hboi20210930

hboi20210930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549

FORM 10-Q

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2021

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from_____to _____

Commission file number 001-33957

HARVARD BIOSCIENCE, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware 04-3306140

(State or other jurisdiction of (I.R.S. Employer

Incorporation or organization) Identification No.)

84 October Hill Road, Holliston, Massachusetts 01746

(Address of Principal Executive Offices, including zip code)

(508) 893-8999

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	HBIO	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S- T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒

Non-accelerated filer ☐ Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 1, 2021, there were 40,810,515 shares of the registrant’s common stock issued and outstanding.

Table of Contents

HARVARD BIOSCIENCE, INC. FORM 10-Q INDEX
		Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements		3

Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 (unaudited)		3

Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)		4

Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)		5

Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)		6

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited)		7

Notes to Unaudited Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		17

Item 3. Quantitative and Qualitative Disclosures about Market Risk		23

Item 4. Controls and Procedures		23

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	25

Item 3.	Default Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	25

SIGNATURES		26

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

HARVARD BIOSCIENCE, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share and per share data)

	September 30,			December 31,
	2021			2020
Assets
Current assets:
Cash and cash equivalents	$	5,548		$	8,317
Accounts receivable, net		18,340			17,766
Inventories		25,978			22,262
Other current assets		5,820			3,355
Total current assets		55,686			51,700
Property, plant and equipment, net		3,453			3,960
Operating lease right-of-use assets		7,081			7,761
Goodwill		57,987			58,590
Intangible assets, net		28,941			33,151
Other long-term assets		724			1,092
Total assets	$	153,872		$	156,254
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	2,470		$	1,721
Current portion of operating lease liabilities		2,127			2,111
Accounts payable		5,616			5,972
Deferred revenue		3,623			3,771
Other current liabilities		9,670			7,478
Total current liabilities		23,506			21,053
Long-term debt		42,740			46,286
Deferred tax liability		1,549			1,899
Operating lease liabilities		6,716			7,481
Other long-term liabilities		2,474			2,854
Total liabilities		76,985			79,573
Commitments and contingencies - Note 13
Stockholders' equity:
Preferred stock, par value $0.01 per share, 5,000,000 shares authorized		-			-
Common stock, par value $0.01 per share, 80,000,000 shares authorized; 40,809,018 and 47,152,587 shares issued and 40,809,018 and 39,407,080 shares outstanding, respectively		451			444
Additional paid-in-capital		225,074			232,357
Accumulated deficit		(133,635	)		(132,386	)
Accumulated other comprehensive loss		(15,003	)		(13,066	)
Treasury stock at cost, -0- and 7,745,507 common shares, respectively		-			(10,668	)
Total stockholders' equity		76,887			76,681
Total liabilities and stockholders' equity	$	153,872		$	156,254

See accompanying notes to condensed consolidated financial statements.

Table of Contents

HARVARD BIOSCIENCE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020

Revenues	$	29,663		$	24,037		$	85,849		$	71,116
Cost of revenues		13,355			10,542			37,757			30,783
Gross profit		16,308			13,495			48,092			40,333

Sales and marketing expenses		6,183			4,588			17,299			14,446
General and administrative expenses		5,458			5,399			18,190			17,828
Research and development expenses		2,660			1,949			7,848			6,336
Amortization of intangible assets		1,459			1,377			4,388			4,258
Total operating expenses		15,760			13,313			47,725			42,868

Operating income (loss)		548			182			367			(2,535	)

Other (expense) income:
Interest expense		(373	)		(1,205	)		(1,161	)		(3,737	)
Other, net		(130	)		(392	)		(477	)		(472	)
Total other expense		(503	)		(1,597	)		(1,638	)		(4,209	)

Income (loss) before income taxes		45			(1,415	)		(1,271	)		(6,744	)
Income tax expense (benefit)		215			(317	)		(22	)		451
Net loss	$	(170	)	$	(1,098	)	$	(1,249	)	$	(7,195	)

Loss per share:
Basic and diluted loss per common share	$	(0.00	)	$	(0.03	)	$	(0.03	)	$	(0.19	)

Weighted-average common shares:
Basic and diluted		40,754			38,920			40,202			38,540

See accompanying notes to condensed consolidated financial statements.

Table of Contents

HARVARD BIOSCIENCE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020

Net loss	$	(170	)	$	(1,098	)	$	(1,249	)	$	(7,195	)
Other comprehensive (loss) income:
Foreign currency translation adjustments		(1,135	)		1,638			(1,937	)		681
Derivatives qualifying as hedges, net of tax		-			92			-			34
Other comprehensive (loss) income		(1,135	)		1,730			(1,937	)		715
Comprehensive (loss) income	$	(1,305	)	$	632		$	(3,186	)	$	(6,480	)

See accompanying notes to consolidated financial statements.

Table of Contents

HARVARD BIOSCIENCE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited, in thousands)

												Accumulated
Three Months Ended	*Number*					*Additional*						*Other*					*Total*
September 30, 2021	*of Shares*			*Common*		*Paid-in*			*Accumulated*			*Comprehensive*			*Treasury*		*Stockholders*’
	*Issued*			*Stock*		*Capital*			*Deficit*			*Loss*			*Stock*		*Equity*

Balance at June 30, 2021		40,486		$	451	$	225,583		$	(133,465	)	$	(13,868	)	$	-	$	78,701
Stock option exercises		38			-		150			-			-			-		150
Vesting of restricted stock units		493			-		-			-			-			-		-
Shares withheld for taxes		(208	)		-		(1,663	)		-			-			-		(1,663	)
Stock compensation expense		-			-		1,004			-			-			-		1,004
Net loss		-			-		-			(170	)		-			-		(170	)
Other comprehensive loss		-			-		-			-			(1,135	)		-		(1,135	)
Balance at September 30, 2021		40,809		$	451	$	225,074		$	(133,635	)	$	(15,003	)	$	-	$	76,887

												Accumulated
Three Months Ended	*Number*					*Additional*						*Other*						*Total*
September 30, 2020	*of Shares*			*Common*		*Paid-in*			*Accumulated*			*Comprehensive*			*Treasury*			*Stockholders*’
	*Issued*			*Stock*		*Capital*			*Deficit*			*Loss*			*Stock*			*Equity*
Balance at June 30, 2020		46,414		$	438	$	230,675		$	(130,673	)	$	(13,704	)	$	(10,668	)	$	76,068
Stock option exercises		3			-		7			-			-			-			7
Stock purchase plan		-			-		1			-			-			-			1
Vesting of restricted stock units		467			-		-			-			-			-			-
Shares withheld for taxes		(164	)		-		(620	)		-			-			-			(620	)
Stock compensation expense		-			-		1,079			-			-			-			1,079
Net loss		-			-		-			(1,098	)

SEC Form 10-Q filed by Harvard Bioscience, Inc.