Harvard Bioscience Inc (HBIO) Q2 2024 Earnings Call Highlights: Navigating Challenges with ...

GuruFocus News
4 min read

In This Article:

  • Revenue: $23.1 million in Q2 2024, down $5.7 million from last year.

  • Gross Margin: 57.2% in Q2 2024, compared to 58% in Q2 last year.

  • Operating Loss (GAAP): $2.1 million in Q2 2024.

  • Adjusted Operating Profit: $800,000 or 3.5% of revenue.

  • Adjusted EBITDA: $1.3 million or 5.5% of revenue.

  • Adjusted EPS: Declined by $0.04 compared to last year.

  • Cash Flow from Operations: $0.6 million for the first half of 2024, compared to $5.4 million in the same period last year.

  • Net Debt: Down $0.7 million compared to the end of 2023.

  • Full Year 2024 Revenue Outlook: Revised to approximately $97 million to $102 million.

  • Full Year 2024 Gross Margin Outlook: Approximately 59% to 60%.

  • Adjusted EBITDA Margin Outlook: High single digits for 2024.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Harvard Bioscience Inc (NASDAQ:HBIO) is focusing on new product initiatives, which are expected to add new revenue streams starting in the second half of the year.

  • The company has implemented cost-saving measures, realizing savings of approximately $700,000 in Q2 and expecting annual run rate savings of approximately $4 million.

  • New product launches, such as the SoHo telemetry devices and VivaMARS neurobehavioral monitoring system, are expected to drive growth in the second half of 2024 and beyond.

  • The company is seeing increased quoting activity in China, indicating potential future growth as market conditions stabilize.

  • Harvard Bioscience Inc (NASDAQ:HBIO) is targeting long-term double-digit revenue growth through new high-growth applications like bioproduction and MEA Organoid platforms.

Negative Points

  • Revenue in Q2 2024 was down $5.7 million from the previous year, primarily due to slower sales in China and reduced capital spending by CRO and biopharma customers in Europe and the US.

  • The company reported an operating loss of $2.1 million on a GAAP basis for the quarter.

  • Gross margin decreased to 57.2% from 58% in the previous year, driven by lower absorption of fixed manufacturing costs and a lower mix of higher-margin products.

  • Adjusted EBITDA declined significantly from $3.9 million last year to $1.3 million this year, primarily due to lower gross margin dollars.

  • The market recovery is expected to be delayed to later in the second half of the year, leading to a reduction in the full-year 2024 revenue outlook to approximately $97 million to $102 million.

Q & A Highlights

Q: What is the total APAC exposure as a percentage of revenue, and what is the outlook for China? A: Historically, Asia Pacific has accounted for about one-quarter of our total revenue, predominantly from China. We believe we've reached the bottom in China, with growing funnels and increased quoting activity. We expect academic markets to stabilize and begin to grow, while industrial sectors like biopharma and CROs may take longer to recover, potentially moving into 2025 for growth.

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