GlobeNewswire Inc | Nov 5, 2020 07:00AM EST

November 05, 2020

-- Operating margin up year-over-year on GAAP and adjusted basis -- Revenue improved sequentially with solid CRO/pharma demand and academic labs reopening -- Generated positive operating cash flow in Q3 with working capital improvements

HOLLISTON, Mass., Nov. 05, 2020 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (Nasdaq: HBIO) (the Company) today announced financial results for the three and nine months ended September 30, 2020.

Jim Green, Chairman and CEO said, Since anticipating academic labs around the world would likely experience pandemic-related shutdowns early in the year, we moved aggressively to manage costs. These actions, combined with restructuring programs, reduced overall cost of operations delivering year-over-year adjusted operating income and margin growth.

Green concluded, The continued growth from CRO/pharma customers, reopening of academic labs and our lower cost of operations, are expected to drive solid operating margins throughout the rest of 2020 and allow for targeted commercial and product investments to drive revenue growth. We expect adjusted operating margins for the second half of 2020 to be in the mid to upper teens.

Quarterly Financial Results Summary Q3'20 Q2'20 Q3'19 Revenue $24.0 $23.3 $27.4 million million million Operating Income (Loss) (GAAP) $0.2 million $0.6 million $(1.4) million Adjusted Operating Income $3.6 million $4.1 million $3.3 million Adjusted Operating Margin 14.8% 17.7% 12.1% Loss per diluted share (GAAP) ($0.03) ($0.04) ($0.07) Diluted EPS (GAAP) $0.04 $0.05 $0.04 Adjusted Diluted EPS* $41.6 $42.1 $48.8 million million 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# 9438549.

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 worlds leading pharmaceutical, biotechnology and clinical 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, 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.

HARVARD BIOSCIENCE, INC. Consolidated Statements of Operations (unaudited, in thousands, except per share data) Three Months Ended September June 30, September 30, 2020 2020 30, 2019 Revenues $ 24,037 $ 23,308 $ 27,418 Cost of revenues 10,542 9,452 12,440 Gross profit 13,495 13,856 12,439 Operating expenses: Sales and marketing 4,588 4,279 5,294 expenses General and administrative 5,399 5,670 6,604 expenses Research and development 1,949 1,897 2,564 expenses Amortization of 1,377 1,454 1,422 intangible assets Impairment charges - - 460 Total operating 13,313 13,300 16,344 expenses Operating income (loss) 182 556 (1,365 ) Other expense: Interest expense, (1,205 ) (1,233 ) (1,348 ) net Other (expense) (392 ) (191 ) 39 income, net Other expense (1,597 ) (1,424 ) (1,309 ) Loss before income (1,415 ) (868 ) (2,674 ) taxes Income tax provision (317 ) 713 (54 ) (benefit) Net loss $ (1,098 ) $ (1,581 ) $ (2,620 ) Basic and diluted loss $ (0.03 ) $ (0.04 ) $ (0.07 ) per share Weighted average common shares: Basic and diluted 38,920 38,468 38,036

HARVARD BIOSCIENCE, INC. Consolidated Statements of Operations (unaudited, in thousands, except per share data) Nine Months Ended September 30, September 30, 2020 2019 Revenues $ 71,116 $ 85,204 Cost of revenues 30,783 38,116 Gross profit 40,333 47,088 Operating expenses: Sales and marketing expenses 14,446 17,370 General and administrative 17,828 17,215 expenses Research and development 6,336 8,070 expenses Amortization of intangible 4,258 4,289 assets Impairment charges - 1,401 Total operating expenses 42,868 48,345 Operating loss (2,535 ) (1,257 ) Other expense: Interest expense, net (3,737 ) (4,129 ) Other expense, net (472 ) (214 ) Other expense (4,209 ) (4,343 ) Loss before income taxes (6,744 ) (5,600 ) Income tax provision (benefit) 451 (363 ) Net loss $ (7,195 ) $ (5,237 ) Basic and diluted loss per share $ (0.19 ) $ (0.14 ) Weighted average common shares: Basic and diluted 38,540 37,764

HARVARD BIOSCIENCE, INC. Condensed Consolidated Balance Sheets (unaudited, in thousands) September 30, December 31, 2020 2019 Assets Cash and cash equivalents $ 2,806 $ 8,335 Accounts receivables 13,879 20,704 Inventories 22,689 22,061 Other current assets 4,146 2,472 Total current assets 43,520 53,572 Property, plant and equipment 4,309 4,776 Goodwill and other intangibles 91,962 95,786 Other long-term assets 9,823 10,736 Total assets $ 149,614 $ 164,870 Liabilities and Stockholders' Equity Current portion, long-term debt $ 2,807 $ 6,900 Other current liabilities 18,441 18,412 Total current liabilities 21,248 25,312 Long-term debt 40,669 46,917 Other long-term liabilities 10,530 10,947 Stockholders? equity 77,167 81,694 Total liabilities and stockholders? $ 149,614 $ 164,870 equity

HARVARD BIOSCIENCE, INC. Condensed Consolidated Statements of Cash Flows (unaudited, in thousands) Nine Months Ended September 30, September 30, 2020 2019 Cash flows from operating activities: Net loss $ (7,195 ) $ (5,237 ) Changes in operating assets and 5,360 960 liabilities Other adjustments to operating cash 8,676 10,102 flows Net cash provided by operating 6,841 5,825 activities Cash flows from investing activities: Additions to property, plant and (1,088 ) (778 ) equipment Disposition of business - 1,020 Other investing activities - (15 ) Net cash (used in) provided by (1,088 ) 227 investing activities Cash flows from financing activities: Proceeds from borrowings 9,615 4,300 Repayments of debt (20,251 ) (11,103 ) Other financing activities (688 ) (392 ) Net cash used in financing (11,324 ) (7,195 ) activities Effect of exchange rate changes on 42 (185 ) cash Decrease in cash and cash (5,529 ) (1,328 ) equivalents Cash and cash equivalents at the 8,335 8,173 beginning of period Cash and cash equivalents at the $ 2,806 $ 6,845 end of period

HARVARD BIOSCIENCE, INC. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) (in thousands, except per share data) Three Months Ended September June, 30 September 30, 30, 2020 2020 2019 GAAP operating income $ 182 $ 556 $ (1,365 ) (loss) Stock-based 1,079 769 987 compensation expense Severance, restructuring and 876 1,287 1,759 transformation costs Acquired intangible assets amortization 1,377 1,455 1,882 and impairments Non-cash expense - 51 53 59 acquisition accounting Adjusted operating $ 3,565 $ 4,120 $ 3,322 income GAAP operating margin 0.8 % 2.4 % -5.0 % Adjusted operating 14.8 % 17.7 % 12.1 % margin GAAP net loss $ (1,098 ) $ (1,581 ) $ (2,620 ) Stock-based 1,079 769 987 compensation expense Severance, restructuring and 876 1,287 1,759 transformation costs Acquired intangible assets amortization 1,377 1,455 1,882 and impairments Non-cash expense - 51 53 59 acquisition accounting Income taxes (A) (823 ) 103 (341 ) Adjusted net income $ 1,462 $ 2,086 $ 1,726 GAAP loss per diluted $ (0.03 ) $ (0.04 ) $ (0.07 ) share Adjusted items after tax per share assuming 0.07 0.09 0.11 dilution Adjusted earnings per $ 0.04 $ 0.05 $ 0.04 diluted share Weighted average diluted common shares: GAAP 38,920 38,468 38,036 Adjusted 40,307 39,593 38,603 (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) Nine Months Ended September September 30, 30, 2020 2019 GAAP operating (loss) income $ (2,535 ) $ (1,257 ) Stock-based compensation expense 2,641 2,193 Severance, restructuring and 3,635 2,391 transformation costs Acquired intangible assets 4,258 5,690 amortization and impairments Non-cash expense - acquisition 159 239 accounting Adjusted operating income $ 8,158 $ 9,256 GAAP operating margin -3.6 % -1.5 % Adjusted operating margin 11.5 % 10.9 % GAAP net loss $ (7,195 ) $ (5,237 ) Stock-based compensation expense 2,641 2,193 Severance, restructuring and 3,635 2,391 transformation costs Acquired intangible assets 4,258 5,690 amortization and impairments Non-cash expense - acquisition 159 239 accounting Income taxes (A) (435 ) (1,294 ) Adjusted net income $ 3,063 $ 3,982 GAAP loss per diluted share $ (0.19 ) $ (0.14 ) Adjusted items after tax per share 0.27 0.24 assuming dilution Adjusted earnings per diluted share $ 0.08 $ 0.10 Weighted average diluted common shares: GAAP 38,540 37,764 Adjusted 39,824 38,251 (A) Income taxes includes the tax effect of the adjustments to GAAP results.