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Revenue up 7% year-over-year despite volatility in China related to COVID-19 and global supply chain headwinds

HOLLISTON, Mass., May 04, 2022 (GLOBE NEWSWIRE) -- Harvard Bioscience, Inc. (NASDAQ:HBIO) (the "Company") today announced financial results for the first quarter ended March 31, 2022.

Jim Green, Chairman and CEO, said, "Our revenue was up 7% on strength from North American sales despite the impact of lockdowns in China. Demand for our pre-clinical and cellular/molecular (CMT) products continued to be strong, up 7% and 10%, respectively. Adjusted operating income for Q1 was lower than prior year due primarily to higher material, freight and labor costs associated with ongoing global supply disruptions. We also funded growth investments in R&D and marketing. On a GAAP basis, we recorded an operating loss that included an accrual of $5 million of legal fees and other costs to resolve litigation connected to activities of a former subsidiary. Gross margin was stable at 57% as improved pricing and product mix was offset by higher COGS."

Mr. Green concluded, "Sales momentum in North America and improving sales in Europe, combined with a strong backlog underpins our growth outlook. We expect a strong second half recovery in China, though volatility from short term order delays that started in Q1 could take longer to recover. Given the volatility in China, we are adjusting our annual revenue growth guidance to 8% to 13% compared to 2021. This growth remains net of trimming lower value-add products. With sales efforts focused on higher value products and channels, new products launched in 2021 and improvements in internal operations, we expect to improve gross margin by over a percentage point and to deliver adjusted operating margins in the range of 14% to 16%. These anticipated profit improvements include planned expense reductions in the year. However, we will continue incremental investments in R&D to sustain double-digit growth over the long run."


Quarterly Financial Results Summary	Q1'22				Q1'21

Revenues	$	28.8		million	$	27.0		million

Operating Loss (GAAP)	$	(6.7	)	million	$	(0.2	)	million
Adjusted Operating Income	$	2.4		million	$	3.2		million
Operating Margin (GAAP)		(23.3	)	%		(0.9	)	%
Adjusted Operating Margin		8.2		%		12.0		%

Diluted Loss Per Share (GAAP)	$	(0.17	)		$	(0.02	)
Diluted Adjusted Earnings Per Share	$	0.04			$	0.05

Net Debt*	$	44.6		million	$	39.1		million

* Debt outstanding less cash and cash equivalents

For more details on Q1 2022 performance, a slide presentation that will be referenced during the webcast referenced below will be posted to our Investor Relations website shortly before the webcast begins.

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# 6757353.

The conference call will be simultaneously webcast and can be accessed through the Harvard Bioscience website. To listen to the webcast, log on: 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 operating margin, 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. Any non-GAAP financial statement information included herein are accompanied by a reconciliation to the nearest corresponding GAAP measure which 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 and related supply chain disruptions 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, 2021, 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
				March 31, 2022			March 31, 2021

	Revenues		$	28,778		$	26,989
	Cost of revenues			12,601			11,558
		Gross profit		16,177			15,431

	Operating expenses:
		Sales and marketing expenses		6,687			5,386
		General and administrative expenses		6,325			6,333
		Research and development expenses		3,220			2,487
		Amortization of intangible assets		1,466			1,464
		Settlement of litigation		5,191			-
	Total operating expenses			22,889			15,670

	Operating loss			(6,712	)		(239	)

	Other (expense) income:
		Interest expense		(384	)		(411	)
		Other income (expense), net		78			(34	)
	Total other expense			(306	)		(445	)

	Loss before income taxes			(7,018	)		(684	)
	Income tax benefit			(138	)		(15	)
	Net loss		$	(6,880	)	$	(669	)

	Loss per common share:
		Basic and diluted	$	(0.17	)	$	(0.02	)

	Weighted-average common shares:
		Basic and diluted		41,219			39,787


					Exhibit 2
HARVARD BIOSCIENCE, INC.
Condensed Consolidated Balance Sheets
(unaudited, in thousands)

			March 31, 2022		December 31, 2021
	Assets
	Cash and cash equivalents	$	5,433	$	7,821
	Accounts receivables		20,274		21,834
	Inventories		28,711		27,587
	Other current assets		5,030		4,341
	Total current assets		59,448		61,583
	Property, plant and equipment		3,499		3,415
	Goodwill and other intangibles		83,234		85,074
	Other long-term assets		11,863		12,272
	Total assets	$	158,044	$	162,344

	Liabilities and Stockholders' Equity
	Current portion, long-term debt	$	2,720	$	3,235
	Other current liabilities		24,506		22,081
	Total current liabilities		27,226		25,316
	Long-term debt, net		46,244		45,095
	Other long-term liabilities		8,199		8,532
	Stockholders' equity		76,375		83,401
	Total liabilities and stockholders' equity	$	158,044	$	162,344



						Exhibit 3
HARVARD BIOSCIENCE, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)

		Year Ended
			March 31, 2022			March 31, 2021
	Cash flows from operating activities:
	Net loss	$	(6,880	)	$	(669	)
	Adjustments to operating cash flows		2,818			2,894
	Changes in operating assets and liabilities		2,076			(1,188	)
	Net cash (used in) provided by operating activities		(1,986	)		1,037

	Cash flows from investing activities:
	Additions to property, plant and equipment		(471	)		(151	)
	Additions to intangible assets		-			(150	)
	Net cash used in investing activities		(471	)		(301	)

	Cash flows from financing activities:
	Borrowing from revolving line of credit		1,500			-
	Repayment of revolving line of credit		-			(4,000	)
	Repayment of term debt		(936	)		(500	)
	Payments of debt issuance costs		-			(101	)
	Proceeds from exercise of stock options		31			1,924
	Taxes related to net share settlement of equity awards		(501	)		(464	)
	Net cash provided by (used in) financing activities		94			(3,141	)

	Effect of exchange rate changes on cash		(25	)		(97	)
	Decrease in cash and cash equivalents		(2,388	)		(2,502	)
	Cash and cash equivalents at the beginning of period		7,821			8,317
	Cash and cash equivalents at the end of period	$	5,433		$	5,815



																	Exhibit 4
HARVARD BIOSCIENCE, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
Three Months Ended March 31, 2022
(in thousands, except per share data)
											Settlement,
					Stock-Based			Acquired Assets			Restructuring,			Income
Statement of Operations		GAAP			Compensation			Amortization			Transformation			Taxes				ADJUSTED

Revenues		$	28,778			-			-			-			-			$	28,778
Cost of revenues			12,601			(36	)		(11	)		(75	)		-				12,479
	Gross profit		16,177			36			11			75			-				16,299

Gross Margin			56.2	%															56.6	%

Operating expenses:
	Sales and marketing expenses		6,687			(154	)		(2	)		(115	)		-				6,416
	General and administrative expenses		6,325			(791	)		(16	)		(1,092	)		-				4,426
	Research and development expenses		3,220			(42	)		(10	)		(77	)		-				3,091
	Amortization of intangible assets		1,466			-			(1,466	)		-			-				-
	Settlement of litigation		5,191			-			-			(5,191	)		-				-
Total operating expenses			22,889			(987	)		(1,494	)		(6,475	)		-				13,933

Operating Expenses - % of Revenues			79.5	%															48.4	%

Operating (loss) income			(6,712	)		1,023			1,505			6,550			-				2,366

Operating Margin			-23.3	%															8.2	%

Other (expense) income:
	Interest expense		(384	)		-			-			-			-				(384	)
	Other income, net		78			-			-			-			-				78
Total other expense			(306	)		-			-			-			-				(306	)

(Loss) income before income taxes			(7,018	)		1,023			1,505			6,550			-				2,060
Income tax (benefit) expense			(138	)		-			-			-			682				544
Net (loss) income		$	(6,880	)	$	1,023		$	1,505		$	6,550		$	(682	)		$	1,516

	(Loss) income per share	$	(0.17	)														$	0.04

	Diluted weighted average common shares		41,219																42,977



																	Exhibit 4.1
HARVARD BIOSCIENCE, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
Three Months Ended March 31, 2021
(in thousands, except per share data)

					Stock-Based			Acquired Assets			Restructuring,			Income
Statement of Operations		GAAP			Compensation			Amortization			Transformation			Taxes				ADJUSTED

Revenues		$	26,989			-			-			-			-			$	26,989
Cost of revenues			11,558			(20	)		(19	)		(53	)		-				11,466
	Gross profit		15,431			20			19			53			-				15,523

Gross Margin			57.2	%															57.5	%

Operating expenses:
	Sales and marketing expenses		5,386			(92	)		(2	)		(41	)		-				5,251
	General and administrative expenses		6,333			(834	)		(17	)		(846	)		-				4,636
	Research and development expenses		2,487			(22	)		(11	)		(45	)		-				2,409
	Amortization of intangible assets		1,464			-			(1,464	)		-			-				-
Total operating expenses			15,670			(948	)		(1,494	)		(932	)		-				12,296

Operating Expenses - % of Revenues			58.1	%															45.6	%

Operating (loss) income			(239	)		968			1,513			985			-				3,227

Operating Margin			-0.9	%															12.0	%

Other expense:
	Interest expense		(411	)		-			-			-			-				(411	)
	Other expense, net		(34	)		-			-			-			-				(34	)
Total other expense			(445	)		-			-			-			-				(445	)

(Loss) income before income taxes			(684	)		968			1,513			985			-				2,782
Income tax (benefit) expense			(15	)		-			-			-			744				729
Net (loss) income		$	(669	)	$	968		$	1,513		$	985		$	(744	)		$	2,053


	(Loss) income per share	$	(0.02	)														$	0.05

	Diluted weighted average common shares		39,787																42,109



						Exhibit 5
HARVARD BIOSCIENCE, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
(in thousands)
		Three Months Ended
			March 31, 2022			March 31, 2021
	Operating income	$	(6,712	)	$	(239	)
	Stock-based compensation expense		1,023			968
	Acquired asset amortization		1,505			1,513
	Settlements, restructuring and transformation costs		6,550			985
	Adjusted operating income		2,366			3,227
	Depreciation expense		382			445
	Adjusted EBITDA	$	2,748		$	3,672

Harvard Bioscience Announces First Quarter 2022 Financial Results