HBIO Reports Second Quarter 2011 Revenue Growth of 5% Over Second Quarter 2010

Harvard Bioscience, Inc. (Nasdaq:HBIO), a global developer, manufacturer, and marketer of a broad range of tools to advance life science research and regenerative medicine, today reported unaudited financial highlights for the three and six months ended June 30, 2011.

Second Quarter Reported Results
Revenues for the three months ended June 30, 2011 were $27.1 million, an increase of $1.2 million, or 4.8%, compared to revenues of $25.9 million for the three months ended June 30, 2010. Currency exchange rates had a positive 3.6% effect on revenues in the second quarter of 2011 compared with the second quarter of 2010. The Company's acquisition of Coulbourn Instruments in August 2010 had a positive 2.8% effect on revenues in the second quarter of 2011 compared to the second quarter of 2010. Excluding the effects of currency exchange rates and acquisitions, the Company's revenue growth was negative 1.6% over the same period in the previous year.

Net income, as measured under U.S. generally accepted accounting principles ("GAAP"), was $1.4 million, or $0.05 per diluted share, for the three months ended June 30, 2011 compared to $1.9 million, or $0.06 per diluted share, for the same period in 2010.

Non-GAAP adjusted net income was $2.5 million for the second quarter of 2011 compared to $2.3 million for the second quarter of 2010, which represented a 12.0% year-to-year increase. Non-GAAP adjusted diluted earnings per share were $0.08 for the second quarter of 2011 and the second quarter of 2010.

Core Life Science Research Tools Results
Non-GAAP adjusted earnings per share for our core Life Science Research Tools business ("LSRT") for the second quarter of 2011 was $0.10 per diluted share, compared with $0.08 per diluted share for the second quarter of 2010.

Regenerative Medicine Device Results
Non-GAAP adjusted earnings per share for our Regenerative Medicine Device business ("RMD") for the second quarter of 2011 was a loss of $0.013 per diluted share, compared with a loss of $0.003 per diluted share for the second quarter of 2010.

Year to Date Reported Results
Revenues for the six months ended June 30, 2011 were $53.5 million, an increase of $1.3 million, or 2.4%, compared to revenues of $52.2 million for the six months ended June 30, 2010. Currency exchange rates had a positive 2.3% effect on revenues for the first six months of 2011 compared with the same period in 2010. The Company's acquisition of Coulbourn Instruments in August 2010 had a positive 2.0% effect on revenues. Excluding the effects of currency exchange rates and acquisitions, the Company's revenue growth was negative 1.9% versus the same period in the previous year.

Net income, as measured under GAAP, was $3.0 million, or $0.10 per diluted share, for the six months ended June 30, 2011 compared to $4.1 million, or $0.14 per diluted share, for the same period in 2010. GAAP income for the six months ended June 30, 2010 included a $0.4 million, or $0.01 per diluted share gain from adjustment of the contingent consideration related to our Denville Scientific acquisition.

Non-GAAP adjusted net income was $4.6 million, or $0.16 per diluted share, for the six months ended June 30, 2011 compared to $5.0 million, or $0.17 per diluted share, for the first six months of 2010. The unfavorable year-to-year non-GAAP adjusted earnings impact was primarily due to increased spending in the Company's RMD business. Non-GAAP adjusted earnings per share for our core LSRT business for the six months ended June 30, 2011 was $0.18 and for our RMD business was $0.02 per diluted share loss. Non-GAAP adjusted earnings per share for our core LSRT business for the six months ended June 30, 2010 was $0.18 and for our RMD business was $0.01 per diluted share loss.

As of June 30, 2011 and December 31, 2010, we had net cash (cash and cash equivalents, net of debt) totaling $4.6 million and $1.7 million, respectively. As of June 30, 2011 and December 31, 2010, we had $17.1 million and $18.0 million, respectively, of borrowings under our credit facility. The borrowings related to our purchases of Coulbourn Instruments and Denville Scientific, and our stock repurchase program. During the six months ended June 30, 2011, we repaid $0.9 million of borrowings under our credit facility.

Commenting on the Company's performance, Chane Graziano, CEO, stated, "We are pleased to report a 25% increase in non-GAAP adjusted diluted earnings per share and a 5% increase in revenues compared with the second quarter of 2010 for our core LSRT business. We achieved these results despite some softness in the academic and government-funded research lab markets. Major contributors to this performance were the acquisition of Coulbourn Instruments, expansion of the operating margin at Denville Scientific and operational improvements at Panlab, our Spanish subsidiary. We are maintaining our LSRT revenue and earnings guidance for 2011. For the third quarter, we expect our revenues to be in the $28-29 million range and non-GAAP adjusted diluted earnings per share for the LSRT business to be in the 10-11 cents range. For the year, we expect revenues to be in the $113-$115 million range and non-GAAP adjusted diluted earnings per share for the core LSRT business to be in the 41-43 cents range. Our CMA microdialysis acquisition, which closed on July 1st, and the continued impact of operational improvements will be key factors in achieving this performance."

Mr. Graziano continued, "In our RMD business, we participated in the world's first successful transplant of a synthetic trachea, or windpipe. We provided a custom bioreactor used to grow the patient's cells on a synthetic trachea scaffold that was then implanted in the patient, who suffered from late stage tracheal cancer and had only a few weeks to live. The procedure saved the patient's life. We are proud to be a part of such a breakthrough medical event."

Mr. Graziano added, "Going forward, we will continue our investment in the RMD initiative and expect to spend at our budgeted rate as we complete the development of a clinical stem cell therapy injector. We expect our investment to be in the range of 1-2 cents for the third quarter of 2011 and 5-6 cents for 2011."

Our third quarter 2011 revenue and earnings guidance was calculated using exchange rates (USD 1.60/GBP and USD 1.44/Euro) approximating June 30, 2011 rates and assumes a continuation of the business conditions as we see them at this time. The non-GAAP adjusted earnings per diluted share guidance excludes amortization of intangible assets, the impact of future acquisitions, acquisition costs, any future restructuring actions, and stock-based compensation expense recognized under the provisions of FASB ASC Topic 718, "Compensation -- Stock Compensation." See the table below for a reconciliation of our estimated non-GAAP adjusted earnings per diluted share to our estimated GAAP earnings per diluted share. See Exhibits 4, 5 and 6 for reconciliations of GAAP to non-GAAP adjusted operating income, GAAP to non-GAAP adjusted net income and GAAP diluted earnings per common share to non-GAAP adjusted diluted earnings per common share for the three and six months ended June 30, 2011 and 2010, respectively.

Read Full Report

Source: GlobeNewswire