Enabling discovery, safety and
production of tomorrow's therapeutics
NASDAQ: HBIO
Q1'24 Earnings Presentation
Jim Green, Chairman, President & CEO
Jennifer Cote, CFO & Treasurer
May 7, 2024
Forward-Looking Statements and Non-GAAP Financial Information
Forward-Looking Statements
This document contains forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "may," "will," "expect," "plan," "anticipate," "estimate," "intend" and similar expressions or statements that do not relate to historical matters. Forward-looking statements include, but are not limited to, information concerning expected future financial and operational performance including revenues, gross margins, earnings, cash and debt position, growth and the introduction of new products, and the strength of the Company's market position and business model. Forward-looking statements are not guarantees of future performance and involve known and unknown uncertainties, risks, assumptions, and contingencies, many of which are outside the Company's control. Risks and other factors that could cause the Company's actual results to differ materially from those described its forward-looking statements include those described in the "Risk Factors" section of the Company's most recently filed Annual Report on Form 10-K as well as in the Company's other filings with the Securities and Exchange Commission. Forward-looking statements are based on the Company's expectations and assumptions as of the date of this document. Except as required by law, the Company assumes no obligation to update forward-looking statements to reflect any change in expectations, even as new information becomes available.
Use of Non-GAAP Financial Information
This document includes non-GAAP financial information including one or more of adjusted operating income (loss), adjusted operating margin, adjusted net income (loss), adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings (loss) per share, foreign exchange adjusted revenue, and net debt. 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 resulting from items that we do not believe are representative of the underlying operations of the business. Items excluded include stock-based compensation, amortization of intangibles related to acquisitions, other operating expenses, loss on equity securities, income taxes and the tax impact of the reconciling items. Management believes that this non-GAAP financial information is important in comparing current results with prior period results and is useful to investors and financial analysts in assessing the Company's operating performance. Non-GAAP historical financial statement information included herein is accompanied by a reconciliation to the nearest corresponding GAAP measure which is included as exhibits below.
With respect to non-GAAPforward-looking measures, we provide an outlook for adjusted EBITDA margin. Many of the items that we exclude from this forward-looking measure calculation are less capable of being controlled or reliably predicted by management. These items could cause the forward-looking measures presented in our outlook statements to vary materially from our GAAP results.
The non-GAAP financial information provided in this presentation 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.
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CEO Summary: Q1'24 Highlights
Strong gross margin performance and focus on efficiency to support ongoing investments in growth
Income Statement Components ($ in millions except percentages) | Q1' 2024 | Q1'2023 |
Revenue | 24.5 | 30.0 |
Gross Margin | 14.8 | 18.3 |
% of Revenue | 60.3% | 61.2% |
Operating (Loss) Profit | (2.3) | 1.7 |
% of Revenue | -9.3% | 5.8% |
Adjusted Operating Profit* | 1.2 | 4.4 |
% of Revenue | 4.8% | 14.8% |
Adjusted EBITDA* | 1.6 | 4.8 |
% of Revenue | 6.6% | 15.9% |
* Non-GAAP measure, see Appendix for reconciliation to GAAP financial measures
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Q1'24 Revenue by Geography
As Reported
Americas
- Overall:Down 6.6% as reported
- Pre-clinical:Slow in Covid related Respiratory products
- CMT:Growth in advanced cell based systems
- Academics/NIH: Slow - lack of budget clarity
- Pharma and CRO: Still keeping tight strings
EMEA
- Overall:Down 16% reported, includes 1% FX headwind
- Pre-clinical:General slowing on tight budgets
- CMT:modest slowing
- Macro:Spending slower with higher interest rates; Ukraine funding affecting government spend
APAC
- Overall:Down 35.4% reported vs record PY
- Pre-clinical:Continued down on tight budgets
- CMT:Academics remained down significantly from government funded timing for academic research
- Macro:Improving outlook for second half on China stimulus announcement
* Non-GAAP measure
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New Product Introductions: Focused on Commercialization
Established base platform targets market growth; exciting new growth opportunities in bio-production and cellular
STRENGTHEN THE BASE
EXPAND TO
BIO-PRODUCTION
INNOVATE CELLULAR
PRECLINICAL
- Extend leadership in telemetry with the introduction of SoHo Shared Housing telemetry family of implants
• | Introduced latest Ponemah software integrating |
VivaMARS high-capacity behavioral testing with our industry | |
leading GLP data management and reporting system | |
• | Showcased VivaMARS at SfN and SoT expanding our |
addressable market into neuro pharmacology applications |
- Fortify leading position in cellular/molecular/inhalation- respiration technologies for research/discovery
- Continue to expand field service offerings
CMT
- Adapted our well known BTX electroporation family to cGMP bioproduction applications
- Released our GLP/cGMP compliant Amino Acid Analyzer for Biopharma bioproduction, adapted from our leading AAA clinical analyzer
CMT-
ORGANOIDS
- Launched the Mesh MEA Organoid Platform at SfN
• Showcased Mesh MEA at Society for Toxicology
- Initial applications in research and biopharma discovery for neuro, exploring in-vitro safety applications
~85% of FY23 Rev
~10% of FY23 Rev | ~5% of FY23 Rev | ||
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Financials
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Q1'24 Performance vs. Q1'23 (GAAP except where noted)
$ in millions except | REVENUE | GROSS MARGIN | ADJUSTED EBITDA* |
per share data |
$4.8
$1.6
DILUTED (LOSS) EARNINGS | CASH FLOW FROM OPERATIONS | NET DEBT* | |
PER SHARE | |||
GAAP | Adjusted* |
Q1'24 | Q1'23 | Q1'24 | Q1'23 |
* Non-GAAP measure, see Appendix for reconciliation to GAAP financial measures
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Outlook
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2024 Full Year Outlook: 'A Tale of Two Halves'
For FY2024, we expect:
- Revenues approximately flat for the full year vs. prior year
- Weakness in the first half versus a strong prior year comparison
- Second half growth versus both first half of 2024 and the second half of 2023, supported by new product commercializations and expected improvements in China
- Gross margins in the 60% range
- Adjusted EBITDA margins to the mid-teens
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Appendix
Attachments
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Disclaimer
Harvard Apparatus Regenerative Technology Inc. published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 11:06:17 UTC.