GlobeNewswire Inc | Aug 5, 2020 07:00AM EDT

August 05, 2020

-- 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) $0.6 million ($3.3) million $0.2 million(GAAP)Adjusted Operating Income $4.1 million / $0.5 million / $3.4 million // Margin 17.7% 2.0% 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 worlds 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 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 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, March 31, June 30, 2020 2020 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 5,670 6,759 4,809 expenses Research and development 1,897 2,490 2,771 expenses Amortization of intangible 1,454 1,427 1,436 assets 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 December 31, 30,2020 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? $ 150,685 $ 164,870 equity

HARVARD BIOSCIENCE, INC.Condensed Consolidated Cash Flow Information(unaudited, in thousands) Six Months Ended June June 30, 30,2020 2019 Cash flows from operating activities: Net loss $ (6,097 ) $ (2,617 )Changes in operating assets and 5,296 (1,267 )liabilitiesOther adjustments to operating cash 6,045 6,551 flowsNet cash provided by operating 5,244 2,667 activities Cash flows from investing activities: Additions to property, plant and (524 ) (423 )equipmentDispositions - 1,020 Other investing activities - (9 )Net cash (used in) provided by (524 ) 588 investing activities 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 (55 ) 43 cashDecrease in cash and cash equivalents (5,706 ) (3,239 )Cash and cash equivalents at the 8,335 8,173 beginning of periodCash and cash equivalents at the end $ 2,629 $ 4,934 of period

HARVARD BIOSCIENCE, INC.Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)(in thousands, except per share data) Three Months Ended June 30, March 31, June 30, 2020 2020 2019 GAAP operating income (loss) $ 556 $ (3,273) $ 228 Stock-based compensation 769 793 615 expenseSeverance, restructuring and 1,287 1,471 138 acquisition costsAcquired intangible assets 1,455 1,427 2,378 amortization and impairmentsNon-cash expense - 53 57 57 acquisition accountingAdjusted 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 769 793 615 expenseSeverance, restructuring and 1,287 1,471 138 acquisition costsAcquired intangible assets 1,455 1,427 2,378 amortization and impairmentsNon-cash expense - 53 57 57 acquisition accountingIncome 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 0.09 0.11 0.05 share assuming dilutionAdjusted diluted earnings $ 0.05 $ (0.01) $ 0.04 (loss) per common share (A) Income taxes includes the tax effect of the adjustmentsto 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, June 30, 2020 2019 GAAP operating (loss) income $ (2,717) $ 108 Stock-based compensation expense 1,562 1,202 Severance, restructuring and acquisition 2,758 632 costsAcquired intangible assets amortization and 2,882 3,808 impairmentsNon-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 2,758 632 costsAcquired intangible assets amortization and 2,882 3,808 impairmentsNon-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 0.20 0.13 dilutionAdjusted diluted earnings per common share $ 0.04 $ 0.06 (A) Income taxes includes the tax effect of the adjustmentsto GAAP results.