Harvard Bioscience, Inc. · NASDAQ:HBIO
Harvard Bioscience — Q4 2019 Earnings Presentation
22 slides from Harvard Bioscience's earnings presentation, Feb 26, 2020
Slide 1: Q4'19 Earnings Presentation
NASDAQ: HBIO Q4’19 Earnings Presentation Jim Green, Chairman, President & CEO Mike Rossi, CFO February 26, 2020
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 ▪ Q4 and Full Year Performance ▪ Product Segment Update ▪ Action Plan Update ▪ Financial Update ▪ Outlook 3
Slide 4: Highlights
Highlights Q4’19 Highlights ▪ Significant year-over-year Adjusted Operating Margin growth: 14% to 18% ▪ Strong cash flow: year-over-year leverage reduction from 3.7x to 3.3x ▪ Major restructuring plan initiated: greater than $4M annualized savings 2020 Outlook ▪ Return to organic sales growth ▪ Sign
Slide 5: 2019 Q4 Performance
2019 Q4 Earnings Presentation Q4 2019 Performance Revenue ($M) ▪ Revenue: $31.0M, down $2.9M (-8.6%) 33.9 (includes -$0.2M of F/X, -$1.3M of 31.0 low-margin portfolio rationalization) ▪ Gross Margin (GAAP) 55.6%, up 30 bps ▪ Adjusted Gross Margin* 55.9%, down 30 bps Q4 2018 Q4 2019 ▪ Operating Incom
Slide 6: FY 2019 Performance
2019 Full Year FY 2019 Performance Adj. Revenue ($M) * ▪ Revenue (GAAP) $116.2M, down 3.8% 122.0 116.2 ▪ Gross Margin (GAAP) 55.4% ▪ Adjusted Gross Margin* 55.8%, up 10 bps ▪ Operating Income/ Margin (GAAP) $0.4M / 0.3% FY 2018 FY 2019 Adj. Operating Margin * ▪ Adj. Operating Income / Margin* $14.9M
Slide 7: 2019 Revenue by Product Family
2019 Revenue by Product Family (in $M) Q4 Q4 FY FY 2019 2018 2019 2018 Cellular & 19.6 20.6 -4.9% 75.2 78.2 -3.8% Headwinds in Europe for the year through Q3’19, recovered in Q4 Molecular Products* • $1.3M Q4 impact from Product Portfolio Rationalization • $2.1M full year impact from a few large OEM
Slide 8: Action Plan Update – Announced Restructuring Plan
2019 Q4 Earnings Presentation Action Plan Update – Announced Restructuring Plan ▪ Completed TBSI consolidation into Minneapolis operation ▪ Initiated Connecticut manufacturing consolidation to Holliston MA ▪ Initiated downsizing of UK operation ▪ Reduction in force > 10% across overall business ▪ An
Slide 9: Financial Section
(Tr Harvard Bioscience Financial Section
Slide 10: Q4 2019 Non-GAAP Results
Q4 2019 Non-GAAP Results (in $M, except EPS) Q4 2019 Q4 2018 ▪ Revenue -8.6% (-8.0% excluding currency) ▪ Americas down on product Adjusted Revenue* 31.0 33.9 -8.6% rationalization ($1.3M), large pharma deals in Q4’18 Adjusted Gross Profit* 17.3 19.1 -9.4% ▪ ROW: flat in Q4, improvements in China, A
Slide 11: FY 2019 Non-GAAP Results
FY 2019 Non-GAAP Results (in $M, except EPS) FY 2019 FY 2018 ▪ Revenue -4.8% ▪ -5.2% excluding currency impact (-1.6%), Adjusted Revenue* 116.2 122.0 -4.8% acquisitions / divestitures (+2.0%) ▪ CROs declines in 1st half on consolidations, Adjusted Gross Profit* 64.9 68.0 -4.6% stabilizing in 2nd hal
Slide 12: 2020 Outlook
(Tr Harvard Bioscience 2020 Outlook
Slide 13: 2020 Looking Forward: Cost Reductions
2020 Looking Forward 2020 Cost Reductions Expand both Gross Margin and Operating Margins $4M annualized savings from global restructuring announced in Q4’19, savings begin Q1 ▪ Consolidation of Connecticut manufacturing into core Massachusetts operation in process, complete mid-2020 ▪ Restructuring
Slide 14: 2020 Growth Drivers
2020 Looking Forward 2020 Growth Drivers ▪ CRO consolidation impact annualized and return to growth in the 1st half ▪ CRO & Pharma expect increased growth on demand for next generation implantable telemetry devices starting in Q1 ▪ Incremental pull through opportunities for cellular based products (
Slide 15: 2020 Financial Outlook
2020 Financial Outlook 2020 Full Year Outlook – In line with previously announced targets ▪ Revenue returns to organic growth in the low single digits ▪ Gross Margin Expansion of approx. 2 percentage points ▪ Operating Margin Expansion of approx. 3 percentage points: reaching 15%-16% full year ▪ Deb
Slide 16: Appendix
(Tr Harvard Bioscience Appendix
Slide 17: GAAP Income Statements
GAAP Income Statements (in $M, except EPS) Q4 2019 Q4 2018 FY 2019 FY 2018 Revenue 31.0 33.9 116.2 120.8 Gross Profit 17.2 18.7 64.3 63.2 Gross Margin 55.6% 55.3% 55.4% 52.3% Operating Expenses 15.6 17.0 63.9 62.2 % of revenue 50.4% 50.2% 55.0% 51.5% Operating Income (loss) 1.6 1.7 0.4 1.0 Operating
Slide 18: Balance Sheet
Balance Sheet (in $M) Q4'18 Q4'19 Assets Cash & Cash Equiv alents 8.2 8.3 Accounts Receiv ables 21.5 20.7 I nv entories 25.1 22.1 Other Current Assets 3.1 2.5 Total Current Assets 57.8 53.6 Property, Plant, Equipment 5.9 4.8 Goodw ill & Other I ntangibles 103.1 95.8 Other Assets 1.8 10.7 Total Asset
Slide 19: Cash Flow Statements
Cash Flow Statements (in $M) YTD 2019 YTD 2018 Net Cash Provided by Operating Activities 8.0 2.9 Additions to PP&E (1.2) (1.0) Acq., net of cash acquired - (68.6) Disposition, net of cash sold 1.0 15.8 Other investing activities (0.0) (0.0) Net Cash Provided by Investing Activities (0.2) (53.8) Proc
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (In thousands) Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 GAAP revenue $ 30,972 $ 33,858 $ 116,176 $ 120,774 Denville revenue reported within discontinued operations - - - 893 Deferred revenue valuation adjustments on acquisition - 77
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (In thousands, except EPS) Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 GAAP operating income $ 1,634 $ 1,742 $ 377 $ 984 Stock-based compensation expense 841 812 3,030 2,894 Severance, restructuring and acquisition costs 1,551 127 3,943
Slide 22: 2020 Guidance Reconciliation
GAAP to Non-GAAP Reconciliation 2020 Guidance Exhibit 5 HARVARD BIOSCIENCE, INC. Reconciliation of GAAP Measures to Non-GAAP Guidance for 2020 (unaudited) Projected GAAP operating income % of revenue (A) 4%-5% Adjustments: Stock-based compensation expense 3% Severance, restructuring, and acquisition