Slide 1: Investor Presentation
Investor Presentation Jim Green, President and CEO Sept 2019
Slide 2: Forward-Looking Statements and Non-GAAP Financial Information
Forward-Looking Statements and Non-GAAP Financial Information Forward-Looking Statements This information in this presentation or in oral statements of the management of the Company may include forward-looking statements within the meaning of the federal securities laws, including the Private Securi
Slide 3: Table of Contents
Table of Contents Company Overview Investment Highlights Financial Summary Strategy and Actions 3
Slide 4: Company Overview
(¥ Harvard Bioscience, Inc. Solutions to Advance Life Science Company Overview
Slide 5: Harvard Bioscience At a Glance
Harvard Bioscience At a Glance Founded 1901 as Harvard Apparatus Headquarters Holliston, Massachusetts, just west of Boston Employees 560 Revenue $122M (FY18) Adj. Operating Margin 12% (FY18) Listed NASDAQ: HBIO Shares Outstanding 38M Primary Locations Boston, Minneapolis, Stuttgart
Slide 6: What We Do
What We Do Discovery through Preclinical In vitro research and target selection In vivo preclinical required for all drugs Cellular & Molecular Technologies* Pre-Clinical Systems (DSI) Cellular and Molecular Biology Physiological Monitoring & Telemetry CRISPR: Gene Splicing, etc. Data Acquis
Slide 7: Global Footprint
Global Footprint Cellular & Molecular Cambridge, UK Cellular & Molecular Stuttgart, DE Pre-Clinical Systems (Data Sciences Intl.) Minnesota, US Cellular & Molecular Massachusetts, US HBIO Headquarters Operating Site Small Operation 7
Slide 8: Investment Highlights
(HB Harvard SN Bioscience, Inc. Solutions to Advance Life Science
Slide 9: Investment Highlights
Investment Highlights Known life science leader enabling research and drug discovery Strong brands with blue chip customer base Extensive installed base with recurring customers Attractive end markets with significant upside potential Building a profitable platform 9
Slide 10: Large Diversified Blue-Chip Customer Base
Large Diversified Blue-Chip Customer Base 10
Slide 11: A global platform with a balanced portfolio
A global platform with a balanced portfolio Pharma, Rest of Biotech, CRO, World Cellular & med device, Academic, Preclinical Asia Molecular Other Government (DSI) Pacific 3% 21% 35% 42% 46% 58% 65% 31% Europe North America Product Family Customer Geography * Full Year 2018 Revenue 11
Slide 12: Significant Long-Term Revenue Potential
Significant Long-Term Revenue Potential Portfolio Management & Sales Innovation Optimization New products Combine Cellular and Drive strategic innovation Molecular Sales Force Double down on winners Expanding the number of Tune quotas monitored parameters enables Price optimization new
Slide 13: Financial Summary
(¥ Harvard Bioscience, Inc. Solutions to Advance Life Science Financial Summary
Slide 14: Financial Summary
Financial Summary 2017 2018 2019 Guidance Revenue(1) $102M $122M $119 – 122M Gross Margin 47% 56% ~56% Adj. Operating Margin 7% 12% ~12% Adj. EPS $0.12 $0.20 $0.19 – 0.21 2018 acquisition of high margin pre-clinical technologies business (DSI) and sale of low margin distribution business (Denville
Slide 15: Unlocking New Value Strategies and Action Timeline
Unlocking New Value Strategies and Action Timeline
Slide 16: Opportunities
Opportunities Significant consolidation and integration o Brand rationalization o Combining sales and support organizations to maximize coverage and services o Facility and entity rationalization Product portfolio and pricing optimization Inventory management opportunities 16
Slide 17: 2019 Action Plan (rest of year)
2019 Action Plan (rest of year) Stabilize the business, complete leadership team Improve margins through consolidations, reduced COGS & operating expenses Optimize manufacturing & supply chain Reenergize and refocus sales operations Rationalize product portfolio and pricing, trim the tail
Slide 18: Action Plan – Margin Profile Evolution
Action Plan – Margin Profile Evolution FY19 - immediate FY20 (H2) FY21 - Go Forward Initiate action plan Improved financials Profitable organic growth Achieve our financial Strong platform in place Return to inorganic goals Minor revenue dis-synergies Lean operations & Complete the
Slide 19: Disciplined Capital Allocation
Disciplined Capital Allocation 2019 and 2020 Priorities Refinance and restructure our debt Paying down debt Exit 2020 with leverage ratio < 3x 2021 Priorities Opportunistic acquisitions 19
Slide 20: Summary
Summary Creating Superior Long-Term Value by… Capitalizing on the strong global Harvard Bioscience Franchise Simplifying and rationalizing our business model to expand margins Reigniting organic growth Disciplined and thoughtful capital allocation Thank You 20
Slide 21: Thank You
(Ts Harvard Bioscience, Inc. Solutions to Advance Life Science
Slide 22: Appendix and Reconciliations of Non-GAAP Measures
Appendix and Reconciliations of Non-GAAP Measures 22
Slide 23: Senior Management
Senior Management Jim Green, Chairman, President and CEO Appointed President and CEO in July 2019; Chairman since 2017; Director since 2015 Most recently: o President of Spacelabs Healthcare, where he significantly expanded both gross margins and operating margins while returning to organic reve
Slide 24: Non-GAAP Adjusted Revenue
Non-GAAP Adjusted Revenue (unaudited, in thousands) Year Ended December 31, 2018 2017 GAAP revenue $ 120,774 $ 77,407 Adjustments: Denville revenue reported within discontinued operations 893 24,475 Deferred revenue valuation adjustments on acquisition 284 - Non-GAAP adjusted revenue $ 121,951 $ 101
Slide 25: Non-GAAP Adjusted Gross Profit
Non-GAAP Adjusted Gross Profit (unaudited, in thousands) Year Ended December 31, 2018 2017 GAAP gross profit $ 63,181 $ 39,170 Adjustments: Denville Non-GAAP adjusted gross profit 360 8,432 Deferred revenue valuation charges on acquisition 284 - Inventory valuation step-up charges on acquisition 3,8
Slide 26: Non-GAAP Adjusted Operating Income and Non-GAAP Adjusted EBITDA
Non-GAAP Adjusted Operating Income and Non-GAAP Adjusted EBITDA (unaudited, in thousands) Year Ended December 31, 2018 2017 GAAP operating income (loss) $ 984 $ (635) Adjustments: Amortization of intangible assets 5,384 1,553 Denville Non-GAAP adjusted operating income 17 1,607 Deferred revenue valu
Slide 27: Non-GAAP Adjusted Net Income
Non-GAAP Adjusted Net Income (unaudited, in thousands) Year Ended December 31, 2018 2017 GAAP net income (loss) $ (2,922) $ (865) Adjustments: Amortization of intangible assets 5,384 1,553 Denville Non-GAAP adjustments included in discontinued operations (A) (920) 1,072 Deferred revenue valuation ch
Slide 28: Non-GAAP Adjusted Diluted Earnings Per Common Share
Non-GAAP Adjusted Diluted Earnings Per Common Share (unaudited) Year Ended December 31, 2018 2017 GAAP diluted earnings (loss) per common share $ (0.08) $ (0.02) Adjustments: Amortization of intangible assets 0.15 0.04 Denville Non-GAAP adjustments included in discontinued operations (0.03) 0.03 Def
Slide 29: Guidance for 2019 Non-GAAP Adjusted Diluted Earnings Per Common Share
Guidance for 2019 Non-GAAP Adjusted Diluted Earnings Per Common Share (unaudited) GAAP diluted earnings per common share (A) $ 0.00 - 0.02 Adjustments: Amortization of intangible assets 0.15 Depreciation of fixed asset step-up on acquisition 0.01 Severance and restructuring charges 0.01 Stock-based