0.03 ) $ (0.16 ) Weighted-average common shares: Basic and diluted 40,152 38,468 39,960 38,389

Exhibit 2 HARVARD BIOSCIENCE, INC. Condensed Consolidated Balance Sheets (unaudited, in thousands) June 30, December 31, 2021 2020 Assets Cash and cash equivalents $ 6,237 $ 8,317 Accounts receivables 17,391 17,766 Inventories 24,709 22,262 Other current assets 5,220 3,355 Total current assets 53,557 51,700 Property, plant and equipment 3,429 3,960 Goodwill and other intangibles 88,934 91,741 Other long-term assets 8,051 8,853 Total assets $ 153,971 $ 156,254 Liabilities and Stockholders' Equity Current portion, long-term debt $ 2,220 $ 1,721 Other current liabilities 21,048 19,332 Total current liabilities 23,268 21,053 Long-term debt 40,921 46,286 Other long-term liabilities 11,081 12,234 Stockholders? equity 78,701 76,681 Total liabilities and stockholders? $ 153,971 $ 156,254 equity

Exhibit 3 HARVARD BIOSCIENCE, INC. Condensed Consolidated Statements of Cash Flows (unaudited, in thousands) Six Months Ended June 30, June 30, 2021 2020 Cash flows from operating activities: Net loss $ (1,079 ) $ (6,097 ) Adjustments to operating cash flows 5,789 6,045 Changes in operating assets and (2,905 ) 5,296 liabilities Net cash provided by operating activities 1,805 5,244 Cash flows from investing activities: Additions to property, plant and (357 ) (524 ) equipment Addition to intangible assets (150 ) - Net cash used in investing activities (507 ) (524 ) Cash flows from financing activities: Proceeds from borrowings - 6,115 Repayments of debt (5,000 ) (16,411 ) Payments of debt issuance costs (102 ) - Proceeds from exercise of stock options 2,759 187 Taxes related to net share settlemenrt of (990 ) (262 ) equity awards Net cash used in financing activities (3,333 ) (10,371 ) Effect of exchange rate changes on cash (45 ) (55 ) Decrease in cash and cash equivalents (2,080 ) (5,706 ) Cash and cash equivalents at the 8,317 8,335 beginning of period Cash and cash equivalents at the end of $ 6,237 $ 2,629 period

Exhibit 4HARVARD BIOSCIENCE, INC.Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)Three Months Ended June 30, 2021(in thousands, except per share data) Acquired Severance, Assets Stock-Based Amortization Restructuring, Income Statement of GAAP Compensation & Transformation Taxes ADJUSTEDOperations Impairments Revenues $ 29,197 - - - - $ 29,197 Cost of revenues 12,844 (31 ) (17 ) (100 ) - 12,696 Gross profit 16,353 31 17 100 - 16,501 Gross Margin 56.0 % 56.5 % Operating expenses: Sales and 5,730 (131 ) (2 ) (73 ) - 5,524 marketing expenses General and administrative 6,399 (969 ) (16 ) (1,108 ) - 4,306 expenses Research and development 2,701 (33 ) (11 ) (249 ) - 2,408 expenses Amortization of 1,465 - (1,465 ) - - - intangible assetsTotal operating 16,295 (1,133 ) (1,494 ) (1,430 ) - 12,238 expenses Operating Expenses - 55.8 % 41.9 %% of Revenue Operating income 58 1,164 1,511 1,530 - 4,263 Operating Margin 0.2 % 14.6 % Other expense: Interest expense (377 ) - - - - (377 ) Other expense, net (313 ) - - - - (313 )Total other expense (690 ) - - - - (690 ) (Loss) income before (632 ) 1,164 1,511 1,530 - 3,573 income taxesIncome tax (benefit) (222 ) - - - 1,040 818 expenseNet (loss) income $ (410 ) $ 1,164 $ 1,511 $ 1,530 $ (1,040 ) $ 2,755 (Loss) income per $ (0.01 ) $ 0.06 share Diluted weightedaverage common 40,152 43,425 shares

Exhibit 4.1HARVARD BIOSCIENCE, INC.Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)Three Months Ended June 30, 2020(in thousands, except per share data) Acquired Severance, Assets Stock-Based Amortization Restructuring, Income Statement of GAAP Compensation & Transformation Taxes ADJUSTEDOperations Impairments Revenues $ 23,308 - - - - $ 23,308 Cost of revenues 9,452 (14 ) (20 ) (43 ) - 9,375 Gross profit 13,856 14 20 43 - 13,933 Gross Margin 59.4 % 59.8 % Operating expenses: Sales and marketing 4,279 (62 ) (2 ) 16 - 4,231 expenses General and administrative 5,670 (645 ) (18 ) (1,260 ) - 3,747 expenses Research and development 1,897 (48 ) (14 ) - - 1,835 expenses Amortization of 1,454 - (1,454 ) - - - intangible assetsTotal operating 13,300 (755 ) (1,488 ) (1,244 ) - 9,813 expenses Operating Expenses - 57.1 % 42.1 %% of Revenue Operating income 556 769 1,508 1,287 - 4,120 Operating Margin 2.4 % 17.7 % Other expense: Interest expense (1,233 ) - - - - (1,233 ) Other expense, (191 ) - - - - (191 ) netTotal other expense (1,424 ) - - - - (1,424 ) (Loss) income before (868 ) 769 1,508 1,287 - 2,696 income taxesIncome tax (benefit) 713 - - - (103 ) 610 expenseNet (loss) income $ (1,581 ) $ 769 $ 1,508 $ 1,287 $ 103 $ 2,086 (Loss) income per $ (0.04 ) $ 0.05 share Diluted weightedaverage common 38,468 39,593 shares

Exhibit 4.2 HARVARD BIOSCIENCE, INC. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) Six Months Ended June 30, 2021 (in thousands, except per share data) Acquired Severance, Assets Stock-Based Amortization Restructuring, Income Statement of GAAP Compensation & Transformation Taxes ADJUSTED Operations Impairments Revenues $ 56,186 - - - - $ 56,186 Cost of revenues 24,402 (51 ) (36 ) (153 ) - 24,162 Gross profit 31,784 51 36 153 - 32,024 Gross Margin 56.6 % 57.0 % Operating expenses: Sales and 11,116 (224 ) (4 ) (114 ) - 10,774 marketing expenses General and administrative 12,732 (1,803 ) (33 ) (1,954 ) - 8,942 expenses Research and development 5,188 (54 ) (22 ) (294 ) - 4,818 expenses Amortization of 2,929 - (2,929 ) - - - intangible assetsTotal operating 31,965 (2,081 ) (2,988 ) (2,362 ) - 24,534 expenses Operating Expenses - 56.9 % 43.7 % % of Revenue Operating (loss) (181 ) 2,132 3,024 2,515 - 7,490 income Operating Margin -0.3 % 13.3 % Other expense: Interest expense (788 ) - - - - (788 ) Other expense, net (347 ) - - - - (347 ) Total other expense (1,135 ) - - - - (1,135 ) (Loss) income before (1,316 ) 2,132 3,024 2,515 - 6,355 income taxesIncome tax (benefit) (237 ) - - - 1,784 1,547 expenseNet (loss) income $ (1,079 ) $ 2,132 $ 3,024 $ 2,515 $ (1,784 ) $ 4,808 (Loss) income per $ (0.03 ) $ 0.11 share Diluted weighted 39,960 42,954 average common shares

Exhibit 4.3 HARVARD BIOSCIENCE, INC. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) Six Months Ended June 30, 2020 (in thousands, except per share data) Acquired Severance, Assets Stock-Based Amortization Restructuring, Income Statement of GAAP Compensation & Transformation Taxes ADJUSTED Operations Impairments Revenues $ 47,079 - - - - $ 47,079 Cost of revenues 20,241 (24 ) (40 ) (2 ) - 20,175 Gross profit 26,838 24 40 2 - 26,904 Gross Margin 57.0 % 57.1 % Operating expenses: Sales and 9,858 (113 ) (4 ) (110 ) - 9,631 marketing expenses General and administrative 12,429 (1,341 ) (35 ) (2,646 ) - 8,407 expenses Research and development 4,387 (84 ) (31 ) - - 4,272 expenses Amortization of 2,881 - (2,881 ) - - - intangible assetsTotal operating 29,555 (1,538 ) (2,951 ) (2,756 ) - 22,310 expenses Operating Expenses - 62.8 % 47.4 % % of Revenue Operating (loss) (2,717 ) 1,562 2,991 2,758 - 4,594 income Operating Margin -5.8 % 9.8 % Other expense: Interest expense (2,532 ) - - - - (2,532 ) Other expense, net (80 ) - - - - (80 ) Total other expense (2,612 ) - - - - (2,612 ) (Loss) income before (5,329 ) 1,562 2,991 2,758 - 1,982 income taxesIncome tax (benefit) 768 - - - (391 ) 377 expenseNet (loss) income $ (6,097 ) $ 1,562 $ 2,991 $ 2,758 $ 391 $ 1,605 (Loss) income per $ (0.16 ) $ 0.04 share Diluted weighted 38,389 39,461 average common shares

Exhibit 5 HARVARD BIOSCIENCE, INC. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) (in thousands) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020 Net loss $ (410 ) $ (1,581 ) $ (1,079 ) $ (6,097 ) Amortization of intangible 1,465 1,454 2,929 2,881 assets Depreciation 446 498 891 982 expense Interest 377 1,233 788 2,532 expense Income taxes (222 ) 713 (237 ) 768 Stock-based compensation 1,164 769 2,132 1,562 expense Severance, restructuring and 1,530 1,287 2,515 2,758 transformation costs Adjusted $ 4,350 $ 4,373 $ 7,939 $ 5,386 EBITDA